October 12, 2013

When does someone who's selling services as a "psychic" deserve to be prosecuted for committing a crime?

In NYC, the government prosecuted a fortune teller — Sylvia Mitchell, 39 — who worked in some storefront in Greenwich Village. The jury convicted her and she could be sentenced to as much as 15 years in prison. The charges were larceny and a scheme to defraud.
During a weeklong trial, prosecutors portrayed Ms. Mitchell as a clever swindler who preyed on distraught people, promising them that she could alleviate their troubles through prayer and meditation to remove what she called “negative energy” and rectify problems that arose from their “past lives.”
In my book, this is entertainment and unconventional psychological therapy. Let the buyer beware. Who's dumb enough to actually believe this? Should the government endeavor to protect everyone who succumbs to the temptation to blow a few bucks on a fortune teller? But this was a case where there were a couple victims who somehow had enough money to make their losses nontrivial. One woman gave Mitchell $27,000 in what was portrayed as an "exercise in letting go of money." Another put $18,000 in a jar as a way to relieve herself of "negative energy."
Both women admitted on the stand under cross-examination that they were deeply skeptical of Ms. Mitchell’s techniques, but paid her anyway, suggesting that they were never tricked into thinking the psychic had the power to better their lives, [Mitchell's lawyer] said.

But an assistant district attorney, James Bergamo, described Ms. Mitchell as an expert at discovering people’s vulnerabilities and scaring them into handing over their cash. It mattered little, he argued in his summation, if Ms. Mitchell’s clients believed what she said about their past lives or negative spirits: the important fact was that they believed she would return their money. “The facts scream scam,” he said.
In Stupid World, no one can hear facts screaming. 

Here's the classic U.S. Supreme Court case on when unbelievable beliefs can form the basis for a criminal prosecution for fraud: United States v. Ballard. The majority opinion — written by William O. Douglas — says the question needs to be whether the criminal defendant actually believed his own bullshit. (The defendants were faith healers.)
Men may believe what they cannot prove. They may not be put to the proof of their religious doctrines or beliefs. Religious experiences which are as real as life to some may be incomprehensible to others. Yet the fact that they may be beyond the ken of mortals does not mean that they can be made suspect before the law. Many take their gospel from the New Testament. But it would hardly be supposed that they could be tried before a jury charged with the duty of determining whether those teachings contained false representations. The miracles of the New Testament, the Divinity of Christ, life after death, the power of prayer are deep in the religious convictions of many. If one could be sent to jail because a jury in a hostile environment found those teachings false, little indeed would be left of religious freedom. The Fathers of the Constitution were not unaware of the varied and extreme views of religious sects, of the violence of disagreement among them, and of the lack of any one religious creed on which all men would agree. They fashioned a charter of government which envisaged the widest possible toleration of conflicting views. Man's relation to his God was made no concern of the state. He was granted the right to worship as he pleased and to answer to no man for the verity of his religious views. The religious views espoused by respondents might seem incredible, if not preposterous, to most people. But if those doctrines are subject to trial before a jury charged with finding their truth or falsity, then the same can be done with the religious beliefs of any sect. When the triers of fact undertake that task, they enter a forbidden domain.
Justice Jackson, dissenting, thought it was wrong even to ask whether the defendant believes his own purported beliefs. I'm wracking my brain for a judicial opinion I love more than what Jackson says here, and I can't think of one, so let me give you the whole thing, replete with my boldface and commentary:
I should say the defendants have done just that for which they are indicted. If I might agree to their conviction without creating a precedent, I cheerfully would do so. I can see in their teachings nothing but humbug, untainted by any trace of truth. But that does not dispose of the constitutional question whether misrepresentation of religious experience or belief is prosecutable; it rather emphasizes the danger of such prosecutions.
Jackson confesses to the temptation to jump to what feels like the right outcome in this case, but he pulls back into the proper judicial role of following rules that should apply across the board.
The Ballard family claimed miraculous communication with the spirit world and supernatural power to heal the sick. They were brought to trial for mail fraud on an indictment which charged that their representations were false and that they 'well knew' they were false. The trial judge, obviously troubled, ruled that the court could not try whether the statements were untrue, but could inquire whether the defendants knew them to be untrue; and, if so, they could be convicted.

I find it difficult to reconcile this conclusion with our traditional religious freedoms.

In the first place, as a matter of either practice or philosophy I do not see how we can separate an issue as to what is believed from considerations as to what is believable. The most convincing proof that one believes his statements is to show that they have been true in his experience. Likewise, that one knowingly falsified is best proved by showing that what he said happened never did happen. How can the Government prove these persons knew something to be false which it cannot prove to be false? If we try religious sincerity severed from religious verity, we isolate the dispute from the very considerations which in common experience provide its most reliable answer.

In the second place, any inquiry into intellectual honesty in religion raises profound psychological problems. William James, who wrote on these matters as a scientist, reminds us that it is not theology and ceremonies which keep religion going. Its vitality is in the religious experiences of many people. 'If you ask what these experiences are, they are conversations with the unseen, voices and visions, responses to prayer, changes of heart, deliverances from fear, inflowings of help, assurances of support, whenever certain persons set their own internal attitude in certain appropriate ways.' 
The quote, the footnote says, can be found in James's "Collected Essays and Reviews," and Jackson would also like us to read James's "Varieties of Religious Experience" and "The Will to Believe" as well as Burton's (delightfully titled) "Heyday of a Wizzard." (Those last 2 links will get you to free Kindle editions.)
If religious liberty includes, as it must, the right to communicate such experiences to others, it seems to me an impossible task for juries to separate fancied ones from real ones, dreams from happenings, and hallucinations from true clairvoyance. Such experiences, like some tones and colors, have existence for one, but none at all for another. They cannot be verified to the minds of those whose field of consciousness does not include religious insight. When one comes to trial which turns on any aspect of religious belief or representation, unbelievers among his judges are likely not to understand and are almost certain not to believe him.

And then I do not know what degree of skepticism or disbelief in a religious representation amounts to actionable fraud. James points out that 'Faith means belief in something concerning which doubt is theoretically possible.' 
The quote is from "The Will to Belief."
Belief in what one may demonstrate to the senses is not faith. All schools of religious thought make enormous assumptions, generally on the basis of revelations authenticated by some sign or miracle. The appeal in such matters is to a very different plane of credulity than is invoked by representations of secular fact in commerce. Some who profess belief in the Bible read literally what others read as allegory or metaphor, as they read Aesop's fables. Religious symbolism is even used by some with the same mental reservations one has in teaching of Santa Claus or Uncle Sam or Easter bunnies or dispassionate judges. 
That's the best subtly-tucked-away little joke in all of the Supreme Court reporters: dispassionate judges
It is hard in matters so mystical to say how literally one is bound to believe the doctrine he teaches and even more difficult to say how far it is reliance upon a teacher's literal belief which induces followers to give him money.

There appear to be persons—let us hope not many—who find refreshment and courage in the teachings of the 'I Am' cult. If the members of the sect get comfort from the celestial guidance of their 'Saint Germain,' however doubtful it seems to me, it is hard to say that they do not get what they pay for. Scores of sects flourish in this country by teaching what to me are queer notions. It is plain that there is wide variety in American religious taste. The Ballards are not alone in catering to it with a pretty dubious product.
You see what the danger is: discrimination against little-known and little-appreciated religions. If you start going after the scams, when will you stop? It is better not to start at all. Leave them all alone.
The chief wrong which false prophets do to their following is not financial. The collections aggregate a tempting total, but individual payments are not ruinous. I doubt if the vigilance of the law is equal to making money stick by over-credulous people. But the real harm is on the mental and spiritual plane. There are those who hunger and thirst after higher values which they feel wanting in their humdrum lives. They live in mental confusion or moral anarchy and seek vaguely for truth and beauty and moral support. When they are deluded and then disillusioned, cynicism and confusion follow. The wrong of these things, as I see it, is not in the money the victims part with half so much as in the mental and spiritual poison they get. But that is precisely the thing the Constitution put beyond the reach of the prosecutor, for the price of freedom of religion or of speech or of the press is that we must put up with, and even pay for, a good deal of rubbish.

Prosecutions of this character easily could degenerate into religious persecution. I do not doubt that religious leaders may be convicted of fraud for making false representations on matters other than faith or experience, as for example if one represents that funds are being used to construct a church when in fact they are being used for personal purposes. But that is not this case, which reaches into wholly dangerous ground. When does less than full belief in a professed credo become actionable fraud if one is soliciting gifts or legacies? Such inquiries may discomfort orthodox as well as unconventional religious teachers, for even the most regular of them are sometimes accused of taking their orthodoxy with a grain of salt.

I would dismiss the indictment and have done with this business of judicially examining other people's faiths.
He's right.

61 comments:

Ambrose said...

"The cops finally busted Madame Marie for telling fortunes better than they do..."

Ann Althouse said...

I corrected 3 or 4 "typos" in Jackson's opinion.

I'm doubt that the typos were in the original printed reporters. I suspect there were glitches in scanning.

betamax3000 said...

Japanese Schoolgirl Psychic Robot Says:

Put All of Your Money in a Pillow, and We Will Pillow-Fight the Negative Energy Away. When We Are Done Leave the Pillow with Me and I Will Sing it Songs of Love and Flowers.

Matthew Sablan said...

In most cons, the con gets the mark to cool off. If you fail to do so, then you have consequences.

Then again, that is me assuming that the psychic is a con. Can you still prosecute them if the psychic honestly believes they are psychic?

Can you still sue them if their "prediction" turns out right, in some interpretation of their vague mysticism, but not what the mark thought it was?

Honestly, sometimes I want to go to a psychic just to see how good of a cold read they can get on me, but if someone is throwing away thousands of dollars on them, that's a problem. But, I don't know if it is a LEGAL problem.

cassandra lite said...
This comment has been removed by the author.
Matthew Sablan said...

"But that does not dispose of the constitutional question whether misrepresentation of religious experience or belief is prosecutable."

-- Would we be more able to prosecute these cases if the mystic did not stem from a religious experience? What if the psychic was someone like Hari Seldon, which claims a scientific source of the predictions? Would that be closer to classic fraud, and therefore, prosecutable?

cassandra lite said...

This makes as much sense as charging seismologists for failing to predict an earthquake.

Oh, wait, that actually happened in Italy. And the scientists were actually convicted of murder.
http://www.latimes.com/science/sciencenow/la-sci-sn-italy-earthquake-forecast-prison-20130926,0,6239513.story

Matthew Sablan said...

I would, however say, that this part: "The important fact was that they believed she would return their money" negates a lot of the "religious freedom" discussions of psychics in this case. This, seems to me, more where any prosecution should focus on than the spirits and hokum. (Hookum? She sure hooked'um.)

Ann Althouse said...

Religion offers salvation.

Government shouldn't try to save us from our gravitation toward salvation.

That's a clusterfuck of salvation.

It will not go well.

Look at history.

People deserve to be free to try to save their own souls.

Almighty God hath created the mind free....

rhhardin said...

life after death, the power of prayer are deep in the religious convictions of many

Derrida says that the prayer only operates if you don't believe in God.

Otherwise it's just ordering pizza, not praying.

betamax3000 said...

floating adrift without foundation = gravitation toward salvation.

Ann Althouse said...

"The important fact was that they believed she would return their money...."

Why should what they believed determine when the defendant is guilty?

It's the defendant's guilt that is in question. The evidence needs to prove -- and the prosecutor must prove beyond a reasonable doubt -- that the defendant who received the money understood that the money was transferred for temporary safekeeping.

Who gives money to a fortuneteller for safekeeping?

There's too much risk here that the jurors believed that the psychic's belief system is phony.

Of course, it IS phony, but that's Jackson's point.

rhhardin said...

Ohio forbids unconscionable sales practices, which includes selling to the feeble-minded to their disadvantage.

It attempts to get sales to benefit both sides, by getting at one side knowing it doesn't.

jr565 said...

You pay your money, you take your chances.


Bob Boyd said...

There was this guy who kept hearing a great, booming, disembodied voice telling him,"Quit your job, sell your house, take all your money and go to Las Vegas."
Finally, after weeks of this, the guy decides this is his big chance, he must to obey the voice. So he quits his job, sells his house and when he gets off the plane in Vegas, the voice speaks to him again saying, "Go to Caesar's Palace."
He takes a cab down there and goes inside. The voice says, "Go to the roulette table. Put all your money on number 23." The guy takes deep breath and follows instructions.
They spin the wheel, but when it stops, the ball lands on 17.
The voice says, "Ah Fuck."

Skipper said...

How is this "service" any different from the state lotteries?

elkh1 said...

"described Ms. Mitchell as an expert at discovering people’s vulnerabilities and scaring them into handing over their cash."

Sounds like our "successful" politicians in Washington.

"Our Dear Leader is an expert at discovering taxpayers’ vulnerabilities and scaring them into handing over their cash."

betamax3000 said...

Japanese Schoolgirl Psychic Robot Says:

We Shall Draw Flowers and Hearts with Yellow and Blue Crayons Upon Your Money to Free it of Its Control Over You. The Stuffed Monkey In Your Arms is More Important Than Any Colored Paper. You Can Keep the Monkey: It Is My Gift to You. Giving Gifts to Each Other Brings Enthusiastic Joy to Our Lives: Thank You So Very Very Much For Your Gift of the Paper We Colored Together.

EDH said...

The majority opinion — written by William O. Douglas — says the question needs to be whether the criminal defendant actually believed his own bullshit.

That goes to the mens rea. But isn't there the ability to carefully circumscribe the crime in terms of the act?

prosecutors portrayed Ms. Mitchell as a clever swindler who preyed on distraught people, promising them that she could alleviate their troubles through prayer and meditation to remove what she called “negative energy” and rectify problems that arose from their “past lives.”

If a "promise" of result is coupled with an asserted ability on the part of the promisor to deliver that cure in exchange for value, wouldn't that be fraud whether it's a placebo or religion being touted as the cure?

Fraud must be proved by showing that the defendant's actions involved five separate elements: (1) a false statement of a material fact,(2) knowledge on the part of the defendant that the statement is untrue, (3) intent on the part of the defendant to deceive the alleged victim, (4) justifiable reliance by the alleged victim on the statement, and (5) injury to the alleged victim as a result.

These elements contain nuances that are not all easily proved. First, not all false statements are fraudulent. To be fraudulent, a false statement must relate to a material fact. It should also substantially affect a person's decision to enter into a contract or pursue a certain course of action. A false statement of fact that does not bear on the disputed transaction will not be considered fraudulent.

Second, the defendant must know that the statement is untrue. A statement of fact that is simply mistaken is not fraudulent. To be fraudulent, a false statement must be made with intent to deceive the victim. This is perhaps the easiest element to prove, once falsity and materiality are proved, because most material false statements are designed to mislead.

Third, the false statement must be made with the intent to deprive the victim of some legal right.

Fourth, the victim's reliance on the false statement must be reasonable. Reliance on a patently absurd false statement generally will not give rise to fraud; however, people who are especially gullible, superstitious, or ignorant or who are illiterate may recover damages for fraud if the defendant knew and took advantage of their condition.

Finally, the false statement must cause the victim some injury that leaves her or him in a worse position than she or he was in before the fraud.

Left Bank of the Charles said...

Reasonable reliance is one of the elements of fraud. If the victims didn't believe they would get the money back, there would be no fraud.

rhhardin said...

You have to figure in entertainment value in lotteries, which benefits the buyer to make up the difference.

I'd support allowing food stamps to purchase lottery tickets, which benefits both sides again.

One for entertainment, the other for return of the money.

rhhardin said...

I can read minds.

You're thinking that I can't.

rhhardin said...

Language itself is explained in one of two ways, either as prophecy or as mind-reading.

chuck said...

Nasty precedent. Who next, the President and his Democratic enablers in Washington?

Left Bank of the Charles said...

You seem to be saying that since everyone knows psychics are phonies, you can't be defrauded by one. Isn't that the insult to religious freedom?

Roger Sweeny said...

So would Ballard provide a defense to someone accused of violating a recently passed law against "gay conversion therapy"? And would it matter whether the "client" were a minor or an adult?

EDH said...

My first thought on reading this post was the Whoopi Goldberg character Oda Mea in the movie "Ghost" who claimed she could speak to the dead for a fee.

Then I saw the séance goes high tech. There's no fraud in continuing to sell cell phone service that allows people to hear from the dead, and the terms of service agreement probably protects the cell phone company from a contract claim when the deceased is abruptly "called home" by, of all things, a mundane "service upgrade".

Dead loved ones' voices fall victim to technology

A growing number of people who have saved cellphone messages of dead loved ones as a source of comfort are becoming victims of technology upgrades and policies that are silencing those voices forever.

Lisa and Tom Moore of Terre Haute, Ind., spent $1,700 over the past five years to preserve their 19-year-old daughter's voice mail greeting following her death in a 2008 car crash.

But Alexis Moore's greeting was deleted during a Sprint upgrade that her family didn't learn of until it was too late.
Other victims include a widow of an Army major killed in the 2009 massacre at Fort Hood and a Washington state man who lost his mother to cancer.

Experts say voice recording can help people maintain a connection to those who've died.

David said...

Douglas, the darling of liberals, was no great civil libertarian. He like to support the power of the state though. In that sense he was a thoroughly modern liberal.

William said...

Brenda Maddox wrote a fine, comic biography of W.B. Yeats, called Yeat's Ghosts. Yeats was a believer in spiritualism. He met his wife in a theosophic society. She was a psychic who communicated with the spirit world. Those spirits instructed her to tell Yeats to take afternoon naps and have sex afterward. Yeats duly complied with the instructions from the spirit world. The marriage produced two healthy children, although it should be noted that the first child was not a world historical figure as predicted by the spirits but a miscarriage. Beyond a successful marriage and healthy children, the spirit world gave Yeats some powerful symbolism that he used effectively in his poetry.......It takes a certain amount of horse shit to cultivate a rose garden. Some people intuitively seek out what they need. (Maybe the followers of that liberal preacher, the Rev Jones, wanted an early death.)

traditionalguy said...

Then Scientology must be a crime.

Today's popular "I am spiritual, but I am not religious" schtick is an invitation to every spiritual experience being a valid experience.

Tolerance is the best approach to religious beliefs. So we need to tell Pontifex Maximus Obama that he has to tolerate Judeo-Christian beliefs as much as he does the Muslim faith of his fathers.

Lem said...

If we are not allowed to be fooled we are going to fool ourselves just a little more. with or w/o help there is going to be some fooling around.

Foolin' Def Leoppard, two p's

Mountain Maven said...

Not only are the nannystaters going to protect the poor, but also the wealthy from themselves. While anyone with any sense knows fortune tellers are phoney, foolish customers should not use the state to get their money back.

The moral of the story is don't do business in a blue state. If they don't like you, you are in trouble. I work in a very reputable profession and the govt, state and fed, is always trying to regulate us more.

Harold said...

For those who haven't seen an episode of "The Mentalist", it's an absolutely great show. Has probably done more to debunk fortunetellers and seers then any skeptics group could ever dream of. Through entertainment.

Should fortunetellers be prosecuted? Hmmm... Mixed thoughts there. If they confine themselves to a few dolloars here, a few there, providing soothiing feelings and making people feel good, they're no worse then the average psycotherapist. Who cahrges money for doing the same thing in a "scientific manner." With a probably lower success rate. It's when the seer's go after the "big score" and wipe out someone's life savinngs that I see a problem with them.

eddie willers said...

Great dissent by Jackson. In addition to your highlights, I must add this:

But that is precisely the thing the Constitution put beyond the reach of the prosecutor, for the price of freedom of religion or of speech or of the press is that we must put up with, and even pay for, a good deal of rubbish.

Mark said...

Professor, we had one of these prosecutions in federal court here in South Florida just last month: http://www.sun-sentinel.com/news/local/crime/fl-rose-marks-verdict-20130926,0,5722520,full.story

I found it remarkable that the feds would prosecute a fortune teller for fraud. I still feel the way I did when I first heard that the fortune teller was convicted: "She's guilty of fraud b/c she's not really psychic? Are you kidding me?"

Michelle Dulak Thomson said...

Skipper,

How is this "service" any different from the state lotteries?

Indeed. We are seeing ads here in Oregon about all the good work that's being done with lottery money. You get 20+ seconds of that, and two seconds of "Lotteries should be played for entertainment purposes only." In other words, what you just spent a lot of time telling us is to be regarded as total hooey.

St. George said...
This comment has been removed by the author.
St. George said...

Telepsychic Ray: Hi, welcome to Cable TV Channel D. This is "Telepsychic". My name is Ray, and I'll be taking your calls today. Here's the numbers: 555-1231, 2, 3, 4 and 5. Our lines are open, ask me about anything today - about life, jobs, money, love.. anything at all, I'll predict for you. Hello, Telepsychic.

Caller #1: Uh.. yeah.. yeah.. I lost my job, and I need some money. Uh.. am I gonna get some money soon, and get a job?

Telepsychic Ray: Okay, uh.. yes.. in a week.. somebody will give you some money.. and you'll get a new job in.. oh.. about a month. Okay?

Caller #1: Okay, thank you, Ray!

Marc said...
This comment has been removed by the author.
Marc said...

MDT, I too hear those lottery ads. The bureaucrats in Salem need to come up with a version integrating that awful fake pop/folk Cover Oregon song.

The Godfather said...

Back in the late '50s/early '60s, the Hartford (CT) City Council passed an ordiance to ban fortune telling. Some members of the small Gypsy community made a living this way. In response to the ban, the Gypsies replaced their fortune-telling signs with signs offering "Character Readings". To close the loophole, the Council added character reading to the ban. The local psychiatric association protested that this ordinance might arguably ban the practice of psychiatry in Hartford. Accordingly, the ban was modified to permit character reading if performed by someone licensed to do so by the State of Connecticut.

My father, a psychiatrist, thought this was very funny.

Revenant said...

When does someone who's selling services as a "psychic" deserve to be prosecuted for committing a crime?

Always.

Gabriel Hanna said...

A car salesman knowingly sells you a lemon. Indictable.

A car salesman knowingly sells you a lemon, then says according to his religion that any car will run if the driver prays and has faith--and the car does in fact run on the spiritual plane.

Unindictable, apparently. This is the wrong metric.

If I open up a repair shop that charges for fixing only the spiritual problems of cars, I can see the logic--no one can prove cars don't have spiritual problems so no one can prove I didn't do what I claimed to do.

But psychics frequently claim much more than this. They say they can find murder victims, or murderers. They say they can heal and predict the future. They make empirically claims all the time.

n.n said...

In the real world, dissociation of risk sponsors corruption and stunts growth. Children require moderation because of their limited familiarity with the world. Adults require moderation because of involuntary or superior exploitation. However, we cannot bypass the feedback mechanism and hope for proper human development. Life is an exercise in risk management.

openidname said...

This fact situation was a question in my con law final exam.

Harold House said...

She sure sounds like a Sen. Cruz to me! Perhaps he learned from her.

Crunchy Frog said...

You're gonna take a walk in the rain
And you're gonna get wet
I predict
You're gonna eat a bowl of chow mein
And feel hungry real soon
I predict
Are my sources correct
Are my sources correct
Are my sources correct
I predict

Crunchy Frog said...

You're gonna take a walk in the rain
And you're gonna get wet
I predict
You're gonna eat a bowl of chow mein
And feel hungry real soon
I predict
Are my sources correct
Are my sources correct
Are my sources correct
I predict

Andy Freeman said...

> But psychics frequently claim much more than this. They say they can find murder victims, or murderers. They say they can heal and predict the future. They make empirically claims all the time.

MDs make claims too, about healing even.

So, the real problem is that psychics don't have people sign consent forms, right?

Mark said...

Religion provides more than just a promise of salvation. Judaism makes no explicit promises therein. I actually think that's why it pisses everyone else off.

Mark said...

Here's a religion: You will live forever. Everything you have ever done will live forever. Every moment of your life is eternal. Your life is a record, a tape, a CD, a DVD, that will and has lasted through all time.

Are you happy with that?

anonymous said...

Charlatans and pseudoskeptics create confusion but these links have the facts about genuine psychic phenomenon:

Proof of ESP

Evidence for the Afterlife

Peer Reviewed Journal Articles on Psychic Phenomena

You would be surprised at the nuber of Nobel prize winners and other scientists who believed in paranormal phenomena because of their own research, their own experiences, or the research of other investigators.

Grant McKenna said...

If I claim to be a medical doctor and advise as to health, I am a fraud.
If I claim to offer spiritual advice, then my advice is worth whatever you value it as being worth.
If, however, I claim to have powers different to others- or claim to having learnt how to use powers better than others have, and I cannot demonstrate those powers, then I am a fraud.

Brian Macker said...

Mark, Sorry next to no one is aware of what you claimed about Judiasm, and I've never heard an anti-semite list it as a reason for hating Jews. What you don't know about cannot motivate you. I have hear other things listed like their belief they are the chosen people, they killed christ, etc.

Brian Macker said...

The lottery actually pays out. The promise they make on selling the ticket is that someone will win. The people I know who buy the tickets do not do so for "the entertainment value". They do so for the chance to win. they are in fact chosing to increase their risk ratio on a very small portion of their income. This presents no issue of externalities to others.

However when someone gambles so much of their income that they become a burden on others (by turning to theft for example) then I think it is right for the government to say they can no longer gamble.

I think it reasonable for the government to say it will not enforce a gambling debt against someone who clearly could not afford to lose it, and also claim the right to prevent anyone else from enforcing it. In effect setting up an incentive for the other parties to a bet to find out a person's financial status.

Obviously there are more details to consider but this is not a book, but a comment.

Brian Macker said...

In the case of the government setting up a gambling house, well the above reasoning will not apply because in fact the government will be left holding the bag. If someone gambles all their money away on governemnt lottery tickets, then the government has to support them (when their are welfare laws).

It is also the government that will have to support them in jail if they turn to crime. No numbers runner on the street is going to do that for you.

So the government is in a unique position. That's true regardless of whether they do the right thing, or what the actual collection of decisions are with regard to providing welfare, enforcing laws against theft, or running lotteries. It is due to their claimed monopoly on enforcement.

Brian Macker said...

Do fortune tellers claim to be running a religion? I don't think so. If you are going to argue that what they are doing is religious then you are placed in the position of having to answer why they should pay taxes on the money they scam out of people.

I also don't agree that religion is supported for entertainment value only. If so then why not tax it at a higher rate like we do for other pointless entertainments (drinking, gambling, smoking)? BTW, I don't think taxes should be used to drive behavior. I'm just asking those who think religion is entertainment only (and especially if they are religious).

Ben said...

"If you are going to argue that what they are doing is religious then you are placed in the position of having to answer why they should pay taxes on the money they scam out of people."

That's an easy one to solve, especially since the current IRS scandal.

Make a single tax-exempt status for all non-profit organizations whether religious, political or whatever. There are 29 501(c) organizations, reduce it to one in a revenue neutral fashion.

That takes the IRS out of the business of judging speech altogether.

Brian Macker said...

No, I think the answer is to make no activty tax deductible. Charities, religion, educational foundations, etc. All use public services and a good estimation of how much is their intake of contributions.

RobertL said...

Time to prosecute every evangelical preacher on the planet and the entire Obama campaign!!!!

Martinkh said...

If people could go to jail for manipulating people into buying BS, then the organized criminal conspiracy called the Democratic Party would be shut down and thrown in jail.