"Land Titling" In South Africa And The Miracle Of Private Property

On Monday I was a guest of the Atlas Foundation at a lunch where the speaker was a guy named Temba Nolutshungu.  Nolutshungu is from South Africa, and is the Director of a group in that country called the Free Market Foundation, an organization that works to promote free market principles. The particular subject of Nolutshungu's speech was a program of the FMF called Khaya Lam, or "my home."

It seems that South Africa, like most everyplace these days, is subject to trendy progressive groupthink on how to raise the poor up from poverty.  So of course the South Africans have engaged in massive building of subsidized public housing for the poor.  All over the country, the government has built vast tracts of tiny homes, row upon row of them, on small plots of land.  In line with the typical socialist business model, the "beneficiaries" of the program cannot buy or own the homes, but rent them at subsidized rents from their government overlords.  The projects look clean, if modest, upon completion. However, over time they gradually deteriorate, and certainly the residents never make any significant investments in improving them as long as they are in public ownership -- which until now has been, indefinitely.  Here is an example of what these projects look like (this one in a township called Khyalitsha, on the outskirts of Cape Town):

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Nolutshungu estimated that some 5 million or more South Africans, almost all black, live in housing of this type.

Nolutshungu then described the idea of the Khaya Lam program as "land titling," that is, providing "title" to the land and building to the people living in it.  It was an interesting choice of words.  I would have described the program as giving away the public housing to the residents.  As Nolutshungu described it, when title to one of these homes is transferred to the residents, the government does not charge anything for the land or the building; however, there is a fee of the equivalent of about $150 for what he called "conveyancing."

And then Nolutshungu described what happens when the people get title to their homes.  Suddenly, they start investing in them.  They expand their size, put in plumbing, replace the roof, put up security gates and fences, put in better windows, and on and on.  Plumbers, bricklayers, roofers, ironworkers, welders, glaziers and others are suddenly in demand.  Economic activity greatly expands.  Who would have thought such a thing might happen?  I asked Nolutshungu to provide me with some "before" and "after" pictures, but I have not yet received them.  They will likely be the subject of a future post.

Of course, trendy opinion and bureaucrats looking to protect their fiefs try to slow or halt this initiative at every turn.  So far the Khaya Lam initiative is basically a pilot program in one town, called Ngwathe.  The number of homes transferred to the residents, according to Nolutshungu, is approaching 1000 -- but that is out of around 20,000 in Ngwathe alone, and many millions in all of South Africa.  Bureaucrats impose restrictions (like minimum residency time requirements and prohibition on renting out the home after title transfer) so that fewer people will qualify and those who do will not be able to maximize the value of their investments.  Why am I not surprised?

If you would like to donate to this initiative, you can do so at this link.  Believe it or not, it only takes about $150 per unit to transfer the unit to the residents.  

Meanwhile, my proposal to do the same thing in Manhattan and transfer title of the public housing to the residents continues to go nowhere.  Instead of taking tens of thousands of currently poor people and making them rich, we are building more "affordable housing" so we can keep more and more people in a life of permanent poverty.  It's the Manhattan way!

Obamacare: How Do We Know If It's In A Socialist Death Spiral?

There's every reason to think that Obamacare is in the early stages of a socialist death spiral.  After all, all you really need to know to predict a socialist death spiral is that people aren't stupid.  As soon as the government puts you on the "from" side of "from each according to his abilities, to each according to his needs," you start to spend your waking hours figuring out how to minimize or otherwise get out from under the confiscation.  

Still, the government and its press enablers are doing everything in their power to keep up the image that all is just fine.  Mainstream press organs like the New York Times have gone virtually silent on the issue.  The Census Bureau changed its methodology in 2013 to make its figures as to percent uninsured no longer comparable to figures prior to that year.  Numbers for government expenditures on Obamacare are well-hidden and difficult to segregate.

But then every once in a while along comes an article that gets into the weeds on how people push back to avoid getting caught in Obamacare's snares.  Such an article appears on page B-1 of today's Wall Street Journal, titled "Health Law Spurs Hunt For Cheaper Policies."   (In the online version, the title is "Sales of Short-Term Health Policies Surge.")

Now, you may have thought that a key element of Obamacare was to make all health insurance have all the coverages that were now to be mandatory.  But smart people got to work figuring out a way around that, and they have come up with one, known as "short term insurance."  Believe it or not, it seems that if you have a health insurance product that covers less than one year, then all the ACA coverage mandates that make things so expensive (e.g., can't exclude pre-existing conditions, can't have coverage limits, prescription drugs must be covered, plus long list of things that must be covered without deductible such as birth control for women) don't apply.  Can that really be true?  The WSJ checked with a spokesman for HHS, and got the following:

A spokesman for the Department of Health and Human Services said that under federal law, short-term plans aren’t considered individual health insurance, and thus aren’t subject to the ACA’s rules.

But:

Some short-term plans can last nearly a year, after which a policyholder must reapply.

So let's try to understand this.  Obamacare supposedly did away with the ability of an insurer to refuse to sell to someone with a pre-existing condition.  But with so-called "short-term insurance" outside the restrictions, what's to keep people from gaming this system and waiting until they are sick before buying an ACA-compliant policy?  The main control they supposedly have over that is restricting signing up for Obamacare to so-called "open enrollment" periods of only a few months a year, basically November 1 to January 31.  Thus, go without insurance, and you risk having up to a nine-month uncovered period when you are on your own.  Or at least, that's how it was supposed to work.

Ah, but now you can buy an 11-month policy to take you year by year from one open enrollment period to the next.  And, if you don't have a pre-existing condition, there are lots of advantages to these short-term plans over the ACA options:

• They are lots cheaper.  The WSJ article gives an example of a woman for whom coverage under a short-term plan costs "roughly one-quarter" of what ACA-compliant coverage would cost.
• They are "offered year-round" as opposed to just during the ACA open-enrollment period.
• Many of them offer "broad access to doctors" as opposed to the very narrow networks that many ACA-compliant plans have used to keep costs down.
• And, best of all, "if consumers develop health problems they can move to ACA plans that cover pre-existing conditions."

Really, could it be this easy to game Obamacare?  Just get a short-term policy to take you from one open enrollment period to the next for as long as you are healthy; and then when you get sick, jump over and get your pre-existing condition covered.  Voila!  Perhaps you had been wondering why last March CBO was predicting there would be 21 million people enrolled on the Obamacare exchanges in 2016, and now they are saying 13 million (a number which, by the way, will decline further as the year progresses and people drop out).  Now you know.  Really, as people figure this out, why will any sane person buy an Obamacare exchange policy before they are actually sick?  Oh, and the WSJ reports that sales of the short-term policies are "surging."

Of course, socialist death spirals move slowly.  And the government will do everything in its power to hide this one, at least until the change of administration next year.  But it's hard to see how Obamacare can survive such an obvious avoidance strategy for the long pull.  

Unauthorized, Unregulated, Foolproof, Lawless Government Coercion

The title comes from a November 2015 opinion by Judge Posner of the Seventh Circuit in a case between the website backpage.com and Thomas Dart, Sheriff of Cook County, Illinois (the county that includes Chicago, and is the second most-populous county in the country after Los Angeles County).  Judge Posner's decision has been hailed as a landmark vindication of the First Amendment.  The problem is that the government has dozens of ways to avoid judicial review of its "unauthorized, unregulated, foolproof and lawless coercion." 

Backpage is known principally for running ads for people euphemistically known as "sex workers" (although backpage also runs numerous other types of ads).  In June 2015 Sheriff Dart sent letters to Visa and MasterCard, from which the following is the key quote:

As the Sheriff of Cook County, a father and a caring citizen, I write to request that your institution immediately cease and desist from allowing your credit cards to be used to place ads on websites like Back- page.com. . . .   [I]t has become increasingly indefensible for any corporation to continue to willfully play a central role in an industry that reaps its cash from the victimization of women and girls across the world.  

Notice that although Dart peppered his missive with legalistic sounding law enforcement talk ("cease and desist," "your institution," "willfully play a central role"), there was nothing illegal about Visa or MasterCard using their networks to facilitate payments to backpage.  (Dart did throw in a reference to the federal money laundering statute -- something he had no jurisdiction to enforce, and which was in any event inapplicable, at least in any reasonable reading of the ridiculously vague statute.)  Nevertheless, after receiving Dart's letter, Visa and MasterCard cut backpage off completely from their payments systems -- even as to the many activities of backpage that had nothing to do with the sex trade.  And now, it is Sheriff Dart who has been enjoined from taking any "actions, formal or informal, to coerce or threaten credit card companies, processors, financial institutions, or other third parties with sanctions intended to ban credit card or other financial services from being provided to Backpage.com."  

It's a good result in one case.  But of course there are hundreds of cases of the government engaging in unauthorized, lawless coercion and then maneuvering to get itself in a position where there can and will be no judicial review.  Consider, for example, the subject of so-called "corporate inversions" -- U.S. companies selling themselves to foreign entities in order to get out from under the only-in-the-U.S. rule that U.S.-based companies must pay (highest in the world) U.S. corporate income tax on income earned abroad.  Nobody can point to anything in the U.S. tax code that makes one of these inversions illegal -- it's just how the tax code works.  Indeed, I'm not the only one who thinks this.  Perhaps you may recall the interview conducted by CNBC's Jim Cramer with Treasury Secretary Jack Lew back in 2014.  Lew was complaining about the wave of corporate inversions, and Cramer asked him why the IRS did not use rulemaking to address that.  Lew responded: "We do not believe we have the authority to address this inversion question through administrative action. If we did, we would be doing more."

Yup.  Well, that was 2014.  Then Pfizer announced its $160 billion deal with Ireland-based Allergan, and suddenly the IRS came up with a rule to block the deal.  (Essentially, the new rule says that the IRS going forward will take the position that a deal like the Pfizer-Allergan deal will still subject the combined entity to U.S. corporate income tax on worldwide income.)  A few days later, Pfizer and Allergan called off their deal.  They weren't willing to subject their shareholders to the risk of having to pay a few tens of billions of dollars of extra income tax to the IRS and then fight for decades to try to get it back.  I guess there won't be any judicial review there.  Who says the government needs actual legal authority to get its way with its subjects?

For lots more examples of the government improperly attempting to coerce the citizenry, check out this article from Sarah Jeong in the Atlantic.  Jeong discusses at length the program of the Obama Justice Department known as Operation Choke Point.  The basic idea of that operation is to identify businesses designated as "high risk" and then lean on financial institutions not to do business with them.  But what is "high risk"?  Are these businesses legal, or illegal?  A list of businesses said to be "high risk" was then put out by the FDIC.  And when you go through the list, you find that some are illegal, some are just unsavory, and others are things that the government just doesn't like.  Mixed in with "ponzi schemes" and "pyramid-type schemes," we have everything from "ammunition sales" to "coin dealers" to "firearms sales" to  "tobacco sales" and on and on and on.  And, as Jeong points out, in a world of no cash and of highly-regulated financial institutions dependent for their every move on government acquiescence, all it takes is one word from the regulator to get anyone the government does not like cut off from the financial system.  Political dissidents, anyone?   

Annals Of Government Orwellianism

Back in the late 90s, for several years running, I wrote a series of articles titled "Top Ten Federal Government Efforts To Suppress Free Speech."  A couple of those articles are here and here.  And I must say there were plenty of good instances to choose from.  Well, things haven't gotten any better.

You may be thinking that the biggest threats to free speech today are on university campuses, where chalked words like "Trump 2016" can bring outraged cries from offended students for a crackdown, which cries then get a sympathetic ear from the university administration.  It's ugly, but there is no actual legal requirement that a private university give free rein to dissenting opinions.  

Governments are a different story.  Can a government in the United States, state or federal, actually seek to suppress speech that dissents from an official government line?  I mean, don't we have a First Amendment?  Government-backed speech suppression efforts are of course far more pernicious than any similar private efforts because they come backed by the government's coercive powers.  But, equally of course, such suppression is everywhere.  For today, I'll give just a couple of examples.   As always with the government, the speech sought to be suppressed contravenes the official government line on some subject.  And the official government line as always is part of the "main project" of the government, that is, the ongoing effort to use government resources to propagandize the people into supporting, or at least not opposing, the ongoing growth and expansion of the government and its powers.

Up in Westchester County (the first county immediately north of New York City) they have a long-running dispute with the federal housing bureaucracy (HUD) over whether and where to build subsidized low-income housing.  As readers here know, I have long characterized subsidized low-income housing in wealthy areas as "the worst possible public policy," because it costs enormous amounts of money for small numbers of "beneficiaries," and then traps those beneficiaries in poverty for life.  HUD's core business is foisting the "worst possible public policy" on more and more places in the U.S., and of course it needs more and more subsidized housing in more and more places in order to grow its mission and its budget.  In 2006 they sued Westchester to force it to provide more subsidized housing in wealthy areas, and in 2009 then-County Executive Andy Spano (a Democrat) settled that case with an agreement to do so.  Part of the settlement imposed a "monitor" on Westchester, supposedly to be sure it is complying with its obligations under the agreement.  The "monitor" is a guy named James Johnson, a partner of the Debevoise law firm who previously held various positions in the Clinton administration in the 90s.  After the settlement, Spano promptly lost the next election to a guy named Rob Astorino, a Republican, who then became County Executive in 2010 and continues in that job.  You won't be surprised to learn that Astorino has been in a continuous tussle with Johnson ever since.

A couple of weeks ago Johnson filed a 55 page "report" with the Judge supervising the case, who is Denise Cote.  Oh, she also held positions in the Clinton administration before being appointed to the bench by Clinton.  The gist of the "report" is that Astorino has been repeatedly speaking out in opposition to HUD and its agenda for Westchester, and this somehow constitutes a violation of the settlement; and therefore the court must order Astorino and Westchester to stop their opposition to HUD's agenda for Westchester and speak in accordance with the HUD party line. 

Stanley Kurtz of National Review has been all over this story, including a comprehensive recent article on March 30.  Here is Kurtz's take on the "monitor"'s latest gambit:

The Federal Monitor wants to force Astorino, the man who has led public resistance to Obama’s de facto takeover of local governments, to repudiate his own claims and parrot the administration’s line instead. In effect, they want a court to order Astorino to stop criticizing Obama’s HUD and start advertising HUD’s own views. This is truly Orwellian stuff, a frightening demonstration of how the expansionist regulatory state ultimately chokes off political speech itself.

HUD is upset that Astorino keeps saying that it is trying to override Westchester's zoning and force Westchester to build not just the 750 subsidized units that are part of the 2009 settlement, but thousands of additional units at a cost of a billion dollars and more.  As part of getting HUD grants (you should never have taken that money, Westchester!) the county has to submit a periodic report called the "AI."  In its reports, Westchester keeps saying that its zoning is not racially discriminatory.  And HUD keeps "rejecting" the reports, and demanding more and more "analysis" of a long list of additional factors.  Astorino believes that they will keep "rejecting" the reports until Westchester confesses that its zoning is discriminatory and agrees to build vast additional amounts of HUD housing.  So, should Astorino, an elected official, be allowed to express his views on what HUD is really trying to accomplish with this?  

Here is an excerpt from what the "monitor" proposes as the remedy that he wants the court to order:

[T]he Monitor recommends that the Court and County take steps to ensure that the public is accurately informed about the terms of the Settlement and that the public receives an education campaign that honors the letter and spirit of Paragraph 33(c) [of the settlement agreement].  Those steps include . . .  (e) hiring, within 30 days of the issuance of this report, a public communications consultant that will craft a message and implement a strategy sufficiently robust to provide information broadly to the public that describes the benefits of integration, as required by Paragraph 33(c). Within 30 days of the hiring of a public communications consultant, the County should submit a plan for a public education campaign to the Monitor for approval. 

Orwellian indeed!  You must conduct a public relations campaign in your name, and it must say what we want it to say, and you must submit what you plan to say to us, and we get to approve or disapprove.  Sorry, Westchester, but it's time to get away from this HUD thing entirely and stop taking their money.

In the whole affair, I do have one criticism of Astorino, which is over how he pitches his message. Rob, instead of focusing only on oppressive federal overreach and the overriding of local zoning, why don't you also point to your neighboring county Manhattan (just about 4 miles away at the closest point) and ask how HUD-supported public housing there is doing at promoting HUD's supposed goals of increasing integration and lessing income inequality.  If subsidized housing led to more racial integration, why are the HUD-supported projects in Manhattan islands of racial segregation?  Why is the private housing in Harlem today far more integrated than the HUD-supported projects?  And if subsidized housing led to lessening of income inequality, why does Manhattan, with far more than its share of public housing, have the highest income inequality in the country?  And why are the HUD-supported projects, 40 and 50 and 60 years after their construction, still islands of poverty in the midst of the wealthiest county in the country?  Rob, you are right on this and they are wrong.  Keep fighting!

And, if you think it would be hard to top that one in the annals of government Orwellianism, then consider the current efforts of the climate campaigners to silence any dissent from the orthodoxy that government must take over at least the entire energy sector of the economy, if not the whole economy, in order to "save the planet."  Back last spring, Senator Whitehouse of Rhode Island embarked on a campaign to try to get the Justice Department to prosecute (criminally!) so-called "climate deniers" (dissenters from government-backed orthodoxy) under the RICO statute.  Then, at a Senate hearing last month, under questioning from the same Senator Whitehouse as to why the Justice Department hasn't done anything about "the climate denial scheme," AG Loretta Lynch responded that the matter had been "discussed" and referred to the FBI for consideration.  Meanwhile last week, even as the Manhattan Contrarian was pointing out that the government was relying on altered data in its brief to the DC Circuit seeking approval of an EPA plan to shut down the coal industry, AG Eric Schneiderman of New York was announcing the newfound support of 15 other AGs for his "investigation" of Exxon Mobil over insufficient obeisance to climate orthodoxy.   So where is this one going?  As far as I know, at least since the days of Eliot Spitzer, no company even remotely near the size of Exxon Mobil has ever been investigated for anything by the New York AG without paying at least $100 million in protection money and issuing a mea culpa.  There is no reason to think that this one will end any differently.

So welcome to the new world, where everyone must toe the government line, and say only what the government wants said.

Why Isn't The $15 Minimum Wage Effective Immediately?

If you're in a trendy, happening coastal city these days, you know that the progressive cause of the moment is raising the minimum wage to $15 per hour.  And thus the poor will magically be raised up to prosperity, paid for entirely by evil exploitative employers who up until now have been woefully underpaying their workers.  Seattle led the way in the higher minimum wage movement in 2014 by raising its minimum to $15, followed closely by San Francisco.  And now New York, not about to be embarrassed by being behind the curve on trendy progressivism, is in the process of enacting its own $15 minimum wage.  As reported by the New York Post on Friday (uh-oh, that was April Fools' Day; but the news conference was on the previous day, March 31, and I think it actually happened) Governor Cuomo has announced that he is "near" a budget agreement with state lawmakers that includes a $15 minimum wage for our state too.

But here's the funny thing:  even though each of these trendy progressive jurisdictions claims to have enacted a $15 minimum wage, none of the new wage requirements has actually gone into effect.  Instead, all of them are scheduled for multi-year phase-ins, with full effectiveness of the $15 level at least several years away in each case.  According to the website of the mayor of Seattle here, its $15 minimum first takes effect on January 1, 2017, but only for employers with 500 or more employees who provide no medical insurance.  Large employers who provide medical insurance get longer, and smaller employers get longer still, so that many employers get until 2021 to reach the $15 level.  The San Francisco $15 minimum, passed by voters in a referendum in November 2014, only kicks in on July 1, 2018.   And in New York, the proposal is for a complicated patchwork of mandates varying by size of employer, location in the state, and maybe other factors.  The earliest $15 minimum will be in New York City in 2018.  Even the very prosperous immediate suburban counties will get at least two additional years, and further upstate, even longer. 

OK, here's my question:  If enacting a minimum wage just redistributes free money from evil, exploitative employers at no real cost to anyone, why not make it effective immediately?  What are you afraid of?  To put it bluntly, is there a down side here, or isn't there?  And if there is a down side, how does putting the increase off by two years (or four, or six) make that down side any less?

The fact that the enacted increases in the very most progressive jurisdictions in the country will only take place several years out is a clear admission that even the most ardent proponents of the increases understand that of course there is a down side.  And in addition, they also admit there is a downside when they draw the line on the increase at $15.  If there were no downside, then the minimum should be at least $20.  I mean $30.  I mean $100.  Or whatever.

And if there is a down side, on whom does it fall?  On the 20-year-old white college kid from a prosperous family whose parents can call in connections to get him a job even at the new raised minimum?  Or on the 20-year-old non-college-attending black kid whose parents have no connections to call in?  If you don't think the answer to those questions is completely obvious, you might consider the February 20, 2016 editorial from the New York Times titled "The Crisis Of Minority Unemployment."   Citing a study from something called the Great Cities Institute of the University of Illinois at Chicago, the Times points out that in recent years in New York and Los Angeles, close to 30% of black men aged 20 - 24 have been out of both work and school; and in Chicago the figure has been closer to 50%.  And those figures are before any recently-enacted minimum wage increases.  With a high enough minimum we could get those young-black-male unemployment rates to close to 100%!  The Times, of course, is an advocate of the $15 minimum wage.  Don't worry; according to the Times, we could mitigate the effect of the higher minimum wage with employer subsidies paid for with free federal money from the infinite credit card.

By delaying the effective date of the minimum wage increase, I think the proponents are trying to make it so the public will not perceive the cause and effect between the change in the law and the increase in minority unemployment many years later. 

But the $15 minimum wage has the potential to greatly enhance the visible contrast between the high-tax high-spend high-regulation "blue model" jurisdictions, and the low-tax, low-spend low-regulation "red model" jurisdictions.  So far, you really need to be a follower of the statistics to understand how much more successful places like Florida and Texas have been in recent years than places like New York and Illinois.  To all appearances, for New York, the City is doing rather well, and living here you don't realize that upstate is rapidly hollowing out and overall the population of the state has stagnated for decades.  Similarly in Illinois, the Loop and North Side of Chicago seem just fine, while no visitor would ever travel down to the dozens of square miles of abandonment on the South Side.  Losing population?  If you hang out where everybody hangs out, it's imperceptible to the eye.

But if places that enact the $15 minimum suddenly have black youth unemployment and idleness rates 10 and 20 and even 30 percent higher than other places that don't, that will be very hard not to notice.  Will it happen?  The obvious prediction is that it will.  As noted here several months ago, in Puerto Rico, where the federal minimum wage even at $7.25 per hour is around 70% of the median wage, the labor force participation rate is a full 20 percent below the rate on the mainland (42% versus 62%).  Why will the result be any different in New York, San Francisco, or Seattle?       

The Joke Of Criminalizing Money Laundering -- Part II

Who was it who first came up with the bright idea that if we just criminalize something called "money laundering," and make all the banks involuntary deputies of law enforcement, spying on their customers behind their backs 24/7, we can put a stop to all the nefarious criminality and perfect the world?  The game started with the disgusting Bank Secrecy Act back in 1970, and moved to a new level with the USA PATRIOT Act in 2001.  Today, banks in the U.S. file close to 2 million annual "Suspicious Activity Reports" on their customers.  Did they file one (or a hundred) on you?  You don't know, because they're not allowed to tell you. 

Did you notice that along the way the law enforcement authorities have achieved victory in the drug war?  Yeah, neither did I.  And drug dealing at least involves substantial amounts of real money.  Nobody can even give a coherent explanation of how a money laundering regime that can't make a dent in the multi-billion dollar drug business is supposed to stamp out terrorism, which generally does not involve any substantial amounts of real money.  In this post last June I called criminalization of "money laundering" a "joke" and "an exercise in total futility."  Of course, it may not seem like a joke to people like former House Speaker Denny Hastert, who found himself prosecuted for "money laundering" for engaging in the distasteful but otherwise perfectly legal activity of paying blackmail.  And then there are the banks, who have paid, in the aggregate, in excess of $20 billion in fines over the past decade for supposedly violating anti-money-laundering regulations.  For example, HSBC paid a fine in excess of $1.9 billion in 2012, said to arise mainly out of dealings in Mexico.  (You mean they have drug dealers down there?  Who knew?)

Bringing us up to date on the activities of our genius government, the Wall Street Journal yesterday helpfully carried a front-page article headlined "U.S. Terror-Finance Rules Drive Money Underground."   And guess what?  It seems that after paying the 20 or so billion, the banks have decided that it pays not to take chances, and they have moved to declining to do business with any potential customer who looks the least bit sketchy.  

U.S. banks have closed thousands of accounts held by people and organizations considered suspicious, high-risk or difficult to monitor—including money-transfer firms, foreign banks and nonprofits working abroad. Closing accounts for fear their customers may be up to no good evicts from the financial system the innocent as well as those the U.S. government would most like to watch, a consequence not anticipated by Washington.  Comptroller of the Currency Thomas Curry this month acknowledged the potential danger. “Transactions that would have taken place legally and transparently may be driven underground,” he told an international conference of bankers and regulators in Washington.  

Really, who could have guessed that such a thing might happen?

The Journal reporter then tracks the activities of one Abdi Warsame, a Somali native who works for a Midwestern money-transfer company.  Seems that the company has been shut out of the banking system.  No problem!  Warsame neatly stacks and wraps some tens of thousands in mid- to high-denomination dollar bills, packs them into his luggage, and flies off to Dubai.  Along the way, he files all the appropriate forms with the U.S. and Dubai authorities and goes through all the security and customs checks.  Upon his arrival in Dubai, the money disappears into the underground system.  Congratulations to our genius government functionaries!  Really, where did they think this was going?

But don't worry -- as reported here just a few days ago, the government geniuses already have the new plan at the ready, namely the abolition of cash.  Yeah, that'll work!  It's like they have never heard of Bitcoin.  Or then there's my favorite, gold.  At the current price of about $1250, $1 million in gold weighs about 50 pounds -- not so much more than $1 million in hundred dollar bills (which weighs about 20 pounds).  OK, it's a little awkward, but still not so much that you can't get it into your carry-on bag for the flight to Dubai.