Barney Frank, the Occasional Libertarian

Rep. Barney Frank, chairman of the House Committee on Financial Services, gave a resoundingly libertarian interview to NPR’s “All Things Considered” Friday evening. Frank has introduced a bill to repeal last year’s ban on online gambling. As he did in this 2003 Cato Policy Forum, he made his argument in libertarian terms. From the Nexis transcript:

ROBERT SIEGEL: First of all, what is your motive here? Is it libertarian? Is it to achieve more revenues for the government by taxing activity? What is it?

Rep. FRANK: It’s libertarian. I am appalled at the notion that the government tells adults that they cannot do certain things with their own money on their own time in ways that do not harm anybody else because other people disapproved of them. …

But my motive is overwhelmingly that I just don’t want to see the government telling people what to do….

SIEGEL: How much money would taxing Internet gambling bring in to the federal government?

Rep. FRANK: Well, in the bill I am - not a lot - I really want to make it very clear, that’s not my major focal point here. Potentially this could be a useful source of revenue just like any other business. But I do want to stress, my main motivation here is that I do think I should mind my own business and I want to deal with the environment, and I want to deal with economic problems, and I want to deal with poverty and all these other things. But I spend a lot of energy trying to protect people from other people. I have none left for protecting people from themselves.

In between those segments, Frank said that we allow lots of things over the Internet–like wine sales–that are appropriate for adults but not for children. And he said that conservatives want to ban things they think are immoral, and liberals want to ban things they think are “just tacky.”

It’s good to hear an elected official use the word libertarian, and use it correctly, and apply it to issues. Would that more of his colleagues would do so. I’m reminded that seven years ago I did a libertarian rating of Congress. Frank did better than most Democrats, and indeed better than most Republicans (including 7 of the 11 members of the Republican Liberty Caucus Advisory Board). But he voted to restrict steel imports, restrict gun sales and gun shows, and implement the restrictive “Know Your Customer” bank regulations, and he opposed a tax cut. So his commitment to not telling what people to do with their own lives and their own money seems limited.

This year, as Financial Services chairman, he’s demonstrating his interventionist tendencies as well as his sometime libertarian instincts. He wants to push all workers into government health care, to regulate corporate decisions about executive compensation, to put more obstacles in the way of free trade across national borders, to keep Wal-Mart from creating an internal bank clearinghouse to hold down its costs. Not to mention expanding anti-discrimination rules to include gay, lesbian, bisexual and transgender people.

Frank told another journalist:

“In a number of areas, I am a libertarian,” Frank said. “I think that John Stuart Mill’s ‘On Liberty’ is a great statement, and I was just rereading it.

“I believe that people should be allowed to read and gamble and ride motorcycles and do a lot of things that other people might not want to let them do.”

Would that the Republicans who once took Congress on the promise of “the end of government that is too big, too intrusive, and too easy with the public’s money” also reread (or read) “On Liberty” and take its message to heart. And would that Barney Frank come to realize that adults should also be free to spend the money they earn as they choose and to decide what contracts, with foreign businesses or local job applicants, they will enter into.

Mallaby, Penn & Teller on Immigration

Sebastian Mallaby’s Washington Post column today on immigration is simply outstanding. After providing evidence that hard-working people who have crossed the border without the state’s stamp of approval do not increase the rate of unemployment, cost the average taxpayer nothing, and at worst depress wages of native high school drop-outs by 9 percent, Mallaby makes the argument that many otherwise decent people seem unable to make: the well-being of immigrants counts, too:

[A]lthough the concern for high-school dropouts is welcome, it must be weighed against the aspirations of migrants. Is it right to push native workers’ pay up by 2 percent [a generous estimate of the gain from tighter restrictions on liberty of movement] if that means depriving poor Mexicans of a chance to triple their incomes?

Of course it isn’t, and given that the total economic effect of immigration on U.S. households is a wash, the big ramp-up in enforcement spending beloved by immigration hawks is an egregious waste of money. But no politician is going to say that.

Another excellent, and rather more entertaining, rejoinder to nativist hysteria is Penn and Teller’s new immigration episode of Bullsh*t, available here for your viewing pleasure.

How to Reform E-Voting

On Friday, I made the case for scrapping computerized voting. Today I’m going to look at the leading legislative proposal to accomplish that goal, Rush Holt’s Voter Confidence and Increased Accessibility Act. As I wrote in a recent article, the proposal would do several things:

It bans the use of computerized voting machines that lack a voter-verified paper trail. It mandates that the paper records be the authoritative source in any recounts, and requires prominent notices reminding voters to double-check the paper record before leaving the polling place. It mandates automatic audits of at least three percent of all votes cast to detect discrepancies between the paper and electronic records. It bans voting machines that contain wireless networking hardware and prohibits connecting voting machines to the Internet. Finally, it requires that the source code for e-voting machines be made publicly available.

All of these seem to me to be big steps in the right direction. Requiring source code disclosure gives security experts like Ed Felten and Avi Rubin the opportunity to study e-voting systems and alert the authorities if major security problems are discovered. Banning Internet connections and wireless networking hardware closes off two major avenues hackers could use to compromise the machines. Perhaps most importantly, by requiring that machines produce paper records, that those records be the official record, and that the records be randomly audited, the legislation would provide a relatively high degree of certainty that even if a voting machine were hacked, we would be able to detect it and recover by using the paper records.

All in all, this seems like a good idea to me. But the legislation is not without its critics. I’ll consider two major criticisms below the fold.

One set of objections comes from state election officials. Some officials argue that some of the legislation’s requirements would be an unreasonable burden on them. I’m a strong proponent of federalism, so those concerns are worth taking seriously. But the Holt proposal appears to do a reasonably good job of respecting states’ autonomy in designing their own election procedures. For example, if a state already has an auditing procedure that differs from the procedure mandated in the Holt bill, it is permitted to continue using its own procedures so long as the National Institute for Science and Technology certifies that the state’s procedures will be no less effective. Other tweaks may be appropriate to avoid stepping on the toes of state election officials, but on the whole, the Holt legislation seems to me to strike a good balance between local autonomy and the need to ensure that federal elections are secure and transparent.

The most vocal critics of the legislation come from activists who feel the legislation does not go far enough. They believe that nothing less than an outright ban on computerized voting is acceptable. And they have some good arguments. They point out that the add-on printers now on the market are slow and unreliable, that technical glitches can lead to long lines that drive away voters, and that many voters don’t bother looking at the paper record of their vote anyway, reducing their usefulness.

These are all good reasons to prefer old-fashioned paper ballots over e-voting machines with a printer bolted on. Fortunately, the Holt bill does not require any state to use computerized voting machines. That decision is left up to the states, and activists are free to lobby state legislatures to use only paper ballots.

The activists may be right that an outright ban on computerized voting would be a simpler and more elegant solution to the problem. It would certainly make the legislation a lot shorter, since most of the bill is designed to address the defects of computerized voting machines. However, there does not appear to be much appetite for an outright e-voting ban this Congress, and I don’t think we can afford to run another election on the current crop of buggy and insecure voting machines. The Holt bill may not be perfect, but it seems like a big step in the direction of more secure and transparent elections.

Irish Policy Makers Resist Tax Harmonization

Tax-news.com reports on the growing concern in Ireland about European Union plans to harmonize the definition of taxable income for corporations. Such a scheme, particularly if it is voluntary, is not automatically objectionable. But Irish lawmakers correctly fear that a common tax base is merely the first step on the path to harmonized (and higher) tax rates:

European Union Taxation Commissioner Laszlo Kovacs has reportedly told Irish business leaders that formal plans for a common EU corporate tax base will be unveiled by the European Commission next week. …despite Kovacs’s assurances that the system would be optional for businesses, many member states, including Ireland, are strongly opposed to the CCCTB plans, wary that it would be the first step towards the harmonisation of corporate tax rates across the EU, an idea favoured by France and Germany. If this was the case, Ireland would certainly have a lot to lose, as its 12.5% corporate tax rate has been cited as a major ingredient in Ireland’s economic revival in recent years, and investors certainly would not welcome European interference with Ireland’s corporate tax regime. Consequently, organisations such as IBEC, and Irish politicians, have been lobbying in opposition of CCCTB. …Irish MEP Eoin Ryan…told MEPs that he “cannot and will not accept” moves towards a common corporate tax base. “Tax competition is healthy for the economic development of the European Union. It provides a clear incentive to European Governments to manage their public finances carefully and to build a corporate tax regime that encourages enterprise,” he stated. “The bottom line here is that no one size fits all policy covering corporate taxation matters in Europe is going to succeed. It is neither sensible nor realistic to seek convergence of corporate tax rates across Europe. EU member states have different demographic and social priorities. EU member states need to use their corporate taxation policies in different ways so as to entice foreign direct investment into their countries and generate employment.”

This Is a Republic (2)

At an appearance in Iowa this month, the Washington Post reports, Sen. John McCain went out of his way to declare his support for President Bush:

“There’s only one commander in chief of the United States, and that’s George W. Bush,” he told the crowd.

No, senator. This is a constitutional republic, and we don’t have a commander in chief. According to Article II of the Constitution, “The President shall be Commander in Chief of the Army and Navy of the United States.”

That’s an important distinction, and it’s disturbing that any candidate for the presidency would miss it. If McCain wants to be commander in chief of the whole country, of you and me, and to direct us the way the president directs the officers and soldiers of the armed forces, he needs to propose an amendment to the Constitution–an amendment that would effectively make the rest of the Constitution irrelevant, since it was designed as a Constitution for a limited government of a free people.

Next McCain will want us to bow and curtsy.

European Commission Continues Attack on Swiss Tax System

A Swiss newspaper reports on the latest skirmish in the Brussels-led effort to hinder
Switzerland’s ability to maintain pro-growth tax policy. The European Commission argues that low tax rates are somehow akin to a subsidy, while also arguing that a free-trade agreement between Switzerland and the European Union somehow obliges
Switzerland to modify its tax laws. But the most revealing part of the story is that both the socialists and the so-called conservatives in the European Parliament are in favor of this attack on tax competition:

The European Union has once again taken Switzerland to task for its policy on corporate taxes, which it claims violates a free trade accord with Bern. …Earlier this week senior EU diplomats approved a mandate for talks between the Commission and Switzerland. Brussels argues that the practice of some cantons of partially exempting profits generated abroad from local company taxes is in breach of the 1972 agreement between Bern and Brussels. However, Switzerland which is not a member of the EU, has consistently said that corporate tax and the tax policies of the cantons were never parts of the free trade agreement. …The two main political groups in Strasbourg: the Conservatives and Social Democrats, supported the European Commission in its position against Bern.

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This Is a Republic

Queen Elizabeth II is coming to Washington and Jamestown, and the Washington Post offers advice in case you should happen to meet her.

You don’t have to curtsy or bow. That requirement went out a generation ago.

Um, actually, the United States is a republic. (“And to the republic for which it stands.”) That requirement went out in 1776.

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