Topic: Government and Politics

UK National ID in Collapse - U.S. National ID to Follow?

The Sunday Times (U.K.) reports that “Tony Blair’s flagship identity cards scheme is set to fail and may not be introduced for a generation.” The Times cites leaked e-mails reflecting senior officials’ belief that the plan to subject the U.K. population to the regimentation of a national ID system is falling apart. Even a backup, scaled-down national ID card isn’t “remotely feasible,” according to the e-mails cited by the report. Ministers who are pressing ahead with the plan are “ignoring reality.”

Similar e-mails may well be floating around the U.S. Department of Homeland Security, which will be issuing regulations to flesh out the REAL ID Act this summer this fall after November 7th. (No bureaucrat with an ounce of political acumen would drop a $9-billion-dollar unfunded surveillance-mandate before the mid-term election.)

This is not bad news. A national ID system is useful for controlling a law-abiding population, but not useful for securing against law-breakers, particularly committed threats like terrorists - unless it is part of a total surveillance system.

The failure to implement a national ID system in the U.S. would represent little loss to the nation in terms of security, and a substantial gain in terms of preserved freedom and autonomy. All this is discussed in my new book, Identity Crisis: How Identification is Overused and Misunderstood.

Unlike the U.K., where a national ID is apparently a project identified with Tony Blair, the Bush Administration does not have to look for a face-saving alternative. The U.S. national ID was not a Bush Administration project, but something it accepted in a political bargain. The Administration can now (rightly) declare it impossible to implement and inconsistent with American values, then work with Congress to repeal the REAL ID Act.

Ron Paul in the Post

The Washington Post profiles libertarian congressman Ron Paul (R-Tex.) – in its Sunday Style section, which is sort of a throwaway placement.

It’s one of those 1970s-style laundry list stories:

The amiable Texas congressman would do away with the CIA and the Federal Reserve. He’d reinstate the gold standard. He’d get rid of the Department of Education.

Rather than really try to present the argument for individual rights and limited constitutional government, drawing on public choice economics and the failures of government programs, the reporter just lists one out-of-the-mainstream position after another. Still, she does make it clear that he’s philosophically principled and not your typical Bush-supporting JFK-lookalike 21st-century congressman.

Here’s an interesting point about Ron Paul that I haven’t seen anyone make: As far as I know, Ron Paul is the only member of Congress who has been elected three times as a non-incumbent. Two of those times he beat an incumbent.

He first won a special election in 1976, then lost that fall. Two years later he came back and defeated incumbent Bob Gammage. After three terms he ran for the Senate, losing the Republican nomination to Phil Gramm. The really bad news was that he was replaced by Tom DeLay. In 1988 Paul was the Libertarian Party nominee for president. Then in 1996, 20 years after his first election and 12 years after he had last won election to the House, he ran again in a differently configured district. He had to beat Democrat-turned-Republican incumbent Greg Laughlin in the primary – against the opposition of the National Republican Congressional Committee, the National Federation of Independent Business, the National Rifle Association, former attorney general Ed Meese, Senators Gramm and Kay Bailey Hutchison, and Gov. George W. Bush.

Given that kind of firepower and the incumbent reelection rate of about 99 percent these days, Ron Paul has a remarkable political record. He must be doing something right back in Texas.

Better than Investing

Former congressman Randy “Duke” Cunningham had a bribe menu for lobbyists who wanted government contracts. Amazingly, it wasn’t just an understanding between friends, or a general concept. He actually wrote it down on his congressional stationery. As Brian Ross reported for ABC News:

The card shows an escalating scale for bribes, starting at $140,000 and a luxury yacht for a $16 million Defense Department contract. Each additional $1 million in contract value required a $50,000 bribe.

The rate dropped to $25,000 per additional million once the contract went above $20 million.

I love the volume discount. And I especially love the fact that Cunningham didn’t think his customers could handle the math involved in “it’s $50,000 for each million.” Instead, he wrote down each increment with “50” next to it. (See the card here.)

Now a Washington Post story ties lobbying fees to specific earmarks. Lobbying fees and earmarks are legal, of course, so this is not an illegal bribe menu. But I was struck by the cost-benefit ratio:

For example, the Institute for Human and Machine Cognition, affiliated with the Florida University system, received an earmark valued at $2.3 million to conduct research for the Navy after paying Copeland Lowery $60,000 last year, according to House records and a spokeswoman for the institute.

The Rochester Institute of Technology received six earmarks valued at $8.9 million after paying Copeland Lowery $440,000 from 2002 to 2005.

The lobbying prices seem higher than Cunningham’s, but of course there was more overhead involved. And I’m no businessman, but I’m betting that it’s pretty hard to turn $440,000 into $8.9 million in manufacturing or other normal economic activity.

So you can see why, as long as Washington has far too much money to hand out, people will spend money to get a piece of it.

Rent-Seeking 101

Mike Munger, chair of Duke University’s political science department and a friend of Cato, has a great essay on the waste of political “rent-seeking,” the attempt to get taxpayer money channeled through government to your favored interest (whether hungry children, municipal governments, corporations, or private individuals).

Here’s an excerpt:

In my classes, I ask students to imagine an experiment that I call a Tullock lottery, after one of the inventors of the concept of rent-seeking, Gordon Tullock.

The lottery works as follows: I offer to auction off $100 to the student who bids the most. The catch is that each bidder must put the bid money in an envelope, and I keep all of the bid money no matter who wins.

So if you put $30 in an envelope and somebody else bids $31, you lose both the prize and the bid. When I run that game with students I can sometimes make $50 or more, even after paying off the prize. In politics, the secret to making money is to announce you are going to give money away.

Take a walk along K Street in Washington, DC. It is lined with tall buildings, full of fine offices and peopled by men and women with excellent educations and a real sense of ambition, a desire to make lots of money and achieve great things. What are those buildings, those people? They are nothing more than bids in the political version of a Tullock lottery. The cost of maintaining a D.C. office with a staff and lights and lobbying professionals is the offer to politicians. If someone else bids more and the firm doesn’t get that tax provision or defense bid or road system contract, it doesn’t get its bid back. The money is gone. It is thrown into the maw of bad political competition.

Who benefits from that system? Is it the contractors, all those companies and organizations with offices on K Street? Not really. Playing a rent-seeking game like that means those firms spend just about all they expect to win. It is true that some firms get large contracts and big checks, but all the players would be better off overall if they could avoid playing the game to begin with.

This is a large part of why I think Jonathan Chait is daffy for saying that Warren Buffett should dump some large fraction of his billions on “slick political operatives” on K Street. The competition for political rents is zero- and often negative-sum. The rent-seeking game has features of both a commons tragedy and an arms race — neither being a good model for a prosperous and peaceful society. But that’s what big-government types, left and right, are asking for when they insist on keeping government money and power on the table.

Chait is no doubt right that if his political tribe had more billionaire patrons, they could win more “auctions.” Unless the other tribe has even more motivated billionaire patrons, that is. He seems not to grasp that this a mug’s game — a low-grade civil war — flatly inconsistent with the general welfare. It’s a huge waste of financial and human resources. And once the game gets started, you often get sucked in, whether or not you’d like to, just to survive. Munger:

My students ask why anyone would play this sort of game. The answer is that the rules of our political system have created that destructive kind of political competition. When so much government money is available to the highest bidder, playing that lottery begins to look very enticing. The current Congress has, to say the least, failed to stem the rising tide of spending on domestic pork-barrel projects. Political competition run amok has increased spending nearly across the board. And sometimes, you have to bid just to keep from having money taken away from you through regulation.

I think once you really grasp the logic behind the tremendous loss of welfare through destructive political competition for rents, it becomes difficult to defend big, relatively unlimited government. Chait notoriously claimed that limited-government, market liberal types (i.e., Cato types) are evidence-immune ideologues, while statist liberals like him are just plain old empiricists, following the evidence where it leads. Well, Jon Chait, open-minded empiricist, I’d like to introduce you to my friend Mike Munger.

Tom Delay Is a Virginian

One of the best arguments for term limits is that we have reached the point where members of Congress are no longer “representatives” of their districts. The latest evidence of that came in this morning’s newspaper, which says Tom Delay will be on a Texas ballot in an upcoming election even though he has now declared himself to be a Virginian. Whether Delay wants to participate in that election or not, it is interesting that he has announced his status as a “Virginian” so fast. Or perhaps it’s not fast by modern standards.

Let’s see: Bob Dole returned to Russell, Kansas, to announce his candidacy for president. When he lost, he decided to live at the Watergate here in D.C. A few years later, his wife Elizabeth went to North Carolina to become a senator. The Clintons left Arkansas and are now New Yorkers. William Weld was governor of Massachusetts, but came down to New York to run for governor there. And there’s plenty more.

We need term limits before the next generation simply assumes that this is all perfectly normal and appropriate.

Federal Ban on Internet Gambling Marches On

Yesterday, I spoke with an aide to a Republican congressman who, as far as congressmen go, is somewhat libertarian. The aide told me that much to his chagrin, said congressman will be backing the ban on Internet gambling. What’s more, the aide said the congressman actually understands the economics of prohibitions, he just thinks that this will be the one time they don’t apply.

“For some reason, he thinks this is one instance where government can actually pull it off,” the aide said.

Unbelievable.

Internet gambling is already illegal, of course. That’s why gaming sites set up and operate offshore (several are actually traded on the London Stock Exchange). Yet, it’s still a $12 billion industry in the U.S. That means government already is trying, and failing, to prohibit it.

I guess the thinking is — as it is with the drug war — that if we try just a bit harder, spend just a bit more, harass private citizens just a bit more, and give government a bit more power, we’ll be able to buck history and finally make a vice prohibition stick.

Or perhaps lawmakers know it won’t work, and don’t care. The symbolism of trying to take a moral stand against gambling is more important than the policy actually working.

According to the New York Times, the gambling ban moves to the House floor for a vote next week, where it’s almost certain to pass. Here’s the kicker:

The majority leader, Representative John A. Boehner, Republican of Ohio, announced a few days ago that the measure would be voted on this summer as part of what the Republicans call their American Values Agenda.

So because the Republicans have garnered public scorn for the unethical, corrupt, morally bankrupt way they’ve governed over the last decade, they’ve decided to make a last-ditch attempt to hold on to power by passing judgment on the morals of their constituents (most of whom, polls show, oppose the bill).

Super.

The Times piece also looks at the free trade implications of Internet gambling prohibition, often overlooked in the debate. The Goodlatte-Leach bill will certainly exacerbate existing trade tensions between the U.S. and the 80 or so countries that allow online gambling. But many of those tensions have been bubbling over for years.

This bill brings up some new problems.

Because the bill effectively deputizes banks to sniff out and eradicate gambling among their customers (the creepy privacy implications of that alone ought to kill this bill), it amounts to a piece of blatantly protectionist legislation. Its practical effect will be to shield a domestic company (PayPal, which is owned by eBay) from foreign competitors like FirePay and Netteller.

I’ve explained a bit more about how this will work here.

Thus far, when countries like Antigua have challenged the U.S. gambling ban on free trade grounds, the Bush administration has fought tooth and nail to preserve its right to police the private behavior of American citizens. That means the administration has used millions of taxpayer dollars to prevent more liberty-minded countries from making too much freedom available to U.S. taxpayers over the Internet.

Of course, kicking Antigua around is one thing. When Britain mounts a challenge, as it likely will, this will all get much more interesting.

Gotta love the party of limited government.

Mexico’s Thin Margin

NPR keeps reporting that conservative Felipe Calderon seems to have won the Mexican presidential election “by the thinnest of margins.” Thin, yes. But I wouldn’t call it “the thinnest.” At this writing, Calderon leads by 243,000 votes, about 0.5 percent in an electorate of 40 million.

John F. Kennedy defeated Richard Nixon in 1960 by about 118,000 votes out of 69 million cast, or 0.15 percent. (And that’s if you give Kennedy about 320,000 Democratic votes in Alabama, even though only five of Alabama’s 11 Democratic electors intended to vote for Kennedy. If you don’t credit the Alabama votes to Kennedy, then he would win the electoral college vote while losing the popular vote.) Nixon got his revenge eight years later, defeating Hubert Humphrey by about 500,000 votes, or 0.70 percent in an electorate of 73 million. And then of course there was George W. Bush, whose popular vote margin was about minus 500,000 in 2000.

Calderon’s margin is thin, but it is “the thinnest” only by Mexican standards, not when compared to U.S. presidential elections.