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Megan McArdle

Megan McArdle - Megan McArdle is a senior editor for The Atlantic who writes about business and economics. She has worked at three start-ups, a consulting firm, an investment bank, a disaster recovery firm at Ground Zero, and The Economist. More

Megan was born and raised on the Upper West Side of Manhattan, and yes, she does enjoy her lattes, as well as the occasional extra-dry skim-milk cappuccino. Her checkered work history includes three start-ups, four years as a technology project manager for a boutique consulting firm, a summer as an associate at an investment bank, and a year spent as sort of an executive copy girl for one of the disaster-recovery firms at Ground Zero … all before the age of 30.

While working at Ground Zero, Megan started Live From the WTC, a blog focused on economics, business, and cooking. She may or may not have been the first major economics blogger, depending on whether we are allowed to throw outlying variables such as Brad Delong out of the set. From there it was but a few steps down the slippery slope to freelance journalism. She has worked in various capacities for The Economist, where she wrote about economics and oversaw the founding of Free Exchange, the magazine's economics blog. She has also maintained her own blog, Asymmetrical Information, which moved to The Atlantic, along with its owner, in August 2007.

Megan holds a bachelor's degree in English literature from the University of Pennsylvania and an M.B.A. from the University of Chicago. After a lifetime as a New Yorker, she now resides in northwest Washington, D.C., where she is still trying to figure out what one does with an apartment larger than 400 square feet.

What policy lessons should we take from Spitzer's downfall?

By Megan McArdle
Mar 13 2008, 10:14 AM ET Comment

For starters, this seems like an awfully good time for Democrats and Republicans to unite behind the repeal of the Mann Act, a barbarous relic of 19th century sexual hysteria most generally used for persecuting various sorts of scary minorities.

And we already know how I feel about our nation's prostitution statutes.

Jack Balkin suggests that it might also be time to take a long hard look at the surveillance state:

These events offer a window into a much larger phenomenon, the National Surveillance State, in which the state increasingly identifies and solves problems of governance through the collection, collation and analysis of information. Governments have always used information, but today's techniques are made more powerful and more prevalent by lower costs of computing and data storage. This story also shows the important role played by private businesses in constructing and implementing the National Surveillance State. The Times report suggests that the banks in question volunteered more than the letter of the law might have required, because the transactions in questions were wire payments rather than coin or currency. The banks erred on the side of caution, seeking to assist the state in its efforts. Moreover, they already had their own pattern recognition systems designed to identify suspicious behavior. (Many people are probably familiar with the programs devised by credit card companies which analyze consumer transactions to calculate the probabilities that a card is being used fraudulently.)

If computing power increases enough, there is no reason why governments might not lower the threshold for reporting of suspicious transactions, or, indeed, require that every transaction over 100 dollars be reported. All this information could later be sifted through by data mining programs, in order to spot patterns of suspicious activity. The only limit is the technology and the manpower that law enforcement is willing to devote to analysis of financial transactions.

The Spitzer story shows both the promise and the threat of these developments. On the one hand, reporting financial transactions makes the job of law enforcement easier, and it uncovers crimes (and terrorist plots) that might never be discovered otherwise. Mandatory disclosure (or in this case, voluntary disclosure by banks) of private individual's financial transactions, and sharing of data between intelligence services, federal, state and local law enforcement helps the state identify patterns of criminal activity, prevent crimes before they occur, and punish them after the fact. These techniques and technologies allow governments to do the jobs entrusted to them more powerfully and more efficiently than ever before.

On the other hand, these developments carry all of the potential risks of a powerful National Surveillance State: Governments can make mistakes in assessing levels of criminality and dangerousness; and their data mining models may characterize innocent activity as suspicious. Without sufficient oversight and checking functions, government actors may misuse the additional knowledge they gain, for example, by instigating abusive prosecutions, or creating discriminatory systems for access to public and private services (like banks, airports, government entitlements and so on). And the more powerful government becomes in knowing what its citizens are doing, the easier it becomes for government to control people's behavior.

Terrorism aside--and my understanding is that terrorists are very rarely caught using a money trail--most of the "crimes" we catch by spying on people's bank accounts shouldn't be illegal, so I can't say I'm thrilled to hear that the government is now 200% more efficient at putting the "perpetrators" in the pokey. Particularly when they have to spy on me to catch them. I don't think it's any of the government's damn business if I want to carry around $10,000 in cash--and if you need broad powers to monitor the financial transactions of ordinary Americans in order to catch drug dealers, then I suggest that it's time to rethink the laws that necessitate the creation of these financial "crimes".

On the other hand, I'm not distressed to hear that the Feds were spying on Eliot Spitzer. No, not because I don't like the man, but because I think maybe we should spy on our politicians, all the time. No probable cause, you say? I fling back at you Mark Twain's observation that America only has one distinct criminal class: Congress. Perhaps every member of Congress should be subject to warrantless wiretaps--except that the spies should be the American public, streaming over the web. If they need a national security exemption, of course, I think they should be able to get it one from an appropriate judicial authority. I'll even agree to a generous 24-hour delay to allow them to make their case.

On a more serious note, I think it's entirely appropriate that the anti-corruption police watch politicians like hawks. They've chosen public office; that conveys a lot of responsibility to the public, including assuring them that your votes aren't being bought outright. I also think that politicians, when caught in a crime, should automatically get the maximum penalty; if they think the law is such a good idea, they ought to suffer heartily when they disregard it.

This is all quite moot, because of course the people we need to past the laws restraining politicians are . . . politicians. But a girl can dream, can't she?



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