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Straight Story: For your eyes only

TEXT OF INTERVIEW

KAI RYSSDAL: It is time once again for our economics editor, Chris Farrell, to help you sort out what is smart, what is stupid and what is the straight story. This week, Chris some private thoughts, I gather.

CHRIS FARRELL: Well, some thoughts on privacy or maybe I should really say, what privacy?

RYSSDAL: Ah-ha.

FARRELL: Look at it this way, Kai. I think even George Orwell would be shocked at today's personal data collection economy. And by the way, you ain't seen nothin' yet. Thanks to the Internet, high-speed computer networks, collecting and analyzing customer data is getting easier. I mean think about it. When you apply for a mortgage, all kinds of sensitive personal financial information leaks into the hands of other lenders, and that's just one of countless examples. So it's enough to make me wonder. Is privacy becoming a thing of the past in America? That's the trend, but it doesn't have to be. Here's the Straight Story: If business wants our data, they should buy it from us with cold, hard cash. And customers should have the right not to sell. That's called capitalism.

RYSSDAL: Certainly some noble sentiments, and I'd have to say I agree, but what's got you all hot and bothered this week?

FARRELL: Oh, pretexting. The scandal at Hewlett Packard with its board.

RYSSDAL: Yes.

FARRELL: Private investigators spying on board members, pretending to be something else and obtaining the phone records. It's called pretexting. I mean there's even a term for it, and people know this is going on all the time. Now, that crosses the line, right?

RYSSDAL: Yes.

FARRELL: But it just made me think about all the data. I mean every time go on the Internet, go to the grocery store . . . I mean our personal data is just stored digitally. And then this is a valuable asset. I mean corporate America defines our digital personal information as a business asset. They're selling it. They're making a lot of money off of it, and they are eroding our privacy day after day.

RYSSDAL: Let me give you a very benign comeback to that. When I go to the grocery store and I buy the giant pack of diapers and I swipe my frequent buyer card, the machine next to the cash register spits out this coupon because it knows that I buy these things. I mean isn't it a good thing? And won't companies say, 'We're just giving consumers what they want?'

FARRELL: I think that's just fine. You're getting a coupon back. You're an adult. You're making a decision: OK, I'm going to continue to buy these diapers, and then I get a discount. This is a lot of data coming from public records and all our buying habits and our products. And there's a real digital picture of what we are, and that's a valuable asset.

RYSSDAL: Uh-huh.

FARRELL: So I say you know what? Let's make this an adult decision. Pay me for that information. Here's an analogy: You like music. You download music, right?

RYSSDAL: I do, yes. Legally, legally of course.

FARRELL: Legally? Well, that's the key. If you download music, you pay for it. If you download a movie, you pay for it. If you don't, you're a pirate. Well, what is the difference between a company downloading all this personal information on us, and they're not paying us for it?

RYSSDAL: Alright, two thoughts: One, I would submit that the genie is already out of the bottle and we're not going to be able to get it back. But two, how would it work?

FARRELL: You know what? I love entrepreneurial America. I think the entrepreneur is perfectly capable in this high-tech world at coming up with solutions. Now, if you're going to get these complaints from the established companies, and they are going to say, 'Well, that's going to raise the cost of doping business by X.' And then you raise the cost of doing business by X, and that means your mortgages are going to cost this much more, and those cost of this car loan, and blah, blah, blah, and however many hundred billion of dollars it's going to cost extra to this economy is terrible for the consumer, and I say: Nonsense. All you're going to do is create an opportunity for entrepreneurs to come in with a new business model. And they're going to say, 'Hey, I can make money off of this, and I can pay you.' And then some of the established companies are going to adjust. And then there are the dinosaurs who are going to insist on their old business model. And guess what? They're going to be on the destruction side of creative destruction.

RYSSDAL: We are very sad to say in a different world after September 11. What do you think the odds are of the FBI or the CIA paying you for your information?

FARRELL: Zero, and I don't know that they should pay you for your information. Now, what I'm talking about is to have the government accountable. Freedom and Information Act needs to be streamlined and made much easier. There's a lot of things that we can do to make our government elites accountable without exposing the inner-workings of a surveillance technique that obviously we're using for national security reasons.

RYSSDAL: Alright, the private thoughts of our man, Chris Farrell. Thank you, Chris.

FARRELL: Thank you.

About the author

Chris Farrell is the economics editor of Marketplace Money.

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