Reason’s December 2014 issue is devoted to the future of finance, and features a description from Matt Welch of the history of how the United States lost its commitment to financial privacy.
Welch begins with Richard Nixon’s 1970 Bank Secrecy Act, which first required banks to begin reporting the personal information of anyone with a transaction of over $10,000—ostensibly to stop money laundering.
Welch notes that, before this, financial transactions had been protected under the Fourth Amendment’s prohibition on unreasonable searches and seizures of American property. The founders had enshrined what Welch argues is a Calvinist tradition of valuing financial privacy and personal freedom.
Then slowly but surely, various administrations used public fear of crime and terrorism to chip away at Americans’ right to conduct their affairs away from the government’s watchful eye. First it was Nixon’s crusade against money-laundering; a decade later it was the Reagan administration’s tighter restrictions aimed at curbing the drug trade.
This would lead, among other things, to granting police the ability to seize citizen property without accusing its owners of any crime, under the now widely criticized practice of civil asset forefeiture.
Then came 9/11, and most recently, Obama’s Foreign Account Tax Compliant Act to target foreign accounts. The next step, according to Welch, is making all this global. Welch sums up:
Read the full piece at Reason.
