The "Worst Possible Public Policy" Comes To Westchester County

The editors of the New York Times must have read my piece about "affordable housing" on Friday, because as if on cue they come out with a lead editorial on Saturday excoriating Westchester County Executive Rob Astorino for resisting the expansion of subsidized housing in his jurisdiction.  Their editorial is titled "Westchester's Tortured Road."  

As usual with Pravda, you scratch your head wondering if they have been taken in by the fraud of the government bureaucrats, or if they are actually part of the fraud.  In this case, it's hard to believe that they are part of the fraud, because what benefit does the New York Times get from the subsidized housing game, which is to provide lifetime sinecures to bureaucrats while those bureaucrats imprison the poor in a lifetime of poverty?  That leaves as the only alternative that the editors of Pravda have been taken in, which in turn means that they are incapable of getting outside of their cushy offices and walking a few blocks to the vast public housing tracts located on the West Side of Manhattan to observe those islands of permanent poverty, not to mention racial segregation, plunked into the middle of the richest county in the country.  And did I mention that those Manhattan projects are in the process of a maintenance crisis and financial collapse of a classic socialist death spiral?

So let's force Westchester down the same path!  What is the thought process that could lead someone to advocate expanding New York City's disastrous subsidized housing policies beyond the City limits?  The gist of the Pravda editorial is "fairness" and "opportunity" -- things you could only believe about subsidized housing if you just flatly refuse to observe it with your own eyes.  Here is a key quote:

The county [Westchester] entered into a consent decree in 2009 to build at least 750 units of affordable housing and work to remove the barriers to fair housing that in many villages and towns function as invisible “Whites Only” signs. Its obligations are straightforward and — given the bad behavior that gave rise to the court order — eminently fair. 

On the other hand, I must say that the opponents of subsidized housing seem to have their own messaging problem.  As to Astorino, I can't find him speaking out much at all on the subject.  But Pravda characterizes the debate as "fairness" and "opportunity" on one side, and "privilege" on the other.  If those were actually the real issues, I myself would be a supporter of subsidized housing.  And plenty of opponents of subsidized housing fall into the trap of couching their position in terms that sound very much like "privilege."  For example, the article from The Hill that I linked on Friday quoted extensively from a Congressman named Paul Gosar, Republican of Arizona:

Rep. Paul Gosar (R-Ariz.) . . . argued that the administration “shouldn’t be holding hostage grant monies aimed at community improvement based on its unrealistic utopian ideas of what every community should resemble.  American citizens and communities should be free to choose where they would like to live and not be subject to federal neighborhood engineering at the behest of an overreaching federal government,” said Gosar.

Sorry, Paul, but this argument sounds like "we should be able to keep out anyone we don't like."  It's not just that that's not going to persuade anyone.  More important is that it misses the point, which is that subsidized housing is a disastrous public policy on every front.  It's a disaster for every reason that socialism is a disaster.  It does not help the intended beneficiaries but instead imprisons them, and the projects themselves inevitably go into socialist death spiral.  And thus in the subsidized housing in New York we find:

• The cost of subsidized housing is huge on a per beneficiary basis, and therefore it can only be provided to a relatively tiny number of people.
• The huge expense does not count in the income of the beneficiaries.  They remain poor.
• The asset provided to the beneficiaries, despite its immense cost, cannot be used by the beneficiaries to help extricate themselves from poverty, because it is completely illiquid, and cannot be sold, sublet, mortgaged, etc.
• The supposed benefit of a subsidized housing unit comes attached to poisonous incentives, including making it much more difficult to move for a job (or a better job), together with income restrictions that strongly discourage getting ahead.
• Rents inevitably fail to cover operating expenses, making the projects dependent on subsidies that must ever increase.  It's only a question of time until the units fall into disrepair.  The taxpayer expense increases with every passing year.  No money is available for capital improvements -- even if the project is located in a fancy area where market values would immediately support private renovation at no taxpayer expense.
• The only way the residents can take advantage of their "good fortune" is to remain in the subsidized unit for life and not increase their visible income too much.  The projects become permanent concentrations of poverty and racial segregation.

So, Mr. Astorino, stand up for your position!  The poor need the incentives of capitalism to extricate themselves from their position.  Stand up for them against these predatory federal bureaucrats! 

The "Affordable Housing" Juggernaut Goes National

Really, what is it about "affordable housing"?  I have previously called building "affordable housing" in Manhattan "the worst possible public policy."  I have pointed out that "affordable housing" is "the most expensive possible way to help the smallest number of people" and that it just seems to be "one of those issues on which rational thought is impossible."  Is anybody listening?

And now, to prove my points, along comes the Obama administration, via the Department of Housing and Urban Development, to double, triple and quadruple down on subsidized housing as the way to fix the perceived problem of inequality in our society.  The Hill newspaper reports yesterday that HUD is moving forward this month to finalize its proposed rule with the Orwellian name of Affirmatively Furthering Fair Housing.  Here is the Rule as initially proposed back in 2013.

As usual with stuff coming out of the bureaucracy, this Rule is endless and unreadable.  I certainly would not recommend your trying to get through its 35 three-column pages of fine print.  But the basic idea is to use the threat of withholding government grants to force localities to prepare things called "Assessments of Fair Housing," which would then lead to "Consolidated Plans," "PHA Plans," and "Capital Fund Plans" -- and ultimately to building subsidized housing in places that don't currently have enough of it to please the government overlords.  Here are the key sentences of incomprehensible bureaucrat-speak from the Summary:

HUD proposes an improved structure and process whereby HUD would provide these program participants with guidance, data, and an assessment template from which they would complete an assessment of fair housing (the AFH). This assessment would then link to Consolidated Plans, PHA Plans, and Capital Fund Plans, meaningfully informing resulting investments and related policies to affirmatively further fair housing.

What then is the logic for going national with this huge expansion of the "worst possible public policy"?  The Hill quotes an unnamed HUD spokesman giving the usual justification that if only the government can compel communities to be integrated by building subsidized housing, that will break down the barriers to opportunity and presumably help the poor rise from poverty.

“HUD is working with communities across the country to fulfill the promise of equal opportunity for all,” a HUD spokeswoman said. “The proposed policy seeks to break down barriers to access to opportunity in communities supported by HUD funds.”

Others quoted in the article in The Hill take that argument even farther.  For example, here is Margery Turner of the Urban Institute, from the same article:

“In our country, decades of public policies and institutional practices have built deeply segregated and unequal neighborhoods,” Turner said.  Children growing up in poor communities have less of a chance of succeeding in life, because they face greater exposure to violence and crime, and less access to quality education and health facilities, Turner suggested.  “Segregation is clearly a problem that is blocking upward mobility for children growing up today,” she said.

Some of this might seem at least plausible, except for one small problem.  This has been tried over and over and is a total demonstrated failure. Can anybody please come here to Manhattan and open your eyes and look around?  Manhattan is not some obscure out-of-the-way place.  Probably, it's the most easily accessible place in this country.  All roads lead here, not to mention airline flights.  And we have the highest density of subsidized housing in the country.

And when you come here, here's what you will see.  You will see that Manhattan (New York County) is the wealthiest county in the country (measured by per capita income).  You will see a tremendous business community, with millions of high-end jobs crammed into a few square miles.  You will see some of the wealthiest and most expensive residential neighborhoods in the country.  And literally a stone's throw from these high-end jobs and expensive homes, vast tracts of HUD subsidized housing.  In just low-income housing alone, we have over 50,000 units in Manhattan, housing about 120,000 people, about 7% of the population.  Other forms of subsidized housing bring the proportion of the population receiving housing subsidies of one form or another to well over 10%.

And instead of raising the residents out of poverty, the HUD-supported complexes are in fact concentrated islands of poverty right in the midst of the greatest wealth in the country.  The New York City Housing Authority reports the poverty rate in its projects at 51%.  How is that even possible in the wealthiest county in the country?  Because a NYCHA project comes attached to poisonous incentives that virtually force the residents to remain in a lifetime of poverty in order to keep their specially-located apartment and ridiculously low rent.

If the HUD model of subsidized housing does not work in the wealthiest county with the highest concentration of the best jobs in the country, then it is not going to work anywhere.  And in fact it doesn't just "not work."  It actively traps the residents in poverty, even in the midst of plenty.

The fact is that the interest of the bureaucracy does not lie in raising the poor out of poverty.  The interest of the bureaucracy lies in creating a permanent dependent class that can never shrink and can never get out of poverty, so that the functionaries can forever hold out the poor as a reason to expand their fiefdoms.  Am I the only one who finds their efforts to keep the poor poor to be reprehensible?

New York, of course, is already committed to more and yet more of this "world's worst public policy."  Rest of the country, do yourself a favor and don't take the money.  Congress, how about just zeroing out the HUD budget -- now in the range of $50 billion per year? 

What's The Best Way For Obamacare To Die?

Call me crazy, but I think it's just a matter of time until Obamacare dies.  I'm sure there are many who disagree with me.  Why anyone thinks this enormously complicated Rube Goldberg contraption is worth preserving is another question, but it certainly has its fierce defenders.  As with any socialist scheme, it is plagued with rapidly increasing costs and benefits that somehow don't materialize.  The believers believe that this time that cycle can be broken, but it's never happened with prior socialist schemes.  Sooner or later the death spiral ends in death.

But how?  And when?  A potential trigger is the King v. Burwell case, now fully briefed and argued before the Supreme Court with a decision expected within weeks at most.  The petitioners in that case challenge the legality under the Act of subsidies going to those who purchase policies on the federally-established exchange.  Some 34 states did not establish their own exchanges, and therefore a victory for petitioners will mean that federal subsidies go away for the majority of those now receiving them.  That could be a serious blow to Obamacare.  But will it be fatal?

Don't underestimate the creativity of the bureaucrats and their academic facilitators in coming up with ways to continue to spend billions not authorized by Congress.  In the current issue of Engage, Josh Blackman of South Texas Law School considers some schemes that have already been proposed to keep Obamacare going after a defeat in King.  First among these is something called the "administrative fix," an idea attributed by Blackman to Nicholas Bagley and David Jones in a Yale Law Journal forum:

 HHS could revise its regulations and the Blueprint to provide that some states should be understood as having established an exchange, even if they never formally elected to do so. . . .   In other words, HHS would look to past actions as tacit evidence that the state in fact established an exchange, even in states that did not submit the declaration and application. Bagley and Jones query whether "the regular performance of essential and substantial exchange functions, over time, [could] constitute the establishment of an exchange."

The basic idea here is that some of the 34 states without exchanges have co-operated with the feds to some degree in the operation of the federal exchange, and that would then be deemed by regulation to be the equivalent of "establishing" an exchange under the words of the statute. 

Then there's another idea, suggested by law professor William Baude of the University of Chicago in a New York Times op-ed and picked up by the Justice Department in a letter submitted to the D.C. Circuit.  This idea is that every recipient of subsidies under Obamacare has a due process right to a hearing before his/her benefits can be cut off.  And therefore any ruling by the Supreme Court should be limited to only the four plaintiffs in the King case itself:

The week before oral arguments in Halbig v. Burwell ”which raises the same issues as King” the Justice Department submitted a letter to the D.C. Circuit Court of Appeals, taking the position that the government was constitutionally prohibited from denying subsidies to millions of Americans. In short, the government argued that people who were not parties to the suit had a due-process right to be heard before their subsidies were extinguished.

Blackman presents some rather cogent reasons why neither of these gambits would be likely to succeed after the King case has been lost.  Still, they could require another round of litigation, which could take years.  If a lower court ruled against the government, would it grant a stay pending appeals all the way to the top this time around?  Personally I find it hard to believe that the government would try either of these gambits; but I have been repeatedly surprised by the chutzpah of this administration.

Meanwhile, should we check in on how it is going on the overall Obamacare death spiral front?  Data are trickling out with frustrating slowness, which I take as a sure indication that the government doesn't want us to know how bad it is.  A website called Obamacarefacts.com, which claims no affiliation with the government, is nevertheless the site with the official best administration spin on any and all Obamacare data.  They report that as of the end of Q1 2015 the percent "uninsured" in the U.S. was down to 11.9% from 15.7% at the time Obamacare was enacted in 2009.   By the way, they use Gallup data for the 11.9%.  Isn't the government collecting this information?  OK, that's about a 4% "improvement," which is about 12 million people.  But it still leaves close to 40 million in the "uninsured" category.  Somehow, I was remembering that the whole idea here is that everyone was going to get "covered."  Five years ago it was the world's greatest crisis that 48 million or so were uninsured.  Today it's no crisis at all and indeed a great triumph that 38 million or so are still uninsured.  Go figure.

And of the 12 million or so newly "insured," how many are as a result of all the mandates and the exchanges, and how many are just the Medicaid expansion?  The answer from Obamacarefacts is: 10.8 million as of March 31, and estimated at 11.7 million by May 31 are new Medicaid enrollees.  In other words, almost all of the 12 million are from the Medicaid expansion.  So essentially all of the enrollment through the exchanges has been equally offset by the decline in employer-based insurance.  Why again did they bother with this enormously complicated Rube Goldberg thing?

And finally, how is the idea faring that you could greatly increase the demand for medical care while at the same time the cost would go down?  Really, did anyone believe that?  In just the past few days many insurers have announced their premiums for the 2016 year, and the picture is not pretty.  Here's an article from today in Forbes by Robert Laszewski.  Average proposed premium increases are well in the double digits, and Laszewski cites numerous examples in the 30 - 50% and even higher.  Here's his take:

You might recall that I have said we wouldn’t see the real Obamacare rates until the 2017 prices are published in mid-2016. By then health plans will finally have had a couple of years of credible claim data and two of the three “3 Rs” reinsurance provisions subsidizing the insurance companies will have gone away. . . .   Instead of moderate rate increases for one more year, the big rate increases have begun. They are particularly large among the health insurers with the most enrollment—the carriers with the most data.

So they put in a lot of subsidies to hide the obvious problems for a couple of years, but the disaster is making itself apparent already.  There are a lot of ways that Obamacare can die.

The Joke Of Criminalizing Money Laundering

It's hard to keep up with all the "money laundering" criminality going on all around us.  Just days ago former House Speaker Denny Hastert got indicted for the "crime" of repeatedly withdrawing amounts of less than $10,000 at a time from his bank account in order to pay off a blackmailer.  Then it was revealed that Citigroup is expecting to close its Banamex subsidiary because of inability to comply with government demands to control money laundering in the Mexican affiliate.  Then on Friday it emerges that the U.S. Justice Department is accusing international bank HSBC of "serious deficiencies" in its money laundering controls.

The HSBC revelation arises out of a prior settlement between the bank and U.S. authorities back in 2012.  HSBC paid some $1.9 billion to settle the money laundering allegations at the time, and as part of the settlement entered into something called a "deferred prosecution agreement" by which it agreed to have a government-appointed monitor snooping around it all the time and auditing and reporting back to the government on anything deemed to be a weakness.  The monitor has recently produced a report of some 1000 pages or so, and we learn of its existence because the government has made a motion to keep it secret.  According to June 5 article in the Guardian linked above:

HSBC’s procedures to prevent money laundering, sanction-breaking and criminal activity still have deficiencies so serious that to publicly disclose them would risk serious crime, the US Department of Justice has said.  The embarrassing disclosure of continuing issues with HSBC’s processes is contained in a 16-page motion filed to a US court this week by the DoJ, which is seeking to keep confidential a report on the bank that is more than 1,000 pages long.

Of course, notable about all of these government efforts, and all the others that you will read about in the area of money laundering, is that none of them involve prosecution of the actual bad guys.  Hastert's actions in paying blackmail may be unsavory, but nobody says they were illegal.  The blackmailer?  Hey, he's the cooperating witness -- of course he goes free.  Citigroup and HSBC?  They're involuntarily deputized law enforcement agents who supposedly can stop money transfers by the Mexican drug cartels if only they put in place enough "controls," whatever that may mean.  What is the control that is supposed to stop depositing small amounts of cash at ATMs on one end and withdrawing same on the other end?  I guess that deep secret is what the government is trying to hide by keeping this HSBC report confidential.

All of these guys should read the article in today's Wall Street Journal titled "Money Isn't Free, but Moving It Is Now Cheaper," by Christopher Mims.  This is about lots of new money transfer systems, from Venmo to Apple to Square Cash to Google Pay.  Oh, and then there's Bitcoin.  Bitcoin doesn't involve banks, and they're not the only one.  How about MoneyGram:

Alex Holmes, chief financial officer of MoneyGram, points out that 90% of the remittances his company handles are cash to cash, and they are between people who don’t even have bank accounts.

Really, how much loss of privacy and phony prosecutions of non-criminals do we need to go through in this exercise in total futility?

The Greatest Scientific Fraud Of All Time -- Part V

Scientific fraud has been all over the news this past week.  The latest example is an article titled "When contact changes minds: An experiment on transmission of support for gay equality," by  Michael LaCour and Donald Green, that appeared in Science back in December.  The LaCour/Green article reported on a study in which it was claimed that people's attitudes toward gay marriage were significantly changed following discussions of about 20 minutes in length with door-to-door canvassers.  When the article came out, it created a mini media sensation, with discussion in outlets including the New York Times, Washington Post, Wall Street Journal, Los Angeles Times, The Economist, and others.  Really, it's just remarkable how all BS radar gets turned off when a new study reports what the right people want to hear.

The unraveling began on May 19 when a critique of LaCour/Green titled "Irregularities in LaCour (2014)" appeared on the website of Stanford University, written by David Broockman and others. Trying to replicate and extend LaCour's results, Broockman and his co-authors uncovered serious irregularities in the LaCour data.  They presented the information to Green, who then asked that the article be retracted.  LaCour claims to stand by his data, but -- oops -- it has been deleted.  And thus this past week we are treated to long philosophical essays on scientific fraud from the likes of NYT and WSJ.

I have to admit that in the world of scientific frauds, this is a pretty good one.  Then again, compared to the Big One, this is pretty small time.  By the Big One, I am of course referring to the world temperature data tampering fraud, by which 50 and 100 year old temperature records are systematically altered to make them cooler, thus exaggerating the extent of warming and keeping the "global warming" narrative going.  Anything new on that one this week?

As a matter of fact, there is.  On Thursday June 4, Science came out with an article by Thomas Karl and multiple co-authors titled "Possible artifacts of data biases in the recent global surface warming hiatus."   Yes, it's the same Science that also published the discredited LaCour article.  This article is an attempt to deal with the now-famous global warming "pause" or "hiatus," in which world temperatures, as measured by multiple data sets including the highly accurate satellites, have refused to increase for a period now exceeding 18 years, in the face of predictions of disaster coming out of the UN IPCC and others.  Tom Karl, for those who don't recognize the name, is a high-ranking bureaucrat at NOAA and a serious global warming alarmist.  Here's the abstract of the article from Science:

Much study has been devoted to the possible causes of an apparent decrease in the upward trend of global surface temperatures since 1998, a phenomenon that has been dubbed the global warming “hiatus.” Here we present an updated global surface temperature analysis that reveals that global trends are higher than reported by the IPCC, especially in recent decades, and that the central estimate for the rate of warming during the first 15 years of the 21st century is at least as great as the last half of the 20th century. These results do not support the notion of a “slowdown” in the increase of global surface temperature.

You see, we have just "updated" the "global surface temperature analysis."  No big deal in that.  And of course the updating "reveals" that temperatures are increasing faster than anyone thought!

Needless to say, the New York Times immediately picked up the story and reported it as fed to them by Karl, without any critical thinking of any kind.  The article on June 4 is by climate-activist-masquerading-as-reporter Justin Gillis, and titled  "Global Warming 'Hiatus' Challenged By NOAA Research."   Excerpt:

Scientists have long labored to explain what appeared to be a slowdown in global warming that began at the start of this century as, at the same time, heat-trapping emissions of carbon dioxide were soaring. The slowdown, sometimes inaccurately described as a halt or hiatus, became a major talking point for people critical of climate science.  Now, new research suggests the whole thing may have been based on incorrect data.  When adjustments are made to compensate for recently discovered problems in the way global temperatures were measured, the slowdown largely disappears, the National Oceanic and Atmospheric Administration declared in a scientific paper published Thursday.

So, Tom and Justin, can you kindly explain how you have managed to make temperatures of the past get cooler in order to make it appear that there is a warming trend where none previously existed in multiple data sets?  The problem they have is that now lots of credible scientists are immediately all over their work, and before the week was out everybody who follows this knew how the trend got altered.  By the end of the week we had  "A First Look at ‘Possible artifacts of data biases in the recent global surface warming hiatus’ by Karl et al., Science 4 June 2015," by Ross McKitrick;  "Has NOAA ‘busted’ the pause in global warming?" by Judith Curry; "@NOAA ‘s desperate new paper: Is there no global warming ‘hiatus’ after all?" by Patrick Michaels, Richard Lindzen and Paul Knappenberger; and "Reports of the death of the global warming pause are greatly exaggerated," from the Global Warming Policy Foundation.  The last is the least technical, so I'll quote from their list of obvious points:

* The authors have produced adjustments that are at odds with all other surface temperature datasets, as well as those compiled via satellite.

* They do not include any data from the Argo array that is the world’s best coherent data set on ocean temperatures.

* Adjustments are largely to sea surface temperatures (SST) and appear to align ship measurements of SST with night marine air temperature (NMAT) estimates, which have their own data bias problems.

* The extent of the largest SST adjustment made over the hiatus period, supposedly to reflect  a continuing change in ship observations (from buckets to engine intake thermometers) is not justified by any evidence as to the magnitude of the appropriate adjustment, which appears to be far smaller.

And by the way guys, how about the data from the satellites?  Anyway, for Karl, Gillis, et al., it's all very simple:  pick one data set that you like, even though everyone knows it has big gaps and inaccuracies, and adjust all other and better data to that one to fit your narrative.  The President will be proud!

And in other climate-related news, President Obama wanted to talk to famed environmental documentary-maker Richard Attenborough, so on the spur of the moment he had Attenborough flown over from London to "chat" about climate change.  According to this report at Slate, Attenborough said he was "baffled" about why the President wanted to talk to him.  And don't worry, the carbon footprint of that trans-Atlantic roundtrip doesn't count, because it was for Obama.  Also, by the way, the carbon footprint of that flight was teensy compared to the one laid down by John Kerry.  That's the guy who has declared global warming to be the biggest security risk to the United States, bigger than Iran and ISIS.  After breaking his leg riding his bicycle in France, Kerry was flown home from Geneva.  Here's a picture of the plane he flew home in -- a C17.  Hey, it's smaller than a 747!

Denny Hastert: Can You Top This Phony Prosecution?

The game of "Can you top this?" in the world of phony prosecutions continues with the indictment of former House Speaker Denny Hastert at the behest of prosecutors in the Northern District of Illinois.  Here's the indictment.  I like the lead line of today's Washington Post story by Janell Ross:

In journalism, there's a time-worn saying: It's not the crime but the coverup that gets them every time.

OK, Janell, but is it a crime to cover up something that is not itself a crime?  Can you explain why?

Seems like Hastert was being blackmailed over some alleged misconduct dating from a time 30 or so years ago when he was a high school wrestling coach.  He was paying the blackmailer in cash, and withdrew the money in multiple increments from several banks each month, each withdrawal under $10,000.

Now as far as I know, blackmailing someone is a crime, but paying blackmail is not.  So what has Hastert been indicted for?  There are two charges in the indictment.  One is for the crime of "structuring."  The other is for lying to the FBI.

You haven't heard of "structuring"?  You may have heard that if you deposit or withdraw an amount of $10,000 in a bank they are required to file something called a "currency transaction report" and report you to the government.  Of course people caught on to that, and started dividing up their deposits into amounts under $10,000.  So in 1986 Congress in its wisdom made a crime out of intentionally dividing up your deposits to avoid reporting to the government.  It's 31 U.S.C. Section 5324.

This is all part of the government's crackdown on what it calls "money laundering."  I have previously referred to this as "the most insidious area of government regulation."  Supposedly the idea is to catch drug dealers and terrorists -- or at least that's how it's sold to the gullible public -- but money laundering regulation is completely useless in dealing with those things.  An article by Charles Kenny in Bloomberg News back in February could not identify one single terrorism prosecution that had come out of anti-money laundering regulation.  I can't find one either.  And if anti-money laundering regulation was of any use against drug kingpins, then why hasn't the drug war been won instead of lost?  Kenny cites a recent study by Levi, Reuter and Halliday for the IMF that finds "no demonstration of [the] benefits" of AML regulation.  Nada, zip, zilch.

By the way, the administrative bureaucracies at banks to deal with this AML stuff cost tens of billions of dollars per year in the aggregate.  And no matter how much they spend, the banks have no practical way of cracking down on money laundering.  It's obvious to everyone that literally all drug money finds its way somehow into the banking system, and in a world where almost all deposits and withdrawals involve no human interaction, the possibilities for identifying which ones are "drug money" are just about nil.  But the feds endlessly torture banks for supposedly not having sufficient "controls" to stop the money laundering.  Just today the Wall Street Journal front page has a story that Citigroup plans to close its Banamex subsidiary because of government allegations that its money laundering "controls" are weak.  Believe me, the Mexican drug lords will still figure out a way to move their money.

If you really want to get your blood boiling, troll around a little for some articles on what "anti-money laundering" prosecutions are actually about.  The answer is, this is how the predatory government steals money from hard-working small business people under the color of the law.  Here's an article from Radley Balko in the Washington Post in 2014 reporting on a few cases that have gotten some notoriety:  a young immigrant woman from Russia who wanted to make a down payment on a house and had difficulty getting money wired from her bank account in Russia so she withdrew cash in several increments from ATMs and deposited the money in her U.S. account; one seasonal produce market in Frederick, Maryland, and another one in Maryland on the Eastern Shore; a small grocery store in Fraser, Michigan.  Or check out this story about the small Mexican restaurant in Iowa that had its entire bank account seized by the feds.  And so forth.  In each case the government steals the money first and then puts you through endless and expensive legal process to get it back.  Their game plan is to "settle" for keeping most but maybe not quite all of the money for themselves, while you, if you are lucky, just barely survive being put out of business.

In none of these cases was there any allegation by the government that the activity that earned the money was in any way illegal.  Could it really be that "structuring" is a crime even if both your source and use of the money are completely legal?  Absolutely, or at least that's the government's position.

So sorry, Denny, but the fact that you were using the money for a legal purpose is not going to help you.  And in fact, I might even have had some sympathy for you myself, except for one small thing:  although you weren't in Congress when the "structuring" thing was initially passed in 1986, you were there for several increments to the criminal money laundering regime, including that you were the Speaker in 2001 when the USA PATRIOT Act hugely expanded the whole thing.  Do you mean it never occurred to you that they wouldn't ever catch a single terrorist with this regime and instead would turn their guns on you?  Too bad, my friend.

The other "crime" that Hastert is charged with is "lying to the FBI."  (18 U.S.C. 1001)  Again, does it surprise you that that is a crime?  Here they have all these elaborate rituals of making people raise their right hand and administering oaths and calling people before grand juries.  You fully understand that lying after you have gone through all of that is a crime, known as perjury.  But if they skip all the ritual it's still a crime?  Yup.  In fact, a perfectly reasonable way of looking at it is that the ritual is all just a trick to con people into thinking it's not a crime to lie when you are not under oath.

UPDATED, June 15, 2015.  Previous version incorrectly stated that Hastert was in Congress when the "structuring" law was originally enacted.  It was enacted in 1986; he entered Congress in 1987.