Prohibition, Here We Come

Add gambling to the list of sins that the House would like to prohibit. It's been quite a summer: House-passed prohibitions against flag burning and gay marriage are joined by the passage (317 to 93) of HR 4411, the Internet Gambling Prohibition and Enforcement Act. Seventeen brave Republicans voted against their party, joining 76 Democrats.

Forget that the main Congressional claim-to-fame this year is extending tax cuts for an incredible minority of Americans. Or that politicians and traditional media aren't talking about the fact that real median income fell between 2003 and 2004. At the same time, though, the income of the top one percent of all Americans grew by 17 percent. And "[t]he top one percent of households (those with annual incomes above about $315,000 in 2004) garnered 36 percent of the income gains in 2004." (tip)

Last year, then-Federal Reserve Head Alan Greenspan warned:

[T]he US now has a significant divergence in the fortunes of different groups in its labor market. "As I've often said, this is not the type of thing which a democratic society - a capitalist democratic society - can really accept without addressing," Greenspan told the [Joint Economic Committee] congressional hearing.

No, it's more important to pass a law that has little chance of passage in the Senate and a still smaller chance of doing what it purports to do. But I guess it will play well in November in rural and conservative America -- another appeal "to the base." Are most of us still Puritans at heart? Do we really want to tell our neighbors how they can live their lives?

The best comment on the law came from Rep. Ron Paul (R-TX... but he's really a libertarian):

[P]rotecting liberty is more important than passing a bill that regulates something on the Internet.

The Interstate Commerce Clause originally was intended to make sure there were no barriers between interstate trade. In this case, we are putting barriers up.

I want to make the point that prohibition, as a general principle, is a bad principle because it doesn't work. It doesn't solve the problem because it can't decrease the demand. As a matter of fact, the only thing it does is increase the price...

H.R. 4411, the Internet Gambling Prohibition and Enforcement Act, should be rejected by Congress since the Federal Government has no constitutional authority to ban or even discourage any form of gambling.

In addition to being unconstitutional, H.R. 4411 is likely to prove ineffective at ending Internet gambling. Instead, this bill will ensure that gambling is controlled by organized crime. History, from the failed experiment of prohibition to today's futile "war on drugs,'' shows that the government cannot eliminate demand for something like Internet gambling simply by passing a law.

One estimate from Red Herring suggests taxing Internet poker could yield $3.3 billion in federal revenue. In fact, stock prices rose after the House vote.

Rather than regulate and tax the enterprise (which is global in nature) ..... our Congress will simply "prohibit" us from using the Net to gamble. Are they going to "prohibit" state governments from using gambling (that's what the lottery is, folks) as a substitute for raising taxes? No, I thought not.

Pandering by any other name is still pandering.

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