The Paramilitarized Bureaucracies

A dangerous contradiction

By mark steyn

I flew in to Montreal from an overseas trip the other day and was met by a lady from my office, who had kindly agreed to drive me back home to New Hampshire. At the airport she seemed a little rattled, and it emerged that on her journey from the Granite State she had encountered a "security check" on the Vermont–Quebec border. U.S. officials had decided to impose temporary exit controls on I-91 and had backed up northbound traffic so that agents could ascertain from each driver whether he or she was carrying "monetary instruments" in excess of $10,000. My assistant was quizzed by an agent dressed in the full Robocop and carrying an automatic weapon, while another with a sniffer dog examined the vehicle. Which seems an unlikely method of finding travelers' checks for $12,000.

Being a legal immigrant, I am inured to the indignities imposed by the U.S. government. (You can't ask an illegal immigrant for ID, even at the voting booth or after commission of a crime, but a legal immigrant has to have his green card on him even when he's strolling in the woods behind his house.) And indeed, for anyone familiar with the curious priorities of officialdom, there is a certain logic in an agency that has failed to prevent millions of illegal aliens from entering the country evolving smoothly into an agency that obstructs law-abiding persons from exiting the country.

But my assistant felt differently. A couple of days later, I was zipping through a DVD of The Great Escape, trying to locate a moment from that terrific wartime caper that I wished to refer to in a movie essay. While zapping back and forth, I chanced on a scene after the eponymous escape in which Richard Attenborough and Gordon Jackson are trying to board a small-town bus while Gestapo agents demand "Your papers, mein herr." My assistant walked in in the middle, and we exchanged some mordant cracks about life under the Nazis. "It's almost as bad as driving from Lyndonville to Lac Brome for lunch." Etc. Her family have lived blameless and respectable lives in my North Country town for a quarter-millennium, and she didn't like the idea of having to clear an armed checkpoint on a U.S. highway in order to leave the country.

But, if you don't care for the Third Reich comparisons, consider more recent European ones: The capital flight from Greece, Spain, Italy, and elsewhere as the euro zone approaches breaking point. Greek bank deposits dropped 16 percent in the year to this April; according to a Credit Suisse analysis, capital outflows from Spain are currently running at about 50 percent of GDP. Most of these Mediterranean euros have found safe haven in German banks. You can do that on the Continent, not just because of the common currency but because of the free movement of people within the so-called Schengen area. That's to say, if a Greek figures that now's the time to load up the trunk with "monetary instruments" and drive them to a bank in Munich before the whole powder keg goes up, there's no gauntlet of machine guns and sniffer dogs to run. My friend's experience suggests that, come the collapse of the U.S. dollar, Washington is going to be far less sanguine about you tootling what's left of your 401(k) up to the Royal Bank of Canada.

In fact, it already is. On January 1, the FATCAT Act (technically, it's FATCA, but we all get the acronymic message) imposes a whole new bunch of burdensome regulations and punitive fines on Americans with non-U.S. bank accounts. Not just Mitt and his chums with the numbered accounts in Zurich, but ordinary Americans teaching abroad at, say, the International School in Accra, or doing regular business in Ireland, or with an old family hunting camp in Quebec for which they've always had a small checking account just to pay grocery and fuel bills when they're up there. Americans now enjoy less financial freedom than Canadians, Swedes, and Italians. When I mentioned this on NRO recently, I received a fair few e-mails from readers saying they have no plans to work abroad or buy a second home, so why should they care?

Here's why: Because Washington is telling you something important about how things are likely to go when things get even worse. Which is the way to bet. American government is not noted for its sense of proportion. This is a bureaucracy whose Fish and Wildlife agents fine an eleven-year-old Virginia schoolgirl $535 for the crime of rescuing a woodpecker from a cat and nursing him back to health; whose National Oceanic and Atmospheric Administration agents threaten a marine biologist with 20 years in jail over whistling at a whale; whose Food and Drug Administration agents want a hundred grand in fines from some onanistic weirdo in Fremont who gives away his sperm to infertile couples. If you're wondering which of the Food and Drug Administration's twin responsibilities semen counts as, don't waste your time: Whether your deposit belongs at a Swiss bank or a sperm bank, it's all federally regulated.

By the way, I use the word "agents" rather than "officials" because, in the developed world, the paramilitarized bureaucracy is uniquely American. This is the only G7 government whose education minister has his own SWAT team — for policing student-loan compliance. The other day, the Gibson guitar company settled with the feds over an arcane infraction of a law on rare-wood importation — after their factories were twice raided by "agents" bearing automatic weapons. Like the man said, don't bring a knife to a guitar fight. Do musical-instrument manufacturers have a particular reputation for violence? Akin to that of female marine biologists and sixth-grade schoolgirls?

As American insolvency grows and the dollar dies and the real value of household wealth shrivels, is it likely that Washington will share Athens, Madrid, and Rome's insouciant attitude to capital mobility? Or will exit controls on I-91 become as familiar a sight as TSA patdowns? The United States has the most powerful government, with the longest reach, of any nation in history. It is also the Brokest Nation in History. Resolving that contradiction is unlikely to be pretty.