The University of Basel’s Institute of Governance recently published a map showing the nations most linked to dirty money. What made the map interesting is that only one of the 28 nations listed was a so-called tax haven, thus exposing the left-wing lie that low-tax jurisdictions are somehow hotbeds of dirty money.

A more fundamental question is whether anti-money laundering laws are an effective way of fighting crime. The evidence is not encouraging. The system costs billions of dollars each year. Banks are forced to set up expensive monitoring systems to snoop on their customers. They are then required to send reports to the government for all large or unusual transactions. Theoretically, these reports are supposed to alert law enforcement to patterns of criminal activity, but since banks are compelled to send millions of reports every year, it is impossible to sift through haystacks of data to find needles of criminal activity. This is why conservatives, such as a former Reagan Justice Department official John Yoder, think the laws do more harm than good. This six-minute video from the Center for Freedom and Prosperity explains why the time has come for politicians to reconsider the current approach.

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Libertarians (as well as some honest left wingers) also dislike anti-money laundering laws because they substantially undermine privacy. The Constitution guarantees a presumption of innocence and protection against unreasonable searches. Those freedoms are eroded, though, when banks are coerced into treating customers like criminal suspects and required to share millions of reports on the financial transactions of innocent Americans with the government.

It is said that the definition of insanity is doing the same thing over and over again while expecting a different result. So perhaps you won’t be surprised to learn that statist politicians such as John Kerry (D-MA) and Carl Levin (D-MA) want to make money laundering laws more onerous and intrusive. That won’t have much impact on the bad guys, but it will mean less freedom for everybody else.