Privacy Bends for the Sake of Health Care Costs

As the federal budget takes on more financial responsibility for people’s state of health, you expect policies to change accordingly, and here is a good example. New regulations on employer wellness programs give employers more leeway to penalize employees who don’t participate in a wellness program or who don’t meet goals. It is the penalty for not participating that will shock people the most, especially when you look at what these wellness programs are. The standards for relevance are set lower than ever. A “wellness program” does not have to actually improve anyone’s health; it just has to sound like it might. Some real-life employer wellness programs consist of little more than “self-assessment,” which may just mean that employees are obliged to answer a questionnaire about their health history, habits, and lifestyle. The answers may be indirectly collected by the employer and its insurance company. And now, “non-participants” may be obliged to pay as much as 50 percent more as their share of health coverage costs.

In past years, this might have been seen as a worrisome erosion of worker privacy, but this year, the federal government is willing to take that chance in the hope that some of the wellness programs will work and health care costs will be lower. That’s what it means to be on the hook.

Horse Meat Scandals Drag On

Horse meat keeps turning up in other forms of meat, and there is little to indicate that the practice of mixing and mislabeling meat has slowed down. A week ago, two food factory managers in the Netherlands were arrested. Workers there say that factory’s meat was routinely about one-fourth horse, and U.K. investigators think they have identified the English source of many of the horses delivered to the factory. In France, the bankrupt Spanghero meat-packing factory is expected to shut down, some believe as soon as tomorrow, its reputation and finances ruined by its tons of recalled horse meat. In the United Arab Emirates, there are calls for testing of imported meat, with worries that it contains undisclosed horse. Separately, there are scandals about pork being similarly mixed and mislabeled.

The Money Laundering Problem in Digital Currency and Derivatives

There was confusion yesterday as half the financial world briefly and mistakenly thought the U.S. government had shut down Bitcoin. The target was not Bitcoin, but the Costa Rica-based LR, comparable in scale but not nearly so well known. The indictment says substantially all of the transactions in LR were for money-laundering purposes, and the issuer, Liberty Reserve, was operating in secret in Costa Rica after authorities there started to ask questions about its money-laundering controls.

Money laundering is a potential problem in any currency but especially in digital currency, where secret identities and low transaction costs make it easy to divide a single payment of millions of dollars into thousands of transactions among what looks like thousands of unrelated parties, thus disappearing into the background noise of small transactions and becoming almost impossible to trace. Money laundering happens in physical cash too, I must add, but there, its scale is limited by the physical work of moving cash from place to place and party to party. There is no such physical work in digital currency, so it is more open to abuse.

The largest money laundering operations probably are not done in money of any kind, but in derivatives, which can be made to act like money and which, compared to digital currencies, are flexible, highly secretive, and effectively unregulated. It is just another reason why secret derivatives contracts shouldn’t be allowed, and why it is so important to have new laws that require all derivatives contracts to be published.

Turning the Tables on Networking Data

Large corporations routinely use social networking data to find out how people are connected to each other. They hope to use this information to sell you more products. This technology cuts both ways, however, and a mobile app called Buycott makes it easier than ever to find out how products and corporations are related to each other. It is a consumer glimpse into corporate networking, if you want to look at it that way. The networking information involved is large but not amazingly massive, and Buycott puts it to use as the back end of a bar code scanner. From the Buycott product web site:

When you use Buycott to scan a product, it will look up the product, determine what brand it belongs to, and figure out what company owns that brand (and who owns that company, ad infinitum).

Imagine that — you can find out where a product comes from! Buycott suggests that you use this information to support manufacturers that have taken favorable positions on political issues that you care about, while avoiding ones that have taken adverse positions. For example, if you like the Internet, you might pass over a product from a conglomerate that spends money trying to promote legislation that would shut down the Internet, and instead buy one from a company that has taken the opposite position on that issue. But it seems to me that is only the beginning. If you find out where a product comes from, it may help you understand the product itself better. Beyond that, you may be able to deconstruct the marketing message, now that its source is no longer anonymous, and that can help you see how commercial interests are trying to manipulate you.

These are much like the kinds of things that the corporations you will be looking at are already doing with social networking data. These same corporations might not embrace networking analysis quite so eagerly when they found out it is being used against them.

This Week in Bank Failures

One of the popular views in the philosophy of law, simplified to the point where it begins to sound crass, says that law is what powerful men agree on. There are many obvious problems with this formulation, and there are at least as many that are not so obvious. Among them is this question: if law is what powerful men agree on, then what happens after the men are not so powerful? Do they go to jail at that point?

Consider the case of Bank of the Commonwealth, one of the more spectacular bank failures in the history of banking in Virginia. While the bank was still operating, two of its top executives agreed, along with others, that the steps they were taking to make the bank appear more solvent than it was were the right thing to do. After the bank failed, though, indictments followed — indictments that would have been highly implausible, if not unthinkable, while the bank was still operating. Now the two executives have been convicted, along with two others, of a list of charges related to fraud and conspiracy.

Regulators and prosecutors hope this case sends a message to the banking industry, but I don’t see how it could. When you are the executives of one of the biggest banks in town, it is all too easy to believe that your task force meetings and strategic initiatives are the law. It is only after a bank goes under that people start to notice how many of the decisions ran counter to the actual laws on the books. But if the law has a deterrent effect only on former executives, and if current executives are effectively immune from prosecution, then what is the law really? This is, of course, a question for philosophers to discuss.