The government managed broadcast speech for some time, in part through the Fairness Doctrine, which was said to promote balanced public debate and "an uninhibited marketplace of ideas." The history of the Fairness Doctrine confirms the validity of the concerns of the Framers of the First Amendment, because federal officials and their agents used and sought to use the Fairness Doctrine to silence critics of three presidencies. Broadcasters adapted to the Fairness Doctrine by avoiding controversial speech, thereby chilling public debate on vital matters.

The Federal Communications Commission is proposing to manage broadcast speech by imposing localism requirements, including content requirements and advisory boards to oversee managing stations. This proposal limits the editorial independence of license holders to serve the public interest. The history of the Fairness Doctrine suggests that federal officials who make and enforce such policies are more concerned with limiting political debate than they are with advancing local concerns or the public interest. Like the Fairness Doctrine, the FCC's localism initiative poses the risk of restricting speech. Our unhappy experience with the Fairness Doctrine suggests that imposing localism mandates on broadcasters is unlikely to serve the public interest in constitutional propriety and uninhibited political debate.

We employ an wide variety of techniques and social conventions to control who we communicate with in the offline world. We might share details about our love life with friends at a bar that we wouldn't share over Thanksgiving dinner. Conversely, we might tell our families about medical or financial decisions we wouldn't discuss at a bar. And we lower our voices when we want to make sure the people at the next table don't overhear us.

The early Internet was very different. Users faced a stark choice between posting information on a public Web site or sending it in a private email, with little in between. The new generation of social media tools is helping to bridge the gap. Twitter lets me make my tweets public or limit access to people I've specifically approved. Facebook allows me to decide whether my profile will be visible to others with a princeton.edu email address, whether friends-of-friends will be able to see my photos, and even whether my profile will show up at all when someone searches for my name.

Of course, there's still a lot of room for improvement. Many users find these tools inconvenient or hard to use, and some are careless about posting information that could become embarrassing in the future. But we shouldn't be too impatient; the offline world has a centuries-long head start in developing privacy-preserving tools and social conventions.

The steering committee of what could be a model for other sections of the world - where spacious, continuous dialogue can be far more durably effective than violence - is composed of Jewish and Arab educators, journalists and community activists. Rabbi Rosenstein tells me "they have been meeting since the beginning of 2007 to build a network of volunteer correspondents, and seek funding." And at local colleges in the area, departments of education are involving students in the project.

"Nothing like this exists," Rabbi Rosenstein explains his motivation. "We believe it can be a catalyst for bringing together people from throughout this region with a distinct geographical identity - but each community and sector has been living in its own bubble. Our aim in the Dugrinet is to meaningfully address this disconnectedness and mutual ignorance."

Before moving his family to a small community, Shorashim, in Galilee, in 1990, Marc Rosenstein grew up in Highland Park, Ill., majored in biochemistry at Harvard, was ordained a Reform rabbi at Hebrew Union College and earned a Ph.D. in Jewish history at Jerusalem's Hebrew University.

For nearly 20 years in Galilee, through his Galilee Foundation for Value Education and its interactive, intercultural projects, such as a leadership development program for Arab youth, the rabbi has been working to build "a shared cultural and civic identity." Beginning in 2003, there was the Galilee Circus, with 10 Arab and 10 Jewish participants performing in Arab villages and Jewish venues.

In the circus, Rabbi Rosenstein found, "We don't talk about Jews and Arabs. If I fall and you catch me, that's enough. They have to trust each other completely as they overcome fear. As is clear to anyone watching our circus, it creates a common denominator of identity, loyalty, pride and commitment that transcends the definitions of 'Jewish and Arab.' "

Performers from my daughter Jessica's Circus Harmony in St. Louis joined the Galilee Circus for a tour in Israel. Jessica then brought the Galilee Circus to hers in St. Louis, further - as Rabbi Rosenstein puts it - "erasing the hyphen" between the Jewish and Arab labels.

For the rabbi and my daughter, "it's important," Rabbi Rosenstein emphasizes, "that the circus not only provide a powerful experience for the performers, but that it also provide a model and example for the community at large."

In that challenging and fulfilling vein, last August, while the Internet newspaper, Dugrinet, was being organized, the rabbi reported on such of his other projects in the works as: "a film series highlighting various dilemmas in Israeli society; a series of programs on Sephardic liturgical music; a lecture series on Islam by local Imams; and continuing consulting and programming in pluralistic Jewish identity to public schools in the region."

And, also bringing together these communities, Rabbi Rosenstein's wife, Tami - originally from Waukegan, Ill., is a speech clinician specializing in early intervention with handicapped Arab and Jewish infants.

I would think, having had some involvement in network TV production, that there is an abundance of visual evidence for series by PBS, the BBC, and both private and public TV operations abroad, including Al Jazeera, on the continually evolving adventures by the rabbi's Galilee Foundation for Value Education in what has become a life's work in interactive, mutual learning.

"There is a price," he says, "for the status quo of segregation, mutual ignorance and fear, economic gaps, a lack of social solidarity, a lack of shared civic loyalty."

Accordingly, in Israel, he adds, "the perpetuation of the fragmentation of Israeli society does not contribute to the strength of the Jewish state, but rather seriously weakens it."

Now, with the Internet newspaper, Dugrinet, Rabbi Rosenstein is beginning to show, as my daughter, "the Circus Lady" in St. Louis, says of her multicultural troupe:

"We can help defy gravity and fear, soar with confidence, and leap over social barriers."

Elsewhere, it'll take a lot of time, but to see it happening in Galilee, go to eng.makom-bagalil.org.il, and click on the "dugrinet" button. Contributions are welcome.

The rabbi adds: "Before we can resolve the historical and ideological conflicts that divide us, we have to have an awareness of the humanity of the other."

In recent years, self-styled "network neutrality" activists have pushed for legislation to prevent network owners from undermining the end-to end principle. Although the concern is understandable, such legislation would be premature. Physical ownership of internet infrastructure does not translate into a practical ability to control its use. Regulations are unnecessary because even in the absence of robust broadband competition, network owners are likely to find deviations from the end-to-end principle unprofitable.

New regulations inevitably come with unintended consequences. Indeed, today's network neutrality debate is strikingly similar to the debate that produced the first modern regulatory agency, the Interstate Commerce Commission. Unfortunately, rather than protecting consumers from the railroads, the ICC protected the railroads from competition by erecting new barriers to entry in the surface transportation marketplace. Other 20th-century regulatory agencies also limited competition in the industries they regulated. Like these older regulatory regimes, network neutrality regulations are likely not to achieve their intended aims. Given the need for more competition in the broadband marketplace, policymakers should be especially wary of enacting regulations that could become a barrier to entry for new broadband firms.

But the last year has brought better news. In a Vermont case, the Court affirmed that spending limits violated the Constitution and that low contribution limits could also impinge on First Amendment freedoms. Now the Roberts Court has given us its decision in Federal Election Commission v. Wisconsin Right to Life. Sometimes nice gifts come with strange names.

McCain-Feingold made it a federal crime for any corporation to broadcast, 30 to 60 days before an election, any communication that mentions a federal candidate for elected office and is aimed at relevant voters. Wisconsin Right to Life (WRTL) is an ideological corporation that accepted funding from other corporations. Its members wanted to run ads in 2004 urging citizens of their state to contact its two senators and urge them to oppose a filibuster of judicial nominees. Sen. Russ Feingold, one of the senators and a co-author of the law in question, was running for reelection. Wisconsin Right to Life's advertising plans thus constituted a federal crime. At least, they were a crime if the relevant part of McCain-Feingold was constitutional as applied to WRTL.

In fact, McCain-Feingold was constitutionally invalid in this case and probably many others. To understand why requires a quick summary of campaign-finance law.

Congress long ago prohibited contributions to candidates from the general treasuries of corporations and labor unions. But corporations could fund ads commenting on the issues of the day. However, if those ads directly advocated the election or defeat of a candidate, they became an attempt to circumvent the ban on corporate contributions and thus a federal crime. In Buckley v. Valeo, the Court said such "express advocacy" contained words like "elect" and "defeat." If an ad did not use the words, it was not express advocacy and hence, not subject to campaign-finance regulation.

In the 1990s some businesses and labor unions started funding advertising that met the legal standards for issue advocacy. The ads were legal and often highly critical of vulnerable members of Congress in the run up to an election. McCain-Feingold made such speech illegal. It said corporations could not fund ads that mentioned a candidate for federal office with 30 to 60 days of an election. The McConnell Court went along arguing that the ads in question were the "functional equivalent of express advocacy."

In the WRTL decision, Justice Roberts has contracted rather than expanded the scope of government regulation. He has done so by redefining the meaning of express advocacy: "a court should find that an ad is the functional equivalent of express advocacy only if the ad is susceptible of no reasonable interpretation other than as an appeal to vote for or against a specific candidate." The WRTL ad seemed to a reasonable person to be attempt at grassroots organizing. Hence, WRTL wins.

But this standard implicates more than this case. Many of the ads in the 1990s that were the target of McCain-Feingold might have been free of regulation under this standard. Reasonable people could have believed that the ads were attempts to persuade voters to contact their representatives. The political space free of government regulation seems to have expanded. Indeed, it seems possible that many fewer ads will be judged the "functional equivalent of express advocacy" in the future.

So, the good guys won one at last. "Enough is enough," as Justice Roberts writes in considering efforts to further expand regulatory control of politics.

But still there is reason to worry. The majority did not declare the relevant part of McCain-Feingold unconstitutional. Justice Alito did suggest a willingness to hear constitutional challenges to the McConnell decision (and hence, to McCain-Feingold). Justice Roberts also set out some criteria for the "express advocacy" that are fairly broad. An ad that mentions "an election, candidacy, political party, or challenger; or [that takes] a position on a candidate's character, qualifications, or fitness for office" could become express advocacy depending on future judgments by the Court and perhaps, by the Federal Election Commission. An important battle has been won. The war continues.

The WRTL decision adds to Sen. McCain's misery. His presidential campaign has been floundering for some time. The value of a McCain share at the Iowa Electronic Market has dropped by more than fifty percent in the last month. He now trails the other three major candidates by a long way; Fred Thompson's share is worth three times McCain's. Investors are telling us that there is about a 5 percent chance McCain will win the presidency next year. Now his vaunted law may not matter very much in reality even if it remains more or less constitutional. Moreover, the corporations and labor unions harmed by McCain-Feingold may now be able to run ads during the 2008 primaries. If McCain's campaign survives into the primaries, he may find that turnabout is indeed fair play.

How like roaring mice are we treating the bumbling JFK plotters? According to officials, their plan of attack was "not technically feasible." They had no explosives and they had not figured out how to get some. They would have been more dangerous walking the streets of Brooklyn in armor, with swords and shields.

But why should that stop us from being scared? They had performed physical surveillance, made video recordings of buildings and facilities, and located satellite photographs of JFK on the Internet! The latter, according to the criminal complaint filed against these men, was done using Google Earth, a delightful information product that provides satellite imagery of the country free to anyone with an Internet connection and a computer.

But in the hands of nincompoop terrorists, Google Earth is transmogrified. "Google as Terror Tool?" asked smokinggun.com, which published the complaint. "Google Earth — cool or dangerous?" intoned a blogger riffing on the story. And so the Google Earth–terror angle spins and swirls out across the 24–hour panic–alert system known as cable news: Grand Fenwick has the Q–bomb!

There are serious questions here, of course, but most people ask the wrong ones, such as "How do we prevent terrorists from using new technology against us?"

New technology is not a particularly important focus given the persistence of old technologies like explosives and razor blades in terrorism today. Terrorists will use whatever technology is available in whatever way they can. It's all quite beside the point.

Antiterrorist efforts must focus on what is feasible, on what works to stop or minimize terror attacks, and mitigate damage. They should not focus on all things conceivable to do. Indeed, that is not "focus" at all.

It is part of the terrorism strategy to attack from within, using homegrown terrorists or attackers insinuated into a society. One response is to make suspects of everyone. We have seen plenty of that in the push for a national I.D. and in increased surveillance of law–abiding Americans' communications and financial transactions. The privacy of law–abiding citizens is a casualty of this approach, of course. To limit terrorists' access to information technology, likewise, we would have to limit everyone's access to information technology. It would be a self–injurious misstep.

Better to concede the point: Terrorists can get the same access to payment systems, health care, shoe stores, knives, computers, photography equipment, and vitamin supplements as everyone else. Google Earth, too.

That doesn't give them anything they don't already have, but it does allow us to focus. In the JFK case, focus appears to have paid off. A plot was infiltrated and broken up, using time–tested policing and security methods, long before it was anywhere near fruition.

The JFK plot is another victory against people who would use the terrorism strategy against us. It helps to show that terrorists are not all–seeing, crafty, super geniuses. They're closer to dumb. They tend not even to be tall.

Mayor Bloomberg is our best defender against these attackers from Grand Fenwick. "You have a much greater danger of being hit by lightning than being struck by a terrorist," he said when finally drawn into discussing the JFK boys' piddling threat.

His sound effort to manage the psyche of his city brought a hail of derision from people invested in playing up the threat of terror, of course, and conflicted with many conservative pundits and his predecessor Rudy Giuliani. These "terror warriors" would unravel our society's traditions with mass surveillance of law–abiding citizens. They would engage in the Sisyphian struggle to keep technology away from terrorists at the expense of freedom–loving Americans. They need to, quoting Bloomberg, "get a life."

Terrorism is a strategy that weak attackers use to drive a stronger opponent into self–injurious missteps. Mayor Bloomberg refused to be the patsy to terrorism. He was right to ignore the mouse's roar.

A more sensitive issue is that he openly criticized the practices of the founders of Islam and argued that they were not models for modern life. His remarks inflamed radical political Islamists. They even offended some who have defended him, although that has not dampened their resolve. His two staunchest defenders are Dalia Ziada and Esraa Al Shafei, two young Muslim women who have worked tirelessly in behalf of his freedom. Both are outspoken in defense both of their religion and of Kareem's right to be critical of it.

Kareem's problems with the authorities started in March of last year, when he wrote about riots against the Coptic minority in his home city of Alexandria. On his blog he wrote:

I have seen with my own eyes the thugs as they break into our Christian brothers' stores after the whole area of Maharram Beh was completely out of control of the government authorities, and I saw them as they ransack the contents of the store right and left, amidst cheering and shouting extremist Islamic slogans, and I saw them stealing the money from inside the drawers of the cash registers and splitting it among themselves as if it is justified by being owned by what they call the infidels and the worshippers of the cross.

He went on to blame the riots on the spread of Islamic extremism and went so far as to be directly critical of Islam itself. He called Al Azhar a "university of terrorism" and said that "Islam's dirty finger will be found behind every catastrophic event to humanity." Kareem did not blog anonymously, as many do to protect themselves. His blog contained his full profile, including his name and his photo. In the English "About Me" section he described himself as follows:

I am down to earth Law student; I look forward to help humanity against all form of discriminations. I am currently studying Law in Al Azhar University. I am looking forward to open up my own human rights activists Law firm, which will include other lawyers who share the same views. Our main goal is to defend the rights of Muslim and Arabic women against all form of discrimination and to stop violent crimes committed on a daily basis in these countries.

Prior to his expulsion and detention, Kareem was not widely known outside of a small circle (although the Coptic community did publicize his writings). His case is now known all over the world. That is mainly due to the efforts of a group of young bloggers who met Kareem at a conference co-sponsored by the Cato Institute and the Hands Across the Middle East Support Alliance (HAMSA).

After the conference, Abdelkareem kept in touch with me by means of Gmail chat. I would frequently log on in the morning to find a little window open up with the greeting, "Good morning, Dr. Tom! How are you?" Several times I admonished him to be careful, that it may be better to live to fight another day, and so on. His response was always a variation of the same theme: "No one can make me stop writing what I believe to be true." He did once promise that he would think about my advice.

In October I was in Tbilisi for a Cato Institute conference and got my usual instant message of "Hello, Dr. Tom." I asked how he was, and he told me that was worried, because he had been told to go the next day to the prosecutor's office. I asked him if he had informed anyone else. "No. Just you." I said that wouldn't do and he had to send e-mails right now to all of the people from our conference, to other friends, and to anyone who should know. I immediately shot off text messages and e-mails. Several people immediately stepped up to defend Abdelkareem. Dalia arranged for him to have a lawyer go with him to the prosecutor's office. He went with the lawyer, but the lawyer left the prosecutor's office alone. Abdelkareem was detained, "pending investigation of his case," a phrase that was repeated over and over. He was never let free.

As news of his detention came out, other people from the conference stepped up. Esraa, who is behind www.Mideastyouth.com, set up a website dedicated to Abdelkareem's case: www.FreeKareem.org. She and a few friends began to gather information about the case and post it on the site. I blogged about the case and informed Andrew Sullivan, Johann Norberg, and others, who also posted on the case. HAMSA and PetitionOnline.com set up online petitions (now at over 8,000 signatures), and Jesse Sage of HAMSA and Dalia published an article in the International Herald Tribune. Esraa and some others in Bahrain organized a public protest in Abdelkareem's behalf. A former Cato Institute intern, Constantino Diaz-Duran, wrote about it in the Columbia Spectator, and with another former Cato-ite, Chris Kilmer, he organized a rally in New York, as did Cato interns and other young libertarians in Washington. Another former Cato intern (Andrew Perraut) organized an event in London, and then libertarians in other cities followed suit (Paris, organized by Vincent Ginocchio of Liberte Cherie; Rome, organized by Alberto Mingardi of the Instituto Bruno Leoni; and Stockholm, organized by Jonas Virdalm and attended by Johan Norberg, who also spoke at the conference where we met Abdelkareem; and elsewhere). Jesse Sage arranged a letter from members of the U.S. Congress; Alberto arranged letters from members of the Italian parliament; and others mobilized diplomatic pressure from their governments. With Raja Kamal of the University of Chicago, I published op-eds on the case in the Washington Post and the Lebanon Daily Star. (The Post article has been distributed in Arabic through Cato's Arabic Lamp of Liberty.) While the better known organizations such as Human Rights Watch and Amnesty International issued much-appreciated statements, the agitation and publicity was mainly organized by a loose network of classical liberal/libertarian activists and writers.

Most important have been the Muslim Arabs who have stepped forward to defend Kareem, embracing his cause of freedom even as they reject his strong criticism of their religion. Dalia and Esraa and the people they have mobilized (including Mohammed and Lalith, the web administrators for the FreeKareem.org site) are pious and observant Muslims who are bravely standing up against extremists. They are standing up proudly for freedom of speech, and not because they agree with all of what Abdelkareem said, for they strongly disagree with much of it. As they wrote on the FreeKareem site,

The creators and main supporters of the Free Kareem campaign are Muslim, and we are doing this despite what Kareem said about our religion. Free speech doesn't mean "speech that you approve of." It includes criticism.

Kareem's last post before his arrest announced that he had been ordered "to appear for an investigation next Monday at the Moharram Bek Prosecutor's Office." That last post was an impassioned plea for liberty, comparable to the writings of Richard Overton and John Lilburn, the great libertarian agitators of the 17th century to whom the British and American people owe their liberties. When ordered to accompany those sent to arrest him to prison, Overton informed them, "My legs were born as free as the rest of my body, and therefore I scorn that legs or arms or hands of mine should do any villain service, for as I am a free man by birth, so I am resolved to live and die, both in heart, word, and deed, in substance and in show." He never recanted, never gave in, never submitted. Like Overton, Kareem boldly declared,

in all frankness and clarity, my rejection and repudiation of any law, any legislation, and any regime that does not respect the individual's rights and personal freedom, and does not acknowledge the absolute freedom of the individual in doing anything – as long as he does not affect anyone around him in a physical way –, and does not acknowledge the individuals' absolute freedom in expressing their opinions, whatever they may be and whatever they cover, as long as this opinion is merely an opinion or words coming from a person, and is not coupled with any physical action that harms others. At the same time, I declare, in all clarity, that such laws do not obligate me in any way, and I do not acknowledge them or their existence. I detest, from the depths of my soul, whoever works on implementing them, whoever uses them as a guide, and whoever is satisfied with their existence or benefits from them. And if these laws are forced upon us, and we have no power or strength in changing them because that is in the hands of those in power with agendas, who are more than satisfied for the existence of such laws and are making use of it: Nevertheless, all of this will not push me into submission, or into waiting for relief and appeasement.

Abdelkareem Nabil Soliman, in his last published writing, promised: "I shall not recant, not even by an inch, from any word I have written. These restrictions will not preclude my dream of obtaining my freedom, for that has been my wish ever since I was a child, and it will continue to run in my imagination in endlessness."]]> Thu, 29 Mar 2007 00:00:00 EDT http://www.cato.org/pub_display.php?pub_id=8163 http://www.cato.org/pub_display.php?pub_id=8013 A former college student, Abdelkareem Nabil Soliman, is sitting in an Egyptian prison, awaiting sentencing tomorrow. His alleged "crime": expressing his opinions on a blog. His mistake: having the courage to do so under his own name.

Soliman, 22, was expelled from Al-Azhar University last spring for sharply criticizing the university's rigid curriculum and faulting religious extremism on his blog. He was ordered to appear before a public prosecutor on Nov. 7 on charges of "spreading information disruptive of public order," "incitement to hate Muslims" and "insulting the President." Soliman was detained pending an investigation, and the detention has been renewed four times. He has not had consistent access to lawyers or to his family.

Egyptian authorities have made a mistake in prosecuting Soliman. It is Egypt that will be hurt if he is convicted and sent to prison. That's why sincere friends of Egypt call on the government to drop the charges against him. It is the right thing to do, and it is the best thing for Egypt's standing in the modern world.

The case has gained attention in newspapers the world over and from human rights organizations such as Amnesty International. Informal networks of bloggers have spread the word, notably through http://www.freekareem.org. Last Thursday, bloggers and human rights activists around the globe gathered to call on Egyptian authorities to respect freedom of speech. We echo this call.

Soliman has criticized Egyptian authorities as failing to protect the rights of religious minorities and women. He has expressed his views about religious extremism in very strong terms. He is the first Egyptian blogger to be prosecuted for the content of his remarks. Remarkably, the legal complaint originated with the university that had expelled him; once, it was a great center of learning in the Arab world, but it has been reduced to informing on students for their dissent from orthodoxy.

One of us, Tom Palmer, met Soliman at a conference for bloggers in the Middle East last year. In person, Soliman seemed quiet and shy but very committed to championing women's rights and the rights of minorities.

We kept in touch by G-mail chat. Despite occasional admonitions to be careful about what he posted online and to think about possible consequences of public dissent, Soliman said that he was not afraid to express his views.

Last October, Soliman instant-messaged that he had been ordered to attend an interview with prosecutors the next day. Friends at organizations such as Hands Across the Middle East Support Alliance and the Arabic Network for Human Rights Information quickly found Soliman a lawyer. Word spread when he had been detained, and protests were organized at Egyptian embassies. Soliman had no organized movement or group behind him, but his case came to be known around the world.

We find it shocking that a university would turn a student over to the authorities to be prosecuted for voicing his views. The future of learning and science is at risk when dissenting views are punished rather than debated. Jointly, we have contacted Egyptian authorities to ask that they correct a clear mistake and release Soliman.

Egypt is a signatory to the International Covenant on Civil and Political Rights, which guarantees the "freedom to seek, receive and impart information and ideas of all kinds, regardless of frontiers, either orally, in writing or in print, in the form of art, or through any other media." The exceptions allowed are narrowly drawn and require proof of "necessity" before restrictions can be imposed. The posting of opinions on a student's personal blog hardly qualifies as a threat to national security, to the reputation of the president or to public order.

Soliman is not a threat to Egypt, but this prosecution is.

Whether or not we agree with the opinions that Abdelkareem Nabil Soliman expressed is not the issue. What matters is a principle: People should be free to express their opinions without fear of being imprisoned or killed. Blogging should not be a crime.

The adoption of new technology in the Arab world is in full gear. With the absence of free press and media outlets, citizens are now turning to external media outlets such as CNN, BBC, and Al-Jazeera to obtain less filtered news, and to the Internet as a venue to express and share their thoughts. In his Weblog, Abdelkareem voiced a rather sharp criticism of Al-Azhar University, its archaic and rigid curriculum that entices and fosters religious extremism, and the Egyptian government. He was subsequently expelled from the institution.

This was, however, only the beginning of his problems. In November last year, he was ordered to appear before a public prosecutor on charges of "spreading information disruptive of public order," "incitement to hate Muslims," and "insulting the president." Since then, he has been detained "pending investigation" of the case and the detention has been renewed four times. He has not had consistent access to legal counsel or to family members.

Although we feel the opinions he expressed were strongly worded and he could have chosen less aggressive and contentious words, Abdelkareem raises legitimate issues and concerns of paramount importance to the Egyptian society. For example, the rigid academic curricula at Egyptian (and other Arab) colleges are in need of overhauling at the very least. Universities, such as Al-Azhar, lack a commitment to critical thinking and have failed to help their students integrate in the modern globalizing world.

Egypt is a signatory to the International Covenant on Civil and Political Rights, which guarantees the "freedom to seek, receive and impart information and ideas of all kinds, regardless of frontiers, either orally, in writing or in print, in the form of art, or through any other media." The exceptions allowed are narrowly drawn and require a showing of "necessity" before restrictions can be imposed; the posting of opinions on a student's personal blog hardly qualifies as a threat to national security, to the reputation of the president, or to public order. Abdelkareem is not a threat to Egypt, but this prosecution is.

Dissenting views ought not to be punished, but rather debated. We feel that the Egyptian authorities should clear this tragic mistake and release Abdelkareem immediately. Outraged by how this case has unfolded, the international community has used the Internet, Abdelkareem's favorite means of communication, to galvanize orchestrated support through a Web site (www.freekareem.org). On February 15, bloggers and human rights activists gathered around the world to call on the Egyptian authorities to respect freedom of speech. We echo and encourage this call.

We strongly feel that sending Abdelkareem to jail will not solve Egypt's problems but rather will help create a larger wedge of mistrust between the government and its people. This will force bloggers to go underground, publishing their blogs under assumed names.

Policies of restricting free expression are doomed to fail. What the government of Egypt must do is to accept and embrace new technology like the Internet and use it as a source of constructive dialogue that will advance discussion on topics of importance to the Egyptian people. Issues like transparency, educational reform, personal liberties, and the role of women must be debated, advanced, and resolved. Egypt will greatly benefit from having thousands of bloggers debating and exchanging ideas in cyberspace.

The government of Egypt must reach out to people like Abdelkareem because they are a much-needed source of reform on all levels. Citizens should be free to express their personal opinions without fear of being imprisoned or killed. The mind and the parachute have one thing in common. They only work when they are open.

You might be surprised to learn that lobbying like this is illegal at all. The First Amendment prevents Congress from abridging freedom of speech or the right "to petition the government for redress of grievances." So urging fellow citizens to contact their senators about issues on which you feel strongly seems like a fundamental right. But there are caveats.

In 2004, Wisconsin Right to Life, a pro-life organization, produced several television ads appealing to Wisconsin residents to ask their senators not to filibuster President Bush's judicial nominees. One of those senators, Russell Feingold, was running for re-election in 2004, which meant—under the McCain-Feingold law, co-sponsored by Feingold himself—that airing the ads would have been illegal.

The same year, the ACLU sponsored radio ads opposing parts of a homeland security bill that affected immigrants. If those ads had been run in Wisconsin and had mentioned Feingold, they too would have been illegal.

How could this be? In 2002, McCain-Feingold stipulated that broadcast ads that mentioned a candidate for federal office less than two months before a general election were subject to federal campaign finance law.

Though they retained some First Amendment rights, labor unions and corporations have been prohibited for some time from contributing directly to candidates for federal office. Until 2002, they like everyone else had a right to sponsor ads concerning public issues and run them at a time of their choosing. Not surprisingly, they ran many of their ads near election day.

And why shouldn't they? The public debates that inform voter choice inevitably involve issues and candidates. Much of the advertising blocked by McCain-Feingold—though hardly all—reflected poorly on incumbent members of Congress. Without such criticism and the debates it engenders, elections would hardly have any point.

Members of Congress, however, do not take threats to their re-election lightly. In passing McCain-Feingold, they required labor unions, corporations, and other groups to stop funding ads that threatened members of Congress at the moment the ads mattered most.

Sadly, the U.S. Supreme Court upheld this blow to free speech in a 2003 ruling that left groups like WRTL and the ACLU in the same boat as unions and corporations.

In spite of their desire to deflect criticism, a majority of Congressmen would probably support exemptions for the speech of groups like WRTL and the ACLU. Vermont senator James Jeffords, who wrote part of McCain-Feingold, stated in 2002 that it "will not affect the ability of any organization to urge grassroots contacts with lawmakers on upcoming votes."

The law already has certain exemptions for news stories, commentaries and editorials, as well as speech on the Internet. Grassroots lobbying of the public, however, is not exempt. It should be.

Campaign finance laws are often intended to help or hurt political parties or sets of candidates seeking office. In votes on matters of procedure, the FEC sometimes splits along party lines. In this case, partisan concerns are irrelevant. As the examples of the WRTL and ACLU show, the benefits of freeing up grassroots lobbying will fall across the political spectrum.

Let's not forget what is at stake here. A Republican member of the FEC, Hans A. von Spakovsky, noted recently that "the right of citizens to petition the government was deemed so fundamental and of such central importance that it formed the basis for the American Revolution." Indeed, the right is older than the United States itself. The 1688 Declaration of Rights in England insisted upon the people's right to petition king and parliament for redress of grievances.

Many Americans supported McCain-Feingold in the hope that it would prevent corruption of politics. Their concern is understandable. However, efforts to educate citizens on the issues facing them can hardly corrupt our political life. To the contrary, those efforts make our political decisions more informed. Like citizens, grassroots groups have a right to petition the government, and the FEC should vote to restore it.

Why are we asked for identification cards in the first place? The theory is that there is greater security when someone can examine your background or track your movements.

It's true that surveillance makes law-abiding people easier for authorities to control. People required to show ID could, for instance, be run against databases of outstanding fines and tax delinquencies at local shopping malls. But identification gives the government no similar control over terrorists and sophisticated criminals - the people we're trying to stop with these ID checks.

To do identity-based security, you need to know who people are in the first place. That's not easy to do with lawbreakers.

To start, the U.S. has a substantial trade in false documents good enough to fool Department of Motor Vehicle employees. And criminals regularly corrupt DMV workers to procure false drivers' licenses. Can this problem be curtailed? Yes. Solved? No. Even if we had the strongest possible national ID card - a cradle-to-grave, government-mandated, biometric tracking system - the greatest weakness would still remain: Knowing who a person is does not reveal what they plan to do.

Examples are legion in terrorism, and routine in crime, of people with no history of wrongdoing being the ones who act. For the 9/11 attacks, Al Qaeda selected operatives without records of involvement in terrorism.

In the end, talk about creating a foolproof ID card distracts us from making honest improvements in security that address tools and methods of attack directly. Strong cockpit doors and self-reliant passengers prevent commandeering of airplanes no matter who is onboard. That is real security.

What's more, the negative consequences of a national ID card would be profound. Lawful trade and travel would be disrupted for ID checks, at a substantial cost to both liberty and commerce. What little benefits we'd reap would not be worth such a high price.

It's possible to "fix" the identification problem, but it doesn't solve the security problem. A national ID system would provide a tiny margin of security - and almost none against threats like terrorism.]]> Sat, 05 Aug 2006 00:00:00 EDT http://www.cato.org/pub_display.php?pub_id=6581 http://www.cato.org/pub_display.php?pub_id=6393 One of the biggest success stories of the American economy in the past decade is the Internet search firm Google. After a humble start in a Stanford University dorm room, the company went public in 2004 and now has a stock price of about $370 per share.

Founders Larry Page and Sergey Brin and many other wealthy officers of the company got rich the only way you can in a free market: by producing something other people want. A lot of brilliant people worked long hours producing computer software that hundreds of millions of people chose to use, in the midst of a highly competitive market that offered lots of other options.

But in our modern politicized economy - which National Journal columnist Jonathan Rauch called the "parasite economy" - no good deed goes unpunished for long. Some people want to declare Google a public utility that must be regulated in the public interest, perhaps by a federal Office of Search Engines. The Bush administration wants Google to turn over a million random Web addresses and records of all Google searches from a one-week period. Congress is investigating how the company deals with the Chinese government's demands for censorship of search results by Chinese users.

So, like Microsoft and other companies before it, Google has decided it will have to start playing the Washington game. It has opened a Washington office and hired well-connected lobbyists. One of the country's top executive search firms is looking for a political director for the company.

What should concern us here is how the government lured Google into the political sector of the economy. For most of a decade the company went about its business, developing software, creating a search engine better than any of us could have dreamed, and innocently making money. Then, as its size and wealth drew the attention of competitors, anti-business activists, and politicians, it was forced to start spending some of its money and brainpower fending off political attacks. It's the same process Microsoft went through a few years earlier, when it faced the same sorts of attacks. Now Microsoft is part of the Washington establishment, with more than $9 million in lobbying expenditures last year.

By Washington standards, Google is still a bit player, with lobbying costs of less than $1 million per year.

Seasoned Washington players have been patronizing about Google's political innocence. Technology lobbyist Rhett Dawson says that the company "is quickly going through a maturation phase. ... It pays to pay attention to Washington." Lauren Maddox, a former Newt Gingrich aide recently hired by Google, says that the company's lobbyists are explaining to them that the "policy process is an extension of the market battlefield."

Microsoft went through the same hazing, though with more of an edge. A congressional aide said, "They don't want to play the D.C. game, that's clear, and they've gotten away with it so far. The problem is, in the long run they won't be able to."

Sorta like, "Hey, Bill, nice little company ya got there. Shame if anything happened to it."

And companies get the message: If you want to produce something in America, you'd better play the game. Contribute to politicians' campaigns, hire their friends, go hat in hand to a congressional hearing and apologize for your success.

The tragedy is that the most important factor in America's economic future - in raising everyone's standard of living - is not land, or money, or computers; it's human talent. And some part of the human talent at another of America's most dynamic companies is now being diverted from productive activity to protecting the company from political predation. The parasite economy has sucked in another productive enterprise.

The slowdown of the American economy over the past few decades can be blamed in large measure on just this process - the expansion of the parasite economy into the productive economy. The number of corporations with Washington offices has shot up, along with the number of CEOs who visit Washington regularly. And if you thought the growth of the parasite economy would slow down under Republican government, you'd be wrong. The number of companies with registered lobbyists is up 58 percent in six years, and official spending on lobbying has risen from $1.5 billion to $2.1 billion in that time.

In 1998, Bill Gates wrote, "It's been a year since the last time I was in D.C. I think I'm going to be making the trip a lot more frequently from now on."

And that's what the parasite economy is costing America. The founders of Microsoft and Google and other innovative companies are going to waste their brains on protecting their companies rather than thinking up new products and new ways to deliver them.

Google's new presence in Washington is entirely understandable, but it is a tragic symbol of the diversion of America's productive resources into the unproductive world of political predation and the struggle to resist it.

Proponents of measures to make independent section 527 organizations into "political committees" under the Federal Election Campaign Act, subjecting the organizations federal campaign limits and reporting requirements, misunderstand both the role and result of regulation in campaigns and the jurisprudence in this area.

Such measures would leave much activity unregulated and would induce a shift of activity from one legal structure to another, thus rendering any perceived partisan advantage arising from the measures improbable or incalculable.

Organizations engaged in independent speech and association with no connection to candidates or officeholders cannot be made to register with the Federal Election Commission simply because they mention candidates; and they cannot be limited in the financial contributions they may receive for their independent communications. Independent organizations do not corrupt the legislative process. They are not corrupting the balloting process. They are a part of, not corrupters of, the information exchange process in and around elections.

That politicians and party chairmen on both sides of the aisle favor restricting the speech of independent organizations on vaguely egalitarian grounds ignores the Supreme Court's clear instruction that limiting the voice of some to enhance the relative voice of others is foreign to the First Amendment. The instrumental value of this maxim is backed by data. Studies show that more speech in campaigns, not less, benefits voters of all socio-economic backgrounds.

Mark Moller and Angus Dwyer debate.


]]> Tue, 07 Mar 2006 00:00:00 EST http://www.cato.org/pub_display.php?pub_id=5987 http://www.cato.org/pub_display.php?pub_id=5159

Advocates say campaign finance restrictions are necessary to prevent corruption of government. They add that the Internet may offer a way around existing campaign finance restrictions, in their parlance a “loophole” that must be closed by Congress or the Federal Election Commission.

In truth restrictions on campaign finance have little to do with corruption but serve well as limits on electoral competition. After all, if members of Congress can make it harder to raise money to fund challengers, fewer challengers will end up running for office and fewer incumbents will lose their bids for re-election.

In particular, money in politics funds new technologies that make it easier to challenge the political status quo. For example, in 1968, three candidates for the presidency -- Eugene McCarthy, George Wallace, and Richard Nixon -- spent significant sums on television advertising. It was the first time television had played such an important role throughout a presidential election.

Those three candidates’ spending shook the status quo. McCarthy’s showing in the New Hampshire primary drove the incumbent president Lyndon Johnson out of the race. George Wallace ran well in the Democratic party primaries and ultimately led one of the most successful third party bid for the presidency. Nixon narrowly won the presidency by spending big on television. No one needed to be told that the new technology of television could upend the electoral status quo in Congress too.

In early 1969, Congress began considering campaign finance laws directed primarily at broadcast spending. Two years later Congress passed spending limits on television ads, limits that directly sought to head off challenges similar to the 1968 efforts. The TV monster had been tamed, as one member of Congress put it.

History now seems ready to repeat itself. A new technology -- the Internet -- made an impact in 2004. Howard Dean used the new technology to raise money quickly and challenge the more established Democratic candidates. The eventual Democratic candidate, John Kerry, used the medium to raise record sums and mount a successful effort against a sitting president. The Internet also fostered new entries into the political marketplace of ideas, new voices that threatened the political status quo. Bloggers of all political stripes assessed and assailed their candidates and causes of choice. Their criticisms of CBS News and its faulty reporting on President Bush’s National Guard service ultimately drove Dan Rather from office.

Absent affirmative protections for free speech, it seems inevitable that campaign finance laws will once again be used to control and neuter a technology that threatens the political status quo. The danger to free speech is real and requires action.

Considerations of political interest support free speech in this case. Neither of the major parties has a clear advantage in fundraising through the Internet. Hence, neither party will gain an advantage by restricting political speech or fundraising on the Internet. (In fact, Sen. Harry Reid (D-NV) has introduced a companion bill to the Online Freedom of Speech Act in the U.S. Senate). Bloggers articulate liberalism, conservatism and all views in between. Suppressing Internet speech will not offer anyone a clear advantage in the struggle of ideas.

Finally, as Rep. Hensarling’s bill suggests, not every member of Congress sees campaign finance restrictions as a good way to make life easier come election time. Some are willing to stand up for the First Amendment. This time their courage should be strengthened by the popularity of the Internet. Americans love the new medium and correctly expect they have a right to use the Internet for whatever political activities they might undertake. The question remains whether enough members of Congress will vote for what the Constitution demands and their constituents desire.]]> Wed, 02 Nov 2005 00:00:00 EST http://www.cato.org/pub_display.php?pub_id=5159 http://www.cato.org/pub_display.php?pub_id=5125 Kofi Annan, Coming to a Computer Near You! The Internet's long run as a global cyberzone of freedom--where governments take a "hands off" approach--is in jeopardy. Preparing for next month's U.N.-sponsored World Summit on the Information Society (or WSIS) in Tunisia, the European Union and others are moving aggressively to set the stage for an as-yet unspecified U.N. body to assert control over Internet operations and policies now largely under the purview of the U.S. In recent meetings, for an example, an EU spokesman asserted that no single country should have final authority over this "global resource."

To his credit, the U.S. State Department's David Gross bristled back: "We will not agree to the U.N. taking over management of the Internet." That stands to reason. The Internet was developed in the U.S. (as are upgrades like Internet 2) and is not a collective "global resource." It is an evolving technology, largely privately owned and operated, and it should stay that way.

Nevertheless the "U.N. for the Internet" crowd say they want to "resolve" who should have authority over Internet traffic and domain-name management; how to close the global "digital divide"; and how to "harness the potential of information" for the world's impoverished. Also on the table: how much protection free speech and expression should receive online.

While WSIS conferees have agreed to retain language enshrining free speech (despite the disapproval of countries that clearly oppose it) this is not a battle we've comfortably won. Some of the countries clamoring for regulation under the auspices of the U.N.--such as China and Iran--are among the most egregious violators of human rights.

Meanwhile, regulators across the globe have long lobbied for greater control over Internet commerce and content. A French court has attempted to force Yahoo! to block the sale of offensive Nazi materials to French citizens. An Australian court has ruled that the online edition of Barron's (published by Dow Jones, parent company of The Wall Street Journal and this Web site), could be subjected to Aussie libel laws--which, following the British example, is much more intolerant of free speech than our own law. Chinese officials--with examples too numerous for this space--continue to seek to censor Internet search engines.

The implications for online commerce are profound. The moment one puts up a Web site, one has "gone global"--perhaps even automatically subjected oneself to the laws of every country on the planet. A global Internet regulatory state could mean that We Are the World--on speech and libel laws, sales taxes, privacy policies, antitrust statutes and intellectual property. How then would a Web site operator or even a blogger know how to act or do business? Compliance with some 190 legal codes would be confusing, costly and technically impossible for all but the most well-heeled firms. The safest option would be to conform online speech or commercial activities to the most restrictive laws to ensure global compliance. If you like the idea of Robert Mugabe setting legal standards for everyone, then WSIS is for you.

The very confusion of laws makes some favor a "U.N. for the Internet" model. Others propose international treaties, or adjudication by the World Trade Organization, to stop retaliation and trade wars from erupting over privacy, gambling and pornography. Still others assert that the best answer is to do nothing, because the current unregulated Web environment has helped expand free speech and commerce globally for citizens, consumers and companies.

We favor the nonregulatory approach. But where laissez-faire is not an option, the second-best solution is that the legal standards governing Web content should be those of the "country of origin." Ideally, governments should assert authority only over citizens physically within its geographic borders. This would protect sovereignty and the principle of "consent of the governed" online. It would also give companies and consumers a "release valve" or escape mechanism to avoid jurisdictions that stifle online commerce or expression.

The Internet helps overcome artificial restrictions on trade and communications formerly imposed by oppressive or meddlesome governments. Allowing these governments to reassert control through a U.N. backdoor would be a disaster.]]> Sun, 09 Oct 2005 00:00:00 EDT http://www.cato.org/pub_display.php?pub_id=5125 http://www.cato.org/pub_display.php?pub_id=4405 The PayPal Wars: Battles With eBay, the Media, the Mafia, and the Rest of Planet Earth, by Eric M. Jackson, Gardena, Calif.: World Ahead Publishing, 344 pages, $27.95

In September 2004 Bill Quick received a notice from PayPal, the online payment company that facilitated reader donations to his Daily Pundit blog. The notice warned Quick that his account was on hold, and that it would be terminated unless he removed "hate" content from his site. This appeared to be a reference to Quick's link to a video of a terrorist beheading. PayPal sent a similar letter to Jarlaynn Merrit's civil liberties blog Talk Left. Neither site is at all hateful, and both linked to the beheading video for reasons that, while controversial, were certainly within the realm of civil discussion.

Both letters came a month after PayPal announced an abrupt shift in its terms of use. The company would no longer permit customers to use the service for purchases associated with "mature audiences," gambling, hate paraphernalia, or prescription drugs, along with a long list of other prohibitions. It would also fine its customers up to $500 for attempting such transactions. Those terms apparently applied to donations to blogs with content PayPal found objectionable.

That's a far cry from the libertarian vision founders Peter Thiel and Max Levchin originally had for PayPal, an online payment service that enables account holders to send money to anyone in the world with an e-mail address. Thiel and Levchin had hoped PayPal would grow to become an extra-governmental system of currency, something reminiscent of the world described in Neal Stephenson's novel Cryptonomicon, in which programmers use encryption to create an offshore data haven free from government control.

Eric M. Jackson documents the story of PayPal in his lively new book, The PayPal Wars. Jackson's engaging narrative reads in turn like a spy novel, a business text, and an insider tell-all. One of PayPal's earliest employees and savviest marketers, Jackson documents the full spate of challenges and obstacles faced by start-ups and entrepreneurs, and how visionaries often have to abandon big ideas to keep competitors at bay and to satisfy petty bureaucrats and politicians.

Thiel is a philosophy major who drew inspiration from Aleksandr Solzhenistyn; Levchin a Ukranian Jew who grew up in the former Soviet Union and immigrated to Chicago with his family in 1991. They met in Silicon Valley in the late 1990s and over a series of lunches began to collaborate on marketing a method of data encryption that would let users safely send information between two personal digital assistants (Palm Pilots, for example). Thiel and Levchin eventually decided that the most practical application of the technology was money—specifically, the ability to "beam" funds between PDAs without currency, checks, or credit cards. At a conference in July 1999, representatives from Nokia Ventures and Deutche Bank used the encryption technology to send Thiel $3 million in venture capital via a Palm Pilot. Confinnity, later to become PayPal, was born.

In the book's first chapter, Jackson recalls a speech Thiel gave to Confinnity employees, just a few days after he began work, in which he described his hopes for PayPal to become a borderless private currency. He saw PayPal facilitating trade in currency for anyone with an Internet connection by enabling an instant transfer of funds from insecure currencies to more stable ones, such as U.S. dollars. Thiel explained to his young staff how governments had historically robbed their own citizens through inflation and currency devaluation. The very rich could always protect themselves by investing offshore. It's the poor and middle class, Thiel explained, who get screwed. "PayPal will give citizens worldwide more direct control over their currencies than they ever had before," Thiel predicted. "It will be nearly impossible for corrupt governments to steal wealth from their people through their old means because if they try the people will switch to dollars or pounds or yen, in effect dumping the worthless local currency for something more secure."

Though he touches on brushes with nearly a dozen would-be competitors to PayPal, much of Jackson's book follows the continuing tug-of-war between PayPal and eBay, the online auction behemoth. Early on, Jackson had smartly identified eBay users as ideal potential PayPal customers. Jackson recounts how, as his marketing overtures began to bring in high-volume eBay sellers, PayPal struggled to innovate, adapt, and scale up its customer service support to meet their needs. When PayPal's early success began to overwhelm its own customer service staff, for example, the company didn't have the capital to hire additional help. Executives temporarily staved off the problem by sending the company's reps to post answers to common problems on high-traffic message boards frequented by online auctioneers. The strategy reduced call volume without much additional labor.

PayPal was again challenged when hackers, sophisticated crooks, and even international mobsters began to use the service for fraud and money laundering. The company's tech team responded with an ingenious yet simple way to distinguish human beings opening accounts from mechanized "bots" designed to open hundreds of fraudulent accounts at once. The "Gausebeck-Levchin" test imposed an image of black letters set against a yellow background with crisscrossing lines, and asked the new user to enter the letters he saw on his monitor to proceed. Human customers could discern the letters easily, but programs pretending to be human couldn't. The test is still in wide use today among e-commerce sites plagued by automated fraud.

At the same time, eBay was aggressively pushing its own online payment system, called Billpoint. Jackson recounts several episodes in which eBay issued new policies specifically designed to give Billpoint an advantage over PayPal, such as demanding smaller logo sizes from outside vendors or changing auction procedures and settings in ways that transparently favored Billpoint. PayPal's challenge was to respond to the new policies, win any ensuing public relations war that might result from them, and keep its own customers happy and loyal along the way.

What's interesting is that though the eBay struggles are the most frequent source of conflict in The PayPal Wars, it's during these battles that PayPal is at its most competitive, its most innovative, and its most responsive. When Billpoint entered into a partnership with Visa, for example, PayPal responded by offering its customers a PayPal debit card and giving them cash back each time they used it. Each eBay policy change aimed at outside vendors pushed PayPal not only to comply and adapt on the fly but to find new ways to communicate the new policies to its users quickly.

PayPal ultimately won the battle with Billpoint, despite the decided disadvantage of having to compete within the framework of Billpoint's parent company. For months, Billpoint's listing share (the percentage of eBay auctions accepting Billpoint payments) hovered around 25 percent, while PayPal's climbed to more than 70 percent.

By October 2001 PayPal was at the brink of escaping the dot-com peril. It was the preferred payment method for just under half of all eBay auctions, its registered users numbered more than 12 million (after just 22 months of operation), and more than a third of its payments came from sources other than auctions, demonstrating the company's ability to broaden its user base. More important, despite burning through capital on payroll, bonuses for users who brought new accounts, and marketing, profits soared, and the company achieved its first positive cash flow for that month. It would go on to turn its first profit in the fourth quarter of 2001.

PayPal consequently decided it was time to begin filing for its initial public offering. That's when the regulators, lawyers, and politicians moved in.

The first shots came from the media, which were skeptical of the new economy after the NASDAQ bust and agitated at having been duped into hyping so many failed dot-coms. Industry publications hinted that the IPO was PayPal's way of shopping for a savior, while one Silicon Valley lawyer wrote in the California legal publication The Recorder that PayPal was an ideal money laundering mechanism for "drug dealers and domestic terrorists," despite the successful anti-fraud devices concocted by Levchin's tech team. Having already entered the mandatory pre-IPO "quiet period"—a relic of Depression-era reforms—PayPal was prohibited from responding to its critics.

Next came a rash of lawsuits. Some came from competitors who Jackson says sought to cash in on a company keen to deflect negative publicity so close to its public offering. The first lawsuit, for example, was from a company called CertCo, which claimed PayPal's payment system violated one of its patents. It was settled for what the terms called a "non-consequential" payment.

But class action suits followed—four during one four-month stretch of 2001 alone. Some illustrated the damned-if-you-do, damned-if-you-don't dynamics of running a small business. MasterCard, for example, fined PayPal $313,600 for excessive credit card "charge backs" (that is, credit refunds), a good indicator that the service was being used for fraud. As mentioned, Levchin and the company's tech team had addressed those problems and cut fraud by a third. But those anti-fraud measures triggered more scrutiny. One class action suit accused the company of mistakenly freezing the accounts of several users for up to a week while it investigated suspicious activity.

Finally, the politicians and regulators came calling. Just hours before PayPal was set to go public, the state of Louisiana ordered it to terminate all business in that state, asserting that the company had failed to obtain a "money transfer license," which many states require from anyone in the businesses of cashing checks, transmitting money, or exchanging currency. New York threatened a similar order. The Louisiana decree was issued under the pretense of "protecting consumers," though terminating service in that state would have left all of Louisiana's PayPal-using auctioneers in the lurch.

The company managed to negotiate its way through these obstacles, and in early 2002 PayPal successfully launched its IPO. Salomon Smith Barney priced the initial 5.4 million shares available to the public at $12 to $14 each. The entire company consisted of 60 million shares, giving PayPal a market value of $720 million to $840 million. On the first morning of trading, under the ticker symbol PYPL, PayPal opened at $13 per share but jumped to $18 within minutes. Shares peaked at $22 in the mid-afternoon before settling at a little more than $20 at the close of trading. The 50 percent increase represented the first successful IPO since September 11 and a significant achievement for an e-commerce company in the post–tech bubble market.

But PayPal's regulatory troubles persisted. The banking industry had tried and failed several times to set up competitors to PayPal and Billpoint. As entrenched industries often do, it turned to government when its efforts in the marketplace failed. Oregon, California, Illinois, and Louisiana subsequently sent Billpoint notices that it had failed to get a money transfer license. A director from the American Banking Association told CNET that online payment services should be classified and regulated as commercial banks—a move that likely would have killed off all online payment services except those run by existing banks.

More class actions followed. New York Attorney General Eliot Spitzer cited PayPal for posting a user agreement that "wasn’t clear enough." He also subpoenaed all documents pertaining to PayPal's use in online gaming sites, suggesting the company was in violation of New York gambling laws. Spitzer's investigation was followed by a U.S. Justice Department determination that PayPal's use by gaming sites was a violation of the USA PATRIOT Act.

The financial pressures of battling aggressive government officials and opportunistic class action lawyers, all while trying to stave off a better-funded competitor, soon became too much for the still-young company to bear. "It was clear," Jackson writes, "that PayPal now faced many challenges outside the marketplace. Entrepreneurial nimbleness may have helped us survive the company's post-merger internal turmoil and Billpoint's fierce competitive charge, but these new threats would require a different approach."

In July 2002 PayPal executives sold the start-up firm to their longtime nemesis, eBay. Jackson notes that the sale had some obvious benefits. The company's new parent already had a formidable, well-funded legal team in place to deal with PayPal's litigation and regulation troubles. Also, eBay promised to do away with Billpoint, essentially securing PayPal's position as the premier online payment provider.

But there were significant drawbacks too—most of them for consumers. Instead of allowing its customers to transact voluntarily with anyone they please, eBay, whose conciliatory approach is touted within the company as its "culture of community," settled the PATRIOT Act charge with the Justice Department for $10 million and agreed to bar its customers from using the service for online gambling. Shortly thereafter, PayPal announced the even stricter policy that ensnared Quick and Merritt (though both accounts were later reactivated). The new terms of service prohibited the use of PayPal not only for adult-oriented purchases but for "non-adult services whose Web site marketing can be reasonably misconstrued as allowing adult material or services to be purchased using PayPal."

PayPal today is a far cry from Thiel and Levchin’s dream. It's a far cry even from pre-IPO PayPal. Most of the bright young minds Thiel brought in to get the company airborne left shortly after the takeover. Safely nestled within the belly of the eBay monopoly, and without Billpoint to foster a competitive itch, PayPal is far removed from the market forces that sparked the rapid innovation and entrepreneurial fire that marked its early days. Blogs bristle about PayPal's unfriendly terms of service, its difficult account management, and its tendency to freeze accounts and bar access to the assets in them. Two popular sites, paypalsucks.com and paypalwarning.com, have sprung up to document user frustrations.

PayPal's story is a sad but instructive lesson in how this country treats its entrepreneurs. PayPal is huge and growing. With eBay branding, it now boasts 73 million users, making it by far the largest online payment service. But it's nothing like what it was intended to be: a way for people to protect the money they earn from greedy governments and protect private purchases from the prying eyes of regulators. Greedy governments and prying regulators saw to that. The company sold out to eBay not because eBay beat it in the marketplace, not because eBay offered a better product, and not to reap a financial windfall for PayPal employees. PayPal sold out because, after the beating it took from those claiming to represent the interests of consumers, selling itself was the only way to keep the company alive. Exactly how consumers benefited from that isn’t clear.]]> Sat, 27 Aug 2005 00:00:00 EDT http://www.cato.org/pub_display.php?pub_id=4405 http://www.cato.org/pub_display.php?pub_id=4248 A Senate Appropriations subcommittee recently held a hearing on this year's $500 million budget request for public broadcasting. I was invited to testify against funding, and the other four panelists all worked for public broadcasting and enthusiastically supported the funding.

So it was four tax recipients to one taxpayer. That sounds stacked, but it was actually more balanced than the average appropriations hearing. The average hearing is closer to 20 tax consumers for every representative of the taxpayers. The narrow 4 to 1 edge reflected the current controversy over bias in National Public Radio and the Public Broadcasting System.

The battle over bias falls into familiar red-blue, liberal-conservative terms. Conservatives—including the current chairman of the Corporation for Public Broadcasting, Ken Tomlinson—complain that NPR and PBS tilt to the left. In response, activist groups on the left such as Moveon.org rush to PBS's defense, more or less confirming the conservatives' charge.

As a libertarian, I have an outsider's perspective on both liberal and conservative bias. I'm sympathetic to some of public broadcasting's biases, such as its tilt toward gay rights, freedom of expression, and social tolerance and its deep skepticism toward the religious right. And I share many of the cultural preferences of its programmers and audience, for theater, independent cinema, history, and the like.

Even so, I think it is undeniable that public broadcasting leans to the left. Take PBS's primetime show "Now," hosted until recently by Bill Moyers, the poster child for liberal bias. A report in Current, the newspaper of public broadcasting, showed that in six months "Now" broadcast 19 segments on the war in Iraq, only four of which "included anyone voicing support for the war....In fact, of the 75 segments over six months that treated controversial issues like the Iraq War, the state of the economy and the corrupting influence of corporate money on politics, only 13 included anyone who spoke against the thrust of the segment."

Sometimes the bias is not quite so obvious. Rather than imbalance within each report, the bias is reflected in the choice of topics. A careful listener to NPR would notice a preponderance of reports on racism, sexism, and environmental destruction, but very few reports on the burden of taxes and regulation, or the unconstitutionality of most federal programs, or the way that state and federal governments increasingly abuse the rule of law in going after unpopular defendants such as tobacco companies and Wall Street executives.

Anyone who got all his news from NPR would never know that Americans of all races live longer, healthier, and in more comfort than ever before in history, or that the environment has been getting steadily cleaner.

In the past few weeks, as this issue has been debated, I've noted other examples. Take the long and glowing reviews of two leftist agitprop plays, one written by Robert Reich and performed on Cape Cod and another written by David Hare and performed in Los Angeles. And then there was the effusive report on Pete Seeger, the folksinger who was a member of the Communist Party, complete with a two-hour online concert, to launch the Fourth of July weekend.

The real problem is not liberal bias but the inevitability of bias. Any reporter or editor has to choose what's important. It's impossible to make such decisions without a framework, a perspective, a view of how the world works.

If anything should be kept separate from government and politics, it's the news and public affairs programming that informs Americans about government and its policies. When government brings us the news—with all the inevitable bias and spin—the government is putting its thumb on the scales of democracy. Journalists should not work for the government. Taxpayers should not be forced to subsidize news and public-affairs programming.

NPR and PBS have wildly enthusiastic audiences. Their greatest fundraising appeal ever would be one that began "The heartless and barbaric Republican Congress has cut off our funding..." It's time to free NPR and PBS from politicians, and time to free taxpayers from supporting ideas they don't like.

Insta Pundit
University of Tennessee
School of Law
Knoxville, TN

Dear Mr. Pundit,

I am writing to inform you that the Federal Election Commission has voted unanimously to support my recommendation that there is "reason to believe" that you have violated federal election law. Pursuant to that finding, the Commission has opened an investigation of these violations.

I hereby direct you to provide sworn written answers to the following questions related to your violation of federal election law.

1. Did you on or before August 30, 2008, state on your "blog" that "If elected, Hillary Clinton will be the worst U.S. president of my lifetime"?

2. Did you on or before August 10, 2008, state on your "blog" that "John McCain is an enemy of the First Amendment. If he is elected president, the nation is in trouble."?

3. Did your "blog" on August 10, 2008, and August 30, 2008, receive in excess of 100,000 visitors?

As part of its investigation, the Commission has subpoenaed your hosting company to provide information about activity on your "blog" on the dates in question in relation to the questions above.

Please note: if you refuse to provide sworn written answers to these questions, the Commission can ask a federal district court to enforce these subpoenas and orders.

In your last letter to the Commission, you stated that "my alleged blogging about Senators McCain and Clinton is protected from government regulation by the First Amendment to the U.S. Constitution." You conclude: "The Constitution says 'Congress shall make no law... abridging freedom of speech.' No law means no law."

This is incorrect. The Supreme Court has long recognized that Congress may restrict the financing of campaigns to prevent corruption or the appearance of corruption. The Court has also stated that Congress may close loopholes in campaign finance law by regulating speech that influences federal elections.

In 2008, Senators Clinton and McCain were the major party candidates in a federal election for the presidency. The Commission has ruled that messages that reach over 100,000 voters nationally (or 25,000 voters in an electioneering area) may be assumed to influence a federal election. The complaint against you alleges that your statements received well over 200,000 hits on the dates in question.

You also state that you received no payments to blog about the election from any candidate, candidate's committee, or political party. That is irrelevant. Congress and the Commission, with the blessing of the Supreme Court, have decided that your influence on federal elections justifies regulation of your activities. If your attempts to influence federal elections were not regulated, the entire structure of campaign finance regulation (and hence, the very integrity of our democracy) would be threatened.

Frankly, we are surprised that a law professor would make such absurd claims based on the outmoded "Congress shall make no law" view of the First Amendment. In fact, Congress has complete authority to regulate freedom of speech to realize the values underlying the First Amendment. If you doubt that, please read the Supreme Court decision in McConnell v. Federal Election Commission (2003).

In 2007 Congress passed the Internet Freedom, Responsibility and Level Playing Field Act which states that Internet messages influencing federal elections shall be valued at ten cents per voter affected by the message. If the facts are as alleged in the complaint, you have apparently contributed $20,000 to the presidential campaigns of both Senator McCain and Senator Clinton. Federal law limits individual contributions to $2251.01 annually.

The Office of General Counsel will review your sworn, written answers to these questions and prepare a brief that recommends whether the Commission should find there is "probable cause to believe" you have violated federal election law. You or your attorney will have fifteen (15) days to respond to this brief.

Have a great day,

Office of General Counsel
Federal Election Commission

Naturally the federal government is about to come down hard on bloggers.

Here's why. In 2002, Congress passed the McCain-Feingold campaign finance law which restricted political advertising by corporations and labor unions on television and radio. The Federal Election Commission—the agency charged with implementing McCain-Feingold—initially decided that Congress had not intended to restrict political speech on the Internet.

Last fall, a federal judge said exempting the Internet from the law's restrictions on political speech would undermine McCain-Feingold. Now the FEC is back at it trying to figure out how to restrict political speech on the Internet.

If you care about freedom of speech, there are good reasons for concern. The FEC may conclude that allowing political advertising by campaigns and parties on websites will undermine the restrictions on ads in McCain-Feingold. Ads on the Internet would be a loophole to McCain-Feingold that the FEC should close.

But bloggers don't necessarily work for a campaign or a political party and thus should not fall under McCain-Feingold, right?

Don't be too sure. Bloggers often endorse candidates or parties in an election. Those endorsements are of value to the candidates and may end up being treated as a campaign contribution, subject to limits and disclosure. Bloggers may also contribute to a campaign by linking to a candidate's website or republishing a candidate's press release.

Of course, The New York Times can endorse candidates for office and promote their causes, and you might think that bloggers would enjoy the same First Amendment protections. But you would be wrong. The FEC has not given news sites or bloggers what is tellingly called "the press exemption" from campaign finance laws. What bloggers say and do may well fall under federal campaign finance restrictions.

History should give pause to those concerned about liberty on the Internet. New technology that threatens the political status quo quickly attracts Congressional regulation and restrictions.

Take the history of television in American politics. In 1968, three candidates—Eugene McCarthy, George Wallace, and Richard Nixon—challenged the entrenched status quo by spending large sums of money on television advertising. McCarthy's spending drove the incumbent president Lyndon Johnson out of office. Wallace's TV strategy brought him 14 percent of the vote and may have denied Democrats the presidency. Richard Nixon's lavish spending on television helped him narrowly take the presidency from Hubert Humphrey.

In 1968, uncontrolled political spending on a new technology threatened the political status quo.

Congress acted swiftly to meet the threat. In the spring of 1969, members introduced a bill to limit campaign spending on television advertising. The bill became law in 1971 and went into effect the following year. Congress had, in the words of one member, "tamed the television monster." Yet the "monster" in question was a threat only to those who held power.

Last year a relatively new technology shook up the political world. The upstart presidential candidate Howard Dean used the Internet to raise unprecedented sums that fueled his outsider campaign for the Democratic nomination. Bloggers brought down Dan Rather of CBS News, a titan of the old media, and offered uncontrolled sources of information and insight to voters.

In 2005, as in 1969, those who use this technology have to expect the status quo they are upending will fight back.

The upcoming effort to regulate and restrict the Internet thus seems as inevitable as it is unfortunate. Indeed, the effort to clamp down on the Internet will succeed absent resistance.

Someone said that a man with a hammer sees nails everywhere. Congress holds the hammer of McCain-Feingold, and its members see the Internet as a nail.

No doubt, the relentless censorship advocates at the Parents Television Council (PTC) are already firing up the engines at their automated complaint factory to bombard Federal Communications Commission (FCC) regulators with letters. Recent Freedom of Information Act requests to the FCC have revealed that the PTC has been responsible for over 98 percent of all indecency complaints to the FCC over the past two years. PTC is quickly coming to have a "heckler's veto" over programming in America as many of the shows they complain about receive significant fines or are even driven off the air.

While the PTC claims to be non-partisan, the watchdog group's public policy advocacy adopts a distinctly social conservative and moralistic tone. Interestingly, the PTC's motto is: "Because Our Children Are Watching," which begs the question: Why are your children watching? Why are they watching Desperate Housewives or any other show you find objectionable? I know my kids aren't watching.

I've always been particularly troubled by the fact that so many conservatives, who rightly preach the gospel of personal and parental responsibility about most economic issues, seemingly give up on this notion when it comes to cultural issues. Art, music, and speech are fair game for the Ministry of Culture down at the FCC, but don't let them regulate our cable rates! Conservatives and religious groups decry government activism in terms of educating our children, for example, but with their next breath call in Uncle Sam to play the role of surrogate parent when it comes to TV content.

Censorship advocates like the PTC respond that parents just don't have enough time to monitor their children's listening and viewing habits in this hectic age. But this is a weak excuse for government intervention. If parents bring media devices into the home and then give their kids free rein, that's just poor parenting. While there's more media than ever before, there also exist more technological tools to screen or limit what children see. Parents don't bring other products home -- such as cars, weapons, liquor, or various chemicals -- and then expect the government to assume responsibility from there. But that is essentially the logic many social conservatives rely on to justify broadcast television and radio censorship.

Censorship advocates also claim that any exposure to "indecent" or "violent" material will result in degenerate, dangerous youths. Increased exposure to media -- and especially television -- they argue, can be directly correlated with promiscuous sexual behavior or aggressive tendencies. The psychological literature is all over the place on this issue, but recent social trends call this thesis into question. Despite the fact that today's youngsters live in a media-saturated world and consume much more news and entertainment than previous generations, important cultural indicators are all showing significant signs of improvement. Consider these facts:

• Juvenile murder, rape, robbery and assault are all down significantly over the past decade. Overall, aggregate violent crime by juveniles fell 42% from 1995-2002.
• There are fewer murders at school today and fewer students report carrying weapons to school or anywhere else than at any point in the past decade.
• Alcohol and drug abuse has generally been falling and is currently at a 20-year low. Teen birth rates have hit a 20-year low and fewer teens are having sex today than they were 15 years ago.
• High school dropout rates continue to fall steadily, as they have for the past 30 years.
• And while teenage suicide rates rose steadily until the mid-1990s, they then began a dramatic decline that continues today.

Not surprisingly, you don't hear any of this good news over at the PTC website or from other conservative groups. Could it be because it does not fit nicely into their "Let's-blame-media-for-all-our-problems" mentality? Social conservative icon William Bennett used to publish a book entitled "The Index of Leading Cultural Indicators" that read like a guidebook to the fall of civilization. A new edition is nowhere to be found, however. Bennett appears to have abandoned the endeavor as soon as all the numbers started to improve.

Alas, none of these facts will stop desperate regulators and even more desperate censorship advocates from condemning Desperate Housewives and the fact that many youngsters are apparently watching such a racy show. Instead of rushing to fire off complaints to the FCC, maybe parents should start rushing to the remote to turn off the television.

First, some facts. A journalist named Carlton Sherwood is producing a film entitled "Stolen Honor: Wounds that Never Heal." In the program, some former prisoners of war in Vietnam say that Sen. Kerry's antiwar activities after he returned home emboldened their Vietnamese captors and lengthened their ordeal.

The Sinclair Group has decided to run "Stolen Honor" next week on its 62 stations which together potentially can reach about 24 percent of the national television audience. Sinclair executives have decided the film will be offered as news programming in the context of the upcoming election.

The response to Sinclair's plans has been heavy-handed threats. Seventeen Democratic U.S. senators have written a letter to the Federal Communications Commission asking for an investigation of Sinclair's plan to air the film. They allege that broadcasting the film violates the letter and spirit of current laws.

The senators' letter is pure intimidation of the media. No television station may operate without a license from the federal government. Indeed, those licenses are the most important asset of a station or network. The FCC awards licenses under the supervision of Congress. The meaning of the senators' letter is clear: if the Sinclair runs "Stolen Honor," their applications to renew their station licenses may be in doubt, especially if Democrats have a working majority in Congress.

Democrats also attacked on the campaign finance front. Party leaders plan to complain to the Federal Election Commission that broadcasting "Stolen Honor" constitutes an in-kind contribution to President Bush's campaign. The Democrats say the film is a long, "attack ad" aimed at their presidential candidate and not news programming. By going to the FEC, the Democrats hope to force Sinclair to choose between not running the film and going to jail.

Federal campaign finance law now prohibits advertising that mentions a federal candidate for 60 days prior to a general election if the ad is funded by a corporation. The law does grant an exemption from this prohibition for news programming. If the FEC concludes that running "Stolen Honor" is not news, the Sinclair Group will have to decide to not run the film or to continue with their plans and risk fines or imprisonment. Democratic Party leaders are betting the broadcasters will choose the former, thereby suppressing criticism of Sen. Kerry in battleground states.

Let's be honest. Sinclair is in hot water with Democrats because of the content of the speech they plan to broadcast. Democratic leaders and the 17 Democratic senators do not like what "Stolen Honor" says about Sen. Kerry. They are afraid it will cost him the presidency. Consequently, they are threatening the Sinclair group with fines and jail to prevent the film being shown.

Republicans, however, will have a hard time taking the moral high ground on this issue. Republicans disliked the content of Michael Moore's film "Fahrenheit 9/11," and at the time of the film's release, many argued that the film constituted illegal political advertising. If a network had decided to show Moore's film just before the election, some Republican senators might have asked the FCC and FEC to investigate the network. The GOP would have asked the FEC to define Moore's film as a corporate-sponsored ad and hence, illegal. Certainly the Republicans tried hard to get the FEC to criminalize the electoral activities of certain 527 groups affiliated with the Democratic Party.

Free speech is in the public interest. Voters benefit from having more information rather than less in the weeks prior to an election. Candidates and political parties see free speech in a more self-interested light. Free speech can cost them the presidency or control of Congress. Everyone--Democrats, Republicans, and third parties--striving for power at one time or another wants to suppress free speech.

Recognizing this conflict of interest between the voters and politicians, the American founders adopted the First Amendment to protect freedom of speech. The Constitution thus assures that the public interest in the free flow of information trumps the lust for power of candidates and political parties.

This election has stirred deep passions among some Americans. So strong are those passions that everyone is in danger of forgetting a larger truth. The American republic will survive a Kerry or Bush victory this November. It will not survive government control over political speech.

Press reports quickly described 527 groups as a "loophole" in the Bipartisan Campaign Reform Act of 2002 -- sponsored by Arizona Republican John McCain and Wisconsin Democrat Russ Feingold in the Senate, and by Connecticut Republican Christopher Shays and Massachusetts Democrat Marty Meehan in the House.

As Supreme Court Chief Justice William Rehnquist explained, in his dissent from a deplorable 5-4 decision allowing that 2002 law to stand, "All political speech that is not sifted through federal regulation ... would be a 'loophole' in the current system." In a system with no such loopholes, free speech would be entirely supplanted by regulated speech.

The 527 organizations date to 1974 and have been required to report contributions and spending to the Internal Revenue Service since July 2000. There is nothing "shadowy" about them.

The Center for Responsive Politics categorizes nearly all 527 groups as ideological -- with"Democratic/Liberal" raising $131.5 million so far this year and "Republican/Conservative" raising less than $17 million (www.opensecrets.org). That 8-to-1 tilt toward Democratic/liberal 527 contributions makes it ludicrous that Mr. Kerry whined that the Swift Boat Veterans are "funded by hundreds of thousands of dollars from a Republican contributor out of Texas." Texas homebuilder Bob Perry, who is not a major contributor to the Bush campaign, gave the Swift Boat dissidents $200,000. Two other "large donors" gave $25,000. Even $200,000 would be pocket change for big contributors to Democratic 527 groups, such as insurance executive Peter Lewis or real estate heir and Hollywood playboy/producer Steve Bing, both of whom bankrolled even more hysterical anti-Bush TV ads than billionaire George Soros.

The largest 527 is the $41.6 million Joint Victory Campaign, whose fourth-largest contributor ($4.6 million) is Mr. Soros. This is a joint fund-raising committee run by the second-largest 527, the Media Fund, and the third-largest, America Coming Together (which received another $5 million from Mr. Soros).

The next two largest 527 are government employee unions, followed by MoveOn.org, whose main contributor is -- you guessed it -- Mr. Soros ($2.6 million). Next largest is the New Democrat Network. Its largest contributor is the Media Fund.

The ads of 527 groups on the "wrong" (other) side of any issue undoubtedly annoy affected politicians. But to "shut down all the ads and activity by 527 groups" would be another blatant assault on free speech. Shut down means shut up.

Even if the 527s could be muzzled, people with a strong interest in political issues would soon find other ways to be heard. Resourceful organizations, individuals and foundations can, for example, bankroll biased books, films and studies with transparent political objectives. Will the next "reform" censor biased documentaries and ban partisan books?

Congress has been repeatedly "reforming" campaign finance since 1974. Each reform leaves a "loophole" that supposedly requires another law, which soon reveals yet another method by which people express themselves politically, which requires yet another law, and so on.

Restrictions on individuals boosted fund-raising by organized political action committees (PACs). Restrictions on PACs boosted "soft money" fund-raising by political parties. Restrictions on political parties boosted fund-raising by tax-exempt 527 organizations.

"Reform" has come to mean political opinion should be confined to opinion journalists, loudmouth entertainers and disingenuous film producers. Everyone else should just shut up.

The 2002 law, for example, actually bans labor unions and corporations from producing TV and radio ads for the last 60 days before an election, although there is no such ban (yet) for PACs or 527 groups.

My first article on campaign reform (or deform) laws appeared in 1974, in the American Spectator, co-authored by Sam Kazman, now general counsel for the Competitive Enterprise Institute. We argued that protection of incumbents would be the main effect of those initial efforts to limit financing.

Incumbents have such huge advantages over challengers -- such as free publicity and the ability to use pork-barrel spending to lure PAC money -- that challengers must spend millions more to have any chance. Limiting the challengers' access to large individual donors, we predicted, would be a job security program for incumbents. By no coincidence, incumbents were re-elected 98 percent of the time in the past three congressional races.

Another predictable result of restricting individual contributions was great enhancement of the relative political clout of organized interest groups, including PACs of the Association of Trial Lawyers, the American Federation of Municipal Employees and the American Federation of Teachers.

Congress naturally rigged campaign reform against the little guy and in favor of organized interest groups. Under the 2002 law, individuals can contribute only $2,000 to a candidate, but they can give $5,000 to a PAC, which can then give $5,000 to a candidate. Individuals can also give $35,000 to political parties. Those priorities seem cleverly designed to compel candidates to pander to PACs, party bosses and bundled "individual" gifts from law partners and investment bankers.

Mr. McCain, for example, relied on PACs for 27 percent to 36 percent of his campaign financing in the last two senatorial races. Mr. McCain has raised $2.6 million this year; his opponent only $2,715. Don't even think about sending the underdog challenger a big check -- that's a federal crime.

Informed voting requires information, and information is not free. If attempts to reduce spending on campaigns ever succeeded, they would result in less informed voters.

As the Supreme Court argued in the 1976 Buckley vs. Valeo case: "A restriction on the amount of money a person or group can spend on political communication during a campaign necessarily reduces the quantity of expression by restricting the number of issues discussed, the depth of their exploration and the size of the audience reached. This is because virtually every means of communicating ideas in today's mass society requires the expenditure of money."

The 1974-2002 laws ostensibly enacted to take money out of politics have had the opposite effect -- tending to exclude everyone but the super-rich from political communication or political office. As the Center for Responsive Politics reports, "The number of wealthy candidates funding their own campaigns has risen dramatically in recent years."

The contributions of wealthy candidates to their own campaigns are unlimited, while rivals' finance sources are handicapped by law. One goal of the 2002 law -- shutting down many competing sources of issue ads for 60 days before an election -- has ironically shifted power toward the super-rich financiers of 527 groups. Intentional or not, I predicted this in two columns in the Washington Times on March 22-23, 2001.

I argued, "Campaign finance reform has always been about tilting the balance of political power in one direction or another." If the McCain-Feingold bill were enacted, I forecast "courting the influence of media and entertainers would become even more dominant forms of political expression."

Fantasy filmmaker Michael Moore and his fan Linda Rondstadt have since made me look prescient. I also predicted the new campaign reform law "would tilt the balance of power toward PACs, lobbyists, the media and 'independent' advocacy groups ... producing issue ads." Annoyed by the newly enhanced influence of advocacy groups and their issue ads? Can't say you weren't warned.

"All versions of campaign finance reform invariably favor some set of organized interests over individual liberty," I wrote. "That is what this game is all about."

Restoring free speech and unregulated political competition would be easy. Start by repealing the singularly outrageous 2002 campaign finance law. Then repeal all the others.