Monday, May 25, 2009

Perspectives from India: North Korea thumbs its nuclear nose at Washington

Is Obama Another Jimmy Carter? By Bahukutumbi Raman
North Korea thumbs its nuclear nose at Washington.
Forbes, May 25, 2009, 11:35 AM EDT

During the U.S. Presidential primaries last year, I had expressed my misgivings that Barack Obama might turn out to be another Jimmy Carter, whose confused thinking and soft image paved the way for the success of the Islamic Revolution in Iran.

The subsequent Iranian defiance of the U.S. and Carter's inability to deal effectively with the crisis in which Iranian students raided the U.S. Embassy in Teheran and held a number of U.S. diplomats hostage led to disillusionment with him in sections of the U.S. and to his failure to get re-elected in 1980. The strong line taken by him against the invasion of Afghanistan by the Soviet troops towards the end of 1979 did not help him in wiping out the image of a soft and confused president.

The defiant action of North Korea in testing a long-range missile with military applications last month, and its latest act of defiance in reportedly carrying out an underground nuclear test on May 25, can be attributed--at least partly, if not fully--to its conviction that it will have nothing to fear from the Obama administration for its acts of defiance. It is true that even when George Bush was the president, North Korea had carried out its first underground nuclear test in October 2006. The supposedly strong policy of the Bush administration did not deter it from carrying out its first test.

After Obama assumed office in January, whatever hesitation that existed in North Korea's policy-making circles regarding the likely response of U.S. administration has disappeared, and its leadership now feels it can defy the U.S. and the international community with impunity.

A series of actions taken by the Obama administration have created an impression in Iran, the "Af-Pak" region, China and North Korea that Obama does not have the political will to retaliate decisively to acts that are detrimental to U.S. interests, and to international peace and security.

Among such actions, one could cite: the soft policy toward Iran: the reluctance to articulate strongly U.S. determination to support the security interests of Israel; the ambivalent attitude toward Pakistan despite its continued support to anti-India terrorist groups and its ineffective action against the sanctuaries of Al-Qaida and the Taliban in Pakistani territory; its silence on the question of the violation of the human rights of the Burmese people and the continued illegal detention of Aung San Suu Kyi by the military regime in Myanmar; and its silence on the Tibetan issue.

Its over-keenness to court Beijing's support in dealing with the economic crisis, and its anxiety to ensure the continued flow of Chinese money into U.S. Treasury bonds, have also added to the soft image of the U.S.

President Obama cannot blame the problem-states of the world--Iran, Pakistan, Myanmar and North Korea--if they have come to the conclusion that they can take liberties with the present administration in Washington without having to fear any adverse consequences. North Korea's defiance is only the beginning. One has every reason to apprehend that Iran might be the next to follow.

Israel and India have been the most affected by the perceived soft policies of the Obama administration. Israel is legitimately concerned over the likely impact of this soft policy on the behavior of Iran. South Korea and Japan, which would have been concerned over the implications of the soft policy of the Obama administration, had no national option because they lack independent means of acting against North Korea.

Israel will not stand and watch helplessly if it concludes that Iran might follow the example of North Korea. Israel will not hesitate to act unilaterally against Iran if it apprehends that it is on the verge of acquiring a military nuclear capability. It will prefer to act with the understanding of the U.S., but if there is no change in the soft policy of the Obama administration, it will not hesitate to act even without prior consultation with the U.S.

India, too, has been noting with concern the total confusion, which seems to prevail in the corridors of the Obama administration over its Af-Pak policy. Some of the recent comments of U.S. Secretary of State Hillary Clinton about alleged past incoherence in U.S. policy toward Pakistan--and about the part-responsibility of the U.S. for the state of affairs in the Af-Pak region--have given comfort to the military-intelligence establishment and the political leaders in Pakistan.

Obama's new over-generosity to the Pakistani armed forces and his reluctance to hold them accountable for their sins of commission and omission in the war against terrorism have convinced the Pakistani leaders that they have no adverse consequences to fear from the Obama administration. India would be the first to feel the adverse consequences of this newly found confidence in Islamabad vis-a-vis its relations with the U.S.

Jimmy Carter took a little over three years to create the image of the U.S. as a confused and soft power. Obama is bidding fair to create that image even in his first year in office. The North Korean defiance is the first result of this perceived soft image. There will be more surprises for the U.S. and the international community to follow if Obama and his aides do not embark on corrective actions before it is too late.

Bahukutumbi Raman is a retired officer of the Indian intelligence service and director of the Institute For Topical Studies, in Chennai, India. He is also associated with the Chennai Centre For China Studies.

Remarks by the Federal President on Memorial Day

THE WHITE HOUSE
Office of the Press Secretary
_________________________________________________________
For Immediate Release
May 25, 2009

REMARKS BY THE PRESIDENT ON MEMORIAL DAY
Memorial Amphitheater
Arlington National Cemetery

THE PRESIDENT: Thank you, Admiral Mullen, for that generous introduction and for your sterling service to our country. To members of our armed forces, to our veterans, to honored guests, and families of the fallen -- I am deeply honored to be with you on Memorial Day.

Thank you to the superintendent, John Metzler, Jr., who cares for these grounds just as his father did before him; to the Third Infantry Regiment who, regardless of weather or hour, guard the sanctity of this hallowed ground with the reverence it deserves -- we are grateful to you; to service members from every branch of the military who, each Memorial Day, place an American flag before every single stone in this cemetery -- we thank you as well. (Applause.) We are indebted -- we are indebted to all who tend to this sacred place.

Here lie Presidents and privates; Supreme Court justices and slaves; generals familiar to history, and unknown soldiers known only to God.

A few moments ago, I laid a wreath at their tomb to pay tribute to all who have given their lives for this country. As a nation, we have gathered here to repeat this ritual in moments of peace, when we pay our respects to the fallen and give thanks for their sacrifice. And we've gathered here in moments of war, when the somber notes of Taps echo through the trees, and fresh grief lingers in the air.

Today is one of those moments, where we pay tribute to those who forged our history, but hold closely the memory of those so recently lost. And even as we gather here this morning, all across America, people are pausing to remember, to mourn, and to pray.

Old soldiers are pulling themselves a little straighter to salute brothers lost a long time ago. Children are running their fingers over colorful ribbons that they know signify something of great consequence, even if they don't know exactly why. Mothers are re-reading final letters home and clutching photos of smiling sons or daughters, as youthful and vibrant as they always will be.

They, and we, are the legacies of an unbroken chain of proud men and women who served their country with honor; who waged war so that we might know peace; who braved hardship so that we might know opportunity; who paid the ultimate price so we might know freedom.
Those who rest in these fields fought in every American war. They overthrew an empire and gave birth to revolution. They strained to hold a young union together. They rolled back the creeping tide of tyranny, and stood post through a long twilight struggle. And they took on the terror and extremism that threatens our world's stability.

Their stories are the American story. More than seven generations of them are chronicled here at Arlington. They're etched into stone, recounted by family and friends, and silently observed by the mighty oaks that have stood over burial after burial.

To walk these grounds then is to walk through that history. Not far from here, appropriately just across a bridge connecting Lincoln to Lee, Union and Confederate soldiers share the same land in perpetuity.

Just down the sweeping hill behind me rest those we lost in World War II, fresh-faced GIs who rose to the moment by unleashing a fury that saved the world. Next week, I'll visit Normandy, the place where our fate hung on an operation unlike any ever attempted, where it will be my tremendous honor to address some of the brave men who stormed those beaches 65 years ago.
And tucked in a quiet corner to our north are thousands of those we lost in Vietnam. We know for many the casualties of that war endure -- right now, there are veterans suffering and families tracing their fingers over black granite not two miles from here. They are why we pledge anew to remember their service and revere their sacrifice, and honor them as they deserve.

This cemetery is in and of itself a testament to the price our nation has paid for freedom. A quarter of a million marble headstones dot these rolling hills in perfect military order, worthy of the dignity of those who rest here. It can seem overwhelming. But for the families of the fallen, just one stone stands out -- one stone that requires no map to find.

Today, some of those stones are found at the bottom of this hill in Section 60, where the fallen from Iraq and Afghanistan rest. The wounds of war are fresh in Section 60. A steady stream of visitors leaves reminders of life: photos, teddy bears, favorite magazines. Friends place small stones as a sign they stopped by. Combat units leave bottles of beer or stamp cigarettes into the ground as a salute to those they rode in battle with. Perfect strangers visit in their free time, compelled to tend to these heroes, to leave flowers, to read poetry -- to make sure they don't get lonely.

If the fallen could speak to us, what would they say? Would they console us? Perhaps they might say that while they could not know they'd be called upon to storm a beach through a hail of gunfire, they were willing to give up everything for the defense of our freedom; that while they could not know they'd be called upon to jump into the mountains of Afghanistan and seek an elusive enemy, they were willing to sacrifice all for their country; that while they couldn't possibly know they would be called to leave this world for another, they were willing to take that chance to save the lives of their brothers and sisters in arms.

What is thing, this sense of duty? What tugs at a person until he or she says "Send me"? Why, in an age when so many have acted only in pursuit of the narrowest self-interest, have the soldiers, sailors, airmen and Marines of this generation volunteered all that they have on behalf of others? Why have they been willing to bear the heaviest burden?

Whatever it is, they felt some tug; they answered a call; they said "I'll go." That is why they are the best of America, and that is what separates them from those of us who have not served in uniform -- their extraordinary willingness to risk their lives for people they never met.
My grandfather served in Patton's Army in World War II. But I cannot know what it is like to walk into battle. I'm the father of two young girls -- but I can't imagine what it's like to lose a child. These are things I cannot know. But I do know this: I am humbled to be the Commander-in-Chief of the finest fighting force in the history of the world. (Applause.)

I know that there is nothing I will not do to keep our country safe, even as I face no harder decision than sending our men and women to war -- and no moment more difficult than writing a letter to the families of the fallen. And that's why as long as I am President, I will only send our troops into harm's way when it is absolutely necessary, and I will always provide them with the equipment and support they need to get the job done. (Applause.)

I know that military families sacrifice more than we can understand, and feel an absence greater than we can comprehend. And that's why Michelle and I are committed to easing their burden.
And I know what a grateful nation owes to those who serve under its proud flag. And that's why I promise all our servicemen and women that when the guns fall silent, and you do return home, it will be to an America that is forever here for you, just as you've been there for us. (Applause.)

With each death, we are heartbroken. With each death, we grow more determined. This bustling graveyard can be a restless place for the living, where solace sometimes comes only from meeting others who know similar grief. But it reminds us all the meaning of valor; it reminds us all of our own obligations to one another; it recounts that most precious aspect of our history, and tells us that we will only rise or fall together.

So on this day of silent remembrance and solemn prayer I ask all Americans, wherever you are, whoever you're with, whatever you're doing, to pause in national unity at 3:00 this afternoon. I ask you to ring a bell, or offer a prayer, say a silent "thank you." And commit to give something back to this nation -- something lasting -- in their memory; to affirm in our own lives and advance around the world those enduring ideals of justice, equality, and opportunity for which they and so many generations of Americans have given that last full measure of devotion.

God bless you, God bless the fallen, and God bless the United States of America. (Applause.)

Leo Thorsness: Torture thoughts on Memorial Day

Leo Thorsness: Torture thoughts on Memorial Day. By Scott Johnson
Powerline blog, May 25, 2009 at 10:00 AM

Leo Thorsness is the Minnesota native who was awarded the Medal of Honor for unbelievable heroics in aerial combat over North Vietnam in April 1967. Within a few days of his heroics on his Medal of Honor mission, Col. Thorsness was shot down over North Vietnam and taken into captivity. In captivity he was tortured by the North Vietnamese for 18 straight days and periodically thereafter until his release in 1973.

Col. Thorsness recounts his experiences in Surviving Hell: A POW's Journey, about which I wrote at length here. In its own modest way, it is a great and timely book.

Thinking of Memorial Day in the context of current controversies, Col. Thorsness wrote the folllowing column:

Think Memorial Day and veterans usually come to mind. Think veterans and our national debate about torture comes to mind.

Of the 350 "old timer" Vietnam POWs, the majority were severely tortured by the North Vietnamese. Ironically the Department of Defense did not formally study torture after the POWs were released in 1973. We provided our military an actual "torture database library" but to this day, the Pentagon has never tapped the resource to help clarify national debate about "what is torture."

I and many other Vietnam POWs were tortured severely - some were tortured to death. Several POWs wrote books after our release in 1973 describing the torture in detail. Mike McGrath's book had extensive drawings vividly depicting types of torture the North Vietnamese used. (A gallery of McGrath's drawings is accessible here.)

When I wrote Surviving Hell in 2008, initially I did not include discussions of torture, knowing that others had earlier described it. My editors encouraged me to add it; if our younger population reads only current books, they may perceive that the treatment at Abu Grab and Gitmo was real torture. I added my experience being tortured so that readers will know that there is abuse and humiliation, and there is torture.

If someone surveyed the surviving Vietnam POWs, we would likely not agree on one definition of torture. In fact, we wouldn't agree if waterboarding is torture. For example, John McCain, Bud Day and I were recently together. Bud is one of the toughest and most tortured Vietnam POWs. John thinks waterboarding is torture; Bud and I believe it is harsh treatment, but not torture. Other POWs would have varying opinions. I don't claim to be right; we just disagree. But as someone who has been severely tortured over an extended time, my first hand view on torture is this:

Torture, when used by an expert, can produce useful, truthful information. I base that on my experience. I believe that during torture, there is a narrow "window of truth" as pain (often multiple kinds) is increased. Beyond that point, if torture increases, the person breaks, or dies if he continues to resist.

Everyone has a different physical and mental threshold of pain that he can tolerate. If the interrogator is well trained he can identify when that point is reached - the point when if slightly more pain is inflicted, a person no longer can "hold out," just giving (following the Geneva Convention) name, rank, serial number and date of birth. At that precise point, a very narrow torture "window of truth" exists. At that moment a person may give useful or truthful information to stop the pain. As slightly more pain is applied, the person "loses it" and will say anything he thinks will stop the torture - any lie, any story, and any random words or sounds

This torture "window of truth" is theory to some. Having been there, it is fact to me. While in torture I had the sickening feeling deep within my soul that maybe I would tell the truth as that horrendous pain increased. It is unpleasant, but I can still dredge up the memory of that window of truth feeling as the pain level intensified.

Our world is not completely good or evil. To proclaim we will never use any form of enhanced interrogations causes our friends to think we are naïve and eases our enemies' recruitment of radical terrorists to plot attacks on innocent kids, men and women - or any infidel. If I were to catch a "mad bomber" running away from an explosive I would not hesitate a second to use "enhanced interrogation," including waterboarding, if it would save lives of innocent people.

Our naïveté does not impress radical terrorists like those who slit the throat of Daniel Pearl in 2002 simply because he was Jewish, and broadcast the sight and sound of his dying gurgling. Publicizing our enhanced interrogation techniques only emboldens those who will hurt us.

At the end of the second paragraph of his column, Col. Thorsenss adds the following footnote: "Kepler Space University is beginning a study of Vietnam POW torture, headed by Professor Robert Krone, Col., USAF (ret.)." Thanks to Col. Thorsness for permission to post his column here today.

New Evidence Points to Hezbollah in Hariri Murder

New Evidence Points to Hezbollah in Hariri Murder. By Erich Follath
Der Spiegel, May 23, 2009

The United Nations special tribunal investigating the murder of former Lebanese Prime Minister Rafik al-Hariri has reached surprising new conclusions -- and it is keeping them secret. According to information obtained by SPIEGEL, investigators now believe Hezbollah was behind the Hariri murder.

A tribute to America's war heroes, past and present - Those Who Make Us Say 'Oh!'

Those Who Make Us Say 'Oh!'. By Peggy Noonan
A tribute to America's war heroes, past and present.
WSJ, May 25, 2009

More than most nations, America has been, from its start, a hero-loving place. Maybe part of the reason is that at our founding we were a Protestant nation and not a Catholic one, and so we made "saints" of civil and political figures. George Washington was our first national hero, known everywhere, famous to children. When he died, we had our first true national mourning, with cities and states re-enacting his funeral. There was the genius cluster that surrounded him, and invented us—Jefferson, Adams, Madison, Hamilton. Through much of the 20th century our famous heroes were in sports (Jack Dempsey, Joe Louis, the Babe, Joltin' Joe) the arts (Clark Gable, Robert Frost) business and philanthropy (from Andrew Carnegie to Bill Gates) and religion (Billy Graham). Nobody does fame like America, and they were famous.

The category of military hero—warrior—fell off a bit, in part because of the bad reputation of war. Some emerged of heroic size—Gens. Pershing and Patton, Eisenhower and Marshall. But somewhere in the 1960s I think we decided, or the makers of our culture decided, that to celebrate great warriors was to encourage war. And we always have too much of that. So they made a lot of movies depicting soldiers as victims and officers as brutish. This was especially true in the Vietnam era and the years that followed. Maybe a correction was in order: It's good to remember war is hell. But when we removed the warrior, we removed something intensely human, something ancestral and stirring, something celebrated naturally throughout the long history of man. Also it was ungrateful: They put themselves in harm's way for us.

For Memorial Day, then, three warriors, two previously celebrated but not so known now by the young.

Alvin York was born in 1887 into a Tennessee farming family that didn't have much, but nobody else did, so it wasn't so bad. He was the third of 11 children and had an average life for that time and place. Then World War I came. He experienced a crisis of conscience over whether to fight. His mother's Evangelical church tugged him toward more or less pacifist thinking, but he got a draft notice in 1917, joined the Army, went overseas, read and reread his Bible, and concluded that warfare was sometimes justified.

And click here to order her new book, Patriotic Grace. In the battle of the Argonne in October 1918, the allies were attempting to break German lines when York and his men came upon well-hidden machine guns on high ground. As he later put it, "The Germans got us, and they got us right smart . . . and I'm telling you they were shooting straight." American soldiers "just went down like the long grass before the mowing machine at home."

But Cpl. York and his men went behind the German lines, overran a unit, and captured the enemy. Suddenly there was new machine-gun fire from a ridge, and six Americans went down. York was in command, exposed but cool, and he began to shoot. "All I could do was touch the Germans off just as fast as I could. I was sharp shooting. . . . All the time I kept yelling at them to come down. I didn't want to kill any more than I had to." A German officer tried to empty his gun into York while York fired. He failed but York succeeded, the Germans surrendered, and York and his small band marched 132 German prisoners back to the American lines.

His Medal of Honor citation called him fearless, daring and heroic.

Warriors are funny people. They're often naturally peaceable, and often do great good when they return. York went home to Tennessee, married, founded an agricultural institute (it's still operating as an award-winning public high school) and a Bible school. They made a movie about him in 1941, the great Howard Hawks film "Sergeant York." If you are in Manhattan this week, you may walk down York Avenue on the Upper East Side. It was named for him. He died in Nashville in 1964 at 77.

Once, 25 years ago, my father (U.S. Army, replacement troops, Italy, 1945) visited Washington, a town he'd never been to. There was a lot to see: the White House, the Lincoln Memorial. But he just wanted to see one thing, Audie Murphy's grave.

Audie Leon Murphy was born in 1924 or 1926 (more on that in a moment) the sixth of 12 children of a Texas sharecropper. It was all hardscrabble for him: father left, mother died, no education, working in the fields from adolescence on. He was good with a hunting rifle: he said that when he wasn't, his family didn't eat, so yeah, he had to be good. He tried to join the Army after Pearl Harbor, was turned away as underage, came back the next year claiming to be 18 (he was probably 16) and went on to a busy war, seeing action as an infantryman in Sicily, Salerno and Anzio. Then came southern France, where the Germans made the mistake of shooting Audie Murphy's best friend, Lattie Tipton. Murphy wiped out the machine gun crew that did it.

On Jan. 26, 1945, Lt. Murphy was engaged in a battle in which his unit took heavy fire and he was wounded. He ordered his men back. From his Medal of Honor citation: "Behind him . . . one of our tank destroyers received a direct hit and began to burn. Its crew withdrew to the woods. 2d Lt. Murphy continued to direct artillery fire, which killed large numbers of the advancing enemy infantry. With the enemy tanks abreast of his position, 2d Lt. Murphy climbed on the burning tank destroyer, which was in danger of blowing up at any moment, and employed its .50 caliber machine gun against the enemy. He was alone and exposed to German fire from three sides, but his deadly fire killed dozens of Germans and caused their infantry attack to waver. The enemy tanks, losing infantry support, began to fall back."

Murphy returned to Texas a legend. He was also 5-foot-7, having grown two inches while away. He became an actor (44 films, mostly Westerns) and businessman. He died in a plane crash in 1971 and was buried with full honors at Arlington, but he did a warrior-like thing. He asked that the gold leaf normally put on the gravestone of a Medal of Honor recipient not be used. He wanted a plain GI headstone. Some worried this might make his grave harder to find. My father found it, and he was not alone. Audie Murphy's grave is the most visited site at Arlington with the exception of John F. Kennedy's eternal flame.

I thought of these two men the other night after I introduced at a dinner a retired Air Force general named Chuck Boyd. He runs Business Executives for National Security, a group whose members devote time and treasure to helping the government work through various 21st-century challenges. I mentioned that Chuck had been shot down over Vietnam on his 105th mission in April 1966 and was a POW for 2,488 days. He's the only former POW of the era to go on to become a four-star general.

When I said "2,488 days," a number of people in the audience went "Oh!" I heard it up on the podium. They didn't know because he doesn't talk about it, and when asked to, he treats it like nothing, a long night at a bad inn. Warriors always do that. They all deserve the "Oh!"

WSJ Editorial Page: Malaria, Politics and DDT - The U.N. bows to the anti-insecticide lobby

Malaria, Politics and DDT. WSJ Editorial
The U.N. bows to the anti-insecticide lobby.
WSJ, May 25, 2009

In 2006, after 25 years and 50 million preventable deaths, the World Health Organization reversed course and endorsed widespread use of the insecticide DDT to combat malaria. So much for that. Earlier this month, the U.N. agency quietly reverted to promoting less effective methods for attacking the disease. The result is a victory for politics over public health, and millions of the world's poor will suffer as a result.

The U.N. now plans to advocate for drastic reductions in the use of DDT, which kills or repels the mosquitoes that spread malaria. The aim "is to achieve a 30% cut in the application of DDT worldwide by 2014 and its total phase-out by the early 2020s, if not sooner," said WHO and the U.N. Environment Program in a statement on May 6.

Citing a five-year pilot program that reduced malaria cases in Mexico and South America by distributing antimalaria chloroquine pills to uninfected people, U.N. officials are ready to push for a "zero DDT world." Sounds nice, except for the facts. It's true that chloroquine has proven effective when used therapeutically, as in Brazil. But it's also true that scientists have questioned the safety of the drug as an oral prophylactic because it is toxic and has been shown to cause heart problems.

Most malarial deaths occur in sub-Saharan Africa, where chloroquine once worked but started failing in the 1970s as the parasite developed resistance. Even if the drugs were still effective in Africa, they're expensive and thus impractical for one of the world's poorest regions. That's not an argument against chloroquine, bed nets or other interventions. But it is an argument for continuing to make DDT spraying a key part of any effort to eradicate malaria, which kills about a million people -- mainly children -- every year. Nearly all of this spraying is done indoors, by the way, to block mosquito nesting at night. It is not sprayed willy-nilly in jungle habitat.

WHO is not saying that DDT shouldn't be used. But by revoking its stamp of approval, it sends a clear message to donors and afflicted countries that it prefers more politically correct interventions, even if they don't work as well. In recent years, countries like Uganda, Tanzania and Zambia have started or expanded DDT spraying, often with the help of outside aid groups. But these governments are also eager to remain in the U.N.'s good graces, and donors typically are less interested in funding interventions that WHO discourages.

"Sadly, WHO's about-face has nothing to do with science or health and everything to do with bending to the will of well-placed environmentalists," says Roger Bate of Africa Fighting Malaria. "Bed net manufacturers and sellers of less-effective insecticides also don't benefit when DDT is employed and therefore oppose it, often behind the scenes."

It's no coincidence that WHO officials were joined by the head of the U.N. Environment Program to announce the new policy. There's no evidence that spraying DDT in the amounts necessary to kill dangerous mosquitoes imperils crops, animals or human health. But that didn't stop green groups like the Pesticide Action Network from urging the public to celebrate World Malaria Day last month by telling "the U.S. to protect children and families from malaria without spraying pesticides like DDT inside people's homes."

"We must take a position based on the science and the data," said WHO's malaria chief, Arata Kochi, in 2006. "One of the best tools we have against malaria is indoor residual spraying. Of the dozen or so insecticides WHO has approved as safe for house spraying, the most effective is DDT." Mr. Kochi was right then, even if other WHO officials are now bowing to pressure to pretend otherwise.

The president of the Dallas Fed on inflation risk and central bank independence

Don't Monetize the Debt. By Mary Anastasia O'Grady
The president of the Dallas Fed on inflation risk and central bank independence.
WSJ, May 25, 2009

Dallas

From his perch high atop the palatial Dallas Federal Reserve Bank, overlooking what he calls "the most modern, efficient city in America," Richard Fisher says he is always on the lookout for rising prices. But that's not what's worrying the bank's president right now.

His bigger concern these days would seem to be what he calls "the perception of risk" that has been created by the Fed's purchases of Treasury bonds, mortgage-backed securities and Fannie Mae paper.

Mr. Fisher acknowledges that events in the financial markets last year required some unusual Fed action in the commercial lending market. But he says the longer-term debt, particularly the Treasurys, is making investors nervous. The looming challenge, he says, is to reassure markets that the Fed is not going to be "the handmaiden" to fiscal profligacy. "I think the trick here is to assist the functioning of the private markets without signaling in any way, shape or form that the Federal Reserve will be party to monetizing fiscal largess, deficits or the stimulus program."

The very fact that a Fed regional bank president has to raise this issue is not very comforting. It conjures up images of Argentina. And as Mr. Fisher explains, he's not the only one worrying about it. He has just returned from a trip to China, where "senior officials of the Chinese government grill[ed] me about whether or not we are going to monetize the actions of our legislature." He adds, "I must have been asked about that a hundred times in China."

A native of Los Angeles who grew up in Mexico, Mr. Fisher was educated at Harvard, Oxford and Stanford. He spent his earliest days in government at Jimmy Carter's Treasury. He says that taught him a life-long lesson about inflation. It was "inflation that destroyed that presidency," he says. He adds that he learned a lot from then Fed Chairman Paul Volcker, who had to "break [inflation's] back."

Mr. Fisher has led the Dallas Fed since 2005 and has developed a reputation as the Federal Open Market Committee's (FOMC) lead inflation worrywart. In September he told a New York audience that "rates held too low, for too long during the previous Fed regime were an accomplice to [the] reckless behavior" that brought about the economic troubles we are now living through. He also warned that the Treasury's $700 billion plan to buy toxic assets from financial institutions would be "one more straw on the back of the frightfully encumbered camel that is the federal government ledger."

In a speech at the Kennedy School of Government in February, he wrung his hands about "the very deep hole [our political leaders] have dug in incurring unfunded liabilities of retirement and health-care obligations" that "we at the Dallas Fed believe total over $99 trillion." In March, he is believed to have vociferously objected in closed-door FOMC meetings to the proposal to buy U.S. Treasury bonds. So with long-term Treasury yields moving up sharply despite Fed intentions to bring down mortgage rates, I've flown to Dallas to see what he's thinking now.

Regarding what caused the credit bubble, he repeats his assertion about the Fed's role: "It is human instinct when rates are low and the yield curve is flat to reach for greater risk and enhanced yield and returns." (Later, he adds that this is not to cast aspersions on former Fed Chairman Alan Greenspan and reminds me that these decisions are made by the FOMC.)

"The second thing is that the regulators didn't do their job, including the Federal Reserve." To this he adds what he calls unusual circumstances, including "the fruits and tailwinds of globalization, billions of people added to the labor supply, new factories and productivity coming from places it had never come from before." And finally, he says, there was the 'mathematization' of risk." Institutions were "building risk models" and relying heavily on "quant jocks" when "in the end there can be no substitute for good judgment."

What about another group of alleged culprits: the government-anointed rating agencies? Mr. Fisher doesn't mince words. "I served on corporate boards. The way rating agencies worked is that they were paid by the people they rated. I saw that from the inside." He says he also saw this "inherent conflict of interest" as a fund manager. "I never paid attention to the rating agencies. If you relied on them you got . . . you know," he says, sparing me the gory details. "You did your own analysis. What is clear is that rating agencies always change something after it is obvious to everyone else. That's why we never relied on them." That's a bit disconcerting since the Fed still uses these same agencies in managing its own portfolio.

I wonder whether the same bubble-producing Fed errors aren't being repeated now as Washington scrambles to avoid a sustained economic downturn.

He surprises me by siding with the deflation hawks. "I don't think that's the risk right now." Why? One factor influencing his view is the Dallas Fed's "trim mean calculation," which looks at price changes of more than 180 items and excludes the extremes. Dallas researchers have found that "the price increases are less and less. Ex-energy, ex-food, ex-tobacco you've got some mild deflation here and no inflation in the [broader] headline index."

Mr. Fisher says he also has a group of about 50 CEOs around the U.S. and the world that he calls on, all off the record, before almost every FOMC meeting. "I don't impart any information, I just listen carefully to what they are seeing through their own eyes. And that gives me a sense of what's happening on the ground, you might say on Main Street as opposed to Wall Street."

It's good to know that a guy so obsessed with price stability doesn't see inflation on the horizon. But inflation and bubble trouble almost always get going before they are recognized. Moreover, the Fed has to pay attention to the 1978 Full Employment and Balanced Growth Act -- a.k.a. Humphrey-Hawkins -- and employment is a lagging indicator of economic activity. This could create a Fed bias in favor of inflating. So I push him again.

"I want to make sure that your readers understand that I don't know a single person on the FOMC who is rooting for inflation or who is tolerant of inflation." The committee knows very well, he assures me, that "you cannot have sustainable employment growth without price stability. And by price stability I mean that we cannot tolerate deflation or the ravages of inflation."

Mr. Fisher defends the Fed's actions that were designed to "stabilize the financial system as it literally fell apart and prevent the economy from imploding." Yet he admits that there is unfinished work. Policy makers have to be "always mindful that whatever you put in, you are going to have to take out at some point. And also be mindful that there are these perceptions [about the possibility of monetizing the debt], which is why I have been sensitive about the issue of purchasing Treasurys."

He returns to events on his recent trip to Asia, which besides China included stops in Japan, Hong Kong, Singapore and Korea. "I wasn't asked once about mortgage-backed securities. But I was asked at every single meeting about our purchase of Treasurys. That seemed to be the principal preoccupation of those that were invested with their surpluses mostly in the United States. That seems to be the issue people are most worried about."

As I listen I am reminded that it's not just the Asians who have expressed concern. In his Kennedy School speech, Mr. Fisher himself fretted about the U.S. fiscal picture. He acknowledges that he has raised the issue "ad nauseam" and doesn't apologize. "Throughout history," he says, "what the political class has done is they have turned to the central bank to print their way out of an unfunded liability. We can't let that happen. That's when you open the floodgates. So I hope and I pray that our political leaders will just have to take this bull by the horns at some point. You can't run away from it."

Voices like Mr. Fisher's can be a problem for the politicians, which may be why recently there have been rumblings in Washington about revoking the automatic FOMC membership that comes with being a regional bank president. Does Mr. Fisher have any thoughts about that?

This is nothing new, he points out, briefly reviewing the history of the political struggle over monetary policy in the U.S. "The reason why the banks were put in the mix by [President Woodrow] Wilson in 1913, the reason it was structured the way it was structured, was so that you could offset the political power of Washington and the money center in New York with the regional banks. They represented Main Street.

"Now we have this great populist fervor and the banks are arguing for Main Street, largely. I have heard these arguments before and studied the history. I am not losing a lot of sleep over it," he says with a defiant Texas twang that I had not previously detected. "I don't think that it'd be the best signal to send to the market right now that you want to totally politicize the process."

Speaking of which, Texas bankers don't have much good to say about the Troubled Asset Relief Program (TARP), according to Mr. Fisher. "Its been complicated by the politics because you have a special investigator, special prosecutor, and all I can tell you is that in my district here most of the people who wanted in on the TARP no longer want in on the TARP."

At heart, Mr. Fisher says he is an advocate for letting markets clear on their own. "You know that I am a big believer in Schumpeter's creative destruction," he says referring to the term coined by the late Austrian economist. "The destructive part is always painful, politically messy, it hurts like hell but you hopefully will allow the adjustments to be made so that the creative part can take place." Texas went through that process in the 1980s, he says, and came back stronger.

This is doubtless why, with Washington taking on a larger role in the American economy every day, the worries linger. On the wall behind his desk is a 1907 gouache painting by Antonio De Simone of the American steam sailing vessel Varuna plowing through stormy seas. Just like most everything else on the walls, bookshelves and table tops around his office -- and even the dollar-sign cuff links he wears to work -- it represents something.

He says that he has had this painting behind his desk for the past 30 years as a reminder of the importance of purpose and duty in rough seas. "The ship," he explains, "has to maintain its integrity." What is more, "no mathematical model can steer you through the kind of seas in that picture there. In the end someone has the wheel." He adds: "On monetary policy it's the Federal Reserve."

Ms. O'Grady writes the Journal's Americas column.

Interrogations and Presidential Prerogative - The Executive and substantial discretionary powers

Interrogations and Presidential Prerogative. By Walter Berns
The Founders created an executive with substantial discretionary powers.
WSJ, May 25, 2009

Recently, an Episcopal church in Bethesda, Md., displayed a banner with the following words: "God bless everyone (no exceptions)." I confessed to the rector of my own church that, try as I might, I simply could not obey this injunction. Judging by what he had to say about "enhanced" interrogations, Sen. Lindsey Graham (R., N.C.) seems not to share my difficulty.

Mr. Graham believes that we're either a rule-of-law nation or we're not, and no exceptions. "I don't love the terrorists. I just love what Americans stand for," he said in an interview with Newsweek in 2006. His point was that our definitions of torture should not vary with the sort of person being questioned -- terrorists, for example, or merely prisoners of war.

Mr. Graham's position is similar to the one taken by Chief Justice Roger Brooke Taney during the Civil War. In 1861, Confederate sympathizers in Maryland were burning railroad bridges, tearing up their tracks, and attacking federal troops so as to prevent them from reaching the national capital. Since local officials did nothing about this, Abraham Lincoln did. He ordered the military to suspend the writ of habeas corpus, which led to the arrest and imprisonment of John Merryman, a leader of the sympathizers.

Chief Justice Taney ruled in Ex Parte Merryman (1861) that only Congress could suspend the writ of habeas corpus and ordered Merryman released. Lincoln disobeyed the order, believing that the executive must sometimes do things it would not do in ordinary times. Would he have done this if the issue had been the interrogation of terrorists? Does the law have something to say about this?

And would Taney and Graham find support for their views in the writings of our Founders or their philosophical mentors, particularly John Locke, the 17th century Englishman sometimes referred to as "America's philosopher"? Locke is the source of our attachment to the rule of law and the priority of the legislative power.

Locke argued in the Second Treatise of Civil Government that the "first and fundamental law is the establishment of the legislative power." And so it is that the first article of the U.S. Constitution is devoted to the legislative power. There is safety in law, he said; the law is "promulgated and known to the people," and everyone without exception is subject to it.

But Locke admitted that not everything can be done by law. Or, as he said, there are many things "which the law can by no means provide for." The law cannot "foresee" events, for example, nor can it act with dispatch or with the appropriate subtlety required when dealing with foreign powers. Nor, as we know very well indeed, can a legislative body preserve secrecy.

Such matters, Locke continued in the Second Treatise, should be left to "the discretion of him who has the executive power." It is in this context that he first spoke of the "prerogative": the "power to act according to discretion, for the public good without the prescription of the law, and sometimes even against it." He concluded by saying "prerogative is nothing but the power of doing public good without a rule" (italics in the original).

Did the Framers find a place in our Constitution for this extraordinary power? What, if anything, did they say on the subject or, perhaps more tellingly, what did they not say?

They said nothing about a prerogative or -- apart from the habeas corpus provision -- anything suggesting a need for it. But they provided for an executive significantly different from -- and significantly more powerful than -- the executives provided for in the early state constitutions of the revolutionary era. This new executive is, first of all, a single person, and, as the Constitution has it, "he shall be Commander in Chief of the Army and Navy." This is no mean power; Lincoln used it to imprison insurgents and to free the slaves.

The Framers seemed to be aware of what they were doing when they established the office. I draw this conclusion from their reaction when the office was first proposed.

According to the "Records of the Federal Convention of 1787," on June 1, a mere two weeks into the life of the convention, James Wilson "moved that the Executive consist in a single person." Charles Pinckney seconded the motion. Then, "a considerable pause" ensued, and the chairman asked if he should put the question. "Doc Franklin observed that it was a point of great importance and wished that the gentlemen would deliver their sentiments on it before the question was put and Mr. Rutledge animadverted on the shyness of gentlemen. . . ."

Why the silence? Why were they shy? Apparently because the proposal was so radically different from the executives provided in the state constitutions (and the fact that there was no executive whatsoever under the Articles of Confederation). All of these governmental bodies (except New York), and especially those whose constitutions were written in the years 1776-78, included "almost every conceivable provision for reducing the executive to a position of complete subordination," as Charles C. Thach Jr., noted in "The Creation of the Presidency, 1775-1789." The gentlemen were also shy because the provision for a single executive reminded them of George III and of what he had done.

This new, single executive is also required to take an oath to "preserve, protect and defend the Constitution of the United States." This was the provision of his oath President George W. Bush used to capture, hold and interrogate terrorists.

Questions arise: Was the Constitution or, better, the nation actually in jeopardy after 9/11? Was Mr. Bush entitled to imprison the terrorists in Guantanamo? Were the interrogations justified? Were they more severe than necessary? Did they prove useful in protecting the nation and its citizens? These are the sorts of questions Locke may have had in mind in his chapter on the prerogative. Who, he then asked, shall be judge whether "this power is made right use of?" Initially, of course, the executive but, ultimately, the people.

The executive in our case, at least to begin with, is represented by the three Justice Department officials who wrote the memos that Mr. Graham and many members of the Obama administration have found offensive. They have been accused of justifying torture, but they have not yet been given the opportunity in an official setting or forum to defend what they did.

That forum could be a committee of Congress or a "truth commission" -- so long as, in addition to the assistance of counsel, they would be judged by "an impartial jury," have the right to call witnesses in their favor, to call for the release of evidence including the CIA memos showing the success of enhanced interrogations, and the right to "confront the witnesses" against them as the Constitution's Fifth and Sixth Amendments provide. There is much to be said for a process that, among other things, would require Nancy Pelosi to testify under oath.

Mr. Berns is a resident scholar at the American Enterprise Institute.

Moral Hazard and the Meltdown: Everybody felt too big to fail

Moral Hazard and the Meltdown. By Scott Harrington
Everybody felt too big to fail.
WSJ, May 25, 2009

Sunday, May 24, 2009

Japan should have ability to strike enemy bases in defense: LDP panel

Japan should have ability to strike enemy bases in defense: LDP panel
Japan Today, Monday 25th May, 06:44 AM JST

TOKYO — A subcommittee of the ruling Liberal Democratic Party’s defense panel plans to propose that Japan be allowed under a new basic defense program to have the ability to strike enemy bases within the scope of its defense-only policy, according to a draft proposal made available Sunday. It also says Japan should be allowed to develop an early warning satellite system to detect the launch of a missile or other objects that may be aimed at the country.

The recommendations are being sought apparently in view of North Korea’s missile launch in April. The government plans to compile a basic defense program for fiscal 2010 to 2014 by the end of this year, and the subcommittee wants to make those recommendations for the deliberations of the outline.

‘‘Japan should have the ability to strike enemy bases within the scope of its defense-oriented policy, in order not to sit and wait for death,’’ the LDP subcommittee said in the draft proposal.

The government takes a stance that Japan can strike an enemy military base even under the nation’s pacifist Constitution, if hostile attacks are certain.

But Defense Minister Yasukazu Hamada and some lawmakers have taken a cautious attitude toward examining Japan’s possessing such capability.

Japan, meanwhile, is depending on a U.S. early warning satellite against possible missile attacks. But since the April 4 missile launch by North Korea, there have been calls for developing Japan’s own system among members of the LDP.

How Joe Biden Wrecked the Judicial Confirmation Process

How Joe Biden Wrecked the Judicial Confirmation Process. By Collin Levy
The vice president can't complain if Republicans object to Obama's Supreme Court nominee.
WSJ, May 22, 2009

Vice President Joe Biden is widely praised for the expertise he brings in helping Barack Obama choose a replacement for retiring Supreme Court Justice David Souter. Having served for three decades on the Senate Judiciary Committee, he is considered an asset both for his relationships with committee members and his familiarity with the nuts and bolts of judicial nominations. So let's have a look at how the confirmation process actually fared under Mr. Biden's leadership.

As a member of the Senate Judiciary Committee, Mr. Biden was present for the nomination and confirmation of every currently sitting Supreme Court justice except for John Paul Stevens. In 1986, the year before Mr. Biden took over as committee chairman, Antonin Scalia was approved by the Senate in a vote of 98-0. Then came Robert Bork and a presidential election.

Before Judge Bork's nomination, Mr. Biden had said he would support him. And why not? He was widely considered a dazzling legal mind and had even received (during his confirmation to the D.C. Circuit Court of Appeals) a rating of "exceptionally well-qualified" from the liberal-leaning American Bar Association. "Say the administration sends up Bork," Mr. Biden told the Philadelphia Inquirer in November 1986, "and, after our investigations, he looks a lot like Scalia. I'd have to vote for him, and if the [special-interest] groups tear me apart, that's the medicine I'll have to take."

But by the time of the actual nomination, Democrats were promising to play "hardball" with President Ronald Reagan's nominees and Mr. Biden was running for president. Mr. Biden's Democratic colleagues lined up against the nominee. They were led by Sen. Edward Kennedy, who demonized him with a monologue on "Robert Bork's America," which he promised would be "a land in which women would be forced into back alley abortions." Liberal groups joined the chorus for Mr. Biden to recant his earlier support, which he did, helping to defeat Mr. Bork's nomination.

Back then the tactics were considered shocking. Warren Burger, the former chief justice, said he was "astonished" by the comments he'd read about a nominee he thought was one of the most qualified he'd seen in 50 years. If the Senate rejected Mr. Bork, he said, "then they shouldn't have confirmed me."

Just one year after the conservative Mr. Scalia's unanimous confirmation the winds had changed dramatically. The Senate had hitherto proceeded on the principle that it owed the president deference on his judicial selections. No longer.

"The framers clearly intended the Senate to serve as a check on the president and guarantee the independence of the judiciary," Mr. Biden said in August 1987 in defense of his newfound opposition to Judge Bork. "The Senate has an undisputed right to consider judicial philosophy." With that marker placed, the ultimate winner of the seat vacated by Justice Lewis Franklin Powell Jr. was a nominee nearly devoid of political philosophy -- Anthony Kennedy.

Mr. Biden's obstruction was further rewarded by the first President Bush. In attempting to dodge controversy, he gave liberals David Souter, whose appeal was enhanced by the fact that he had been a federal judge for less than a year and had almost no paper trail.

By the time Clarence Thomas's confirmation hearings came around, Mr. Biden's modus operandi was well known. In his book, "My Grandfather's Son," Justice Thomas recalls that before the Anita Hill inquisition began, Mr. Biden called him and said "Judge, I know you don't believe me but if the allegations come up I will be your biggest defender." "He was right about one thing," Justice Thomas wrote, "I didn't believe him."

Under Mr. Biden's leadership, holding up nominations to the nation's appeals courts also became a routine exercise. In 1988, the Senate Judiciary Committee delayed 17 months before refusing to confirm law professor and scholar Bernard Siegan to the Ninth Circuit Court of Appeals because of his libertarian positions on economic issues. In 1992, Mr. Bush's nominee to the 11th Circuit, Edward Carnes, endured an eight-month delay and an attempted filibuster before finally being confirmed. By 1992, 64 judicial nominees were stuck in the senatorial muck waiting for the Judiciary Committee to give them a yea or nay.

The Senate obstructionism that began with Reagan's nominees thus became a game of political revenge as each new batch of nominees was made to suffer at the hands of one party for the treatment its nominees had received in the last round. Republicans blocked some of President Bill Clinton's nominees, including briefly, Sonia Sotomayor, the Second Circuit judge said to be on Mr. Obama's short list to replace Mr. Souter. Unable to bottle up Miguel Estrada in committee in 2003, Democrats filibustered him on the floor of the Senate. Sen. Carl Levin (D., Mich.) held up as many as four judicial nominations for years in retribution for Republicans blocking Mr. Clinton's nomination of Helene White (she was confirmed for the Sixth Circuit last year). And so on.

The effect of this game has been toxic not only for the nominees but for the courts. Many circuits have suffered judicial emergencies, defined as vacancies on courts overwhelmed by their caseloads, or vacancies languishing more than 18 months on busy circuits. Some stood open longer. The Bush administration's 2006 appointment of Peter Keisler to fill the D.C. Circuit seat vacated by John Roberts was left to expire, unfilled, at the end of the administration.

True, Supreme Court nominees John Roberts and Samuel Alito were confirmed -- but without the support of then Sens. Joe Biden or Barack Obama. Mr. Alito was confirmed by a vote of 58-42, the second narrowest margin in Senate history (after Clarence Thomas). Even Chief Justice Roberts's margin of 78-22 was contentious in historical terms. Ruth Bader Ginsburg was confirmed 93-3, Sandra Day O'Connor 99-0, John Paul Stevens 98-0, and David Souter 90-9.
What is in store for Mr. Obama's nominees remains to be seen. Sen. Jeff Sessions, the ranking Republican on the Senate Judiciary Committee, has said he isn't inclined to the filibuster even if it is an option and most expect the president's Supreme Court choice will be confirmed.

As a matter of judicial philosophy, however, Mr. Obama has said he wants a nominee who "understands that justice isn't about some abstract legal theory or footnote in a case book." If that is considered by opponents as grounds for rejection Joe Biden will know where they're coming from.

Ms. Levy is a senior editorial writer at the Journal, based in Washington.

WaPo on California Sinking: The case against a federal bailout

California Sinking. WaPo Editorial
The case against a federal bailout
WaPo, Sunday, May 24, 2009

CALIFORNIA FINDS itself in more than a bit of a bind: Facing at least a $21 billion budget deficit, the state could run out of money in a matter of weeks. Borrowing to help fill the hole will be challenging and expensive, given that California has the lowest credit rating of all 50 states. Last week's warning by Standard and Poor's to Britain about a possible debt downgrade will make risky government borrowing even more difficult. The state would like to see Uncle Sam pick up part of the tab; but as steeped in the bailout business as the feds have become, there are strong reasons for them to refuse to add California to the list of recipients.

This is a budget crisis that has been a long time coming. The requirement of a two-thirds vote in the legislature to raise taxes or pass a budget has exacerbated partisanship and made sensible budgeting impossible. The initiative process -- which too often allows politicians to turn the hard decisions over to voters who, surprise, aren't always willing to make them -- results in a crazy-quilt fiscal scheme whose ever-changing priorities leave it underfunded and inherently unstable. When they do make decisions, legislators have routinely elevated the interests of public employees unions over the broader interests of the state, producing crushing costs from high salaries and benefits. Temporary measures and gimmicks have been used to mask these problems for years.

It should come as no surprise, then, that an economic downturn could lead the state to the fiscal brink. Last week's referendum offering up a slew of budgetary fixes was a fiasco, with voters accepting only a plan to freeze the pay of their legislators in the years they run deficits. Now Gov. Arnold Schwarzenegger (R) has to decide how to proceed. He has said that the state needs to find at least $5.5 billion in spending cuts -- likely to come from education, health care and other areas. One-time measures such as selling assets are also on the table: prisons, fairgrounds, concert halls for sale -- anyone, anyone? Even if there are buyers, more action will be required.

As for federal government help in providing funds directly or through loan guarantees, there are economic arguments in favor: California's economy is larger than that of most countries, and the spending cuts and tax increases that would be required to balance the budget are precisely the opposite of the policies needed during an economic downturn. However, there are stronger arguments on the other side. The federal government already is heading dangerously deeper into the red. Getting involved could open the bailout door to 49 other eager states, which would be less likely to manage their own budgets properly if they believed the federal government would save them from their mistakes. The Obama administration seems inclined to agree. Treasury Secretary Timothy F. Geithner has said that money from the Trouble Assets Relief Program (TARP) probably cannot be used to help the states, and the Federal Reserve appears hesitant to get dragged into the mess.

Bailing out the banks was defensible because of the critical and central role they play in the economy. Bailing out the auto companies may have made sense in order to save jobs -- though now that the government is heading for long-term ownership, we are beginning to doubt the worth of that policy. Bailing out the states would be an even more perilous road to start down.

WaPo on Hugo Chavez: Is Silence Consent?

Is Silence Consent? WaPo Editorial
The Obama administration's 'engagement' policy is convenient for Hugo Chávez's latest crackdown.
WaPo, Sunday, May 24, 2009

WHILE THE United States and Venezuela's neighbors silently stand by, Hugo Chávez's campaign to destroy his remaining domestic opposition continues. On Thursday night state intelligence police raided the Caracas offices of Guillermo Zuloaga, the president of the country's last independent broadcast network, Globovision. They claimed to be looking for evidence of irregularities in the car dealership that Mr. Zuloaga also runs. In fact this was a thinly disguised escalation of an attack that Mr. Chávez launched this month against Globovision. The channel has been officially accused of "inciting panic," based on its accurate reporting of a mild May 4 earthquake in Caracas; under the regime's draconian media control law it could be shut down. Few doubt that that is Mr. Chávez's intent: Two years ago he revoked the license of the country's most popular television network after a similarly trumped-up campaign.

To recap: In February Mr. Chávez eliminated the limit on his tenure as president after a one-sided referendum campaign that included ugly attacks on Venezuela's Jewish community. Since then he has imprisoned or orchestrated investigations against most of the country's leading opposition figures, including three of the five opposition governors elected last year. The elected mayor of Maracaibo, who was the leading opposition candidate when Mr. Chávez last ran for president, was granted asylum in Peru last month after authorities sought his arrest on dubious tax charges. The National Assembly, controlled by Mr. Chávez, is considering legislation that would eliminate collective bargaining and replace independent trade unions with "worker's councils" controlled by the ruling party. Another new law would eliminate foreign financing for independent non-government groups.

This is hardly the first time that a Latin American caudillo has tried to eliminate peaceful opponents: Mr. Chávez is following a path well worn by the likes of Juan Perón and Alberto Fujimori -- not to mention his mentor, Fidel Castro. But this may be the first time that the United States has watched the systematic destruction of a Latin American democracy in silence. As Mr. Chávez has implemented the "third phase" of his self-styled revolution, the Obama administration has persisted with the policy of quiet engagement that the president promised before taking office.

"We need to find a space in which we can actually have a conversation, and we need to find ways to enhance our levels of confidence," Assistant Secretary of State Thomas A. Shannon Jr. said two weeks ago, echoing earlier remarks by Secretary of State Hillary Rodham Clinton. We have no objection to dialogue with Mr. Chávez. But isn't it time to start talking about preserving independent television stations, opposition political leaders, trade unions and human rights groups -- before it is too late?

Gates recommends F-35 as Japan's next main striker

Gates recommends F-35 as Japan's next main striker

Friday, May 22, 2009

Elena Bonner speaks on Israel (and Russia)

Elena Bonner speaks on Israel (and Russia) - The Y Files

Understanding why single motherhood is on the rise

Women and Children First. Cathy Young
Understanding why single motherhood is on the rise
Reason, May 21, 2009

A new report from the National Center for Health Statistics with the dry title, "Changing Patterns of Nonmarital Childbearing in the United States," contains startling news: births to single mothers, which had leveled off in the early 2000s, have risen sharply in recent years. In 2007, nearly 40 percent of all babies born in the United States were born to single women, up from 34 percent in 2002. Some sociologists believe we have reached a tipping point: the link between marriage and parenthood is no longer the norm. Why is this happening, and what does it mean for women, children, and men? There are no simple answers—only difficult questions that we ignore at our peril.

Complicating the discussion, single motherhood comes in many different forms. An unwed mother is not necessarily a solo mother: about 40 percent are living with the baby's father when they give birth, and some later marry. A mother without a partner could be a teenage high school dropout trapped in poverty, or a 30-something professional who decides not to wait for "Mr. Right." While older, better-educated women are far less likely to become single mothers, one in three births to women in their late 20s and almost one in five births to women in their 30s are out of wedlock.

Many blame the growth of single motherhood on selfish, irresponsible men who shun commitment and abandon their partners and children. Others condemn self-centered women who refuse to settle for a less-than-perfect man or want total control over their child's upbringing. Both stereotypes have some truth to them. Yet this trend is also driven by major societal shifts—most of them positive, from unprecedented prosperity to individual freedom, tolerance, the liberation of women, and reliable birth control.

The powerful economic, social, and cultural pressures that once pushed the vast majority of people into marriage are gone almost completely. All that remains is romantic love—and refusing to marry your child's other parent is often seen as more honorable than marrying someone you don't love, at least if you're a woman.

For many feminists, the ability to choose single motherhood is an essential part of female autonomy. According to American University law professor Nancy Polikoff, "It is no tragedy, either on a national scale or in an individual family, for children to be raised without fathers." Nation magazine columnist Katha Pollitt has put it more bluntly: "Children are a joy; many men are not."

But would the children agree? Of course, not every father is a joy to his child. Yet there is abundant evidence that children generally fare better with two parents—and many children without fathers keenly feel their absence.

In one positive development, unmarried fathers today are much more likely than in earlier generations to be a part of their children's lives, even if they are not living with the mother. Even Bristol Palin, the daughter of Republican vice presidential candidate Sarah Palin and currently the nation's most famous teenage unwed mom, is now working out a visitation schedule with the baby's father, Levi Johnston. Yet a visiting dad is usually, even with best intentions, a pale substitute for day-to-day interaction with a father in the home.

We now have a situation in which large numbers of men are alienated from family life and from the next generation. And that's hardly "feminist," at least if feminism means the equality of women and men not only in public life but at home.

For years, feminists have urged men to take on their fair share of domestic responsibilities. While parenting still isn't equal in two-parent families, the fathers of today are far more involved in hands-on child care than their predecessors. Yet, paradoxically, there also far more absentee fathers, due to both divorce and unwed childbearing.

For all its liberated trappings, single motherhood is the ultimate "second shift" for working women who shoulder the full burden of domestic labor. It is also, in some ways, a throwback to the very old-fashioned, decidedly non-feminist idea that family life and child-rearing are a female domain. True, there are also more single fathers today who have custody of their children (usually when the mother is unable or unwilling to raise them); but, for both biological and cultural reasons, the single-parent family is likely to remain an overwhelmingly female-dominated structure.

Millions of single mothers and fathers do their best to be good parents, and their efforts should not be disparaged. Nonetheless, an intact marriage is still the most reliable way to protect the father-child bond. It is neither possible nor desirable to turn back the clock on the changes that have turned marriage from a near-necessity into an uncoerced choice. It is, however, a choice the culture should encourage. Giving up on the two-parent family as an ideal would be a sad defeat.

Cathy Young is a contributing editor at Reason magazine and a columnist at RealClearPolitics. She blogs at The Y Files. This article originally appeared at RealClearPolitics.

Review of Leesons's The Invisible Hook: The Hidden Economics of Pirates

Blackbeard Economics, by Katherine Mangu-Ward
Reason, June 2009

Review of The Invisible Hook: The Hidden Economics of Pirates, by Peter T. Leeson, New Jersey: Princeton University Press, 296 pages, $24.95

Pirates are alluring to novelists and moviemakers because we know they really existed but don’t know enough hard facts to get in the way of a good story. Contemporaneous newspaper accounts and other tales from the early 18th century are colorful but unreliable, tending toward propaganda. They report that these appalling yet appealing “Hell-hounds” marauded for the Jolly Roger, enslaved passing sailors, and tortured the innocent for fun. “Danger lurked in their very Smiles,” one pirate chronicler reported. Pirates were “violators of all Laws, Humane and Divine.”

Portraying the freebooters in the worst possible light worked to the advantage of everyone concerned. For governments, crusading against the outlaws who robbed their merchants and treasury ships was a way to keep public opinion firmly on the side of the state. Practicing pirates, meanwhile, were happy to be depicted as violent and unpredictable outlaws, as this encouraged their prey to surrender and cooperate. In fact, the marauders went to great lengths to ensure that their reputation as heartless ship wreckers and torturers remained intact. The famous Blackbeard, for instance, used to stick sulfur fuses in his great, bushy beard and light them on fire before battles to create a general sense of the demonic. He also occasionally killed his pals without warning, just to keep the fear alive.

But a pirate’s life had less publicized qualities as well: Ships were known among sailors for their relatively decent living conditions, profitsharing opportunities, democratic practices, and racially integrated crews. Life “on the account,” as pirating was known, was often far more civilized than legitimate seamanship.

So how can these two images be reconciled?

Bloodthirsty buccaneers and their progressive alter egos both want the same thing: booty. Cold, hard doubloons drove pirates and their persecutors alike. In The Invisible Hook, George Mason University economist Peter T. Leeson digs into the dollars and cents of piracy. He urges us to see pirates as economic actors, their behavior shaped by incentives, just like the rest of us. Once you’re in an economic state of mind, you can begin to understand actions such as lighting one’s beard on fire, voting, being decent to black people, and torturing captives “for fun”—all equally nutty behaviors to the average 18th-century observer. When Leeson is done guiding you through the pirate world, life on a rogue ship starts to look less like a Carnival cruise with cutlasses and cannons and more like an ongoing condo association meeting at sea.

Robbery on the high seas has existed since ancient times, but the seafaring pirates of popular imagination first arose in the 16th century as agents of the state. These privateers, as they were known, were charged with raiding the ships of enemies—or, more accurately, anyone who couldn’t immediately prove to the pirates that he was a friend. Sir Henry Morgan (yes, the real-life Captain Morgan, for those of you doing rum shots at home) was a big name in 17thcentury state-sponsored piracy. The Welsh-born brute sacked Panama and burned the richest city in New Spain to the ground. For his accomplishments, he was knighted and made lieutenant governor of Jamaica.

Once the War of the Spanish Succession, and with it many opportunities for legally approved pillage, came to an end in 1714, many plunderers realized they preferred piracy to the life of an honest seaman. Others who might rather have stayed on the up and up were unable to find work as the world’s navies contracted.

So the great age of piracy began, and it lasted about a decade. During this period, between 1,000 and 2,000 pirates terrorized the seas at any given time. That may not seem like many, but keep in mind that the entire population of the North American colonies back then was only about 150,000. Navies and merchant sailors outnumbered pirates, with 13,000 men in the British Navy alone, but pirates had the better gig.

Leeson begins with a look inside the piratical pocketbook. In peaceful years, annual pay for legit sailors was £25, equivalent to around $4,000 today. A big haul for a pirate crew, on the other hand, might bring in between £300 and £1,000 per man for a few months’ work. If legally sanctioned sailor pay was bad, the working conditions were worse. Captains on merchant ships held absolute power over their crews, and they regularly ordered floggings, revoked pay or rations, or tied men to the mast. Sailors could sue when they got home, and they occasionally won, but that’s cold comfort when you’re six months at sea, stripes from the lash stinging your back, and ordered to forfeit your rum ration.

This commercial setup, Leeson argues, was the result of a bad incentive structure, not a surfeit of sadistic captains. A ship is a big investment. Once its owner sends it out to sea, lots of bad things can happen. Weather. Navigational errors. Even pirates. If you’re just a schmo sailor on the payroll, it makes sense to slack off when no one is looking and bail out as soon as things get rough. Why not steal from the cargo hold? Why not stay up late drinking and gambling? If pirates attack, of course you will hand over the cargo and beg them to spare your life. It’s not like the slaves, spices, or gold were yours to begin with. Indeed, pirates often compensated the conquered crew so that the sailors would be none the worse for having surrendered, even if their masters were out a significant sum. Captains, who often held a small ownership stake in the ship or were family to the merchant owners, had every incentive to rule by force over their less invested crew.

Pirates, by contrast, were outlaws, with no recognized authorities to settle disputes. So they invented their own ways of doing business. Decades before the American Founders got their act together, pirates were drafting documents full of voting rights, juries, checks and balances, rules for property allocation, even methods for impeachment. The buccaneers may have been less concerned with natural rights than with survival and claiming their fair share of booty, but the end result feels surprisingly like the kind of self-governance we expect from enlightened modern republics. Perhaps even better, since the deal was truly voluntary (for the pirates if not their prey). No one is born a pirate, and everyone has to swear into the contract on each venture.
In his 1724 General History of the Pyrates, Charles Johnson, a probable one-time pirate about whom almost nothing is known, described Capt. Bartholomew Roberts like this: “How indeed Roberts could think that an Oath would be obligatory, where Defiance had been given to the Laws of God and Man, I can’t tell.” Johnson then answers his own question: “He thought their greatest Security lay in this, That it was every one’s Interest to observe them if they were minded to keep up so abominable a Combination.”

So it was that Roberts’ men lived under a kind of constitution, a contract for behavior with rules for the political and the personal all spelled out (albeit with pretty poor spelling). The guidelines were surprisingly tame: Lights out by 8 p.m. No drinking below decks after bedtime. No gambling. No smoking. No brawling. Many a modern American high school student lives a wilder life than pirates did in their heyday.

Yet the outlaw existence between raids wasn’t all wholesome and smoke-free. Going on the account meant agreeing to some unpleasant terms as well. Punishments were harsh on the high seas: Holding back more than a dollar’s worth of treasure from your pirate brethren could result in marooning, “a Barbarous Custom of putting the Offender on Shore, on some desolate or uninhabited Cape or Island,” wrote Johnson, “with a Gun, a few Shot, a Bottle of Water, and a Bottle of Powder, to subsist with, or starve.” Quarrels were to be settled not with fists on deck but with swords or pistols on shore. To bring a lady on board in disguise was punishable by death. Failing to chip in with the fighting could also result in death or marooning.

But this “rougish Commonwealth” also had due process. Caprtains were elected, and they could be removed by a vote of the crew. Speeches were given for and against candidates. One of Capt. Roberts’ sailors, for example, urged his fellows to vote for a leader “who by his Counsel and Bravery seems best able to defend this Commonwealth... such a one I take Roberts to be. A Fellow! I think, in all Respects, worthy of your Esteem and Favour.” Speeches also contained warnings and reminders of the power of the people: “Should a Captain be so saucy as to exceed Prescription at any time, why down with him! it will be a Caution after he is dead to his Successors, of what fatal Consequence any sort of assuming may be.”

A ship’s captain received the same lodging and rations as ordinary sailors, and very similar pay. His one unique power was absolute command during battle; in this way, pirates got the advantage of quick decisions from a powerful commander and total obedience from his fighters when the heat of battle was upon them, while enjoying the leisurely indulgence of deliberation and voting when things were calmer. Roberts’ constitution allowed “the Captain and Quarter-Master to receive two Shares of a Prize; the Master, Boatswain, and Gunner, one Share and a half, and other Officers, one and a Quarter.” Additional payments, agreed upon in advance, went to those who lost eyes or limbs, a primitive sort of workers’ compensation.

Balancing the powers of the captain was the quartermaster, the captain’s peacetime counterpart. Sort of a den mother with a blunderbuss, he oversaw the distribution of loot and generally kept peace on the ship by enforcing the rules and arbitrating disputes. He too could be replaced at any time by a vote.

They may have been outlaws “without government,” Lesson writes, “but they weren’t without governance.” And here’s where Leeson gets to his lesson. The book is actually an argument for extralegal systems of regulation—for ordered anarchy.

When it came time for pirates to swing into action, the main goal was not to have to do battle at all. Thinking economically, intimidation, not cannons, was the buccaneer’s chief weapon. Everyone is familiar with the skull and crossbones, designed to remind prey of the death and torture facing them if they were so foolish as to fight. Less well known is that some pirates added extra flourishes to their Jolly Rogers, advertising which specific murderous madman was about to rain hell on the hapless merchants.

That’s one reason why so many accounts of piracy feature tales of torture. Cruel and unusual punishment was a kind of bloody marketing campaign, Leeson suggests. The problem is that once you’ve concocted a reputation for being crazy and tough, you have to a) keep it, b) brand it, and c) prevent other ships from stealing your brand. As the fictional Dread Pirate Roberts (not to be confused with the historical Capt. Bartholomew Roberts) put it in the cult film The Princess Bride, “Once word leaks out that a pirate has gone soft, people begin to disobey you, and then it’s nothing but work, work, work, all the time.”

The sea is big, and we’re talking about a time before there was a reliable way to calculate longitude, so encountering prey was a challenge. One of the reasons pirates used torture was to save themselves time looking for the next ship. When they boarded a merchant vessel, plunderers went first to the captain’s quarters to find records, maps, and other indications of trade routes and future voyages. These were the real booty, since they bought tomorrow’s income as well. Threats of torture made captives more eager to divulge the whereabouts of plans.

As convincing as Leeson’s account of piratus economicus might be, he’s hardly the first to use pirates to illustrate a broader point about social organization. Charles Kingsley, a 19th-century Christian socialist, wrote a poem, “The Last Buccaneer,” about pirate ships as workers’ cooperatives. In the 1987 book Between the Devil and the Deep Blue Sea, University of Pittsburgh historian Marcus Rediker suggested that pirate ships transported 17th-century English radicalism to American revolutionaries. Eugène Delacroix’s famous painting of a bare-breasted Liberty brandishing the French revolutionary flag, Rediker noted, looked awfully similar to engravings of the notorious lady pirate Anne Bonny, who was typically depicted in similar dishabille.

The cross-dressing exploits of Anne and her fellow disguised lady pirates, coupled with the rules against bringing attractive young lads or gals aboard and a form of mutual insurance called matelotage in which two pirates pledged their support to one another, has prompted Arizona State historian B.R. Burg to create a cottage industry of books on queer pirate theory. In Sodomy and the Pirate Tradition (1984), he claims an “almost universal homosexual involvement among pirates.”

In his 1995 article “Black Men Under the Black Flag,” Kenneth J. Kinkor, a historian and piratologist at the Expedition Whydah Sea-Lab and Learning Center in Provincetown, Massachusetts, compiled the available data on the racial composition of pirate crews. By Kinkor’s reckoning, 25 percent to 30 percent of the average golden-age pirate crew was black. Because of this large minority presence, some have argued that pirates were somehow more enlightened than other whites of their age, recognizing blacks as fellow victims of the system.
But what scant evidence there is suggests that Caucasian pirates felt the same way about blacks as did most whites of the time. It seems likely that they simply worked with black pirates if that was the best way to get treasure. Many blacks were worth more as free colleagues than as slaves. “Sometimes,” writes Leeson, “the invisible hook led pirates to display a racial progressivism in practice that didn’t accord with the racial views in their minds.”

Unfortunately, there isn’t much data to support the notion of pirate ships as Enlightenment-born societies of revolutionary republicans and tolerant liberals. For every apparently compassionate act, there is an act of enslavement or murder. For every cooperative effort, there is a brutal maiming or marooning. Everyone wants a piece of the pirates, but most accounts struggle to explain the ways pirates stubbornly deviate from the progressive ideal. Leeson convincingly argues that “without economics, pirates...are a veritable ball of contradictions. They’re sadistic pacifists; womanizing homosexuals; treasure-lusting socialists...and lawless anarchists who lived by a strict code of rules.” With economics, they’re a bunch of gossipy racists who go to bed early, ban women from the premises, and bluster to avoid fighting. These fastidious, calculating pirates may have been a far cry from the romantic, mad buccaneers of legend. But Peter Leeson’s economical actors have an appeal all their own.

Katherine Mangu-Ward is an associate editor at reason.

Thursday, May 21, 2009

What Unions Do: How Labor Unions Affect Jobs and the Economy

What Unions Do: How Labor Unions Affect Jobs and the Economy. By James Sherk
Heritage Backgrounder #2275
May 21, 2009

What do unions do? The AFL-CIO argues that unions offer a pathway to higher wages and prosperity for the middle class. Critics point to the collapse of many highly unionized domestic industries and argue that unions harm the economy. To whom should policymakers listen? What unions do has been studied extensively by economists, and a broad survey of academic studies shows that while unions can sometimes achieve benefits for their members, they harm the overall economy.

Unions function as labor cartels. A labor cartel restricts the number of workers in a company or industry to drive up the remaining workers' wages, just as the Organization of Petroleum Exporting Countries (OPEC) attempts to cut the supply of oil to raise its price. Companies pass on those higher wages to consumers through higher prices, and often they also earn lower profits. Economic research finds that unions benefit their members but hurt consumers generally, and especially workers who are denied job opportunities.

The average union member earns more than the average non-union worker. However, that does not mean that expanding union membership will raise wages: Few workers who join a union today get a pay raise. What explains these apparently contradictory findings? The economy has become more competitive over the past generation. Companies have less power to pass price increases on to consumers without going out of business. Consequently, unions do not negotiate higher wages for many newly organized workers. These days, unions win higher wages for employees only at companies with competitive advantages that allow them to pay higher wages, such as successful research and development (R&D) projects or capital investments.

Unions effectively tax these investments by negotiating higher wages for their members, thus lowering profits. Unionized companies respond to this union tax by reducing investment. Less investment makes unionized companies less competitive.

This, along with the fact that unions function as labor cartels that seek to reduce job opportunities, causes unionized companies to lose jobs. Economists consistently find that unions decrease the number of jobs available in the economy. The vast majority of manufacturing jobs lost over the past three decades have been among union members--non-union manufacturing employment has risen. Research also shows that widespread unionization delays recovery from economic downturns.

Some unions win higher wages for their members, though many do not. But with these higher wages, unions bring less investment, fewer jobs, higher prices, and smaller 401(k) plans for everyone else. On balance, labor cartels harm the economy, and enacting policies designed to force workers into unions will only prolong the recession.

Full report here

Obama’s Speech on Detainees and National Security - Washington Wire - WSJ

Obama’s Speech on Detainees and National Security - Washington Wire - WSJ

A High-Speed Rail Mirage

A High-Speed Rail Mirage, by Randal O'Toole
This article appeared in USA Today on May 20, 2009

At first glance, President Obama's enthusiasm for building a high-speed rail network linking major cities seems like a wise move. On closer inspection, however, it is clear that the plan would cost taxpayers billions of dollars and do little to reduce traffic congestion or improve the environment.

Already California, Florida, Illinois and other states are applying for funds under the president's plan. But, except for rail contractors, Americans should find little reason to like this proposal.
Although every taxpayer would share the cost of these trains, high-speed rails are not about serving the common people. Instead, they are aimed at the elite. Japanese and French high-speed trains are attractive to tourists, but they're not heavily used by local residents. Residents of Japan and France on average ride their bullet trains less than 400 miles a year.


Pricey option

Amtrak charges a minimum of $99 for its high-speed Acela from New York to Washington, but only $72 for its conventional train. Fares for unsubsidized buses on this route start as low as $20 (including free Wi-Fi), while airfares start at $99. Only the wealthy and those whose employers cover the cost will pay the $99 rail fare.

Obama's 9,000-mile high-speed rail plan reaches just 33 states, yet the $13 billion he proposes to spend would cover about 2.5% to 25% of the cost, depending on how the system is built. In contrast with the interstate highway system, which paid for itself out of user fees, high-speed rail fares would not cover the capital costs and only part of the operating costs.

Most of Obama's plan should really be called "moderate-speed rail," as it would upgrade existing freight lines to run passenger trains at top speeds of 110 mph. At around $5 million per mile, the total cost would come close to $50 billion.

Not satisfied with moderate-speed trains, California says it wants half of all federal funds so it can build brand-new 220-mph rail lines. But it's unlikely other states will settle for the slower trains if California gets the faster ones. Building fast trains nationwide would cost at least $500 billion. (By comparison, and adjusting for inflation, the 47,000-mile interstate highway system cost about $425 billion.)


Little congestion relief

Besides the high costs, these trains do little to relieve congestion. "Not a single high-speed track built to date has had any perceptible impact on the road traffic" in Europe, says Ari Vatanen, a European Parliament member. California predicts its 220-mph trains would take just 3.5% of cars off of roads. California highway traffic grows that much every two years.

Moderate-speed trains would do even less. Nor would such trains be good for the environment. Amtrak diesel trains are only a little more energy efficient than flying or driving, and pumping those trains up to 110 mph would reduce their efficiency. Because planes and cars are growing 2% more energy-efficient per year, rail would fare poorly by such measures over the next 15 to 20 years.

Moreover, high-speed rail consumes enormous amounts of energy and emits enormous volumes of greenhouse gases. These would cancel out any operational savings over cars and planes.
Interstates paid for themselves out of gas taxes, and most Americans use them almost every day. Rail requires huge tax subsidies and would regularly serve only a small elite. Which is the better symbol for the America President Obama wants to build?

Seven Bad Ideas for Health Care Reform

Obamacare to Come: Seven Bad Ideas for Health Care Reform. By Michael D. Tanner
Cato, May 21, 2009

President Obama has made it clear that reforming the American health care system will be one of his top priorities. In response, congressional leaders have promised to introduce legislation by this summer, and they hope for an initial vote in the Senate before the Labor Day recess.

While the Obama administration has not, and does not seem likely to, put forward a specific reform plan, it is possible to discern the key components of any plan likely to emerge from Congress:
  • At a time of rising unemployment, the government would raise the cost of hiring workers by requiring employers to provide health insurance to their workers or pay a fee (tax) to subsidize government coverage.
  • Every American would be required to buy an insurance policy that meets certain government requirements. Even individuals who are currently insured — and happy with their insurance — will have to switch to insurance that meets the government's definition of "acceptable insurance."
  • A government-run plan similar to Medicare would be set up in competition with private insurance, with people able to choose either private insurance or the taxpayer-subsidized public plan. Subsidies and cost-shifting would encourage Americans to shift to the government plan.
  • The government would undertake comparative-effectiveness research and cost-effectiveness research, and use the results of that research to impose practice guidelines on providers — initially, in government programs such as Medicare and Medicaid, but possibly eventually extending such rationing to private insurance plans.
  • Private insurance would face a host of new regulations, including a requirement to insure all applicants and a prohibition on pricing premiums on the basis of risk.
  • Subsidies would be available to help middle-income people purchase insurance, while government programs such as Medicare and Medicaid would be expanded.
  • Finally, the government would subsidize and manage the development of a national system of electronic medical records.
Taken individually, each of these proposals would be a bad idea. Taken collectively, they would dramatically transform the American health care system in a way that would harm taxpayers, health care providers, and — most importantly — the quality and range of care given to patients.

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