Lottery? More like... nottery.

Just when I thought I'd never get a cool hook to rant about state-run lotteries, my favorite professional sports team steps up to the plate crease. Earlier this week, the Boston Bruins announced a cross-promotional campaign with the State of Massachusetts to sell Bruins lottery tickets.

I've long maintained that states should get out of the lottery business. It's wrong twofold. First, a lottery isn't anywhere close to a governmental function. Lotteries don't enable equality, they're extremely non-essential and they're not even sectors in which the government can do a better job than the free market. And second, the government decries gambling as immoral in the same breath that it sets itself up as bookie. There are matters in which the government rightfully claims a monopoly: driving rules, war and imprisonment come to mind. But in general, if something is okay for the government to do, it should be okay for the private sector to give it a try. Businesses can even provide private police forces, more or less. If states want to run a lottery — which they shouldn't — they should at least let businesses get a piece of the action.

State governments run lotteries because they're lucrative, but it's a shell game: governments should be open about the funds they need and the taxes they enact to raise them. This form of taxation also happens to be fairly regressive. That many states direct their gambling profits to particularly feel-good causes like education doesn't excuse the fact. In fact, it's a bit of an insult to raise school money from a disproportionately under-educated demographic.

Binding badly behaving banks

At the G20 summit today, leaders from around the world will loudly promise to reform banking in ways they know will never be implemented. Sounds fun to me. I think I'll give it a whirl.

The biggest problem with regulations is that they always leave loopholes. Wall Street may be reckless, but it's also clever, and governments will always lag behind. That's practically by definition, really: nobody notices a loophole until after it's exploited.

In programming, there are two basic approaches to security — that is, to closing off loopholes. The first approach, called blacklisting, is to figure out all of the ways a hacker can sneak into your program, and block them. This is analogous to the government's approach, and it suffers the same disadvantages: you're always playing catch-up.

The second approach, whitelisting, takes the opposite approach: define only the inputs you want to accept, and block the rest. This concept is important enough that one of the Web's early languages has it built in, and more modern languages have add-ons that mimic or extend this behavior.

And that's my proposal for regulating the banking industry: instead of defining the thousands of things that banks, credit card companies, investment banks and the like can't do, define the few things they can do. Not only will there be fewer loopholes, but nearly all of those loopholes will be traceable back to the members of Congress who consciously and explicitly wrote them into law.

Granted, this would put a big damper on fiscal innovation. Is that a bad thing? Banking isn't exactly a new industry; at this point, "innovations" are more likely to be smoke and mirrors than real, fundamental improvements. And if someone does think of a brand new, useful way of doing things, they can petition Congress to allow it. Given the financial industry's power to take down the world's economies, I don't think that's an unjustified burden.