July 21, 2013

Barney Frank: Defending previous commentary

The columnist addresses criticisms of points he made about gambling, immigration and more.

In the Declaration of Independence, Thomas Jefferson eloquently explained that "a decent respect for the opinions of mankind" -- which has always struck me as one of his most felicitous phrases -- was essential to liberty.

In pursuit of this principle I address some of the criticisms of things I have written here.

The first response to my support for the right of adults to gamble charged me with inconsistency because I had worked to regulate the activities of the financial community, which includes a significant element of gambling, but was not for banning casinos. I recognize elements of risk in both sets of activities, and I believe that both should be regulated, not banned. The legislation that reforms the financial community includes only one prohibition of mortgages: to people who are likely to default on them. In every other case, we insist on competition, and the importance of having people who engage in risky behavior bear the responsibility for it. I am similarly supportive of appropriate regulation for casino gambling.

The second objector complained I was ignoring the fact that casinos bring corruption and greed. But corruption increases enormously when we ban a voluntary activity. The rise of organized crime in America, linked so closely to alcohol prohibition, is the enduring example of this. The association of gambling with organized crime in Las Vegas has long since disappeared, not in spite of legalization, but because of it. It is prohibition that is the major cause of corruption.

His other argument was that I was giving in to the greed of out-of-state operators, who would come to Maine and make a profit by offering a service that Mainers wanted to buy.

I wasn't sure when I read that whether he was talking about casino gambling, Burger King or Dunkin' Donuts. The latter two are also commercial enterprises run by out-of-state corporations that take profits out of Maine. And since this argument implicitly concedes that many Mainers want to gamble at casinos, banning them from the state means not only that the casino profit will still go to out-of-staters, but the jobs that are involved will also be the exclusive property of non-Mainers.

Next, in one column, I noted the inconsistency of conservatives who deny that federal government spending has any beneficial impact on our economy, but then oppose sensible reductions in military expenditures on the grounds that this will be bad for employment. Government spending can have a positive job impact, particularly when, as has been the case for the past two years after the deep recession caused by the financial crisis of 2008, there is a good deal of slack in the economy, and unemployment is high.

The right-wing myth that the public sector has been strangling the private sector gets it exactly backward. Had conservative resistance to appropriate fiscal policy not forced the loss of so many federal, state and local employees unemployment would already be below 7 percent. As Professor Alan Blinder pointed out in June in the Wall Street Journal, the private sector has added 6.8 million jobs over the last three years, but federal state and local employment is 1.2 million jobs lower.

Next, came a rebuttal to my defense of immigration.

This writer began by disagreeing with my point that the great majority of undocumented immigrants do not receive public assistance. He's wrong. They don't.

Some programs such as Social Security and Medicare are actually beneficiaries of their presence because many of them who are employed pay into the system without being able to collect. Having asserted in the face of the evidence that immigrants were major recipients of benefits, the writer then complained that too many of them are employed. Specifically, he said that with regard to employment, it was clear that "politicians and rich people," like myself and New York Mayor Michael Bloomberg, wanted to have the low-wage workers.

(Continued on page 2)

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