The IRS scandal has appropriately tarred the Obama administration. But IRS abuse is not new: Franklin Delano Roosevelt, John Kennedy, and Richard Nixon all shamelessly used the tax authorities against their political enemies.

Thus, the problem is nonpartisan. More important, to paraphrase Rahm Emanuel, this scandal will be wasted if we don’t use it to advance the cause of liberty. The real issue is the expansive, expensive bureaucratic state, which threatens any system of limited government, rule of law, and individual liberty.

As I wrote in my recent article on American Spectator online:

the broader the government’s authority, the greater its need for revenue, the wider its enforcement power, the more expansive the bureaucracy’s discretion, the increasingly important the battle for political control, and the more bitter the partisan fight, the more likely government officials will abuse their positions, violate rules, laws, and the Constitution, and sacrifice people’s liberties.

One response to the scandal would be tax reform. But failing to address the broader underlying causes of the scandal would set the stage for a repeat performance in some form a few years hence. At the very least the latest IRS abuses should derail the Obama administration’s efforts to ever-expand the federal government.

The response should not be merely defensive. Americans should insist on abolishing the IRS as we know it. Ending tax-based social engineering would help. Moreover, government–and especially the national government–should do less.

Americans must decide if they want to live in a truly free society. Government increasingly attempts to run our lives at our expense. And now, we see yet again, public officials use their power to reward friends and punish enemies. Firing a couple of mid-level IRS employees isn’t enough. People must insist on real change in Washington.

Benjamin Srigley saw several pit bulls attacking an 11-year-old boy, so he ran into his home, retrieved his handgun, ran back, and shot one of the dogs. A bicycle policeman arrived on the scene shortly thereafter and shot the other two dogs. 

Here comes the twist: This incident happened in Washington, D.C., and even though the Supreme Court declared the city’s gun control regulations unconstitutional in 2008, the city government is still quite hostile to gun ownership. How hostile? Well, prosecutors offered Srigley a “deal”: pay a $1,000 fine and they would drop criminal charges against him. Turns out Srigley had lawfully purchased firearms when he lived outside D.C., but he had not registered them when he moved into D.C.

What kind of government would demand money from a guy who just saved a child’s life? The boy’s family can’t believe what is happening to their knight in shining armor. Srigley is now planning to move out of the city. One wonders if District officials can see any connection between their fine and the move.

On June 4, Cato will be hosting an event about the landmark Heller ruling. Registration information can be found here.

Declaring that “journalists should not be at legal risk for doing their jobs,” President Obama announced Thursday that he had directed Attorney General Eric Holder to review the Justice Department’s guidelines for spying on reporters in the course of leak investigations.

That would be more reassuring if Holder himself hadn’t signed off on a search warrant for the e‑mail correspondence of Fox News reporter James Rosen. The warrant application dubbed Rosen a “co-conspirator” in a violation of the Espionage Act, on the disturbing theory that asking a source to disclose classified information—as national security reporters necessarily do routinely—is itself a crime, even if publication of the same material is constitutionally protected. In other words, the president is asking the fox to investigate mysterious disappearances in the henhouse.

If reporters were looking to take comfort in the press shield bill the President asked Congress to revive in response to the Justice Department’s seizure of Associated Press phone records, they shouldn’t. Because the bill’s protections include a national security exception—and national security leak investigations are precisely when the government is most likely to spy on journalists—it seems unlikely to have made much difference in either the AP or Rosen cases. Indeed, as the Freedom of the Press Foundation points out, it could even make it easier for the government to obtain press records by overriding the common law safeguards some courts have recognized.

If the president really wants to demonstrate his concern for the potential of government spying to chill vital investigative reporting, he needs to take a very different approach, centered on greater transparency and a truly independent audit of Justice Department policy.

Transparency can begin with letting the public know exactly what the guidelines for investigating the press are—and how the Justice Department interprets them. As the FBI’s operational guidelines make clear, the rules requiring the press to be notified when their phone records are obtained only apply to subpoenas—not other secretive tools, such as National Security Letters, which can be issued without court approval. But the rules governing NSL demands for media records remain secret.

The Justice Department should also release any internal memos interpreting the rules governing press investigations. We know, for example, that there exists an informal 2009 opinion in which Justice Department lawyers analyzed how the rules would apply to sweeping demands—such as so-called “community of interest” requests—that can vacuum up a reporter’s records (among many others) even if the reporter is not specifically named as a target. Only brief excerpts of that opinion have been disclosed, thanks to a 2010 Inspector General report, and there is no way of knowing how many others remain secret.

Finally, we need an independent review—conducted by the Office of the Inspector General, not Attorney General Holder—to determine just how much surveillance of reporters has already occurred. It seems clear that the Justice Department does not think the current rules always require the press to be informed when they’ve been spied on: DOJ lawyers convinced a judge that the government never had to notify Rosen they’d read his e‑mails. And because demands for electronic records can be quite broad, it would be all too easy for the government to end up with sensitive information about journalistic investigations even when no reporter was explicitly targeted.

When Congress and the public know what the rules really are, and how they have been applied in practice, we can begin a serious conversation about what reforms are needed to protect press freedom. Asking Eric Holder to investigate Eric Holder, on the other hand, is unlikely to protect much of anything—except, perhaps, Eric Holder.

The Washington Post’s Michael Gerson writes that the IRS’s suppression of tea-party groups and the subsequent cover-up are the second-largest scandal haunting the agency.

Drawing from my article (with Jonathan Adler) on the illegal IRS rule meant to save Obamacare, Gerson concludes:

The IRS seized the authority to spend about $800 billion over 10 years on benefits that were not authorized by Congress. And the current IRS scandal puts this decision in a new light…

The whole enterprise [of Obamacare] is precariously perched atop a flimsy bureaucratic excuse. And the agency providing that excuse is a discredited mess.

When the IRS suppresses speech by the president’s political opponents, that’s nothing to sneeze at. Neither is it anything to sneeze at when the IRS tries to spend almost a trillion dollars against the express wishes of Congress.

This is the most important question in economics: Why did the Industrial Revolution happen when and where it did–and not before or elsewhere? Fail to understand that and you may enact policies that will kill the unprecedented human progress it launched: a multiplication in the average worldwide per-capita income of between 16 and 100 times in the span of just 200 years. Compare that to the preceding thousands of years over which worldwide per-capita income was largely unchanged.

In her brilliant 2011 book Bourgeois Dignity, economist and historian Deirdre McCloskey shot down every leading explanation for this “Great Fact,” and then offered a new one: in the Netherlands and then Britain, entrepreneurship was accorded a widespread liberty and respectability it had never before enjoyed in human history. McCloskey will speak at the Cato Institute on this and related topics on June 20th at noon.

This exquisitely elegant explanation packs enormous punch for students of the history of economics. Among other things, it explains why the ancient Greeks–who invented democracy, the core forms of Western literature, joint-stock corporations, commercial insurance, and even steam-powered toys–never enjoyed an industrial revolution of their own. (The ancient Greek elites abhorred the idea of working for a living.)

As yet, though, there is no “implementation detail” for the Liberty and Dignity theory. Bourgeois Dignity is so successful at shooting down earlier explanations for the Great Fact because it describes the mechanisms by which they are proposed to have driven economic growth and then shows that the magnitude of their impact is simply insufficient. So far, it doesn’t seem that anyone has proposed a specific, quantitatively testable mechanism by which the change in popular rhetoric could have precipitated the 16-to-100-times innovation explosion.

To get the ball rolling, below is one proposal for such a mechanism. (Disclaimer 1: this is not my day job. Disclaimer 2: it wouldn’t be that easy to quantify–sorry.)

Liberty and Dignity for entrepreneurs/​tinkerers/​merchants raised the number of clever, dedicated innovators beyond a threshold that had never before been reached. Below that threshold, would-be innovators would often have hit stumbling blocks that they could not overcome, e.g., needing some as-yet-uninvented process/​material/​tool/​concept to complete/​commercialize their own innovation. Without that missing piece, their innovative efforts would have failed. Above that threshold, cross-pollination among innovators would have drastically reduced the number of insurmountable problems–innovators would increasingly have been able to borrow from their predecessors and contemporaries who were working on related problems. This cross-pollination would have required inexpensive information storage and retrieval (i.e., books), but it also would have required a critical mass of innovators simultaneously working on a vast array of problems, a critical mass that the widespread Liberty and Dignity for entrepreneurs created for the first time.

Call it, “James Burke’s Connections meets Deirdre McCloskey’s Dignity.” Just a thought.

In his stirring speech to the 1984 Democratic National Convention, then-New York governor Mario Cuomo used an extended metaphor of the whole nation as a family. So maybe it should come as no surprise to discover that his son, current New York governor Andrew Cuomo, uses the New York State government as a jobs program for his friends and their families. The Empire State Development Corporation in particular is chock-full of his donors and friends, and their young sons–not to mention Cuomo’s political advisers.

He’s not alone in spending (other people’s) money to help family and friends. The Washington Post reported in December on the family-friendly atmosphere at the Metropolitan Washington Airports Authority:

Meet the Kulle family: mom Helen, daughter Ann Kulle-Helms, son-in-law Douglas Helms, son Albert, daughter-in-law Michele Kulle and Michele’s brother, Jeffrey Thacker.

They all worked for the Metropolitan Washington Airports Authority. All at the same time.

One MWAA board member, 

who has had at least three relatives, including a daughter-in-law, work at the agency, said family members are employed frequently, particularly among board members.

“If you ask a third of those folks, their relatives work there,” he said. “I never thought that we were doing anything wrong.”

…

“This is a government town and an agency town,” Crawford said. “If there’s a possibility that you can hire a relative … it was the norm.”

And yesterday the Post reported that MWAA isn’t just for family, it’s for friends, too. Two old friends, one at MWAA, the other at the D.C. Office of Aging, hired each other’s children and friends and issued numerous contracts and grants to companies run by relatives and friends.

At MWAA, government is truly one big family.

And today comes this touching story from Alabama:

Rep. Jo Bonner, R‑Ala., will resign from Congress later this year to take a job at the University of Alabama, CQ Roll Call has confirmed…

He will take on the newly created position of vice chancellor of government relations and economic development…

Bonner’s sister, Judy Bonner, is president of the University of Alabama in Tuscaloosa.

It bears repeating: “The vice chancellor job is a newly created position in the UA system.”

Anything for family.

Last week-end, the Washington Post had a good article about how difficult it will be for the upcoming U.S.-European Union trade talks to deal with the issue of genetically modified foods. In the Huffington Post, I have a short piece in which I explain why, in my view, trade talks can’t solve this issue.

Here’s my conclusion: 

However, asking trade negotiations to solve the issue in the next year and a half–the projected time-frame for the talks–may doom the whole process of US-EU trade negotiations. Let’s not risk killing a possible free trade deal on a quixotic quest to improve the EU regulatory process. Instead, put the EU arguments to the test: If protectionism is not the reason for the reluctance to approve genetically modified foods, the EU should have no objection to lowering tariffs and removing quotas for U.S. food products that are not genetically modified. Let’s push the EU on that issue instead, moving us towards free trade in the most simple and direct way we can.

My point here is that in order for international trade negotiations to work, we have to focus on what is actually achievable. Tariffs, quotas, and other explicit forms of discrimination are the core of protectionism, and there are plenty of those left. I’m happy to focus on those issues for now. It’s hard enough convincing the U.S. government not to regulate too much; using trade talks to rein in other governments’ regulation is asking a lot.