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Iran's Failed Revolution | Doug Bandow | Cato Institute: Commentary: "In 1953 the U.S. government terminated Iran's earlier democracy by orchestrating the overthrow of Prime Minister Mohammad Mossadegh. Mossadegh, Time's 1951 Man of the Year, died under house arrest by Mohammad Reza Shah Pahlavi.
For a quarter century Washington backed the shah's dictatorship. After years of repression, Islamic fundamentalists emerged stronger than liberal secularists, leading to the creation of the Islamic Republic in 1979. Then the United States supported Iraq's Saddam Hussein after he invaded Iran. Later, President George W. Bush termed Iran a member of the 'Axis of Evil' even as his administration destroyed the Iraqi regime which had helped restrain Tehran's regional ambitions."
"This history continues to afflict America's relationship with Iranians. Persistent threats of military strikes and cheery jingles about bombing campaigns—which undoubtedly would have killed some of the demonstrators whose cause the U.S. government now champions—also taint Washington's call for democracy. So, too, the preelection admission of such neoconservatives as Max Boot and Daniel Pipes that they would prefer the reelection of Iranian President Ahmadinejad. Not all Iranians are likely to see Washington as a disinterested advocate of the best interests of the Iranian people."
"But for the U.S. government to be perceived as interfering—yet again—in Iran's affairs would retard rather than accelerate reform. Ahmadinejad has won on force but lost on legitimacy: Moussavi, fellow reform candidate Mehdi Karroubi, and former-President Mohammad Khatami continue to criticize the fraudulent result. The worst thing Washington could do is turn the issue into a conflict between the U.S. and Iranian governments instead of one between the Iranian government and its people. And if Moussavi unexpectedly triumphed, the United States would not want to be tied to him either. After all, he looks moderate only in comparison to Ahmadinejad.
While unlikely to help unseat the current regime, expansive statements of U.S. government support and generous cash grants risk giving democracy activists a false sense of security. It wouldn't be the first time: Hungarian revolutionaries confronting the Soviet Union in 1956, Shiites rising against Saddam Hussein's regime in 2001, and Georgians battling Russian forces in 2008 all appeared to treat American verbal endorsements as a precursor to armed intervention on their behalf."
"However, the nuclear issue is too important to leave unaddressed. Military strikes might only delay Iran's possible development of nuclear weapons. Moreover, such an attack would increase Tehran's incentive to develop an arsenal. U.S. intelligence does not believe that Iran has an active weapons program underway, though the mullahs may hope to create "turn-key" capability; military action likely would remove any doubt in the regime's mind about the desirability of possessing an atomic deterrent.
Moreover, war would destroy the democracy movement and solidify support for the regime."
Monday, July 13, 2009
The Case for Doing Nothing | Jeffrey A. Miron | Cato Institute: Commentary
The Case for Doing Nothing | Jeffrey A. Miron | Cato Institute: Commentary: "When people try to pin the blame for the financial crisis on the introduction of derivatives, or the increase in securitization, or the failure of ratings agencies, it's important to remember that the magnitude of both boom and bust was increased exponentially because of the notion in the back of everyone's mind that if things went badly, the government would bail us out. And in fact, that is what the federal government has done. But before critiquing this series of interventions, perhaps we should ask what the alternative was."
"From the distributional perspective, the choice is a no-brainer. Bailouts took money from the taxpayers and gave it to banks that willingly, knowingly, and repeatedly took huge amounts of risk, hoping they'd get bailed out by everyone else. It clearly was an unfair transfer of funds. Under bankruptcy, on the other hand, the people who take most or even all of the loss are the equity holders and creditors of these institutions. This is appropriate, because these are the stakeholders who win on the upside when there's money to be made. Distributionally, we clearly did the wrong thing."
"The problem isn't only that the bailout wasn't necessary in the first place. The bailout may have made the credit situation worse. When banks hear that the Treasury Department is dangling hundreds of billions of dollars out there to purchase their toxic assets, what are they going to do? Sell their assets for 20 cents on the dollar, or hold onto them in the hope that the government will eventually buy them for 80 cents on the dollar?
The moment Treasury Secretary Henry Paulson got in front of the cameras last fall and announced that we were on the brink of catastrophe, Wall Street was bound to freeze, because bankers wanted to figure out how much money was available and how they could get some. Let's not realize any losses we don't have to realize, they figured, because Treasury's going to bail us out."
"From the distributional perspective, the choice is a no-brainer. Bailouts took money from the taxpayers and gave it to banks that willingly, knowingly, and repeatedly took huge amounts of risk, hoping they'd get bailed out by everyone else. It clearly was an unfair transfer of funds. Under bankruptcy, on the other hand, the people who take most or even all of the loss are the equity holders and creditors of these institutions. This is appropriate, because these are the stakeholders who win on the upside when there's money to be made. Distributionally, we clearly did the wrong thing."
"The problem isn't only that the bailout wasn't necessary in the first place. The bailout may have made the credit situation worse. When banks hear that the Treasury Department is dangling hundreds of billions of dollars out there to purchase their toxic assets, what are they going to do? Sell their assets for 20 cents on the dollar, or hold onto them in the hope that the government will eventually buy them for 80 cents on the dollar?
The moment Treasury Secretary Henry Paulson got in front of the cameras last fall and announced that we were on the brink of catastrophe, Wall Street was bound to freeze, because bankers wanted to figure out how much money was available and how they could get some. Let's not realize any losses we don't have to realize, they figured, because Treasury's going to bail us out."
A Second Stimulus Package? Yikes! | Alan Reynolds | Cato Institute: Commentary
A Second Stimulus Package? Yikes! | Alan Reynolds | Cato Institute: Commentary: "'Indian stocks fell 5.8% Monday amid concern the proposed government budget will add to the country's fiscal deficit.'
Investors understand that increased government spending diverts valuable resources away from the private sector and ends up imposing even more demoralizing taxes on labor and capital."
"A major study of 18 large economies by Alberto Alesina of Harvard and three colleagues appeared in the 2002 American Economic Review. This paper, "Fiscal Policy, Profits and Investment" found that the surest way to make economies boom can be through deep cuts in government spending--the exact opposite of the "fiscal stimulus" snake oil.
Ireland, for example, slashed government spending by more than 7% of GDP from 1986 to 1989--nearly as much as the 8.4% of GDP the U.S. spends on Social Security and Medicare combined. The Irish economy suddenly switched from a 0.2% pace of economic growth in the early 1980s to annual real GDP growth of 7.2% from 1989 to 2001. With GDP doubling every decade, government debt dropped from 125% of GDP to less than 40%.
By contrast, Japan spent trillions on Keynesian "stimulus" schemes after 1991, doubling the ratio of national debt to GDP. Amazingly, they are doing it still. Japan's "lost decade" of economic stagnation is now approaching two decades with no end in sight."
Investors understand that increased government spending diverts valuable resources away from the private sector and ends up imposing even more demoralizing taxes on labor and capital."
"A major study of 18 large economies by Alberto Alesina of Harvard and three colleagues appeared in the 2002 American Economic Review. This paper, "Fiscal Policy, Profits and Investment" found that the surest way to make economies boom can be through deep cuts in government spending--the exact opposite of the "fiscal stimulus" snake oil.
Ireland, for example, slashed government spending by more than 7% of GDP from 1986 to 1989--nearly as much as the 8.4% of GDP the U.S. spends on Social Security and Medicare combined. The Irish economy suddenly switched from a 0.2% pace of economic growth in the early 1980s to annual real GDP growth of 7.2% from 1989 to 2001. With GDP doubling every decade, government debt dropped from 125% of GDP to less than 40%.
By contrast, Japan spent trillions on Keynesian "stimulus" schemes after 1991, doubling the ratio of national debt to GDP. Amazingly, they are doing it still. Japan's "lost decade" of economic stagnation is now approaching two decades with no end in sight."
Hate Crime Legislation Would Backfire | David Rittgers | Cato Institute: Commentary
Hate Crime Legislation Would Backfire | David Rittgers | Cato Institute: Commentary: "First, crimes motivated by racial animus, misogyny, or homophobia are already recognized as atrocities and prosecuted to the fullest extent of the law. No new law is needed. Second, making the ideology of the perpetrator a centerpiece of the trial doesn't deter like-minded extremists; it encourages them."
"Worse yet, the proposed legislation picks favorites among the public. Mr. Von Brunn could arguably be charged under the proposed hate-crime legislation because he targeted a Jewish museum and shot an African-American guard. Mr. Roeder's crime had the same death toll, but because there is no hate-crime protection for abortion providers he is outside the hate-crime ambit (though arguably subject to prosecution under a separate overfederalization of violence against abortion providers).
Mr. Muhammad wanted to kill an American soldier and he did, but it's not a hate crime unless he was specifically looking for a Christian, female, or gay soldier."
"Worse yet, the proposed legislation picks favorites among the public. Mr. Von Brunn could arguably be charged under the proposed hate-crime legislation because he targeted a Jewish museum and shot an African-American guard. Mr. Roeder's crime had the same death toll, but because there is no hate-crime protection for abortion providers he is outside the hate-crime ambit (though arguably subject to prosecution under a separate overfederalization of violence against abortion providers).
Mr. Muhammad wanted to kill an American soldier and he did, but it's not a hate crime unless he was specifically looking for a Christian, female, or gay soldier."
Obama: Recovery Will Take Years Not Months - Political News - FOXNews.com
Obama: Recovery Will Take Years Not Months - Political News - FOXNews.com: "Health care costs must be controlled, jobs created within the U.S., worker training programs established and budget deficits reduced, he said."
Too bad his policies do the opposite. The government has never been good at controlling costs so government health care won't help. The stimulus bills take massive amounts of money from the economy which kills many jobs and creates only a relative few jobs. Government worker training programs will be inefficient. Budget deficits have smashed records.
Too bad his policies do the opposite. The government has never been good at controlling costs so government health care won't help. The stimulus bills take massive amounts of money from the economy which kills many jobs and creates only a relative few jobs. Government worker training programs will be inefficient. Budget deficits have smashed records.
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