Parties Split on Data-Protection Bill

House Democrats and Republicans split sharply yesterday over how to best protect consumers' personal data, as legislation to curb the persistent scourge of identity theft and fraud began to move on a fast track on Capitol Hill.

In a 13 to 8 vote along party lines, a subcommittee of the House Energy and Commerce Committee approved a bill that would require information brokers to submit plans for safeguarding private data to the Federal Trade Commission for monitoring and review.

The bill also would establish the first nationwide requirement for notification of consumers when certain breaches of data occur and would force brokers to submit to security audits if their data banks are compromised.

But Democrats on the panel said the bill was filled with loopholes and would leave consumers protected than they are now. They also accused the Republicans of shutting them out of bipartisan negotiations, and of making last-minute changes to agreed-upon provisions.

Under the bill, data brokers and other firms that store consumer data would have to notify consumers that their information [ TO BREACH ] only when it was determined that a "significant risk" of identity theft or other fraud might result.

That decision would be made by the company that was breached, which Democrats said was akin to having no requirement at all.

This year alone, tens of millions of consumers have been notified of breaches at information brokers such as ChoicePoint Inc. and LexisNexis, financial institutions, government agencies, universities, online retailers and other firms.

Many notices were sent out under a California law that covers any firm doing business in the state.

"No notices would have gone out under the standard put forth in this bill," which would preempt state laws, said Rep. Janice D. Schakowsky (D-Ill.). "We would not have known how badly corporations treat personal information, nor would consumers have been able to take action to protect themselves - even from financial identity theft - if this bill had been in place in February 2005."

Data brokers, direct marketers, financial institutions and several large technology companies supported the approach of the bill, as did FTC Chairman Deborah P. Majoras. They argue that thieves or hackers cannot always use data they might gain access to, and that bombarding consumers with notices every time a breach occurs would cause people to ignore them.

"That concern is disingenuous," Schakowsky said yesterday. "The right response to over-notification is not to restrict information and to keep consumers and Congress in the dark. If we want to stop over-notification, then corporations need to clean up their act so consumers' personal information is not compromised in the first place."

(Adapted from washingtonpost.com)

Parties Split on Data-Protection Bill

House Democrats and Republicans split sharply yesterday over how to best protect consumers' personal data, as legislation to curb the persistent scourge of identity theft and fraud began to move on a fast track on Capitol Hill.

In a 13 to 8 vote along party lines, a subcommittee of the House Energy and Commerce Committee approved a bill that would require information brokers to submit plans for safeguarding private data to the Federal Trade Commission for monitoring and review.

The bill also would establish the first nationwide requirement for notification of consumers when certain breaches of data occur and would force brokers to submit to security audits if their data banks are compromised.

But Democrats on the panel said the bill was filled with loopholes and would leave consumers protected than they are now. They also accused the Republicans of shutting them out of bipartisan negotiations, and of making last-minute changes to agreed-upon provisions.

Under the bill, data brokers and other firms that store consumer data would have to notify consumers that their information [ TO BREACH ] only when it was determined that a "significant risk" of identity theft or other fraud might result.

That decision would be made by the company that was breached, which Democrats said was akin to having no requirement at all.

This year alone, tens of millions of consumers have been notified of breaches at information brokers such as ChoicePoint Inc. and LexisNexis, financial institutions, government agencies, universities, online retailers and other firms.

Many notices were sent out under a California law that covers any firm doing business in the state.

"No notices would have gone out under the standard put forth in this bill," which would preempt state laws, said Rep. Janice D. Schakowsky (D-Ill.). "We would not have known how badly corporations treat personal information, nor would consumers have been able to take action to protect themselves - even from financial identity theft - if this bill had been in place in February 2005."

Data brokers, direct marketers, financial institutions and several large technology companies supported the approach of the bill, as did FTC Chairman Deborah P. Majoras. They argue that thieves or hackers cannot always use data they might gain access to, and that bombarding consumers with notices every time a breach occurs would cause people to ignore them.

"That concern is disingenuous," Schakowsky said yesterday. "The right response to over-notification is not to restrict information and to keep consumers and Congress in the dark. If we want to stop over-notification, then corporations need to clean up their act so consumers' personal information is not compromised in the first place."

(Adapted from washingtonpost.com)

The Greenspan Effect
To Fight Rising Prices, Fed Nominee May Need New Weapons

Early in his tenure as chairman of the Federal Reserve, Alan Greenspan declared that the risk of too much inflation was so considerable that he would "err more on the side of restrictiveness than of stimulus."

(51) . At his very first meeting, in August 1987, Mr. Greenspan established his inflation-fighting credentials by pushing up short-term interest rates in response to only a modest rise in consumer prices, a move that contributed to the stock market crash just two months (52) .

Ben S. Bernanke, who is expected to take over at the Fed in February, will almost certainly echo Mr. Greenspan's step, raising rates at his first meeting next year, in part to demonstrate his commitment, too, to 53 inflation under
control. But for all the similarities of their actions upon taking office, Mr. Bernanke faces a fundamentally different set of circumstances than those that Mr. Greenspan confronted 18 years ago.

"Inflation is clearly not right around the corner like it used to be," said Edward M. Gramlich, until recently a Fed governor and now interim provost at the University of Michigan. "The relationships are different, and Mr. Bernanke is going to have to figure them out."

Perhaps the biggest differences are the rise of global production, as well as much easier access to capital, particularly from abroad. Adding to the change is labor's weaker bargaining power. These factors have combined to greatly diminish the force of old-style inflation in which demand outran supply, pushing prices ever higher, and wages, too, until the Fed put the brakes on the economy.

Instead, a new style of inflation has emerged as one of the principal threats to the economy. It is evident in the stock market bubble of the late 1990's and in surging home prices in this decade. This asset price spiral, as it is called, has proved much more resistant to the Fed's standard interest rate tool than traditional inflation.

Mr. Bernanke, for his part, is known as an advocate of inflation targeting, a technique for adjusting interest rates with the aim of keeping traditional inflationary pressures within a limited range. He has also asserted, like Mr. Greenspan, that he does not intend to use interest rates prematurely to puncture an asset bubble. But he has signaled a readiness to use a different set of tools to fight the new inflation, 60 .

The Greenspan Effect
To Fight Rising Prices, Fed Nominee May Need New Weapons

Early in his tenure as chairman of the Federal Reserve, Alan Greenspandeclared that the risk of too much inflation was so considerable that he would "err more on the side of restrictiveness than of stimulus."

(51) . At his very first meeting, in August 1987, Mr. Greenspan established his inflation-fighting credentials by pushing up short-term interest rates in response to only a modest rise in consumer prices, a move that contributed to the stock market crash just two months (52) .

Ben S. Bernanke, who is expected to take over at the Fed in February, will almost certainly echo Mr. Greenspan's step, raising rates at his first meeting next year, in part to demonstrate his commitment, too, to 53 inflation under
control. But for all the similarities of their actions upon taking office, Mr. Bernanke faces a fundamentally different set of circumstances than those that Mr. Greenspan confronted 18 years ago.

"Inflation is clearly not right around the corner like it used to be," said Edward M. Gramlich, until recently a Fed governor and now interim provost at the University of Michigan. "The relationships are different, and Mr. Bernanke is going to have to figure them out."

Perhaps the biggest differences are the rise of global production, as well as much easier access to capital, particularly from abroad. Adding to the change is labor's weaker bargaining power. These factors have combined to greatly diminish the force of old-style inflation in which demand outran supply, pushing prices ever higher, and wages, too, until the Fed put the brakes on the economy.

Instead, a new style of inflation has emerged as one of the principal threats to the economy. It is evident in the stock market bubble of the late 1990's and in surging home prices in this decade. This asset price spiral, as it is called, has proved much more resistant to the Fed's standard interest rate tool than traditional inflation.

Mr. Bernanke, for his part, is known as an advocate of inflation targeting, a technique for adjusting interest rates with the aim of keeping traditional inflationary pressures within a limited range. He has also asserted, like Mr. Greenspan, that he does not intend to use interest rates prematurely to puncture an asset bubble. But he has signaled a readiness to use a different set of tools to fight the new inflation, 60 .

(Adapted from The New York Times)

The Greenspan Effect
To Fight Rising Prices, Fed Nominee May Need New Weapons

Early in his tenure as chairman of the Federal Reserve, Alan Greenspandeclared that the risk of too much inflation was so considerable that he would "err more on the side of restrictiveness than of stimulus."

(51) . At his very first meeting, in August 1987, Mr. Greenspan established his inflation-fighting credentials by pushing up short-term interest rates in response to only a modest rise in consumer prices, a move that contributed to the stock market crash just two months (52) .

Ben S. Bernanke, who is expected to take over at the Fed in February, will almost certainly echo Mr. Greenspan's step, raising rates at his first meeting next year, in part to demonstrate his commitment, too, to 53 inflation under
control. But for all the similarities of their actions upon taking office, Mr. Bernanke faces a fundamentally different set of circumstances than those that Mr. Greenspan confronted 18 years ago.

"Inflation is clearly not right around the corner like it used to be," said Edward M. Gramlich, until recently a Fed governor and now interim provost at the University of Michigan. "The relationships are different, and Mr. Bernanke is going to have to figure them out."

Perhaps the biggest differences are the rise of global production, as well as much easier access to capital, particularly from abroad. Adding to the change is labor's weaker bargaining power. These factors have combined to greatly diminish the force of old-style inflation in which demand outran supply, pushing prices ever higher, and wages, too, until the Fed put the brakes on the economy.

Instead, a new style of inflation has emerged as one of the principal threats to the economy. It is evident in the stock market bubble of the late 1990's and in surging home prices in this decade. This asset price spiral, as it is called, has proved much more resistant to the Fed's standard interest rate tool than traditional inflation.

Mr. Bernanke, for his part, is known as an advocate of inflation targeting, a technique for adjusting interest rates with the aim of keeping traditional inflationary pressures within a limited range. He has also asserted, like Mr. Greenspan, that he does not intend to use interest rates prematurely to puncture an asset bubble. But he has signaled a readiness to use a different set of tools to fight the new inflation, 60 .

(Adapted from The New York Times)

The Greenspan Effect
To Fight Rising Prices, Fed Nominee May Need New Weapons

Early in his tenure as chairman of the Federal Reserve, Alan Greenspandeclared that the risk of too much inflation was so considerable that he would "err more on the side of restrictiveness than of stimulus."

(51) . At his very first meeting, in August 1987, Mr. Greenspan established his inflation-fighting credentials by pushing up short-term interest rates in response to only a modest rise in consumer prices, a move that contributed to the stock market crash just two months (52) .

Ben S. Bernanke, who is expected to take over at the Fed in February, will almost certainly echo Mr. Greenspan's step, raising rates at his first meeting next year, in part to demonstrate his commitment, too, to 53 inflation under
control. But for all the similarities of their actions upon taking office, Mr. Bernanke faces a fundamentally different set of circumstances than those that Mr. Greenspan confronted 18 years ago.

"Inflation is clearly not right around the corner like it used to be," said Edward M. Gramlich, until recently a Fed governor and now interim provost at the University of Michigan. "The relationships are different, and Mr. Bernanke is going to have to figure them out."

Perhaps the biggest differences are the rise of global production, as well as much easier access to capital, particularly from abroad. Adding to the change is labor's weaker bargaining power. These factors have combined to greatly diminish the force of old-style inflation in which demand outran supply, pushing prices ever higher, and wages, too, until the Fed put the brakes on the economy.

Instead, a new style of inflation has emerged as one of the principal threats to the economy. It is evident in the stock market bubble of the late 1990's and in surging home prices in this decade. This asset price spiral, as it is called, has proved much more resistant to the Fed's standard interest rate tool than traditional inflation.

Mr. Bernanke, for his part, is known as an advocate of inflation targeting, a technique for adjusting interest rates with the aim of keeping traditional inflationary pressures within a limited range. He has also asserted, like Mr. Greenspan, that he does not intend to use interest rates prematurely to puncture an asset bubble. But he has signaled a readiness to use a different set of tools to fight the new inflation, 60 .

(Adapted from The New York Times)

The Greenspan Effect
To Fight Rising Prices, Fed Nominee May Need New Weapons

Early in his tenure as chairman of the Federal Reserve, Alan Greenspandeclared that the risk of too much inflation was so considerable that he would "err more on the side of restrictiveness than of stimulus."

(51) . At his very first meeting, in August 1987, Mr. Greenspan established his inflation-fighting credentials by pushing up short-term interest rates in response to only a modest rise in consumer prices, a move that contributed to the stock market crash just two months (52) .

Ben S. Bernanke, who is expected to take over at the Fed in February, will almost certainly echo Mr. Greenspan's step, raising rates at his first meeting next year, in part to demonstrate his commitment, too, to 53 inflation under
control. But for all the similarities of their actions upon taking office, Mr. Bernanke faces a fundamentally different set of circumstances than those that Mr. Greenspan confronted 18 years ago.

"Inflation is clearly not right around the corner like it used to be," said Edward M. Gramlich, until recently a Fed governor and now interim provost at the University of Michigan. "The relationships are different, and Mr. Bernanke is going to have to figure them out."

Perhaps the biggest differences are the rise of global production, as well as much easier access to capital, particularly from abroad. Adding to the change is labor's weaker bargaining power. These factors have combined to greatly diminish the force of old-style inflation in which demand outran supply, pushing prices ever higher, and wages, too, until the Fed put the brakes on the economy.

Instead, a new style of inflation has emerged as one of the principal threats to the economy. It is evident in the stock market bubble of the late 1990's and in surging home prices in this decade. This asset price spiral, as it is called, has proved much more resistant to the Fed's standard interest rate tool than traditional inflation.

Mr. Bernanke, for his part, is known as an advocate of inflation targeting, a technique for adjusting interest rates with the aim of keeping traditional inflationary pressures within a limited range. He has also asserted, like Mr. Greenspan, that he does not intend to use interest rates prematurely to puncture an asset bubble. But he has signaled a readiness to use a different set of tools to fight the new inflation, 60 .

(Adapted from The New York Times)

The Greenspan Effect
To Fight Rising Prices, Fed Nominee May Need New Weapons

Early in his tenure as chairman of the Federal Reserve, Alan Greenspandeclared that the risk of too much inflation was so considerable that he would "err more on the side of restrictiveness than of stimulus."

(51) . At his very first meeting, in August 1987, Mr. Greenspan established his inflation-fighting credentials by pushing up short-term interest rates in response to only a modest rise in consumer prices, a move that contributed to the stock market crash just two months (52) .

Ben S. Bernanke, who is expected to take over at the Fed in February, will almost certainly echo Mr. Greenspan's step, raising rates at his first meeting next year, in part to demonstrate his commitment, too, to 53 inflation under
control. But for all the similarities of their actions upon taking office, Mr. Bernanke faces a fundamentally different set of circumstances than those that Mr. Greenspan confronted 18 years ago.

"Inflation is clearly not right around the corner like it used to be," said Edward M. Gramlich, until recently a Fed governor and now interim provost at the University of Michigan. "The relationships are different, and Mr. Bernanke is going to have to figure them out."

Perhaps the biggest differences are the rise of global production, as well as much easier access to capital, particularly from abroad. Adding to the change is labor's weaker bargaining power. These factors have combined to greatly diminish the force of old-style inflation in which demand outran supply, pushing prices ever higher, and wages, too, until the Fed put the brakes on the economy.

Instead, a new style of inflation has emerged as one of the principal threats to the economy. It is evident in the stock market bubble of the late 1990's and in surging home prices in this decade. This asset price spiral, as it is called, has proved much more resistant to the Fed's standard interest rate tool than traditional inflation.

Mr. Bernanke, for his part, is known as an advocate of inflation targeting, a technique for adjusting interest rates with the aim of keeping traditional inflationary pressures within a limited range. He has also asserted, like Mr. Greenspan, that he does not intend to use interest rates prematurely to puncture an asset bubble. But he has signaled a readiness to use a different set of tools to fight the new inflation, 60 .

(Adapted from The New York Times)

The Greenspan Effect
To Fight Rising Prices, Fed Nominee May Need New Weapons

Early in his tenure as chairman of the Federal Reserve, Alan Greenspandeclared that the risk of too much inflation was so considerable that he would "err more on the side of restrictiveness than of stimulus."

(51) . At his very first meeting, in August 1987, Mr. Greenspan established his inflation-fighting credentials by pushing up short-term interest rates in response to only a modest rise in consumer prices, a move that contributed to the stock market crash just two months (52) .

Ben S. Bernanke, who is expected to take over at the Fed in February, will almost certainly echo Mr. Greenspan's step, raising rates at his first meeting next year, in part to demonstrate his commitment, too, to 53 inflation under
control. But for all the similarities of their actions upon taking office, Mr. Bernanke faces a fundamentally different set of circumstances than those that Mr. Greenspan confronted 18 years ago.

"Inflation is clearly not right around the corner like it used to be," said Edward M. Gramlich, until recently a Fed governor and now interim provost at the University of Michigan. "The relationships are different, and Mr. Bernanke is going to have to figure them out."

Perhaps the biggest differences are the rise of global production, as well as much easier access to capital, particularly from abroad. Adding to the change is labor's weaker bargaining power. These factors have combined to greatly diminish the force of old-style inflation in which demand outran supply, pushing prices ever higher, and wages, too, until the Fed put the brakes on the economy.

Instead, a new style of inflation has emerged as one of the principal threats to the economy. It is evident in the stock market bubble of the late 1990's and in surging home prices in this decade. This asset price spiral, as it is called, has proved much more resistant to the Fed's standard interest rate tool than traditional inflation.

Mr. Bernanke, for his part, is known as an advocate of inflation targeting, a technique for adjusting interest rates with the aim of keeping traditional inflationary pressures within a limited range. He has also asserted, like Mr. Greenspan, that he does not intend to use interest rates prematurely to puncture an asset bubble. But he has signaled a readiness to use a different set of tools to fight the new inflation, 60 .

(Adapted from The New York Times)

The Greenspan Effect
To Fight Rising Prices, Fed Nominee May Need New Weapons

Early in his tenure as chairman of the Federal Reserve, Alan Greenspandeclared that the risk of too much inflation was so considerable that he would "err more on the side of restrictiveness than of stimulus."

(51) . At his very first meeting, in August 1987, Mr. Greenspan established his inflation-fighting credentials by pushing up short-term interest rates in response to only a modest rise in consumer prices, a move that contributed to the stock market crash just two months (52) .

Ben S. Bernanke, who is expected to take over at the Fed in February, will almost certainly echo Mr. Greenspan's step, raising rates at his first meeting next year, in part to demonstrate his commitment, too, to 53 inflation under
control. But for all the similarities of their actions upon taking office, Mr. Bernanke faces a fundamentally different set of circumstances than those that Mr. Greenspan confronted 18 years ago.

"Inflation is clearly not right around the corner like it used to be," said Edward M. Gramlich, until recently a Fed governor and now interim provost at the University of Michigan. "The relationships are different, and Mr. Bernanke is going to have to figure them out."

Perhaps the biggest differences are the rise of global production, as well as much easier access to capital, particularly from abroad. Adding to the change is labor's weaker bargaining power. These factors have combined to greatly diminish the force of old-style inflation in which demand outran supply, pushing prices ever higher, and wages, too, until the Fed put the brakes on the economy.

Instead, a new style of inflation has emerged as one of the principal threats to the economy. It is evident in the stock market bubble of the late 1990's and in surging home prices in this decade. This asset price spiral, as it is called, has proved much more resistant to the Fed's standard interest rate tool than traditional inflation.

Mr. Bernanke, for his part, is known as an advocate of inflation targeting, a technique for adjusting interest rates with the aim of keeping traditional inflationary pressures within a limited range. He has also asserted, like Mr. Greenspan, that he does not intend to use interest rates prematurely to puncture an asset bubble. But he has signaled a readiness to use a different set of tools to fight the new inflation, 60 .

(Adapted from The New York Times)