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OpEdNews Op Eds    H2'ed 9/20/17

Equifax Breach Reveals Terrible Truth of the American Experiment

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Today, we think of capitalism in the hands of a democratic-republic as the American way of life, not an experiment. But when this country was founded, a nation where anyone (except slaves and women) could determine their own trajectory, was a bold experiment.

You're taught to believe the founders were saying, "Let's see what happens when 'life, liberty and the pursuit of happiness' are available to all men. With the necessary infrastructure and seemingly endless natural resources, men can do as they please (with a few caveats). Everyone can work for a piece of the pie."

The experiment instituted a system where money is the end-all-be-all. If you have enough money, you can control other people. Neither the church nor the state can controvert the person with money, even if that person breaks the law. Throw money at the law and it works for you. That's how slavery worked in America. All men were created equal, but the men with money made a lie the law.

Incredibly, some men were not men, which meant landholders could subject them to backbreaking labor without pay. When we freed the slaves, and later when the civil rights movement reared up, democracy was saying, "Enough of this ludicrous crap. All people are created equal." Yet there's still the issue of money. Some people just don't have it.

Enter the idea of credit. If you don't have enough money, if you're not able to seize resources that are held by someone else, then the institution in charge of money can lend you a helping hand. Turns out the helping hand is a way for the institution to make more money. If you're too deep in a hole to pay the institution back in full, you owe more and more. Then, if you screw up and default, the institution stamps a number on you that can ruin your chances at the "pursuit of happiness" for the rest of your life.

This money stuff, to begin with, is based on a system of trust. When you work for someone, you trust they'll pay you. When you pay taxes, you trust the government isn't wasting your dollar. When you engage in a system of credit (i.e. the entire banking system), you trust your information, and the money you have in the system, is safe, and that the numbers are actually worth something (they aren't). What's worth something is your personal details. A company like Equifax collects them, and also sells them for billions of dollars in revenue annually .

Enter the Equifax data breach . Equifax is one of the companies working with the government to monitor your financial activity and assign credit scores. Equifax asks you to just be trustworthy, and it will give you a good score. But Equifax hasn't been trustworthy with the personal information of 143 million Americans, personal information hackers stole and could use against people for the rest of their lives, including social security numbers.

In March of 2017, Equifax could have installed a patch to fix a flaw in its web applications. Essentially when we entrust a company like Equifax with our data, we're trusting they'll fix crucial flaws in their system.

To do this, Equifax would need to hire cybersecurity analysts, who make about $86,000 a year in an industry growing by more than 37 percent a year. The reason why it's growing that fast is the government alone sees at least 20 million cyberattacks per day. People want to bring down the government and companies like Equifax, the entire system. This is all very well known. The cybersecurity industry also knows that occasionally software will have vulnerabilities that need to be fixed.

A system of ethics underpins a democratic system that works. Otherwise, trust doesn't work. Yet, according to USA Today, Equifax executives knew about the data breach as early as July 29th and didn't announce it until September 7th. During that window of time, executives sold more than $2 million dollars of Equifax stock, which is unethical, given the obvious inference that once the breach was announced, stocks would fall. Rats flee the ship before it sinks.

Taking a step back, it's clear ethics aren't underpinning the American experiment. We pay taxes, and ethics are extremely important to taxation ; tax professionals must adhere to a document called Circular 230, an ethics document so large it's impossible for them to memorize. Yet the tax code has loopholes that only benefit the rich , such as the capital gains tax rate, which cost the Treasury Department $457 billion between 2011 and 2015. Incredibly rich investors only pay a 15 percent tax rate for their investment dividends. In 2016, a middle class citizen making between $37 and $91K had to pay 25 percent on their income. They don't have much left over to invest.

In a variation on capital gains, Mitt Romney, another millionaire Republican besides the one currently in office, was the fund manager at Bain Capital. The capital gains loophole allowed him pay a mere 15 percent on the special interest he earned from that job, while interest you earn on a savings account gets taxed at a rate of up to 35 percent. I could go on and on about the breaks corporations take advantage of that regular citizens don't get, although Citizens United means corporations can be classified as citizens when it comes to currying political favor for agendas. I could go on and on, but there's not enough space online.

The American Experiment reveals people are greedy and will manipulate the system. Over time, they will skew things to benefit themselves and do their best to keep others down. In the history of the world, that's not news; it's just too bad we haven't yet learned from the past.

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