Topic: Law and Civil Liberties

Does Harper Support Regulation of Gambling and Financial Services?

My post yesterday regarding Members of Congress who voted to exempt financial derivatives from state gambling laws created a firestorm of controversy. Well, two people asked me about it, anyway …

(A new WashingtonWatch.com post on the presidential candidates who didn’t help create our economic problems is available for your perusal, by the way.)

“Why would a libertarian think it’s bad to exempt anyone from regulation? Do you support gambling laws? Do you support financial services regulation?”

These are all fair questions, given my objection to preempting state gambling laws in this case. So let me expand on this observation from my earlier post:

Many gambling laws are nanny-statism, of course, but if they’re going to go away, they should be repealed by the legislatures that wrote them. This federal preemption gave special permission to certain parts of the financial services industry to run a huge gambling operation masquerading as a market in real assets.

I’m quite a bit less a fan of preemption than many of my colleagues. There are fair-minded people who believe that national markets call for national regulatory regimes to replace the states’. As commerce has become national, the Commerce Clause has become a grant of authority to regulate national markets, they appear to believe.

I’m not convinced. Given the nation’s experience under the Articles of Confederation, the Commerce Clause was included in the Constitution to prevent states from regulating parochially - that is, for the benefit of local interests over out-of-staters. The Constitution gave Congress authority to regulate commerce “among the states” - which, if words have meaning, is something narrower than just regulating all commerce.

So when state gambling laws interfere with an interest capturing the sympathy of a majority in Washington, D.C., that doesn’t necessarily empower Congress to withdraw state authority. Congress is supposed to prevent only state parochialism, not every bad idea coming out of a state legislature.

If we are to have a healthy political economy, debates about state gambling regulations should be taken to each state that enacted them. The merits of freedom and personal responsibility should be made clear there so they win majorities once again.

The alternative preferred by many is a shortcut: trumping states by moving power to the federal level. This is not a felicitous trend, and its end-point - a remote national government with plenary power - is not good for liberty.

Gambling regulation is nanny-statism, but I wouldn’t go and kick the legs out from under state anti-gambling regulation through federal preemption - especially not for one narrow part of the financial services industry. This is not a game, where any loss for regulation is a gain for liberty.

If responsibility for self-protection against gambling is going to be restored to people in a given state, the legislature of that state should repeal the anti-gambling laws, signaling people that they are once again responsible for themselves. What happened here was that Congress trumped state power and withdrew the protection of state anti-gambling regulation without signaling to anyone that there were risks to be encountered. What looked like asset-based financial services to all but a few was in fact gambling.

The Congress helped perpetrate a deception about what was going on with financial derivatives - and just because some regulation went under the tires, that isn’t a victory for liberty.

Random Searches = Poor Counterterrorism

terrorism [ter-uh-riz-uhm]
- noun
1. the use of violence and threats to intimidate or coerce, esp. for political purposes.
2. the state of fear and submission produced by terrorism or terrorization.
3. a terroristic method of governing or of resisting a government.

So, one would think that countering terrorism would involve resisting coercion by resisting fear and submission.

That’s not the case in Washington, D.C., where Metro officials plan to start random searches of travelers’ bags. Not because of any specific threat, but because “Americans everywhere are at some risk from terrorism.”

Let’s get something out of the way first: Random searches do not provide security against terrorist acts. If it comes to it, a bomber can inspire fear just as well by exploding a checkpoint as he can by bombing any other part of the Metro system. Other kinds of attacks can be snuck past random checks or even comprehensive checks. Random searches are security theater, designed to make it seem like something protective is being done when it’s not.

What random searches do is reward past acts of terrorism by demonstrating that they have successfully cowed our society, made it fearful, and subject to coercion. This will tend to encourage future acts of terrorism. Seven years later, the 9/11 attacks are still paying dividends.

Searching at random in the Metro system plays into the terrorism strategy. Metro officials mean well, there can be no doubt, but they’re patsies to terrorism.

A New Blog on Free Speech and the Media

This is the time of the season for being fed up with politics and not least, of course, with the presidential election. (Actually, I reached that point a while ago). Part of my frustration comes from the candidates who appear willing to say anything, no matter how unrealistic, to win the White House. But part of my frustration lies also with the media who don’t hold the candidates to any standards that might inform voters who care enough to read and listen. This is all the more so since we are experiencing a financial crisis that elicits nothing more from the candidates than a promise “to fix the economy,” whatever that might mean. Shouldn’t the media demand more on our behalf?

Writing for a new blog from The Media Institute, Patrick Maines helps makes sense of my frustration. He points out that the media are following their practice of covering the financial crisis (and the presidential election) like a horse race. Yes, the crisis is helping Obama, but is that the most important thing to know right now? Maines writes:

The stark fact is that the national news media have underreported and misreported virtually every important aspect of our national nightmare: how we got into it, how we can prevent it from happening again, and, most importantly, how we can escape its worst effects now – and how our national leaders can help us.

Maines’ criticism is apt and convincing. The Media Institute, the home of the blog, works on free speech issues and receives substantial support from media companies. Of course, free speech does not necessarily mean good or even useful speech. But the answer to such shortcomings is more speech as Maines proves in his post.

I am intrigued that Maines criticizes the media, a pretty independent stance when you think about it. This blog bears watching as we head into a new administration that seems likely to offer many challenges to freedom of speech.

Twitter Terror — Laughable? Or Is There a Lesson?

I was amused to read that a draft Army intelligence report identified micro-blogging service Twitter as a potential tool for terrorists. On the other hand, it’s regrettable that this terrorism mania persists to foster this kind of report and media attention. There’s no distinct terror threat from Twitter.

If you’re reading this, you’re familiar with blogs. On Twitter you can publish ever-so-brief thoughts, giving your readers (or “followers”) ambient awareness of what’s on your mind or what you’re doing. Here’s an example: the Cato Institute’s Twitter feed, which I encourage you to follow. WashingtonWatch.com has one too. And CNN. And former Cato intern Felix Ling.

Now, to use of Twitter by terrorists: Sure, it’s possible, just like it’s possible with any communications medium. Twitter is right up there with telephones, pen and paper, email, SMS, and smoke signals as a potential tool for terrorism. Each of these media have different properties which make them more or less susceptible to use for wrongdoing — and more or less protective of legitimate privacy for the law-abiding.

Like most common digital communications, Twitter is a pretty weak medium for planning bad things. Copies of every post are distributed far and wide — and all “Tweets” are housed pretty much permanently by a single organization.

If you want to get caught doing something wrong, use Twitter to plan it.

Securing against terrorism is hard because terrorists don’t wear uniforms or occupy territory. Their tools are our tools: sneakers, sandwiches, credit cards, cars, steak knives, box cutters, cameras, cell phones, driver’s licenses, Web sites, Napster, Friendster, Facebook, spinach. The list goes on and on and on.

(Yes, spinach — it grows terrorists’ muscles.)

The problem is determining what things in our society have a proximate relationship to terrorism that is greater than their relationship to all the good things we do with them. Box cutters were integral to the 9/11 attacks, but they are used by millions of people every day for wonderful purposes, so we haven’t pursued restrictions on, or monitoring of, box cutters (beyond airplanes, of course). Highly enriched uranium can be used to do a lot of damage. There is exceedingly little chance of it being used by terrorists, but it’s prudent to pursue controls on this material and monitor for peoply trying to acquire it.

Twitter and other digital media are used billions of times a day for all the good things law-abiding people do. There is also a small chance that they’ll be used for wrongdoing, and we have rules about what to do when that chance arises. Alas, Supreme Court cases under the Fourth Amendment are a little too permissive these days.

The chance of Twitter being used by terrorists (real ones, serious ones) is very small and not newsworthy. We’re all relatively inexperienced with the security dilemmas created by terrorism, and it’s appropriate to give a brief thought to how all the implements and infrastructure in society might be used to do damage. In summary, the production of a report on Twitter terror is just shy of silly. The media attention paid to the question: fully silly.

The Promise of Divided Government

Former Catoite Radley Balko argues that the Republican Party deserves to lose because it “has exiled its Goldwater-Reagan wing and given up all pretense of any allegiance to limited government.” He goes on to detail all the sordid ways in which the GOP has indeed betrayed its allegedly pro-free market, limited government beliefs and thus “forfeited its right to govern.”

I don’t disagree with any of Balko’s analysis, but I do take issue with his conclusion for one very simple (some would say banal) reason: The best way to limit the federal Leviathan is to have Congress and the presidency controlled by different parties. See, for example, the relevant parts of former Catoite Stephen Slivinski’s book, Buck Wild: How the Republicans Broke the Bank and Became the Party of Big Government.  Slivinski calculates that when one party controls the political branches, the growth of real per capita government spending is 3.4%. Under divided government, the rate is 1.5%. And it doesn’t much matter whether Democrats or Republicans are in sole charge: 3.3% government growth under Democrats vs. 3.6% under Republicans. The most libertarian combination seems to be a Democratic president with a Republican Congress, where the average rate of government growth is 0.4%.  (This is also the rarest alignment in modern times, so it may be less significant statistically.)

In short, yes the Bush administration, enabled by a corrupt (ideologically and otherwise) Republican Congress, has been the second coming of LBJ.  But rather than reward a party whose leaders in Congress have even lower approval ratings than President Bush with unified control of government, it might be better for limited government if the Dems gained in Congress (preferably without a filibuster-proof Senate because judges and international treaties are my pet issues) while losing the White House.  Which isn’t to say that this would necessarily be better than a President Obama with a Republican Congress, just that the chance of the GOP taking over even one house of Congress is only slightly greater than the chance that Bob Barr will be elected president.