AMERICA'S FIVE DUMBEST BANS

10 April 2009

Actions taken on Internet gambling rank right up there

 

Interesting weekend reading came from the Hawaii Reporter at http://www.hawaiireporter.com/story.aspx?7070255f-67df-40c5-af64-9b4fc952db1e , which took an op-ed look at the five dumbest bans perpetrated by the US government - one of them involving online gambling.

Commenting that what the free market gives, governments too frequently take away, the newspaper used four criteria on which to base its assessment:

• No one can present a strong case for marginal social harm from the product or service banned. Consumer choice alone is good enough reason to oppose product bans, but that aside, the bans included herein cannot be argued for on even the most tenuous utilitarian grounds.

• The product should provide benefits to the general public. It should be something that almost anybody might have a theoretical interest in using.

• A government must have actually enforced the ban within the recent past. Many amusingly archaic laws remain on the books but go unenforced—but not all.

• The law in question must be statewide or national in scope. The larger the jurisdiction, the greater the harm it can cause when it bans a product. National and state bans are extremely difficult to circumvent, local bans much less so.

The Hawaii Reporter goes on to deliver its assessment, naming a ban on the use of the cancer drug Provenge; the prohibition in the states of Louisiana, South Carolina, Virginia, and Oklahoma on buying a coffin from an unlicensed dealer; the Louisiana ban on selling a flower arrangement is not a licensed florist and the Texas and nationwide ban on selling horsemeat.

Second on the list was the national restraints on Internet gambling in the United States, about which the article commented:

"Americans like to gamble. As of 2008, 48 states had legal gambling in some form, and today 38 allow the operation of casinos, slot parlors, or card rooms.6

"Nearly all Americans approve of the activity—around 90 percent in one recent poll. However, a 2006 federal law, the Unlawful Internet Gambling Enforcement Act (UIGEA), places absurd restrictions on banks in an attempt to outlaw Internet gambling.

"The law, which the Bush administration attempted to implement through a “midnight” rulemaking effort in its waning days, essentially bars banks from engaging in or facilitating transactions to transfer money to online gambling providers outside of the United States.

"The absurdity of trying to curb gambling aside, UIGEA will adversely affect activities which do not constitute gambling at all, imposing tremendous costs on the rest of the economy. The regulations will impose a sizeable burden on the already struggling banking sector. The cost, the Treasury, Office of Management and Budget, and Federal Reserve agree—will come in upwards of $100 million a year."

The history of the newpaper's annual look at legislative absurdity has included some goodies in the past:

A Virginia ban on sangria

Several state bans on sex toys

A ban on the CardioPump

A ban on selling bottled water in Toronto.

The article concludes:

"This catalog of absurd product bans may seem amusing, but any clearly absurd product ban can have serious negative consequences for freedom and consumer welfare. Nobody can legitimately contend that a society that retracted all of the product bans discussed above would find itself less safe, secure, or moral. These bans simply intrude on the freedom of individuals to live their lives as they please. While the freedom to drink bottled water, buy wildflowers a child has picked, or play cards online might appear inconsequential in the grand context of economic and personal liberty, the sheer absurdity of these product bans makes them all the more insidious. In total, they add to a litany of such laws that, quite simply, ought to go."           

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