The Not-So-Great Game. By Thomas Donnelly, Raphael Cohen, Tim Sullivan
The Weekly Standard, March 16, 2009
In between his many appearances touting the stimulus package and the restructuring of the nation's financial institutions, housing markets, and automobile industry, Barack Obama made his first serious decision as America's commander in chief on February 17. He ordered an additional 17,000 U.S. troops to Afghanistan. In all likelihood, it's just the first installment of an Afghan "surge"--the U.S. and NATO commander in Kabul, General David McKiernan, has been asking for at least 30,000 more troops--but it raises four important questions.
First and foremost, will Obama rally Americans to support another long-running counterinsurgency effort? Despite his campaign rhetoric about Afghanistan being the "right war," Obama has been remarkably passive in setting the course of Afghan policy since taking office. If there's one lesson of the Bush years that Obama should not ignore it's that you cannot delegate war policy. You can't be just a "decider."
The White House has, moreover, been downplaying military issues at every turn. The troop deployment announcement was made by press release. Obama's Sort-of State of the Union address made only passing reference to war policy--other than the decision to close the Guantánamo detention facility. The president has been entirely diffident about discharging what the press release described as his most "solemn duty as President" in a "situation [that] demands urgent attention and swift action."
The Obama administration is already losing control of the narrative: The "good war" is well on its way to becoming another bad war. The tropes of the Afghanistan-as-the-graveyard-of-empires and Vietnam-revisited are back. In recent months, predictions of quagmire have moved from the Joe Klein fringe to the Evan Thomas mainstream. Newsweek's February 21 cover story, headlined "Could Afghanistan Be Obama's Vietnam?" reflects the emerging establishment consensus. According to a recent Washington Post/ABC News poll, only one third of Americans said U.S. troop levels in Afghanistan should be increased. The same number believe levels should be reduced. Only Obama can reconcile Americans to the realities of the Afghanistan war, explaining that success is hard but not impossible. Even the most insightful counterinsurgency strategy will demand patience--time probably matters much more than troop levels.
Second, the president needs to better control his "Team of Rivals." It is a military truism that strategic clarity depends upon a well-defined decisionmaking process, on a "unity of command." This principle is absent in the present Afghanistan policy. To a certain extent, this is inherent to coalition warfare: General McKiernan as International Security Assistance Force commander reports to both NATO and to U.S. Central Command. Likewise, his subordinate commanders--be they British, German, Canadian--report to at least two bosses.
But Obama is making the muddle worse. Afghanistan policy is the product of a horse-by-committee termed "the Interagency." The president, members of his cabinet, the national security adviser and his staff, generals and viceroys, and a burgeoning number of bureaucrats all take part and bring divergent personal or institutional biases with them. Interagency policy reflects the State Department's desires to do traditional diplomacy, the Pentagon's concerns about force structure and "balancing risk," the intelligence and special operations operatives charged with prosecuting the global war on terrorism, the charter of development agencies to alleviate poverty, and so on. No one in Washington is, as yet, responsible for winning the war.
And these structural problems are hugely exacerbated by the herd of elephantine egos and personalities engaged. There are at least three four-star officers with different agendas: McKiernan, CENTCOM chief General David Petraeus, and Admiral Mike Mullen, chairman of the Joint Chiefs of Staff. The civilian side is even worse. Aside from the president himself, who has occasionally quipped that he's smarter than any of his advisers, there are the two poles of the new secretary of state and the old the secretary of defense. There's the national security adviser, Jim Jones, a former four-star general himself, who recently sounded like another four-star NSA, Alexander Haig, when he boasted to the Washington Post that he was in charge at the White House (even though Jones was in Munich at the time).
The Obama administration is also keen on ministers plenipotentiary and special envoys, with the new U.S. Special Envoy for Pakistan and Afghanistan, Richard Holbrooke, being the most special of all. He stands outside the traditional bureaucratic structures, and the great danger is that he will have lots of power but not so much responsibility. Foreign governments--Germany and Britain among them--remember the way in which Holbrooke dominated policymaking during the Balkans wars of the 1990s and want their own Holbrooke-equivalents in Afghanistan, if only to keep tabs on what the American is up to.
This multipolar decisionmaking world is a recipe for competition and confusion. There are at least three Afghanistan reviews underway: at the NSC by Bush-holdover "war czar" General Douglas Lute, at CENTCOM by Petraeus and many of the counterinsurgency experts who designed the Iraq surge, and by Mullen and the Joint Chiefs. These reviews, in turn, are to be reviewed by Bruce Riedel, a scholar at the Brookings Institution now working--at least temporarily--for Jones and the NSC. Whether he will bring clarity instead of further confusion is unclear; Riedel has written that he believes that settling the Israeli-Palestinian dispute is a key to success in Afghanistan and the war on terror.
Third, the administration needs to better define or, better yet, drop entirely the idea of "AfPak." This is the neologism for an emerging strain of conventional wisdom suggesting that for the United States to succeed in Afghanistan, it must first address the problems in the Pakistani border regions.
While there is no denying that the flow of weapons, resources, and fighters across the border into Afghanistan has complicated the U.S. mission there, Pakistan itself presents a range of strategic challenges of which the violence and extremism in its volatile tribal regions are only a symptom. As a nuclear-armed state with a weak civilian government, a politically powerful but malfunctioning military, and a population prone to extremism, Pakistan is strategically far more important to the United States than Afghanistan. The administration cannot afford to shape its policy toward Pakistan based simply upon the effects it hopes to achieve in Afghanistan; it must instead tackle Pakistan qua Pakistan, even as it pursues a comprehensive strategy for its neighbor. "AfPak" thinking will be wrongheaded about both countries.
Even if U.S. forces were able to stem entirely the flow of weapons and fighters, we would still have a robust indigenous Afghan insurgency on our hands. In the Pashtun belts of southern Afghanistan, in particular, much of the manpower behind the insurgency comes from local militants. The presence of criminal organizations and tribal militias throughout the country further complicates this volatile brew.
Conversely, the most immediate problems of Pakistan aren't confined to the border areas. The growing violence and extremism in the country's vast lawless territories aren't simply a problem for U.S. and allied forces in Afghanistan, they are a fundamental threat to Pakistan's survival, as militants move closer to the country's population centers. Thus far, the Pakistani government's responses have been haphazard and appear increasingly desperate. Over the past two years, the Pakistani army has been repeatedly defeated in conventional fights, by Taliban forces. The recent peace deal brokered by local officials and Taliban leaders in the Swat valley is further indication of the government's shrinking writ and testimony to the unpleasant military facts on the ground. The so-called "Malakand Accords" legitimate the rule of sharia law and de facto Taliban government in the region in return for a cease-fire among the roughly 2,000 fighters loyal to Taliban leader Maulana Fazlullah.
Much of Pakistan's dysfunction stems from the military's outsize role in governance and civil society. American engagement with the Pakistani army cannot simply be tactical or operational; it must be strategic and institutional. In the near term, the United States must discourage the Pakistani army from its heavy-handed counterinsurgency tactics and preference for conventional firepower. But the reason that the Pakistani army retains its conventional focus is that it remains a force whose structures and existence are justified by the threat of war with India. These problems--fear of India and the distorted societal role of the army--are larger and deeper problems that dwarf the problems of the border areas.
No matter the outcome in Afghanistan, the problems in Pakistan will persist. The United States, therefore, must be careful not to view its interests in the country simply through the lens of the Afghan conflict. Which leads to our fourth question.
Does the Obama administration have a coherent strategy for the whole region of which Afghanistan is just a part? This is an urgent need, reflected in the dangerous state of U.S. and NATO lines of communication. Several weeks ago, insurgents destroyed a key bridge in the Khyber Pass, the most important supply route from Pakistan into Afghanistan. A bombing in Pakistan also destroyed a group of vehicles due to be shipped north. Then the government of -Kyrgyzstan, thanks to a not-so-subtle bribe from the Russians, announced that it will no longer allow the United States to use the critical air base at Manas. The Kyrgyz have long been trying to raise the rent on Manas, but the U.S. government appears to have been neglectful of the issue, allowing the Russians to make mischief.
We may be able to offer a larger bribe and reclaim Manas, although General Petraeus also recently visited Uzbekistan, where we first had basing rights until we were thrown out for calling attention to the brutalities of the Uzbek regime toward its own people. Add in Iran's desire to create a sphere of influence for itself in western Afghanistan and India's growing concerns about attacks from terror groups based in Pakistan, and the need for a more comprehensive U.S. strategy becomes even more apparent.
It's time for the president to provide political leadership and the strategic clarity for his "right war" and for this dangerous region. Thus far, he's been absent without leave.
Thomas Donnelly is a resident fellow at AEI.
Monday, March 9, 2009
Who Pays for Cap and Trade? Hint: They were promised a tax cut
Who Pays for Cap and Trade? WSJ Editorial
Hint: They were promised a tax cut during the Obama campaign.
WSJ, Mar 09, 2009
Cap and trade is the tax that dare not speak its name, and Democrats are hoping in particular that no one notices who would pay for their climate ambitions. With President Obama depending on vast new carbon revenues in his budget and Congress promising a bill by May, perhaps Americans would like to know the deeply unequal ways that climate costs would be distributed across regions and income groups.
Politicians love cap and trade because they can claim to be taxing "polluters," not workers. Hardly. Once the government creates a scarce new commodity -- in this case the right to emit carbon -- and then mandates that businesses buy it, the costs would inevitably be passed on to all consumers in the form of higher prices. Stating the obvious, Peter Orszag -- now Mr. Obama's budget director -- told Congress last year that "Those price increases are essential to the success of a cap-and-trade program."
Hit hardest would be the "95% of working families" Mr. Obama keeps mentioning, usually omitting that his no-new-taxes pledge comes with the caveat "unless you use energy." Putting a price on carbon is regressive by definition because poor and middle-income households spend more of their paychecks on things like gas to drive to work, groceries or home heating.
The Congressional Budget Office -- Mr. Orszag's former roost -- estimates that the price hikes from a 15% cut in emissions would cost the average household in the bottom-income quintile about 3.3% of its after-tax income every year. That's about $680, not including the costs of reduced employment and output. The three middle quintiles would see their paychecks cut between $880 and $1,500, or 2.9% to 2.7% of income. The rich would pay 1.7%. Cap and trade is the ideal policy for every Beltway analyst who thinks the tax code is too progressive (all five of them).
But the greatest inequities are geographic and would be imposed on the parts of the U.S. that rely most on manufacturing or fossil fuels -- particularly coal, which generates most power in the Midwest, Southern and Plains states. It's no coincidence that the liberals most invested in cap and trade -- Barbara Boxer, Henry Waxman, Ed Markey -- come from California or the Northeast.
Coal provides more than half of U.S. electricity, and 25 states get more than 50% of their electricity from conventional coal-fired generation. In Ohio, it totals 86%, according to the Energy Information Administration. Ratepayers in Indiana (94%), Missouri (85%), New Mexico (80%), Pennsylvania (56%), West Virginia (98%) and Wyoming (95%) are going to get soaked.
Another way to think about it is in terms of per capita greenhouse-gas emissions. California is the No. 2 carbon emitter in the country but also has a large economy and population. So the average Californian only had a carbon footprint of about 12 tons of CO2-equivalent in 2005, according to the World Resource Institute's Climate Analysis Indicators, which integrates all government data. The situation is very different in Wyoming and North Dakota -- paging Senators Mike Enzi and Kent Conrad -- where every person was responsible for 154 and 95 tons, respectively. See the nearby chart for cap and trade's biggest state winners and losers.
[graph in original article]
Democrats say they'll allow some of this ocean of new cap-and-trade revenue to trickle back down to the public. In his budget, Mr. Obama wants to recycle $525 billion through the "making work pay" tax credit that goes to many people who don't pay income taxes. But $400 for individuals and $800 for families still doesn't offset carbon's income raid, especially in states with higher carbon use.
All the more so because the Administration is lowballing its cap-and-trade tax estimates. Its stated goal is to reduce emissions 14% below 2005 levels by 2020, which assuming that four-fifths of emissions are covered (excluding agriculture, for instance), works out to about $13 or $14 per ton of CO2. When CBO scored a similar bill last year, it expected prices to start at $23 and rise to $44 by 2018. CBO also projected the total value of the allowances at $902 billion over the first decade, which is some $256 billion more than the Administration's estimate.
We asked the White House budget office for the assumptions behind its revenue estimates, but a spokesman said the Administration doesn't have a formal proposal and will work with Congress and "stakeholders" to shape one. We were also pointed to recent comments by Mr. Orszag that he was "sure there will be enough there to finance the things that we have identified" and maybe "additional money" too. In other words, Mr. Obama expects a much larger tax increase than even he is willing to admit.
Those "stakeholders" are going to need some very large bribes, starting with the regions that stand to lose the most. Led by Michigan's Debbie Stabenow, 15 Senate Democrats have already formed a "gang" demanding that "consumers and workers in all regions of the U.S. are protected from undue hardship." In practice, this would mean corporate welfare for carbon-heavy businesses.
And of course Congress is its own "stakeholder." An economy-wide tax under the cover of saving the environment is the best political moneymaker since the income tax. Obama officials are already telling the press, sotto voce, that climate revenues might fund universal health care and other new social spending. No doubt they would, and when they did Mr. Obama's cap-and-trade rebates would become even smaller.
Cap and trade, in other words, is a scheme to redistribute income and wealth -- but in a very curious way. It takes from the working class and gives to the affluent; takes from Miami, Ohio, and gives to Miami, Florida; and takes from an industrial America that is already struggling and gives to rich Silicon Valley and Wall Street "green tech" investors who know how to leverage the political class.
Hint: They were promised a tax cut during the Obama campaign.
WSJ, Mar 09, 2009
Cap and trade is the tax that dare not speak its name, and Democrats are hoping in particular that no one notices who would pay for their climate ambitions. With President Obama depending on vast new carbon revenues in his budget and Congress promising a bill by May, perhaps Americans would like to know the deeply unequal ways that climate costs would be distributed across regions and income groups.
Politicians love cap and trade because they can claim to be taxing "polluters," not workers. Hardly. Once the government creates a scarce new commodity -- in this case the right to emit carbon -- and then mandates that businesses buy it, the costs would inevitably be passed on to all consumers in the form of higher prices. Stating the obvious, Peter Orszag -- now Mr. Obama's budget director -- told Congress last year that "Those price increases are essential to the success of a cap-and-trade program."
Hit hardest would be the "95% of working families" Mr. Obama keeps mentioning, usually omitting that his no-new-taxes pledge comes with the caveat "unless you use energy." Putting a price on carbon is regressive by definition because poor and middle-income households spend more of their paychecks on things like gas to drive to work, groceries or home heating.
The Congressional Budget Office -- Mr. Orszag's former roost -- estimates that the price hikes from a 15% cut in emissions would cost the average household in the bottom-income quintile about 3.3% of its after-tax income every year. That's about $680, not including the costs of reduced employment and output. The three middle quintiles would see their paychecks cut between $880 and $1,500, or 2.9% to 2.7% of income. The rich would pay 1.7%. Cap and trade is the ideal policy for every Beltway analyst who thinks the tax code is too progressive (all five of them).
But the greatest inequities are geographic and would be imposed on the parts of the U.S. that rely most on manufacturing or fossil fuels -- particularly coal, which generates most power in the Midwest, Southern and Plains states. It's no coincidence that the liberals most invested in cap and trade -- Barbara Boxer, Henry Waxman, Ed Markey -- come from California or the Northeast.
Coal provides more than half of U.S. electricity, and 25 states get more than 50% of their electricity from conventional coal-fired generation. In Ohio, it totals 86%, according to the Energy Information Administration. Ratepayers in Indiana (94%), Missouri (85%), New Mexico (80%), Pennsylvania (56%), West Virginia (98%) and Wyoming (95%) are going to get soaked.
Another way to think about it is in terms of per capita greenhouse-gas emissions. California is the No. 2 carbon emitter in the country but also has a large economy and population. So the average Californian only had a carbon footprint of about 12 tons of CO2-equivalent in 2005, according to the World Resource Institute's Climate Analysis Indicators, which integrates all government data. The situation is very different in Wyoming and North Dakota -- paging Senators Mike Enzi and Kent Conrad -- where every person was responsible for 154 and 95 tons, respectively. See the nearby chart for cap and trade's biggest state winners and losers.
[graph in original article]
Democrats say they'll allow some of this ocean of new cap-and-trade revenue to trickle back down to the public. In his budget, Mr. Obama wants to recycle $525 billion through the "making work pay" tax credit that goes to many people who don't pay income taxes. But $400 for individuals and $800 for families still doesn't offset carbon's income raid, especially in states with higher carbon use.
All the more so because the Administration is lowballing its cap-and-trade tax estimates. Its stated goal is to reduce emissions 14% below 2005 levels by 2020, which assuming that four-fifths of emissions are covered (excluding agriculture, for instance), works out to about $13 or $14 per ton of CO2. When CBO scored a similar bill last year, it expected prices to start at $23 and rise to $44 by 2018. CBO also projected the total value of the allowances at $902 billion over the first decade, which is some $256 billion more than the Administration's estimate.
We asked the White House budget office for the assumptions behind its revenue estimates, but a spokesman said the Administration doesn't have a formal proposal and will work with Congress and "stakeholders" to shape one. We were also pointed to recent comments by Mr. Orszag that he was "sure there will be enough there to finance the things that we have identified" and maybe "additional money" too. In other words, Mr. Obama expects a much larger tax increase than even he is willing to admit.
Those "stakeholders" are going to need some very large bribes, starting with the regions that stand to lose the most. Led by Michigan's Debbie Stabenow, 15 Senate Democrats have already formed a "gang" demanding that "consumers and workers in all regions of the U.S. are protected from undue hardship." In practice, this would mean corporate welfare for carbon-heavy businesses.
And of course Congress is its own "stakeholder." An economy-wide tax under the cover of saving the environment is the best political moneymaker since the income tax. Obama officials are already telling the press, sotto voce, that climate revenues might fund universal health care and other new social spending. No doubt they would, and when they did Mr. Obama's cap-and-trade rebates would become even smaller.
Cap and trade, in other words, is a scheme to redistribute income and wealth -- but in a very curious way. It takes from the working class and gives to the affluent; takes from Miami, Ohio, and gives to Miami, Florida; and takes from an industrial America that is already struggling and gives to rich Silicon Valley and Wall Street "green tech" investors who know how to leverage the political class.
Brookings: Where Were the Watchdogs? Systemic Risk and the Breakdown of Financial Governance
Where Were the Watchdogs? Systemic Risk and the Breakdown of Financial Governance. By Robert E. Litan
Brookings, Mar 09, 2009 > Testimony, Senate Committee on Homeland Security and Governmental Affairs, Mar 04, 2009
March 04, 2009 — Mr. Chairman, Senator Collins, and other members of this Committee: Thank you for asking me to testify today on what could not be a more important issue facing the country in the wake of the current financial and economic crisis -- how our policies and institutions can do a better job in the future of reducing systemic risk in the financial system.
Specifically, I will address and answer the questions posed in your invitation:
I advance the views I express here with humility. Although I have spent most of my professional career studying the financial industry, the magnitude of recent events is so far beyond anything I could have imagined several years ago that I – and I believe all of us, if we are honest – cannot be fully confident that the “fixes”, both in the short and long run, that we discuss and that the Congress and our regulators eventually adopt will be ideal and immutable. We should all be open to making mid-course corrections, as events continue to unfold, as we learn more, and reflect on what we have learned.
Read the full testimony » (pdf)
Brookings, Mar 09, 2009 > Testimony, Senate Committee on Homeland Security and Governmental Affairs, Mar 04, 2009
March 04, 2009 — Mr. Chairman, Senator Collins, and other members of this Committee: Thank you for asking me to testify today on what could not be a more important issue facing the country in the wake of the current financial and economic crisis -- how our policies and institutions can do a better job in the future of reducing systemic risk in the financial system.
Specifically, I will address and answer the questions posed in your invitation:
- Do we need a systemic risk regulator (SRR)? Yes.
- Can the monitoring and response to systemic risks be accomplished within our existing regulatory structure, specifically by the Federal Reserve, or by some new entity? Ideally, I would like to see all federal financial regulatory activities consolidated in two agencies, a financial solvency regulator and a federal consumer protection regulator, with systemic risk responsibilities being assigned to the solvency regulator. As a second-best option, I would give clear systemic risk oversight authority to the Fed, an option which is better than either creating a new agency just for systemic risk or regulating through a “college” of existing financial regulators.
- If a systemic risk regulator is to be authorized, what should be its mandate? The SRR should have oversight of all systemically important financial institutions (SIFIs), although the nature and details of this oversight should take account of the differences in types of such institutions (banks, large insurers, hedge funds, private equity funds, and financial conglomerates). The SRR (or existing financial regulators should no systemic risk regulator be designated) should also regularly analyze and report to Congress on the systemic risks confronting the financial system.
- There are legitimate challenges associated with assigning any agency the awesome responsibility for reducing systemic risk. But after surveying the alternatives, I have concluded that policy makers have no other choice. As long as there are financial institutions whose failure could lead to calamitous financial and economic consequences, and thus invite all-but-certain federal rescue efforts if the threat of failure is real, then we must have some arm of the federal government oversee systemic risk and do the best we can to make that oversight work.
- Finally, while the United States should continue to cooperate with governments of other countries, notably through the G-20 process, in reforming financial systems, we should not wait for international agreements to be in place before we get our own financial house in order.
I advance the views I express here with humility. Although I have spent most of my professional career studying the financial industry, the magnitude of recent events is so far beyond anything I could have imagined several years ago that I – and I believe all of us, if we are honest – cannot be fully confident that the “fixes”, both in the short and long run, that we discuss and that the Congress and our regulators eventually adopt will be ideal and immutable. We should all be open to making mid-course corrections, as events continue to unfold, as we learn more, and reflect on what we have learned.
Read the full testimony » (pdf)
Czech President Vaclav Klaus on capitalism, collectivism, global warming, the price of water
No Debate. By Vaclav Klaus
Czech President Václav Klaus on why the discussion about global warming is a monologue
WSJ, Mar 09, 2009
For Václav Klaus, the inconvenient truth is this: Global warming is far from being proved, and the problem is that everybody has jumped on the bandwagon before any real debate has taken place.
Mr. Klaus won his second five-year term as president of the Czech Republic in February 2008. He studied at the Prague School of Economics, where he currently holds a professorship in finance.
Mr. Klaus talked to Robert Thomson, managing editor of The Wall Street Journal. Here are edited excerpts of their discussion.
Listening in Frustration
ROBERT THOMSON: Mr. President, obviously during the dark days of communism, America was a beacon for you and many other people in Central and Eastern Europe. What are your impressions of contemporary America?
VÁCLAV KLAUS: Sitting here in this room in the last two hours and the coming from, first Europe, and, second, from a former communist country where I spent most of my life, I almost don't believe my eyes to see how much you believe in government and how much you don't believe in the market.
This is for me a shocking experience. And I have to say that very loudly. As a professor of economics, I have my theoretical arguments about the impossibility of running the economy from above.
As a person who spent almost 50 years of his life in a communist country, I know how crazy it is to introduce schemes like the cap and trade and similar ideas, how devastating and damaging for the economy all those ideas really are. So I'm rather frustrated. It seems to me that to fight for freedom, free markets, is still the task of today, even if we hoped almost 20 years ago in the moment of the fall of communism that it was over.
This is the same in Europe these days. There is one EU summit after another one weekend after another, there is a summit trying to find solutions. But I don't think that this solution will come from the government.
MR. THOMSON: Now, you're also well known for your views on the environment. Are you concerned more about the environmental debate or the lack of debate that seems to be implicit in some people's approach to the environment?
MR. KLAUS: I'm afraid that a serious debate about that issue has not yet started. What we witnessed are monologues, a conference of believers in global warming. The debate has not yet started. Nevertheless, I'm afraid the politicians have already accepted this idea, understood that it's a good political project, and now the things are moving in a way which I consider extremely dangerous. And I know that not only politicians, the businesspeople discovered that it's very attractive investments to get taxpayers' money and to start doing some things. So this is another problem.
But I would like to make one thing clear, let's really differentiate the protection of the environment from the debate about global warming and decarbonizing the economy. I am not against the protection of the environment. I am against global-warming alarmism. Those are conceptually, structurally, two totally different issues.
MR. THOMSON: But a person could argue, "Look, frankly, you've lost the debate on global warming. And what you're doing now is just blaming political correctness for your inability to win an argument you've already lost."
MR. KLAUS: To win an argument you must have a potential place to argue, but I am afraid it does not exist anymore. And to speak about the scientific consensus about global warming, it's not true. To speak about a very strong relationship between carbon dioxide and the temperature in the world, again, not true. And I am really frustrated, I must say.
The Price of Water
AUDIENCE MEMBER: I have great respect for your work in promoting freedom. And at the heart of the current situation regarding climate change, I'd like to compare it to the water-scarcity issue that you identified in California. At our breakout session this morning, I think we pretty much reached a unanimous conclusion that one of the causes is a failure to price water appropriately. It's priced below market. Isn't that a failure in terms of dealing with the environment overall, a failure to price environmental goods?
MR. KLAUS: Well, of course, as an economist, I am aware of the externalities. I am aware of various cases of market failure. Nevertheless, I am first convinced that the government failure is incomparably bigger than any imaginable market failure in history.
With regard to the question of water, I think it's rather difficult to introduce the real market in the case of water. I wouldn't mind doing it in some respect. We are used to doing it differently, without paying attention to the real cost of water. It was a mistake, definitely so. I wouldn't be against, not rationing water, but introducing some sort of market mechanism in consuming water and then paying for that.
AUDIENCE MEMBER: I'm an environmentalist. But I want to applaud your willingness to take on and to try to separate the sometimes frustratingly intertwined topics of climate change or, say, global warming, versus environmental conservation. The Amazon rainforest, for instance, we're looking the equivalent of about 180 football fields every three minutes in deforestation. And that's not a sustainable model in my opinion. Can you comment on what it means to help conservation without overheating the argument around carbon?
MR. KLAUS: Well, there are several points. The first one, I thank you for stressing the difference between protection of the environment and global-warming alarmism and decarbonization of the economy. Those are two separate issues. By the way, communism is the nonexistence of real economic prices on the one hand, and state ownership, no private ownership, was a disaster for the environment. Everyone knows that. So we solved the environmental issues in our country in the moment of the fall of communism. By reintroducing normal prices, which give you the real scarcity of one thing or another, plus by introducing private property forced the solution for the environmental protection in general. This is my very strong, strong belief. The policy, the government policy for the environment, was not secondary but much lower importance as compared to those two systemic changes, prices and property rights.
Second, thank you for differentiating conservationism from environmentalism. Environmentalism is really a doctrine, religion, ideology, which has no connection to climatology or environment or anything else.
Then you mentioned the Brazilian forests. Well, tragic problem. Nevertheless, I think that the real stimulus for deforestation in many developing countries, including Brazil, was the crazy idea of biofuels. And those ideas came from the environmentalists. Now, they discovered it was a wrong idea, so they tried to pretend that they forgot the idea. So I'm afraid the deforestation in Brazil and the environmentalism is deeply, negatively connected.
Czech President Václav Klaus on why the discussion about global warming is a monologue
WSJ, Mar 09, 2009
For Václav Klaus, the inconvenient truth is this: Global warming is far from being proved, and the problem is that everybody has jumped on the bandwagon before any real debate has taken place.
Mr. Klaus won his second five-year term as president of the Czech Republic in February 2008. He studied at the Prague School of Economics, where he currently holds a professorship in finance.
Mr. Klaus talked to Robert Thomson, managing editor of The Wall Street Journal. Here are edited excerpts of their discussion.
Listening in Frustration
ROBERT THOMSON: Mr. President, obviously during the dark days of communism, America was a beacon for you and many other people in Central and Eastern Europe. What are your impressions of contemporary America?
VÁCLAV KLAUS: Sitting here in this room in the last two hours and the coming from, first Europe, and, second, from a former communist country where I spent most of my life, I almost don't believe my eyes to see how much you believe in government and how much you don't believe in the market.
This is for me a shocking experience. And I have to say that very loudly. As a professor of economics, I have my theoretical arguments about the impossibility of running the economy from above.
As a person who spent almost 50 years of his life in a communist country, I know how crazy it is to introduce schemes like the cap and trade and similar ideas, how devastating and damaging for the economy all those ideas really are. So I'm rather frustrated. It seems to me that to fight for freedom, free markets, is still the task of today, even if we hoped almost 20 years ago in the moment of the fall of communism that it was over.
This is the same in Europe these days. There is one EU summit after another one weekend after another, there is a summit trying to find solutions. But I don't think that this solution will come from the government.
MR. THOMSON: Now, you're also well known for your views on the environment. Are you concerned more about the environmental debate or the lack of debate that seems to be implicit in some people's approach to the environment?
MR. KLAUS: I'm afraid that a serious debate about that issue has not yet started. What we witnessed are monologues, a conference of believers in global warming. The debate has not yet started. Nevertheless, I'm afraid the politicians have already accepted this idea, understood that it's a good political project, and now the things are moving in a way which I consider extremely dangerous. And I know that not only politicians, the businesspeople discovered that it's very attractive investments to get taxpayers' money and to start doing some things. So this is another problem.
But I would like to make one thing clear, let's really differentiate the protection of the environment from the debate about global warming and decarbonizing the economy. I am not against the protection of the environment. I am against global-warming alarmism. Those are conceptually, structurally, two totally different issues.
MR. THOMSON: But a person could argue, "Look, frankly, you've lost the debate on global warming. And what you're doing now is just blaming political correctness for your inability to win an argument you've already lost."
MR. KLAUS: To win an argument you must have a potential place to argue, but I am afraid it does not exist anymore. And to speak about the scientific consensus about global warming, it's not true. To speak about a very strong relationship between carbon dioxide and the temperature in the world, again, not true. And I am really frustrated, I must say.
The Price of Water
AUDIENCE MEMBER: I have great respect for your work in promoting freedom. And at the heart of the current situation regarding climate change, I'd like to compare it to the water-scarcity issue that you identified in California. At our breakout session this morning, I think we pretty much reached a unanimous conclusion that one of the causes is a failure to price water appropriately. It's priced below market. Isn't that a failure in terms of dealing with the environment overall, a failure to price environmental goods?
MR. KLAUS: Well, of course, as an economist, I am aware of the externalities. I am aware of various cases of market failure. Nevertheless, I am first convinced that the government failure is incomparably bigger than any imaginable market failure in history.
With regard to the question of water, I think it's rather difficult to introduce the real market in the case of water. I wouldn't mind doing it in some respect. We are used to doing it differently, without paying attention to the real cost of water. It was a mistake, definitely so. I wouldn't be against, not rationing water, but introducing some sort of market mechanism in consuming water and then paying for that.
AUDIENCE MEMBER: I'm an environmentalist. But I want to applaud your willingness to take on and to try to separate the sometimes frustratingly intertwined topics of climate change or, say, global warming, versus environmental conservation. The Amazon rainforest, for instance, we're looking the equivalent of about 180 football fields every three minutes in deforestation. And that's not a sustainable model in my opinion. Can you comment on what it means to help conservation without overheating the argument around carbon?
MR. KLAUS: Well, there are several points. The first one, I thank you for stressing the difference between protection of the environment and global-warming alarmism and decarbonization of the economy. Those are two separate issues. By the way, communism is the nonexistence of real economic prices on the one hand, and state ownership, no private ownership, was a disaster for the environment. Everyone knows that. So we solved the environmental issues in our country in the moment of the fall of communism. By reintroducing normal prices, which give you the real scarcity of one thing or another, plus by introducing private property forced the solution for the environmental protection in general. This is my very strong, strong belief. The policy, the government policy for the environment, was not secondary but much lower importance as compared to those two systemic changes, prices and property rights.
Second, thank you for differentiating conservationism from environmentalism. Environmentalism is really a doctrine, religion, ideology, which has no connection to climatology or environment or anything else.
Then you mentioned the Brazilian forests. Well, tragic problem. Nevertheless, I think that the real stimulus for deforestation in many developing countries, including Brazil, was the crazy idea of biofuels. And those ideas came from the environmentalists. Now, they discovered it was a wrong idea, so they tried to pretend that they forgot the idea. So I'm afraid the deforestation in Brazil and the environmentalism is deeply, negatively connected.
State Sec Clinton to Announce this Year's International Women of Courage Awards
Secretary of State Hillary Rodham Clinton to Announce the International Women of Courage Awards
Bureau of Public AffairsOffice of the Spokesman
Washington, DC, March 9, 2009
Secretary of State Hillary Rodham Clinton will announce this year’s recipients of the Secretary of State’s Award for International Women of Courage. The awards ceremony will take place on March 11 at 4 p.m. in the Benjamin Franklin Room of the U.S. Department of State.
The annual Award for International Women of Courage recognizes women around the globe who have shown exceptional courage and leadership in advocating for human rights and women’s equality. This is the only Department of State award that pays tribute to outstanding women leaders worldwide. This year, the Secretary of State will pay tribute to honorees representing Afghanistan, Guatemala, Iraq, Malaysia, Niger, Russia, Uzbekistan, and Yemen.
The Awards Ceremony will be pool press coverage for cameras and open for writers and still photographers.
Final access time for writers and stills: 3:30 p.m. from the 23rd Street entrance.
Media representatives may attend this event upon presentation of one of the following: (1) A U.S. Government-issued identification card (Department of State, White House, Congress, Department of Defense or Foreign Press Center), (2) a media-issued photo identification card, or (3) a letter from their employer on letterhead verifying their employment as a journalist, accompanied by an official photo identification card (driver's license, passport). Press should allow adequate time to process through security and to be in the briefing room 10 minutes prior to the briefing.
PRN: 196
Bureau of Public AffairsOffice of the Spokesman
Washington, DC, March 9, 2009
Secretary of State Hillary Rodham Clinton will announce this year’s recipients of the Secretary of State’s Award for International Women of Courage. The awards ceremony will take place on March 11 at 4 p.m. in the Benjamin Franklin Room of the U.S. Department of State.
The annual Award for International Women of Courage recognizes women around the globe who have shown exceptional courage and leadership in advocating for human rights and women’s equality. This is the only Department of State award that pays tribute to outstanding women leaders worldwide. This year, the Secretary of State will pay tribute to honorees representing Afghanistan, Guatemala, Iraq, Malaysia, Niger, Russia, Uzbekistan, and Yemen.
The Awards Ceremony will be pool press coverage for cameras and open for writers and still photographers.
Final access time for writers and stills: 3:30 p.m. from the 23rd Street entrance.
Media representatives may attend this event upon presentation of one of the following: (1) A U.S. Government-issued identification card (Department of State, White House, Congress, Department of Defense or Foreign Press Center), (2) a media-issued photo identification card, or (3) a letter from their employer on letterhead verifying their employment as a journalist, accompanied by an official photo identification card (driver's license, passport). Press should allow adequate time to process through security and to be in the briefing room 10 minutes prior to the briefing.
PRN: 196
Last week's Supreme Court drug ruling will cost lives - Wyeth v Levine
The Supreme Court and the Tyranny of Lawyers. By Gordon Crovitz
Last week's drug ruling will cost lives.
WSJ, Mar 09, 2009
Every era of change has holdouts. As the Industrial Age began, the Luddites smashed newfangled mechanized looms. They understood that automation would let more people enter the textile industry, and that low competitive prices would replace their high fixed prices. At one point in the early 1800s, there were more British soldiers fighting the Luddites than there were fighting Napoleon. Our Information Age has its own antitechnology, antimarket Luddites, as the Supreme Court reminded us in a loom-smashing opinion last week.
At one level, Wyeth v. Levine is just another lawsuit with a silly result. The Food and Drug Administration had required Wyeth to distribute carefully worded warnings with its antinausea drug. The FDA told Wyeth to warn that "under no circumstances should Phenergan Injection be given by intra-arterial injection." The warning label also included, in uppercase letters: INADVERTENT INTRA-ARTERIAL INJECTION CAN RESULT IN GANGRENE OF THE AFFECTED EXTREMITY. Tragically, a physician's assistant in Vermont ignored the clear warnings and injected the drug into the arm of Diana Levine, who then developed gangrene and lost the arm. She sued the hospital, successfully. But she also sued Wyeth.
The legal issue was whether the medical experts at the FDA had pre-empted state lawsuits by mandating clear warnings. A majority of justices said that such implied pre-emption could not block lawsuits. The case would have been different if Congress had specifically pre-empted state drug lawsuits. The simple lesson businesspeople took was that the drug maker could not have done anything to avoid being sued. This logic leads to every drug (and ladder, hammer and toaster) having to carry 50 different warnings, one for each state, updated by local juries from time to time.
More broadly, this case is Exhibit A for how our legalistic culture puts a drag on the innovation, transparency and risk-taking that our new era champions. The result will be higher hurdles for funding to start health companies. There will be less research and development for new drugs, at a time when genome and other path-breaking information should be breaking important new ground, curing people, and helping drive the economy. Prices for drugs will rise to cover future jury verdicts. Defensive medicine already accounts for 30% of doctor bills, an amount equal to the cost of covering the 50 million Americans without health insurance.
As legal reformer Philip Howard has pointed out, one reason for excesses in the legal system is that what worked in the Industrial Age no longer works in our less standardized era. "The idea of organizing how to do things," Mr. Howard wrote in his recent book, "Life Without Lawyers," grew out of the need to set up assembly lines and to regulate complex systems and industries. But "today we assume unquestioningly that any activity will be more effective if we detail in advance how to get the job done." Mr. Howard also noted that lowered standards for litigation mean that people are now more free to sue.
"These two great currents of social organization -- prescribing rules to specify how to do things and affording individual rights to invoke a legal proceeding -- now sweep us along through our day like a mighty river, causing us to cling to legal logic for ordinary daily choices," he wrote. "To stay afloat, we must constantly be prepared to answer this question: Can you show this was done properly?" Instead of risk-taking and personal accountability, we have what Mr. Howard called a "moving mudbank comprised of accumulating bureaucracy and whatever claims people unilaterally choose to assert."
There are signs that the Industrial Age is yielding to the Information Age. In Britain, Parliament passed a law in 2006 authorizing judges to consider whether allowing a particular lawsuit to go ahead could "firstly, prevent a desirable activity from being undertaken at all, to a particular extent or in a particular way; or, secondly, discourage persons from undertaking functions in connection with a desirable activity."
This law blocks lawsuits that challenge potentially risky but desirable activities, from school outings to scientific innovation. It also liberates British judges to think about the real-world impact of lawsuits.
Just as jokes about life in the Soviet Union marked the end of the empire, humor in the U.S. suggests that it's time for common sense to replace the tyranny of legalism. The annual Wacky Warning Label Contest winners include a label on a baby stroller warning, "Remove child before folding"; a carpentry electric drill cautioning, "This product not intended for use as a dental drill"; and a brass fishing lure with a three-pronged hook on the end warning, "Harmful if swallowed."
Popular acceptance that one era has passed and another has begun is not enough to establish a clear demarcation. But as the example of the earlier battle against the Luddites shows, it's at least a start.
Last week's drug ruling will cost lives.
WSJ, Mar 09, 2009
Every era of change has holdouts. As the Industrial Age began, the Luddites smashed newfangled mechanized looms. They understood that automation would let more people enter the textile industry, and that low competitive prices would replace their high fixed prices. At one point in the early 1800s, there were more British soldiers fighting the Luddites than there were fighting Napoleon. Our Information Age has its own antitechnology, antimarket Luddites, as the Supreme Court reminded us in a loom-smashing opinion last week.
At one level, Wyeth v. Levine is just another lawsuit with a silly result. The Food and Drug Administration had required Wyeth to distribute carefully worded warnings with its antinausea drug. The FDA told Wyeth to warn that "under no circumstances should Phenergan Injection be given by intra-arterial injection." The warning label also included, in uppercase letters: INADVERTENT INTRA-ARTERIAL INJECTION CAN RESULT IN GANGRENE OF THE AFFECTED EXTREMITY. Tragically, a physician's assistant in Vermont ignored the clear warnings and injected the drug into the arm of Diana Levine, who then developed gangrene and lost the arm. She sued the hospital, successfully. But she also sued Wyeth.
The legal issue was whether the medical experts at the FDA had pre-empted state lawsuits by mandating clear warnings. A majority of justices said that such implied pre-emption could not block lawsuits. The case would have been different if Congress had specifically pre-empted state drug lawsuits. The simple lesson businesspeople took was that the drug maker could not have done anything to avoid being sued. This logic leads to every drug (and ladder, hammer and toaster) having to carry 50 different warnings, one for each state, updated by local juries from time to time.
More broadly, this case is Exhibit A for how our legalistic culture puts a drag on the innovation, transparency and risk-taking that our new era champions. The result will be higher hurdles for funding to start health companies. There will be less research and development for new drugs, at a time when genome and other path-breaking information should be breaking important new ground, curing people, and helping drive the economy. Prices for drugs will rise to cover future jury verdicts. Defensive medicine already accounts for 30% of doctor bills, an amount equal to the cost of covering the 50 million Americans without health insurance.
As legal reformer Philip Howard has pointed out, one reason for excesses in the legal system is that what worked in the Industrial Age no longer works in our less standardized era. "The idea of organizing how to do things," Mr. Howard wrote in his recent book, "Life Without Lawyers," grew out of the need to set up assembly lines and to regulate complex systems and industries. But "today we assume unquestioningly that any activity will be more effective if we detail in advance how to get the job done." Mr. Howard also noted that lowered standards for litigation mean that people are now more free to sue.
"These two great currents of social organization -- prescribing rules to specify how to do things and affording individual rights to invoke a legal proceeding -- now sweep us along through our day like a mighty river, causing us to cling to legal logic for ordinary daily choices," he wrote. "To stay afloat, we must constantly be prepared to answer this question: Can you show this was done properly?" Instead of risk-taking and personal accountability, we have what Mr. Howard called a "moving mudbank comprised of accumulating bureaucracy and whatever claims people unilaterally choose to assert."
There are signs that the Industrial Age is yielding to the Information Age. In Britain, Parliament passed a law in 2006 authorizing judges to consider whether allowing a particular lawsuit to go ahead could "firstly, prevent a desirable activity from being undertaken at all, to a particular extent or in a particular way; or, secondly, discourage persons from undertaking functions in connection with a desirable activity."
This law blocks lawsuits that challenge potentially risky but desirable activities, from school outings to scientific innovation. It also liberates British judges to think about the real-world impact of lawsuits.
Just as jokes about life in the Soviet Union marked the end of the empire, humor in the U.S. suggests that it's time for common sense to replace the tyranny of legalism. The annual Wacky Warning Label Contest winners include a label on a baby stroller warning, "Remove child before folding"; a carpentry electric drill cautioning, "This product not intended for use as a dental drill"; and a brass fishing lure with a three-pronged hook on the end warning, "Harmful if swallowed."
Popular acceptance that one era has passed and another has begun is not enough to establish a clear demarcation. But as the example of the earlier battle against the Luddites shows, it's at least a start.
In Defense of Obamanomics
In Defense of Obamanomics. By Laura D Tyson
History shows that the president's tax plans are consistent with strong economic growth.
WSJ, Mar 09, 2009
If leadership is defined as recognizing a crisis, addressing its challenges, and setting new directions while remaining true to one's values, then Barack Obama is already demonstrating his strengths as a leader. He has inherited an economic crisis worse than any the nation has experienced since the Great Depression. Within fewer than 50 days in office he has signed a historic stimulus package to bolster demand and create 3.5 million jobs. Governors, business leaders and economists from both the left and the right have applauded the stimulus. Friday's distressing employment numbers indicate that much more may be needed.
President Obama has also proposed a 10-year budget that is faithful to the progressive vision he articulated during his campaign. His budget includes significant investments in health care, energy, the environment and education, and a tax cut for the middle class. It also calls for higher taxes on the top 3% of income earners to finance his priorities and reduce the deficit. Not surprisingly, a budget plan this ambitious is triggering strong and well-organized opposition on numerous fronts.
The opposition begins, predictably, with taxes, so it is important to understand the major tax changes President Obama is proposing and their underlying rationale. President Bush's tax cuts are scheduled to expire at the end of 2010. At that time, assuming the economy has entered a recovery, President Obama's budget will restore the top two marginal income tax rates to their 1990s levels of 36% and 39.6% for individuals earning more than $200,000 and couples earning more than $250,000. These changes will affect only the top 3% of taxpayers, the group that has enjoyed the largest gains in income and wealth over the last decade. In addition, for these taxpayers the tax rate on capital gains will increase to 20%, the lowest rate in the 1990s and the rate President Bush proposed in 2001, and the tax rate on dividends will increase to 20%, a rate lower than the rate of the 1990s and nearly 40% lower than that proposed by President Bush in 2001.
Critics charge that President Obama's tax rates for high-income earners will strangle small business and stifle economic growth. Such claims are misguided or disingenuous. A full 97% of small businesses will see their rates unchanged or enjoy additional tax benefits under the Obama plan. And the strong expansion of the 1900s proves that the tax rates on income, capital gains and dividends in the Obama budget will support rapid economic growth and substantial income gains at the top. Moreover, the higher tax revenues resulting from these rates will reduce the deficit by about $750 billion, bringing it down to an average of 3.9% of GDP over the next 10 years and to 3.1% of GDP by the end of the decade. This compares to an average deficit of 3.6% of GDP between 1982 and 1997, when the Dow Jones Industrial Average increased by 835%.
In addition, the president proposes to limit the deductions for dependents, charitable contributions and other expenses to 28%, the top rate for such deductions under Ronald Reagan. Some critics claim this is class warfare. But why should a family in a higher tax bracket get a bigger break on expenses than a middle-class family? And restoring this limit to its Reagan level will raise enough revenue to cover about half of the $634 billion reserve President Obama needs to finance health-care reform with the other half coming from savings in health spending. These savings include competitive bidding in order to reduce Medicare payments to private insurance plans, increasing the Medicaid rebate for brand-name drugs, and strengthening Medicare pay-for-performance incentives for hospitals.
Those who stand to lose from these changes are already protesting. But like the 28% limit on deductions, these savings are fair and reasonable ways to finance the twin goals of achieving universal health-care coverage and moderating the growth of health-care spending. The rising cost of health care per patient not just for Medicare and Medicaid but throughout the health-care system is the principal driver of the government's long-term deficit and debt problems. For more than 40 years, this cost has grown much faster than the overall economy and if the current rate continues, by 2050 Medicare and Medicaid will account for about 20% of GDP, and the national debt will soar to 300% of GDP. These are unsustainable outcomes. Health-care costs must be contained through significant investments in health information technologies, disease management techniques, and wellness and prevention programs. And these investments must begin now. The stimulus package contains over $20 billion for such investments and they are major priorities in the budget.
Reducing the nation's dependence on foreign oil and cutting carbon emissions are also priorities, supported by overwhelming scientific evidence on the risks and costs of climate change. Economists agree that establishing a price for carbon emissions either through a carbon tax or a cap-and-trade system is essential to achieving these goals. The Obama administration has opted for the latter. The system will impose a limit on the amount of carbon that businesses are allowed to emit each year. Firms will be required to purchase permits from the federal government through an auction and will then be free to buy and sell them.
Critics of a cap-and-trade system are correct when they claim it will raise the prices of goods and services whose production and use emit carbon. That's exactly the point: Higher prices are necessary to encourage energy efficiency and the development of renewable energy, to discourage carbon emissions, and to reduce the societal costs of global warming. The Obama auction plan will also generate substantial government revenues, about 80% of which will be used for financing a refundable tax credit of up to $400 for individuals and up to $800 for families. The result will be tax cuts for 95% of working Americans. The remaining 20% of the auction revenue will be used to finance investments in energy efficiency, clean energy and smart-grid technologies.
Even the investments in education contained in the Obama budget will galvanize critics. Some will oppose the expansion of the federal government's funding for early childhood education despite evidence that it is among the best investments the government can make not only for children but for the economy as a whole.
Others will oppose expanding the tax credit for college tuition to $2,500 a year and making it permanent and partially refundable; increasing the Pell Grant to $5,500 a year; and eliminating subsidies to banks participating in the student-loan program, cutting $50 billion from the 10-year deficit. But, again, the returns to higher education are substantial for both the individual and the overall economy. Too many American students are forced to forego these returns because they cannot afford a college education, with deleterious effects on the nation's competitiveness.
The president's budget is progressive and ambitious. It will not, however, explode the size of government as some critics warn. If the economy recovers as projected, over the next decade taxes as a share of GDP at around 19% will be lower than they were during the second half of the 1990s, government spending as a share of GDP at around 22.5% will be about where it was under Reagan, and nondefense discretionary spending at around 3.6% of GDP will fall to its lowest level since that data was first collected in 1962.
The real risk lies in the possibility that the economy's recovery starts later and is much weaker than the economic assumptions in the budget. In this case, by no means remote, President Obama will have to adjust his plans while remaining true to his values. In a very few days in office, he has already demonstrated that he has the leadership skills to rise to the challenge.
Ms. Tyson is a professor of business and public policy at the Haas School of Business, University of California, Berkeley. She served as chair of the Council of Economic Advisers and as the National Economic Adviser under President Clinton. She is a member of President Obama's Economic Recovery Advisory Board.
History shows that the president's tax plans are consistent with strong economic growth.
WSJ, Mar 09, 2009
If leadership is defined as recognizing a crisis, addressing its challenges, and setting new directions while remaining true to one's values, then Barack Obama is already demonstrating his strengths as a leader. He has inherited an economic crisis worse than any the nation has experienced since the Great Depression. Within fewer than 50 days in office he has signed a historic stimulus package to bolster demand and create 3.5 million jobs. Governors, business leaders and economists from both the left and the right have applauded the stimulus. Friday's distressing employment numbers indicate that much more may be needed.
President Obama has also proposed a 10-year budget that is faithful to the progressive vision he articulated during his campaign. His budget includes significant investments in health care, energy, the environment and education, and a tax cut for the middle class. It also calls for higher taxes on the top 3% of income earners to finance his priorities and reduce the deficit. Not surprisingly, a budget plan this ambitious is triggering strong and well-organized opposition on numerous fronts.
The opposition begins, predictably, with taxes, so it is important to understand the major tax changes President Obama is proposing and their underlying rationale. President Bush's tax cuts are scheduled to expire at the end of 2010. At that time, assuming the economy has entered a recovery, President Obama's budget will restore the top two marginal income tax rates to their 1990s levels of 36% and 39.6% for individuals earning more than $200,000 and couples earning more than $250,000. These changes will affect only the top 3% of taxpayers, the group that has enjoyed the largest gains in income and wealth over the last decade. In addition, for these taxpayers the tax rate on capital gains will increase to 20%, the lowest rate in the 1990s and the rate President Bush proposed in 2001, and the tax rate on dividends will increase to 20%, a rate lower than the rate of the 1990s and nearly 40% lower than that proposed by President Bush in 2001.
Critics charge that President Obama's tax rates for high-income earners will strangle small business and stifle economic growth. Such claims are misguided or disingenuous. A full 97% of small businesses will see their rates unchanged or enjoy additional tax benefits under the Obama plan. And the strong expansion of the 1900s proves that the tax rates on income, capital gains and dividends in the Obama budget will support rapid economic growth and substantial income gains at the top. Moreover, the higher tax revenues resulting from these rates will reduce the deficit by about $750 billion, bringing it down to an average of 3.9% of GDP over the next 10 years and to 3.1% of GDP by the end of the decade. This compares to an average deficit of 3.6% of GDP between 1982 and 1997, when the Dow Jones Industrial Average increased by 835%.
In addition, the president proposes to limit the deductions for dependents, charitable contributions and other expenses to 28%, the top rate for such deductions under Ronald Reagan. Some critics claim this is class warfare. But why should a family in a higher tax bracket get a bigger break on expenses than a middle-class family? And restoring this limit to its Reagan level will raise enough revenue to cover about half of the $634 billion reserve President Obama needs to finance health-care reform with the other half coming from savings in health spending. These savings include competitive bidding in order to reduce Medicare payments to private insurance plans, increasing the Medicaid rebate for brand-name drugs, and strengthening Medicare pay-for-performance incentives for hospitals.
Those who stand to lose from these changes are already protesting. But like the 28% limit on deductions, these savings are fair and reasonable ways to finance the twin goals of achieving universal health-care coverage and moderating the growth of health-care spending. The rising cost of health care per patient not just for Medicare and Medicaid but throughout the health-care system is the principal driver of the government's long-term deficit and debt problems. For more than 40 years, this cost has grown much faster than the overall economy and if the current rate continues, by 2050 Medicare and Medicaid will account for about 20% of GDP, and the national debt will soar to 300% of GDP. These are unsustainable outcomes. Health-care costs must be contained through significant investments in health information technologies, disease management techniques, and wellness and prevention programs. And these investments must begin now. The stimulus package contains over $20 billion for such investments and they are major priorities in the budget.
Reducing the nation's dependence on foreign oil and cutting carbon emissions are also priorities, supported by overwhelming scientific evidence on the risks and costs of climate change. Economists agree that establishing a price for carbon emissions either through a carbon tax or a cap-and-trade system is essential to achieving these goals. The Obama administration has opted for the latter. The system will impose a limit on the amount of carbon that businesses are allowed to emit each year. Firms will be required to purchase permits from the federal government through an auction and will then be free to buy and sell them.
Critics of a cap-and-trade system are correct when they claim it will raise the prices of goods and services whose production and use emit carbon. That's exactly the point: Higher prices are necessary to encourage energy efficiency and the development of renewable energy, to discourage carbon emissions, and to reduce the societal costs of global warming. The Obama auction plan will also generate substantial government revenues, about 80% of which will be used for financing a refundable tax credit of up to $400 for individuals and up to $800 for families. The result will be tax cuts for 95% of working Americans. The remaining 20% of the auction revenue will be used to finance investments in energy efficiency, clean energy and smart-grid technologies.
Even the investments in education contained in the Obama budget will galvanize critics. Some will oppose the expansion of the federal government's funding for early childhood education despite evidence that it is among the best investments the government can make not only for children but for the economy as a whole.
Others will oppose expanding the tax credit for college tuition to $2,500 a year and making it permanent and partially refundable; increasing the Pell Grant to $5,500 a year; and eliminating subsidies to banks participating in the student-loan program, cutting $50 billion from the 10-year deficit. But, again, the returns to higher education are substantial for both the individual and the overall economy. Too many American students are forced to forego these returns because they cannot afford a college education, with deleterious effects on the nation's competitiveness.
The president's budget is progressive and ambitious. It will not, however, explode the size of government as some critics warn. If the economy recovers as projected, over the next decade taxes as a share of GDP at around 19% will be lower than they were during the second half of the 1990s, government spending as a share of GDP at around 22.5% will be about where it was under Reagan, and nondefense discretionary spending at around 3.6% of GDP will fall to its lowest level since that data was first collected in 1962.
The real risk lies in the possibility that the economy's recovery starts later and is much weaker than the economic assumptions in the budget. In this case, by no means remote, President Obama will have to adjust his plans while remaining true to his values. In a very few days in office, he has already demonstrated that he has the leadership skills to rise to the challenge.
Ms. Tyson is a professor of business and public policy at the Haas School of Business, University of California, Berkeley. She served as chair of the Council of Economic Advisers and as the National Economic Adviser under President Clinton. She is a member of President Obama's Economic Recovery Advisory Board.
John Yoo: Yes, We Did Plan for Mumbai-Style Attacks in the U.S.
Yes, We Did Plan for Mumbai-Style Attacks in the U.S. By John Yoo
WSJ, Monday, March 9, 2009
Suppose al Qaeda branched out from crashing airliners into American cities. Using small arms, explosives, or biological, chemical or nuclear weapons they could seize control of apartment buildings, stadiums, ships, trains or buses. As in the November 2008 Mumbai attacks, texting and mobile email would make it easy to coordinate simultaneous assaults in a single city.
In the weeks after the Sept. 11, 2001, strikes on New York City and Washington, D.C., these were hypotheticals no more. They became real scenarios for which responsible civilian and military leaders had to plan. The possibility of such attacks raised difficult, fundamental questions of constitutional law, because they might require domestic military operations against an enemy for the first time since the Civil War. Could our armed forces monitor traffic in a city where terrorists were preparing to strike, search for cells using surveillance technology, or use force against a hijacked vessel or building?
While our military put al Qaeda on the run, it was the duty of the government to plan for worst-case scenarios.
In these extraordinary circumstances, while our military put al Qaeda on the run, it was the duty of the government to plan for worst-case scenarios--even if, thankfully, those circumstances never materialized. This was not reckless. It was prudent and responsible. While government officials worked tirelessly to prevent the next attack, lawyers, of which I was one, provided advice on unprecedented questions under the most severe time pressures.
Judging from the media coverage of Justice Department memos from those days--released this week by the Obama administration--this careful contingency planning amounted to a secret plot to overthrow the Constitution and strip Americans of their rights. As the New York Times has it, Bush lawyers "rush into sweeping away this country's most cherished rights." "Irresponsible," harrumphed former Clinton administration Justice Department officials.
According to these critics, the overthrow of constitutional government in the United States began with a 37-page memo, confidentially issued on Oct. 23, 2001, which concluded that the September 11 attacks triggered the government's war powers and allowed the president to use force to counter force. Alexander Hamilton saw things differently than critics of the Bush administration. He wrote in Federalist 74: "The direction of war implies the direction of the common strength, and the power of directing and employing the common strength forms a usual and essential part in the definition of the executive authority."
Congress agreed with Hamilton. Restrictions on deploying the military for domestic law enforcement (originally passed to end Reconstruction in the South) did not apply to self-defense of the nation. Congress blessed military action on Sept. 18, 2001, when it authorized President Bush "to use all necessary and appropriate force against those nations, organizations, or persons" connected to the September 11 attacks, "in order to prevent any future acts of international terrorism against the United States." Passed as the sound of Air Force combat air patrols flew over the Capitol, Congress must have understood that its words included stopping domestic attacks, since the hijacked airliners of 9/11 took off and crashed on American soil.
The government faced another fundamental question, which we addressed in our memo. Does the Fourth Amendment's requirement of a search warrant based on probable cause regulate the use of the military against terrorists on our soil. In portraying our answer, the media has quoted a single out-of-context sentence from our analysis: "First Amendment speech and press rights may also be subordinated to the overriding need to wage war successfully."
This line deliberately misrepresents the memo. The sentence only summarized a 1931 holding of the Supreme Court in the case of Near v. Minnesota concerning press freedom: "When a nation is at war many things that might be said in time of peace are such a hindrance to its effort that their utterance will not be endured so long as men fight and no Court could regard them as protected by any constitutional right." The Court continued: "No one would question but that a government might prevent actual obstruction to its recruiting service or the publication of the sailing dates of transports or the number and location of troops."
Our memo had nothing to do with the First Amendment. It only referred to the case to show that constitutional rights apply differently during the exigencies of warfare than during peacetime. The 1931 case bolstered a point that the Supreme Court recognized in 2000 in Indianapolis v. Edmond, striking down random traffic stops to search for illegal drugs. "The Fourth Amendment would almost certainly permit an appropriately tailored roadblock set up to thwart an imminent terrorist attack," the Court wrote. Courts have understood that law-enforcement standards could not govern military operations against wartime enemies. They have rejected, to take one example, claims that the Constitution required compensation for the destruction of oil facilities before the invading Japanese in World War II.
Imposing Fourth Amendment standards on military action would have made the Civil War unwinnable--combat occurred wholly on U.S. territory and enemy soldiers were American citizens. The military does not have the time to obtain warrants before soldiers fire upon enemy targets and personnel; the battlefield does not provide the luxury to collect evidence needed to meet probable cause standards in civilian courts. Even if the Fourth Amendment applied, we believed that courts would judge military action under a standard of "reasonableness"--as they might review a police officer who fires in self-defense--rather than demand a warrant to use military force to stop a terror attack.
In releasing these memos, the Obama administration may be attempting to appease its antiwar base--which won't bother to read the memos in full--or trying to look good for the chattering classes.
But if the administration chooses to seriously pursue those officials who were charged with preparing for the unthinkable, today's intelligence and military officials will no doubt hesitate to fully prepare for those contingencies in the future. President Obama has said he wants to "look forward" rather than "backwards." If so, he should not restore risk aversion as the guiding principle of our counterterrorism strategy.
John Yoo is a visiting fellow at AEI.
WSJ, Monday, March 9, 2009
Suppose al Qaeda branched out from crashing airliners into American cities. Using small arms, explosives, or biological, chemical or nuclear weapons they could seize control of apartment buildings, stadiums, ships, trains or buses. As in the November 2008 Mumbai attacks, texting and mobile email would make it easy to coordinate simultaneous assaults in a single city.
In the weeks after the Sept. 11, 2001, strikes on New York City and Washington, D.C., these were hypotheticals no more. They became real scenarios for which responsible civilian and military leaders had to plan. The possibility of such attacks raised difficult, fundamental questions of constitutional law, because they might require domestic military operations against an enemy for the first time since the Civil War. Could our armed forces monitor traffic in a city where terrorists were preparing to strike, search for cells using surveillance technology, or use force against a hijacked vessel or building?
While our military put al Qaeda on the run, it was the duty of the government to plan for worst-case scenarios.
In these extraordinary circumstances, while our military put al Qaeda on the run, it was the duty of the government to plan for worst-case scenarios--even if, thankfully, those circumstances never materialized. This was not reckless. It was prudent and responsible. While government officials worked tirelessly to prevent the next attack, lawyers, of which I was one, provided advice on unprecedented questions under the most severe time pressures.
Judging from the media coverage of Justice Department memos from those days--released this week by the Obama administration--this careful contingency planning amounted to a secret plot to overthrow the Constitution and strip Americans of their rights. As the New York Times has it, Bush lawyers "rush into sweeping away this country's most cherished rights." "Irresponsible," harrumphed former Clinton administration Justice Department officials.
According to these critics, the overthrow of constitutional government in the United States began with a 37-page memo, confidentially issued on Oct. 23, 2001, which concluded that the September 11 attacks triggered the government's war powers and allowed the president to use force to counter force. Alexander Hamilton saw things differently than critics of the Bush administration. He wrote in Federalist 74: "The direction of war implies the direction of the common strength, and the power of directing and employing the common strength forms a usual and essential part in the definition of the executive authority."
Congress agreed with Hamilton. Restrictions on deploying the military for domestic law enforcement (originally passed to end Reconstruction in the South) did not apply to self-defense of the nation. Congress blessed military action on Sept. 18, 2001, when it authorized President Bush "to use all necessary and appropriate force against those nations, organizations, or persons" connected to the September 11 attacks, "in order to prevent any future acts of international terrorism against the United States." Passed as the sound of Air Force combat air patrols flew over the Capitol, Congress must have understood that its words included stopping domestic attacks, since the hijacked airliners of 9/11 took off and crashed on American soil.
The government faced another fundamental question, which we addressed in our memo. Does the Fourth Amendment's requirement of a search warrant based on probable cause regulate the use of the military against terrorists on our soil. In portraying our answer, the media has quoted a single out-of-context sentence from our analysis: "First Amendment speech and press rights may also be subordinated to the overriding need to wage war successfully."
This line deliberately misrepresents the memo. The sentence only summarized a 1931 holding of the Supreme Court in the case of Near v. Minnesota concerning press freedom: "When a nation is at war many things that might be said in time of peace are such a hindrance to its effort that their utterance will not be endured so long as men fight and no Court could regard them as protected by any constitutional right." The Court continued: "No one would question but that a government might prevent actual obstruction to its recruiting service or the publication of the sailing dates of transports or the number and location of troops."
Our memo had nothing to do with the First Amendment. It only referred to the case to show that constitutional rights apply differently during the exigencies of warfare than during peacetime. The 1931 case bolstered a point that the Supreme Court recognized in 2000 in Indianapolis v. Edmond, striking down random traffic stops to search for illegal drugs. "The Fourth Amendment would almost certainly permit an appropriately tailored roadblock set up to thwart an imminent terrorist attack," the Court wrote. Courts have understood that law-enforcement standards could not govern military operations against wartime enemies. They have rejected, to take one example, claims that the Constitution required compensation for the destruction of oil facilities before the invading Japanese in World War II.
Imposing Fourth Amendment standards on military action would have made the Civil War unwinnable--combat occurred wholly on U.S. territory and enemy soldiers were American citizens. The military does not have the time to obtain warrants before soldiers fire upon enemy targets and personnel; the battlefield does not provide the luxury to collect evidence needed to meet probable cause standards in civilian courts. Even if the Fourth Amendment applied, we believed that courts would judge military action under a standard of "reasonableness"--as they might review a police officer who fires in self-defense--rather than demand a warrant to use military force to stop a terror attack.
In releasing these memos, the Obama administration may be attempting to appease its antiwar base--which won't bother to read the memos in full--or trying to look good for the chattering classes.
But if the administration chooses to seriously pursue those officials who were charged with preparing for the unthinkable, today's intelligence and military officials will no doubt hesitate to fully prepare for those contingencies in the future. President Obama has said he wants to "look forward" rather than "backwards." If so, he should not restore risk aversion as the guiding principle of our counterterrorism strategy.
John Yoo is a visiting fellow at AEI.
90 Percent Tax Rate Proposed
90 Percent Tax Rate Proposed, by Hans Bader
Open Market/CEI, March 07, 2009 @ 11:14 am
Excerpts:
Congressman Jerry McNerney (D-California) has advocated raising marginal tax rates to 90 percent. Such a tax increase on the wealthy would be necessary, but not sufficient, to pay for the vast spending increases proposed by the Obama Administration, if it is to keep its promise not to raise taxes on those making less than $250,000 per year. Indeed, it would not raise enough money, since there simply are not enough wealthy people to pay for all the proposed spending.
In the National Journal, the disillusioned centrist Stuart Taylor, who once praised Obama, notes that Obama’s budget projections are based on bogus accounting, and would result in mushrooming deficits as far as the eye can see unless taxes are raised radically. Obama, he writes, “has been deceptive in basing his deficit projections on phantom expenditure cuts and wildly optimistic revenue estimates.” Moreover,
“The numbers don’t add up — and still won’t if and when, as seems almost certain, Obama ratchets up his so-far-fairly-modest new taxes on the top 2 percent. ‘A tax policy that confiscated 100 percent of the taxable income of everyone in America earning over $500,000 in 2006 would only have given Congress an extra $1.3 trillion in revenue,’ according to a February 27 editorial in The Wall Street Journal. ‘That’s less than half the 2006 federal budget of $2.7 trillion and looks tiny compared to the more than $4 trillion Congress will spend in fiscal 2010. Even taking every taxable ‘dime’ of everyone earning more than $75,000 in 2006 would have barely yielded enough to cover that $4 trillion.’
As for the budget’s $2 trillion in projected net “savings,” Obama’s budget director, Peter Orszag, admitted in testimony on Tuesday under questioning by Rep. Paul Ryan, R-Wis., that $1.6 trillion comes from phantom cuts of the money that would be needed to sustain the troop surge in Iraq for another decade — money that nobody ever intended to spend.
Other supposed savings — especially from Medicare — seem unlikely to materialize absent benefit cuts, which Obama has not proposed. And the cost of any health care legislation — to be drafted largely by a Congress that is allergic to the kind of cost-cutting necessary to make universal care sustainable — is likely to be two or three times the $634 billion over 10 years that Obama has budgeted.”
Open Market/CEI, March 07, 2009 @ 11:14 am
Excerpts:
Congressman Jerry McNerney (D-California) has advocated raising marginal tax rates to 90 percent. Such a tax increase on the wealthy would be necessary, but not sufficient, to pay for the vast spending increases proposed by the Obama Administration, if it is to keep its promise not to raise taxes on those making less than $250,000 per year. Indeed, it would not raise enough money, since there simply are not enough wealthy people to pay for all the proposed spending.
In the National Journal, the disillusioned centrist Stuart Taylor, who once praised Obama, notes that Obama’s budget projections are based on bogus accounting, and would result in mushrooming deficits as far as the eye can see unless taxes are raised radically. Obama, he writes, “has been deceptive in basing his deficit projections on phantom expenditure cuts and wildly optimistic revenue estimates.” Moreover,
“The numbers don’t add up — and still won’t if and when, as seems almost certain, Obama ratchets up his so-far-fairly-modest new taxes on the top 2 percent. ‘A tax policy that confiscated 100 percent of the taxable income of everyone in America earning over $500,000 in 2006 would only have given Congress an extra $1.3 trillion in revenue,’ according to a February 27 editorial in The Wall Street Journal. ‘That’s less than half the 2006 federal budget of $2.7 trillion and looks tiny compared to the more than $4 trillion Congress will spend in fiscal 2010. Even taking every taxable ‘dime’ of everyone earning more than $75,000 in 2006 would have barely yielded enough to cover that $4 trillion.’
As for the budget’s $2 trillion in projected net “savings,” Obama’s budget director, Peter Orszag, admitted in testimony on Tuesday under questioning by Rep. Paul Ryan, R-Wis., that $1.6 trillion comes from phantom cuts of the money that would be needed to sustain the troop surge in Iraq for another decade — money that nobody ever intended to spend.
Other supposed savings — especially from Medicare — seem unlikely to materialize absent benefit cuts, which Obama has not proposed. And the cost of any health care legislation — to be drafted largely by a Congress that is allergic to the kind of cost-cutting necessary to make universal care sustainable — is likely to be two or three times the $634 billion over 10 years that Obama has budgeted.”
‘Manchurian Candidate’ Starts War on Business: Kevin Hassett
http://www.bloomberg.com/apps/news?pid=20601039&refer=columnist_hassett&sid=amhpOT5rlR1Y
March 9 (Bloomberg) -- Back in the 1960s, Lyndon Johnson gave us the War on Poverty. In the 1970s, Richard Nixon launched the War on Drugs. Now that we have seen President Barack Obama’s first-year legislative agenda, we know what kind of a war he intends to wage.
It is no wonder that markets are imploding around us. Obama is giving us the War on Business.
Imagine that some hypothetical enemy state spent years preparing a “Manchurian Candidate” to destroy the U.S. economy once elected. What policies might that leader pursue?
He might discourage private capital from entering the financial sector by instructing his Treasury secretary to repeatedly promise a brilliant rescue plan, but never actually have one. Private firms, spooked by the thought of what government might do, would shy away from transactions altogether. If the secretary were smooth and played rope-a-dope long enough, the whole financial sector would be gone before voters could demand action.
Another diabolical idea would be to significantly increase taxes on whatever firms are still standing. That would require subterfuge, since increasing tax rates would be too obvious. Our Manchurian Candidate would have plenty of sophisticated ideas on changing the rules to get more revenue without increasing rates, such as auctioning off “permits.”
These steps would create near-term distress. If our Manchurian Candidate leader really wanted to knock the country down for good, he would have to provide insurance against any long-run recovery.
There are two steps to accomplish that.
Discourage Innovation
First, one way the economy might finally take off is for some entrepreneur to invent an amazing new product that launches something on the scale of the dot-com boom. If you want to destroy an economy, you have to persuade those innovators not even to try.
Second, you need to initiate entitlement programs that are difficult to change once enacted. These programs should transfer assets away from productive areas of the economy as efficiently as possible. Ideally, the government will have no choice but to increase taxes sharply in the future to pay for new entitlements.
A leader who pulled off all that might be able to finish off the country.
Let’s see how Obama’s plan compares with our nightmare scenario.
Treasury Secretary Timothy Geithner has been so slow to act that even liberal economist and commentator Paul Krugman is criticizing the administration for “dithering.” It has gotten so bad that the Intrade prediction market now has a future on whether Geithner is gone by year’s end. It currently puts the chance of that at about 20 percent.
No More Deferral
On the tax hike, Obama’s proposed 2010 budget quite ominously signaled that he intends to end or significantly amend the U.S. practice of allowing U.S. multinationals to defer U.S. taxes on income that they earn abroad.
Currently, the U.S. has the second-highest corporate tax on Earth. U.S. firms can compete in Europe by opening a subsidiary in a low-tax country and locating the profits there. Since the high U.S. tax applies only when the money is mailed home, and firms can let the money sit abroad for as long as they want, the big disadvantage of the high rate is muted significantly.
End that deferral opportunity and U.S. firms will no longer be able to compete, given their huge tax disadvantage. With foreign tax rates so low now, it is even possible that the end of deferral could lead to the extinction of the U.S. corporation.
If any firms are to remain, they will be festooned with massive carbon-permit expenses because of Obama’s new cap-and- trade program.
Importing Drugs
Obama’s attack on intellectual property is evident in his aggressive stance against U.S. pharmaceutical companies in the budget. He would force drug companies to pay higher “rebate” fees to Medicaid, and he included wording that suggests Americans will soon be able to import drugs from foreign countries. The stock prices of drug companies, predictably, tanked when his budget plan was released.
Obama will allow cheap and potentially counterfeit substitutes into the country and will set the U.S. price for drugs equal to the lowest price that any foreign government is able to coerce from our drugmakers.
Given this, why would anyone invest money in a risky new cancer trial, or bother inventing some other new thing that the government could expropriate as soon as it decides to?
Finally, Obama has set aside $634 billion to establish a health-reform reserve fund, a major first step in creating a universal health-care system. If you want to have health care for everyone, you have to give it to many people for free. Once we start doing that, we will never stop, at least until the government runs out of money.
It’s clear that President Obama wants the best for our country. That makes it all the more puzzling that he would legislate like a Manchurian Candidate.
(Kevin Hassett, director of economic-policy studies at the American Enterprise Institute, is a Bloomberg News columnist. He was an adviser to Republican Senator John McCain of Arizona in the 2008 presidential election. The opinions expressed are his own.)
To contact the writer of this column: Kevin Hassett at khassett@aei.org
March 9 (Bloomberg) -- Back in the 1960s, Lyndon Johnson gave us the War on Poverty. In the 1970s, Richard Nixon launched the War on Drugs. Now that we have seen President Barack Obama’s first-year legislative agenda, we know what kind of a war he intends to wage.
It is no wonder that markets are imploding around us. Obama is giving us the War on Business.
Imagine that some hypothetical enemy state spent years preparing a “Manchurian Candidate” to destroy the U.S. economy once elected. What policies might that leader pursue?
He might discourage private capital from entering the financial sector by instructing his Treasury secretary to repeatedly promise a brilliant rescue plan, but never actually have one. Private firms, spooked by the thought of what government might do, would shy away from transactions altogether. If the secretary were smooth and played rope-a-dope long enough, the whole financial sector would be gone before voters could demand action.
Another diabolical idea would be to significantly increase taxes on whatever firms are still standing. That would require subterfuge, since increasing tax rates would be too obvious. Our Manchurian Candidate would have plenty of sophisticated ideas on changing the rules to get more revenue without increasing rates, such as auctioning off “permits.”
These steps would create near-term distress. If our Manchurian Candidate leader really wanted to knock the country down for good, he would have to provide insurance against any long-run recovery.
There are two steps to accomplish that.
Discourage Innovation
First, one way the economy might finally take off is for some entrepreneur to invent an amazing new product that launches something on the scale of the dot-com boom. If you want to destroy an economy, you have to persuade those innovators not even to try.
Second, you need to initiate entitlement programs that are difficult to change once enacted. These programs should transfer assets away from productive areas of the economy as efficiently as possible. Ideally, the government will have no choice but to increase taxes sharply in the future to pay for new entitlements.
A leader who pulled off all that might be able to finish off the country.
Let’s see how Obama’s plan compares with our nightmare scenario.
Treasury Secretary Timothy Geithner has been so slow to act that even liberal economist and commentator Paul Krugman is criticizing the administration for “dithering.” It has gotten so bad that the Intrade prediction market now has a future on whether Geithner is gone by year’s end. It currently puts the chance of that at about 20 percent.
No More Deferral
On the tax hike, Obama’s proposed 2010 budget quite ominously signaled that he intends to end or significantly amend the U.S. practice of allowing U.S. multinationals to defer U.S. taxes on income that they earn abroad.
Currently, the U.S. has the second-highest corporate tax on Earth. U.S. firms can compete in Europe by opening a subsidiary in a low-tax country and locating the profits there. Since the high U.S. tax applies only when the money is mailed home, and firms can let the money sit abroad for as long as they want, the big disadvantage of the high rate is muted significantly.
End that deferral opportunity and U.S. firms will no longer be able to compete, given their huge tax disadvantage. With foreign tax rates so low now, it is even possible that the end of deferral could lead to the extinction of the U.S. corporation.
If any firms are to remain, they will be festooned with massive carbon-permit expenses because of Obama’s new cap-and- trade program.
Importing Drugs
Obama’s attack on intellectual property is evident in his aggressive stance against U.S. pharmaceutical companies in the budget. He would force drug companies to pay higher “rebate” fees to Medicaid, and he included wording that suggests Americans will soon be able to import drugs from foreign countries. The stock prices of drug companies, predictably, tanked when his budget plan was released.
Obama will allow cheap and potentially counterfeit substitutes into the country and will set the U.S. price for drugs equal to the lowest price that any foreign government is able to coerce from our drugmakers.
Given this, why would anyone invest money in a risky new cancer trial, or bother inventing some other new thing that the government could expropriate as soon as it decides to?
Finally, Obama has set aside $634 billion to establish a health-reform reserve fund, a major first step in creating a universal health-care system. If you want to have health care for everyone, you have to give it to many people for free. Once we start doing that, we will never stop, at least until the government runs out of money.
It’s clear that President Obama wants the best for our country. That makes it all the more puzzling that he would legislate like a Manchurian Candidate.
(Kevin Hassett, director of economic-policy studies at the American Enterprise Institute, is a Bloomberg News columnist. He was an adviser to Republican Senator John McCain of Arizona in the 2008 presidential election. The opinions expressed are his own.)
To contact the writer of this column: Kevin Hassett at khassett@aei.org
Belief in conspiracy theories and government cover-ups
Are Americans Superstitious? By Karlyn Bowman
A small number of survey questions point to something worrisome: a belief in conspiracy theories and government cover-ups.
AEI, Monday, March 9, 2009
Officially, the term "ides" refers to the 15th day of certain months in the old Roman calendar. But March 15 has a special, inopportune significance--as every reader of Julius Caesar knows.
In an attempt to quantify how superstitious Americans are, pollsters have explored our beliefs about prophecies like the soothsayer's warning about Caesar's imminent death. They've also studied what we think about all things supernatural and fantastical.
Gallup began a battery of questions this way: "Some people are superstitious and try to behave in such a way as to avoid bad luck or jinxing themselves, and others are not. How superstitious are you?" One percent of respondents admitted to being very superstitious, 24% somewhat so, 28% not very and 47% not at all.
The follow-up questions revealed that around a quarter of us are superstitious about knocking on wood, 13% about a black cat crossing a path, 12% about walking under a ladder, 11% about breaking a mirror, 9% about the number 13--and 9% of respondents believed that speaking ill of a person makes it come true.
A small collection of questions on paranormal phenomena exist in the survey archives. Again, turning to Gallup's findings, 63% of respondents to one poll indicated they believe in déjà vu.
In questions asked in 1996 and then a decade later, slightly more than four in 10 believed in ESP, around 30% in telepathy and about a quarter in clairvoyance. Sixty percent said they had had the feeling of déjà vu, and 18% in another question said they had felt they were in touch with someone who had already died.
In November, Harris updated a broader question about "various things some people believe in." Substantial majorities believed in God (80%), miracles (75%) and heaven (73%)--to name just a few of the religious items the polling firm included. But significant numbers also believed in ghosts (44%) and witches (31%). The responses have held steady since Harris first asked the questions in 2005.
In a Gallup question, a third said houses could be haunted, 16% said they had been in such a house and 9% said they had been in the presence of a ghost.
Just 31% told Harris interviewers they believed in astrology, but in answer to a National Opinion Research Center question, a much larger proportion, 57%, admitted having read a horoscope or personal astrology report. Thirty-one percent said they thought astrology was "very" or "sort of" scientific. Seventeen percent told Gallup surveyors they had consulted a psychic or fortune teller.
Responding to a question from Yankelovich, a third said they believed intelligent beings from other planets have visited the U.S. In Harris' survey, 36% of people surveyed believed in UFOs, 25% weren't sure and 39% didn't believe.
These beliefs seem relatively harmless in the grand scheme of things--but a small number of survey questions point to something more worrisome: a belief in conspiracy theories and government cover-ups.
Sixty percent or more of respondents in six surveys taken by different polling organizations between 1988 and 2003 believe there was an official cover-up to keep the public from learning the truth about John F. Kennedy's assassination. Eighteen percent answered a Scripps Howard and Ohio University question from 1997 saying they thought it was very likely the government had been involved in the assassination of JFK, and another third found this somewhat likely.
After the Air Force issued a report in 1997 saying people who reported seeing UFOs and bodies of aliens in Roswell, N.M., actually saw the remains of weather balloons that were part of military experiments, nearly four in 10 told Fox News/Opinion Dynamics pollsters that the Air Force was covering up the UFO crash. A third told Gallup aliens had actually landed.
Further, nearly half of that poll's respondents say the government covered up information about the Waco, Texas, fire in 1993, in which 74 people died, and about the real cause of TWA Flight 80's crash over the Atlantic in 1996. In two other polls, 9 and 4% said the federal government bombed the federal building in Oklahoma City in order to blame extremist groups.
These deep suspicions--and the others many Americans hold--may reflect historical concern about federal government power. But, especially around the Ides of March, they are unsettling nonetheless.
Karlyn Bowman is a senior fellow at AEI.
A small number of survey questions point to something worrisome: a belief in conspiracy theories and government cover-ups.
AEI, Monday, March 9, 2009
Officially, the term "ides" refers to the 15th day of certain months in the old Roman calendar. But March 15 has a special, inopportune significance--as every reader of Julius Caesar knows.
In an attempt to quantify how superstitious Americans are, pollsters have explored our beliefs about prophecies like the soothsayer's warning about Caesar's imminent death. They've also studied what we think about all things supernatural and fantastical.
Gallup began a battery of questions this way: "Some people are superstitious and try to behave in such a way as to avoid bad luck or jinxing themselves, and others are not. How superstitious are you?" One percent of respondents admitted to being very superstitious, 24% somewhat so, 28% not very and 47% not at all.
The follow-up questions revealed that around a quarter of us are superstitious about knocking on wood, 13% about a black cat crossing a path, 12% about walking under a ladder, 11% about breaking a mirror, 9% about the number 13--and 9% of respondents believed that speaking ill of a person makes it come true.
A small collection of questions on paranormal phenomena exist in the survey archives. Again, turning to Gallup's findings, 63% of respondents to one poll indicated they believe in déjà vu.
In questions asked in 1996 and then a decade later, slightly more than four in 10 believed in ESP, around 30% in telepathy and about a quarter in clairvoyance. Sixty percent said they had had the feeling of déjà vu, and 18% in another question said they had felt they were in touch with someone who had already died.
In November, Harris updated a broader question about "various things some people believe in." Substantial majorities believed in God (80%), miracles (75%) and heaven (73%)--to name just a few of the religious items the polling firm included. But significant numbers also believed in ghosts (44%) and witches (31%). The responses have held steady since Harris first asked the questions in 2005.
In a Gallup question, a third said houses could be haunted, 16% said they had been in such a house and 9% said they had been in the presence of a ghost.
Just 31% told Harris interviewers they believed in astrology, but in answer to a National Opinion Research Center question, a much larger proportion, 57%, admitted having read a horoscope or personal astrology report. Thirty-one percent said they thought astrology was "very" or "sort of" scientific. Seventeen percent told Gallup surveyors they had consulted a psychic or fortune teller.
Responding to a question from Yankelovich, a third said they believed intelligent beings from other planets have visited the U.S. In Harris' survey, 36% of people surveyed believed in UFOs, 25% weren't sure and 39% didn't believe.
These beliefs seem relatively harmless in the grand scheme of things--but a small number of survey questions point to something more worrisome: a belief in conspiracy theories and government cover-ups.
Sixty percent or more of respondents in six surveys taken by different polling organizations between 1988 and 2003 believe there was an official cover-up to keep the public from learning the truth about John F. Kennedy's assassination. Eighteen percent answered a Scripps Howard and Ohio University question from 1997 saying they thought it was very likely the government had been involved in the assassination of JFK, and another third found this somewhat likely.
After the Air Force issued a report in 1997 saying people who reported seeing UFOs and bodies of aliens in Roswell, N.M., actually saw the remains of weather balloons that were part of military experiments, nearly four in 10 told Fox News/Opinion Dynamics pollsters that the Air Force was covering up the UFO crash. A third told Gallup aliens had actually landed.
Further, nearly half of that poll's respondents say the government covered up information about the Waco, Texas, fire in 1993, in which 74 people died, and about the real cause of TWA Flight 80's crash over the Atlantic in 1996. In two other polls, 9 and 4% said the federal government bombed the federal building in Oklahoma City in order to blame extremist groups.
These deep suspicions--and the others many Americans hold--may reflect historical concern about federal government power. But, especially around the Ides of March, they are unsettling nonetheless.
Karlyn Bowman is a senior fellow at AEI.
Brookings Institute: Put Earmarks in Perspective
Put Earmarks in Perspective. By Thomas E. Mann
Brookings Institute, Mar 06, 2009
March 06, 2009 — It is hard to take seriously a political opposition whose major antidote to the most serious and frightening financial and economic crisis since the Great Depression is a rhetorical crusade against congressional earmarks.
Sen. John McCain took to the Senate floor Monday to unleash his fury at the 9,000 earmarks — “wasteful, disgraceful, corrupting ... pork barrel spending” — that are included in a $410 billion omnibus spending bill for the current budget year. McCain was particularly incensed that President Barack Obama decided not to veto this legislation in spite of his campaign promise to reform the earmark process and go through the budget line by line to make sure we’re not spending money unwisely.
McCain has long been a passionate opponent of congressional earmarks, and his jeremiads against them never fail to stir a public whose level of trust in government to spend its tax dollars wisely has never been lower. And there is merit to much of what he says. The number and cost of earmarks exploded in the late 1990s and early 2000s. New lobbying shops, often working on commission for private contractors and local governments, used their experience on Capitol Hill and access to policymakers to deliver projects outside of the regular grant-making and contracting processes, threatening the quality of resource allocation. Standards for scrubbing earmark requests in the appropriations committees declined. Campaign fundraising took on aspects of pay-to-play systems for those seeking earmarked projects. On occasion, this descended into criminal quid pro quo exchanges.
The excesses of earmarking have been acknowledged and addressed in the past several years. Most important, new transparency measures were adopted to make possible public accountability. Members of Congress will be increasingly sensitive to the potential political costs as well as benefits of directing project funds to those who pay to play. In addition, the congressional leadership has stopped the precipitous growth of earmarks and begun to reduce their number and cost. Both of these developments — increasing transparency and declining volume — should and almost certainly will continue as work begins on the 2010 budget. An increase in the Department of Justice public corruption investigation budget would also help discipline the most egregious abusers of the earmarking system.
But dramatic calls for an abolition of earmarks, by law or presidential veto, are futile and counterproductive. Congress has the constitutional power of the purse and legitimately defends its authority to allocate public resources. Given the enormity of the economic and financial problems facing the country, Obama would be foolish to engage Congress in a battle over earmarks.
Earmarks constitute less than 1 percent of the federal budget. In most cases, they don’t add to federal expenditures but merely allow Congress to direct a small fraction of program funding that would otherwise be allocated by formula or grant competition. Abolishing all earmarks would therefore have a trivial effect on the level of spending and budget deficits. While earmark reform and reduction is a worthy cause, it is a relatively minor one. It would do nothing to slow the rate of federal spending or improve our long-term budget outlook. Moreover, hyperbolic attacks on earmarks do a disservice to the public, encouraging people to concentrate way too much attention and energy on a largely symbolic issue and ignore the critical decisions that we face in the months and years ahead.
In an effort to stimulate an economy threatened by deflation and severe recession, federal spending will increase dramatically over the next several years. The challenge is to see that these new funds are expended in the most responsible way possible. Beefing up our public management capacity — in contracting, financial accountability, program evaluation — and developing oversight systems are the highest priorities. Same with efforts under way to stabilize the financial markets. Then there are the daunting challenges of designing and implementing new systems to restrain the cost and increase the coverage of health care and to shift to a low-carbon economy, to say nothing of grappling with a huge, long-term fiscal imbalance.
In this most threatening and challenging policy environment, it is time for earmarks to be put in their proper perspective and for politicians in both parties to get serious with the public about what really lies ahead.
Brookings Institute, Mar 06, 2009
March 06, 2009 — It is hard to take seriously a political opposition whose major antidote to the most serious and frightening financial and economic crisis since the Great Depression is a rhetorical crusade against congressional earmarks.
Sen. John McCain took to the Senate floor Monday to unleash his fury at the 9,000 earmarks — “wasteful, disgraceful, corrupting ... pork barrel spending” — that are included in a $410 billion omnibus spending bill for the current budget year. McCain was particularly incensed that President Barack Obama decided not to veto this legislation in spite of his campaign promise to reform the earmark process and go through the budget line by line to make sure we’re not spending money unwisely.
McCain has long been a passionate opponent of congressional earmarks, and his jeremiads against them never fail to stir a public whose level of trust in government to spend its tax dollars wisely has never been lower. And there is merit to much of what he says. The number and cost of earmarks exploded in the late 1990s and early 2000s. New lobbying shops, often working on commission for private contractors and local governments, used their experience on Capitol Hill and access to policymakers to deliver projects outside of the regular grant-making and contracting processes, threatening the quality of resource allocation. Standards for scrubbing earmark requests in the appropriations committees declined. Campaign fundraising took on aspects of pay-to-play systems for those seeking earmarked projects. On occasion, this descended into criminal quid pro quo exchanges.
The excesses of earmarking have been acknowledged and addressed in the past several years. Most important, new transparency measures were adopted to make possible public accountability. Members of Congress will be increasingly sensitive to the potential political costs as well as benefits of directing project funds to those who pay to play. In addition, the congressional leadership has stopped the precipitous growth of earmarks and begun to reduce their number and cost. Both of these developments — increasing transparency and declining volume — should and almost certainly will continue as work begins on the 2010 budget. An increase in the Department of Justice public corruption investigation budget would also help discipline the most egregious abusers of the earmarking system.
But dramatic calls for an abolition of earmarks, by law or presidential veto, are futile and counterproductive. Congress has the constitutional power of the purse and legitimately defends its authority to allocate public resources. Given the enormity of the economic and financial problems facing the country, Obama would be foolish to engage Congress in a battle over earmarks.
Earmarks constitute less than 1 percent of the federal budget. In most cases, they don’t add to federal expenditures but merely allow Congress to direct a small fraction of program funding that would otherwise be allocated by formula or grant competition. Abolishing all earmarks would therefore have a trivial effect on the level of spending and budget deficits. While earmark reform and reduction is a worthy cause, it is a relatively minor one. It would do nothing to slow the rate of federal spending or improve our long-term budget outlook. Moreover, hyperbolic attacks on earmarks do a disservice to the public, encouraging people to concentrate way too much attention and energy on a largely symbolic issue and ignore the critical decisions that we face in the months and years ahead.
In an effort to stimulate an economy threatened by deflation and severe recession, federal spending will increase dramatically over the next several years. The challenge is to see that these new funds are expended in the most responsible way possible. Beefing up our public management capacity — in contracting, financial accountability, program evaluation — and developing oversight systems are the highest priorities. Same with efforts under way to stabilize the financial markets. Then there are the daunting challenges of designing and implementing new systems to restrain the cost and increase the coverage of health care and to shift to a low-carbon economy, to say nothing of grappling with a huge, long-term fiscal imbalance.
In this most threatening and challenging policy environment, it is time for earmarks to be put in their proper perspective and for politicians in both parties to get serious with the public about what really lies ahead.
Bangladesh: Consequences of the BDR Mutiny
Consequences of the BDR Mutiny, by Arvind Gupta
IDSA, March 09, 2009
The mutiny by the troops of Bangladesh Rifles (BDR) on 26 February 26 was extraordinarily brutal. The mutiny toll was about 81 with 72 still missing. Many of these were officers of the Bangladesh army. Three mass graves were discovered. Many bodies were thrown into the sewer pipelines. Many of those killed were stripped, mutilated, bayoneted and shot. The Director General of the BDR, Major General Shakil Ahmed was killed in cold blood. Even his wife was not spared. Her dead body was discovered in one of the mass graves. The whole nation has been numbed by the sheer scale of brutality of the mutiny which has been condemned internationally.
How could the mutineers indulge in such senseless killing over matters of pay and allowances and conditions of service? In brutality, the present mutiny compares with the 1975 murder of Sheikh Mujibur Rehman by some army officers.
The mutiny which was totally unexpected came at a time when the newly elected government, enjoying overwhelming majority in the parliament, was getting ready for the task of governance. Was the mutiny aimed at destabilising the government? Could the fundamentalist elements have been behind the rebellion?
The Prime Minister herself hinted at the possibility of a conspiracy. Several op-ed pieces in Bangladeshi media also spoke in a similar vein. There was nothing spontaneous about the mutiny. A spontaneous shoot-out would not kill so many people in so brutal a manner. A few of the suspected mutineers have been arrested. Only a thorough investigation would reveal the truth but there is growing suspicion that the incident may have been well planned and coordinated. If so, who were the perpetrators? What was their motive? Who was behind them? Was there an intelligence failure? Was DG, BDR the real target or someone else? Who were the real targets? These are some of the troubling questions for which answers will have to be found to set speculation to rest.
What will be the consequences of this tragic event? Firstly, the BDR may have to be restructured; the broken chain of command will have to be restored. The government has appointed Brig Gen Moinul Hossain as the new chief of BDR. His job will be to restore the confidence of the troops. This will be a tough task. The task at hand goes beyond redressing the grievances over pay and the conditions of service. If the anti-army sentiment in the BDR is deep and widespread, its disbanding may not be too extreme a step to contemplate.
Secondly, the relations between BDR and the Bangladesh army will be strained. The army has acted with great restraint and responsibility. It has lost a number of officers and soldiers at the hands of the mutineers. The trust that has been lost cannot be rebuilt overnight. Indeed it may never be restored. This is a dangerous precedent which will have long term implications for the country.
Thirdly, the government’s attention will necessarily be focussed on attending to the urgent matter of restructuring the BDR. This will detract its attention from the pressing problems of socio-economic development at a time when the global economic slowdown is having a negative impact on all countries including Bangladesh. The army has come out in support of the government’s handling of the situation. But one cannot ignore the fact that the army in Bangladesh has in the past been politicised. This time the army has suffered at the hands of the misguided soldiers of a sister force. The army’s response has been mature but the incident has introduced an element of uncertainty in civil-military relations in the country.
Fourthly, BDR was doing the important task of guarding the borders. It had close interaction with the Indian Border Security Force (BSF). Many units of BDR on the India-Bangladesh border were headed by the officers on deputation from the Bangladesh army. Some of these officers, according to reports, fled as the news of mutiny spread. India has reacted with restraint, describing the situation as Bangladesh’s “internal affair”. Nevertheless, the BSF would be hoping for an early return to normalcy as far as BDR is concerned so that the border guarding resumes on both sides. This will be in the interest of both countries.
Fortunately, Sheikh Hasina has overwhelming support in the country. This should help her deal with the problem in a confident manner. She will require the continuous support of the army. She has been praised for the “mature” handling of the situation but her decision to grant amnesty to the mutineers was controversial. The government had to clarify that those who committed murder will not be spared despite the amnesty. The long term effect of the amnesty on the morale and the functioning of the security forces may not be entirely positive. The situation in the country is fragile and can take an unexpected turn. South Asia is seeing signs of instability.
Dr. Arvind Gupta holds the Lal Bahadur Shastri Chair at the Institute for Defence Studies and Analyses, New Delhi. The views expressed here are his own.
IDSA, March 09, 2009
The mutiny by the troops of Bangladesh Rifles (BDR) on 26 February 26 was extraordinarily brutal. The mutiny toll was about 81 with 72 still missing. Many of these were officers of the Bangladesh army. Three mass graves were discovered. Many bodies were thrown into the sewer pipelines. Many of those killed were stripped, mutilated, bayoneted and shot. The Director General of the BDR, Major General Shakil Ahmed was killed in cold blood. Even his wife was not spared. Her dead body was discovered in one of the mass graves. The whole nation has been numbed by the sheer scale of brutality of the mutiny which has been condemned internationally.
How could the mutineers indulge in such senseless killing over matters of pay and allowances and conditions of service? In brutality, the present mutiny compares with the 1975 murder of Sheikh Mujibur Rehman by some army officers.
The mutiny which was totally unexpected came at a time when the newly elected government, enjoying overwhelming majority in the parliament, was getting ready for the task of governance. Was the mutiny aimed at destabilising the government? Could the fundamentalist elements have been behind the rebellion?
The Prime Minister herself hinted at the possibility of a conspiracy. Several op-ed pieces in Bangladeshi media also spoke in a similar vein. There was nothing spontaneous about the mutiny. A spontaneous shoot-out would not kill so many people in so brutal a manner. A few of the suspected mutineers have been arrested. Only a thorough investigation would reveal the truth but there is growing suspicion that the incident may have been well planned and coordinated. If so, who were the perpetrators? What was their motive? Who was behind them? Was there an intelligence failure? Was DG, BDR the real target or someone else? Who were the real targets? These are some of the troubling questions for which answers will have to be found to set speculation to rest.
What will be the consequences of this tragic event? Firstly, the BDR may have to be restructured; the broken chain of command will have to be restored. The government has appointed Brig Gen Moinul Hossain as the new chief of BDR. His job will be to restore the confidence of the troops. This will be a tough task. The task at hand goes beyond redressing the grievances over pay and the conditions of service. If the anti-army sentiment in the BDR is deep and widespread, its disbanding may not be too extreme a step to contemplate.
Secondly, the relations between BDR and the Bangladesh army will be strained. The army has acted with great restraint and responsibility. It has lost a number of officers and soldiers at the hands of the mutineers. The trust that has been lost cannot be rebuilt overnight. Indeed it may never be restored. This is a dangerous precedent which will have long term implications for the country.
Thirdly, the government’s attention will necessarily be focussed on attending to the urgent matter of restructuring the BDR. This will detract its attention from the pressing problems of socio-economic development at a time when the global economic slowdown is having a negative impact on all countries including Bangladesh. The army has come out in support of the government’s handling of the situation. But one cannot ignore the fact that the army in Bangladesh has in the past been politicised. This time the army has suffered at the hands of the misguided soldiers of a sister force. The army’s response has been mature but the incident has introduced an element of uncertainty in civil-military relations in the country.
Fourthly, BDR was doing the important task of guarding the borders. It had close interaction with the Indian Border Security Force (BSF). Many units of BDR on the India-Bangladesh border were headed by the officers on deputation from the Bangladesh army. Some of these officers, according to reports, fled as the news of mutiny spread. India has reacted with restraint, describing the situation as Bangladesh’s “internal affair”. Nevertheless, the BSF would be hoping for an early return to normalcy as far as BDR is concerned so that the border guarding resumes on both sides. This will be in the interest of both countries.
Fortunately, Sheikh Hasina has overwhelming support in the country. This should help her deal with the problem in a confident manner. She will require the continuous support of the army. She has been praised for the “mature” handling of the situation but her decision to grant amnesty to the mutineers was controversial. The government had to clarify that those who committed murder will not be spared despite the amnesty. The long term effect of the amnesty on the morale and the functioning of the security forces may not be entirely positive. The situation in the country is fragile and can take an unexpected turn. South Asia is seeing signs of instability.
Dr. Arvind Gupta holds the Lal Bahadur Shastri Chair at the Institute for Defence Studies and Analyses, New Delhi. The views expressed here are his own.
WaPo: 'Direct diplomacy' with Iran and Syria starts small
A Toe in the Water. WaPo Editorial
'Direct diplomacy' with Iran and Syria starts small.
TWP, Monday, March 9, 2009; A14
THE OBAMA administration's opening forays into foreign affairs have been as calibrated and cautious as its domestic policy has been bold. Last month President Obama laid out a strategy for Iraq that tracked more closely with that recommended by the military commanders appointed by President George W. Bush than with his own campaign promises. Now Secretary of State Hillary Rodham Clinton has opened Mr. Obama's much-promised "direct diplomacy" with adversaries with a couple of low-level contacts with Syria and an invitation to Iran to join a multinational conference on Afghanistan. Ms. Clinton says that she is "testing the waters," and she has been appropriately guarded in her expectations. That's good: A bolder U.S. offer to either country would alarm U.S. allies in the region and probably be rejected.
During her first tour of the Middle East as secretary of state, Ms. Clinton got an earful from Arab rulers alarmed both by Iran's continued belligerence across the region and by the notion that a deal between Washington and Tehran might be in the works. "There's a great deal of concern about Iran in the entire region," she said after three days of talks; a senior State Department official said that Ms. Clinton had expressed doubt in one of her private meetings that Iran would respond to a U.S. offer of engagement. That was only logical, given the latest tirade of Iranian supreme leader Ayatollah Ali Khamenei, who called Israel "a cancerous tumor," rejected Mideast peace negotiations and said that Mr. Obama was following the same "crooked path" as Mr. Bush. Ms. Clinton's suggestion that Tehran participate in the Afghanistan conference came on a front where the two countries have collaborated in the past; Iran's initial response was positive.
The outreach to Syria seems more promising to many. Several former senior U.S. diplomats in the Middle East are saying that Bashar al-Assad's regime is eager to improve relations with the United States. Syria seeks an easing of U.S. economic sanctions and would also like to see U.S. mediation of peace talks with Israel. For its part, the administration wants Syria to curtail its material support for Hamas and Hezbollah; both the United States and Israel dream of rupturing Syria's alliance with Iran.
There are big and probably insurmountable obstacles to any such breakthrough. Mr. Assad heads a murderous regime; a United Nations tribunal was established last week to consider political murders in Lebanon that most likely were authored in Damascus. Mr. Assad continues to seek hegemony over Lebanon, something that the United States should not countenance. Israel's next government will probably be led by Binyamin Netanyahu, who promised immediately before his election that he would not return the occupied Golan Heights to Syria.
Yet the Obama administration, Syria and Israel may all benefit by engaging even in negotiations that go nowhere. The appearance of better relations with the United States may attract more European investment and diplomatic support for Syria; it may also inject an irritant into relations between Syria and Iran. Mr. Netanyahu's unwillingness to discuss Palestinian statehood may draw him toward talks with Syria despite his pledges. Such modest movement may be all Mr. Obama can hope for from "direct diplomacy," at least in the short term.
'Direct diplomacy' with Iran and Syria starts small.
TWP, Monday, March 9, 2009; A14
THE OBAMA administration's opening forays into foreign affairs have been as calibrated and cautious as its domestic policy has been bold. Last month President Obama laid out a strategy for Iraq that tracked more closely with that recommended by the military commanders appointed by President George W. Bush than with his own campaign promises. Now Secretary of State Hillary Rodham Clinton has opened Mr. Obama's much-promised "direct diplomacy" with adversaries with a couple of low-level contacts with Syria and an invitation to Iran to join a multinational conference on Afghanistan. Ms. Clinton says that she is "testing the waters," and she has been appropriately guarded in her expectations. That's good: A bolder U.S. offer to either country would alarm U.S. allies in the region and probably be rejected.
During her first tour of the Middle East as secretary of state, Ms. Clinton got an earful from Arab rulers alarmed both by Iran's continued belligerence across the region and by the notion that a deal between Washington and Tehran might be in the works. "There's a great deal of concern about Iran in the entire region," she said after three days of talks; a senior State Department official said that Ms. Clinton had expressed doubt in one of her private meetings that Iran would respond to a U.S. offer of engagement. That was only logical, given the latest tirade of Iranian supreme leader Ayatollah Ali Khamenei, who called Israel "a cancerous tumor," rejected Mideast peace negotiations and said that Mr. Obama was following the same "crooked path" as Mr. Bush. Ms. Clinton's suggestion that Tehran participate in the Afghanistan conference came on a front where the two countries have collaborated in the past; Iran's initial response was positive.
The outreach to Syria seems more promising to many. Several former senior U.S. diplomats in the Middle East are saying that Bashar al-Assad's regime is eager to improve relations with the United States. Syria seeks an easing of U.S. economic sanctions and would also like to see U.S. mediation of peace talks with Israel. For its part, the administration wants Syria to curtail its material support for Hamas and Hezbollah; both the United States and Israel dream of rupturing Syria's alliance with Iran.
There are big and probably insurmountable obstacles to any such breakthrough. Mr. Assad heads a murderous regime; a United Nations tribunal was established last week to consider political murders in Lebanon that most likely were authored in Damascus. Mr. Assad continues to seek hegemony over Lebanon, something that the United States should not countenance. Israel's next government will probably be led by Binyamin Netanyahu, who promised immediately before his election that he would not return the occupied Golan Heights to Syria.
Yet the Obama administration, Syria and Israel may all benefit by engaging even in negotiations that go nowhere. The appearance of better relations with the United States may attract more European investment and diplomatic support for Syria; it may also inject an irritant into relations between Syria and Iran. Mr. Netanyahu's unwillingness to discuss Palestinian statehood may draw him toward talks with Syria despite his pledges. Such modest movement may be all Mr. Obama can hope for from "direct diplomacy," at least in the short term.
Science Magazine: Remembering a Rare Energy Realism Essay (Best Article Award?)
Science Magazine: Remembering a Rare Energy Realism Essay (Best Article Award?). By Robert Bradley
Master Resource, March 8, 2009
Today, there is much more political science than science in the editorial content of the flagship publication of the American Association for the Advancement of Science. AAAS has become just another special-interest, at the trough of special government favor. So why not, for example, tilt toward exaggeration on big-money research issues like the prospective impact of the human influence on climate?
Recent evidence of the political nature of the scientific community was produced when Al Gore received a standing ovation at the conclusion of his presentation at the annual convention of AAAS in Chicago. Yet Gore has gone far beyond mainstream science to sound the climate alarm, and scientists know it. They just like his politics, because it allows them to act as rent-seekers rather than truth-seekers. Roger Pielke Jr. has blogged on this unfortunate particular episode.
It is also hard for the energy realists to break into the pages of Science, either in the articles or letters section—a subject for another day. But now and then, energy realism breaks through. And in the name of such realism, I want to honor this article as one of the best ever in Science (yes, it is seven years old):
Martin Hoffert et al., “Advanced Technology Paths to Global Climate Stability: Energy for a Greenhouse Planet,” Science, November 1, 2002, available here.
Provided below are some quotations from this essay that remain relevant to today’s debate over energy sustainability and climate-change public policy.
CO2 is a combustion product vital to how civilization is powered; it cannot be regulated away (p. 981).
Paradoxically, Kyoto is too weak and too strong: Too strong because its initial cuts are perceived as an economic burden by some (the United States withdrew for this stated reason); too weak because much greater emission reductions will be needed and we lack the technology to make them (p. 981).
Renewables are intermittent dispersed sources unsuited to baseload without transmission, storage, and power conditioning. Wind power is often available only from remote or offshore locations. Meeting local demand with [photovoltaic] arrays today requires pumped-storage or battery-electric backup systems of comparable or greater capacity (p. 984).
“Energy is critical to global prosperity and equity (p. 986).
All renewables suffer from low area power densities (p. 984).
Sound scholarship passes the test of time. This essay certainly qualifies.
Master Resource, March 8, 2009
Today, there is much more political science than science in the editorial content of the flagship publication of the American Association for the Advancement of Science. AAAS has become just another special-interest, at the trough of special government favor. So why not, for example, tilt toward exaggeration on big-money research issues like the prospective impact of the human influence on climate?
Recent evidence of the political nature of the scientific community was produced when Al Gore received a standing ovation at the conclusion of his presentation at the annual convention of AAAS in Chicago. Yet Gore has gone far beyond mainstream science to sound the climate alarm, and scientists know it. They just like his politics, because it allows them to act as rent-seekers rather than truth-seekers. Roger Pielke Jr. has blogged on this unfortunate particular episode.
It is also hard for the energy realists to break into the pages of Science, either in the articles or letters section—a subject for another day. But now and then, energy realism breaks through. And in the name of such realism, I want to honor this article as one of the best ever in Science (yes, it is seven years old):
Martin Hoffert et al., “Advanced Technology Paths to Global Climate Stability: Energy for a Greenhouse Planet,” Science, November 1, 2002, available here.
Provided below are some quotations from this essay that remain relevant to today’s debate over energy sustainability and climate-change public policy.
CO2 is a combustion product vital to how civilization is powered; it cannot be regulated away (p. 981).
Paradoxically, Kyoto is too weak and too strong: Too strong because its initial cuts are perceived as an economic burden by some (the United States withdrew for this stated reason); too weak because much greater emission reductions will be needed and we lack the technology to make them (p. 981).
Renewables are intermittent dispersed sources unsuited to baseload without transmission, storage, and power conditioning. Wind power is often available only from remote or offshore locations. Meeting local demand with [photovoltaic] arrays today requires pumped-storage or battery-electric backup systems of comparable or greater capacity (p. 984).
“Energy is critical to global prosperity and equity (p. 986).
All renewables suffer from low area power densities (p. 984).
Sound scholarship passes the test of time. This essay certainly qualifies.
Conservative views: The 'most transparent administration in history' buries a Gitmo report
Second Thoughts, by Stephen F. Hayes & Thomas Joscelyn
The 'most transparent administration in history' buries a Gitmo report
The Weekly Standard, Mar 16, 2009, Volume 014, Issue 25
At 12:01 P.M. on January 20, 2009, minutes before Barack Obama was sworn in as president, the first post went up on the Obama White House website. It included a reiteration of a campaign promise Obama repeatedly made: "President Obama has committed to making his administration the most open and transparent in history."
Two days later, Obama ordered the detention facility at Guantánamo Bay closed. And two days after that, on January 24, Newsweek's Michael Isikoff wrote about a Pentagon study that will provide an early test of this promise: "The report, which could be released within the next few days, will provide fresh details about 62 detainees who have been released from Guantánamo and are believed by U.S. intelligence officials to have returned to terrorist activities."
The report was not, in fact, released within the next few days. On February 2, Commander Jeffrey Gordon, the Pentagon spokesman who handles inquiries about Guantánamo, told us that the report would likely be released later that day. We were told to consult the website--defenselink.mil--that afternoon. No report. When we asked where it was, Commander Gordon wrote: "Nothing today, please check back with me in a couple days." We did. No report.
This pattern has repeated itself for a month. So what explains this failure to produce the report?
According to Gordon:
there may be a misunderstanding between when the updated threat analysis was delivered from DIA and the completion of an interagency review process prior to public release.
My understanding is that several requests have been received by our OSD FOIA office and it is being processed for a decision concerning release. If you would like to submit a FOIA request as well, below is a link for your convenience.
Right. So a report that was to have been released on February 2 was suddenly and inexplicably withheld.
The most transparent administration in history apparently realized that releasing a report about the recidivism of Guantánamo detainees could only complicate its effort to shut down the facility. The approximately 247 detainees still held there are the worst of the terrorists captured by the United States since 9/11. Those thought to have been low-risk releases have already been let go. And many of them turned out not to have been low-risk at all. Saudi Arabia recently published a list of its 85 most wanted terrorists; 11 of them had been detained at Guantánamo Bay.
Said Ali al-Shihri, who disappeared from his home in Saudi Arabia after spending months in a Saudi jihad rehabilitation program, recently showed up in a video posted on a jihadist website. He is now the deputy leader of al Qaeda's Yemeni branch, which bombed the American embassy in Sana'a in September 2008. That attack killed 13 civilians, as well as six terrorists.
Mohammed Naim Farouq was released from Gitmo in July 2003. In 2006, the Defense Intelligence Agency listed him as one of the 20 most wanted terrorists operating in Afghanistan and Pakistan.
Abdullah Saleh al Ajmi, a Kuwaiti, was detained at Gitmo, released, and then blew himself up in Mosul, Iraq, in March 2008. The attack killed 13 Iraqi soldiers and wounded dozens more.
Ibrahim Bin Shakaran and Mohammed Bin Ahmad Mizouz were both transferred from Guantánamo to Morocco in July 2004. In September 2007, they were convicted of being recruiters for Al Qaeda in Iraq.
These are detainees that the U.S. government determined were good candidates for release. The ones who remain in Guantánamo are not. "In some cases, we do know that they'll return to the battlefield because they've told us they will," says Juan Zarate, counterterrorism czar in the Bush White House.
The question for the new president and his advisers is what is an acceptable level of risk. "They may say 'These guys are dangerous but it's better than keeping them,' " says Zarate. But "the government needs to be very clear and honest about who these guys are and take any such step to release them with our eyes wide open."
Being clear and honest means sharing with Congress and the American public as much information as possible. Democratic senator Joseph Lieberman is calling for the report's release: "We know that a number of detainees who have been released have returned to the battlefield to attack Americans and American interests abroad. The American people need to know what is in the report so that Congress can make an informed decision on what to do with the detainees currently held at Guantánamo and with combatants captured in the future in the war on terror."
Even George W. Bush did better. In June 2008, the Pentagon released a partial list of recidivist Guantánamo alumni. Is it the case that the Obama administration, just six weeks in, is not even as transparent as the super-secretive Bush administration?
--Stephen F. Hayes & Thomas Joscelyn
The 'most transparent administration in history' buries a Gitmo report
The Weekly Standard, Mar 16, 2009, Volume 014, Issue 25
At 12:01 P.M. on January 20, 2009, minutes before Barack Obama was sworn in as president, the first post went up on the Obama White House website. It included a reiteration of a campaign promise Obama repeatedly made: "President Obama has committed to making his administration the most open and transparent in history."
Two days later, Obama ordered the detention facility at Guantánamo Bay closed. And two days after that, on January 24, Newsweek's Michael Isikoff wrote about a Pentagon study that will provide an early test of this promise: "The report, which could be released within the next few days, will provide fresh details about 62 detainees who have been released from Guantánamo and are believed by U.S. intelligence officials to have returned to terrorist activities."
The report was not, in fact, released within the next few days. On February 2, Commander Jeffrey Gordon, the Pentagon spokesman who handles inquiries about Guantánamo, told us that the report would likely be released later that day. We were told to consult the website--defenselink.mil--that afternoon. No report. When we asked where it was, Commander Gordon wrote: "Nothing today, please check back with me in a couple days." We did. No report.
This pattern has repeated itself for a month. So what explains this failure to produce the report?
According to Gordon:
there may be a misunderstanding between when the updated threat analysis was delivered from DIA and the completion of an interagency review process prior to public release.
My understanding is that several requests have been received by our OSD FOIA office and it is being processed for a decision concerning release. If you would like to submit a FOIA request as well, below is a link for your convenience.
Right. So a report that was to have been released on February 2 was suddenly and inexplicably withheld.
The most transparent administration in history apparently realized that releasing a report about the recidivism of Guantánamo detainees could only complicate its effort to shut down the facility. The approximately 247 detainees still held there are the worst of the terrorists captured by the United States since 9/11. Those thought to have been low-risk releases have already been let go. And many of them turned out not to have been low-risk at all. Saudi Arabia recently published a list of its 85 most wanted terrorists; 11 of them had been detained at Guantánamo Bay.
Said Ali al-Shihri, who disappeared from his home in Saudi Arabia after spending months in a Saudi jihad rehabilitation program, recently showed up in a video posted on a jihadist website. He is now the deputy leader of al Qaeda's Yemeni branch, which bombed the American embassy in Sana'a in September 2008. That attack killed 13 civilians, as well as six terrorists.
Mohammed Naim Farouq was released from Gitmo in July 2003. In 2006, the Defense Intelligence Agency listed him as one of the 20 most wanted terrorists operating in Afghanistan and Pakistan.
Abdullah Saleh al Ajmi, a Kuwaiti, was detained at Gitmo, released, and then blew himself up in Mosul, Iraq, in March 2008. The attack killed 13 Iraqi soldiers and wounded dozens more.
Ibrahim Bin Shakaran and Mohammed Bin Ahmad Mizouz were both transferred from Guantánamo to Morocco in July 2004. In September 2007, they were convicted of being recruiters for Al Qaeda in Iraq.
These are detainees that the U.S. government determined were good candidates for release. The ones who remain in Guantánamo are not. "In some cases, we do know that they'll return to the battlefield because they've told us they will," says Juan Zarate, counterterrorism czar in the Bush White House.
The question for the new president and his advisers is what is an acceptable level of risk. "They may say 'These guys are dangerous but it's better than keeping them,' " says Zarate. But "the government needs to be very clear and honest about who these guys are and take any such step to release them with our eyes wide open."
Being clear and honest means sharing with Congress and the American public as much information as possible. Democratic senator Joseph Lieberman is calling for the report's release: "We know that a number of detainees who have been released have returned to the battlefield to attack Americans and American interests abroad. The American people need to know what is in the report so that Congress can make an informed decision on what to do with the detainees currently held at Guantánamo and with combatants captured in the future in the war on terror."
Even George W. Bush did better. In June 2008, the Pentagon released a partial list of recidivist Guantánamo alumni. Is it the case that the Obama administration, just six weeks in, is not even as transparent as the super-secretive Bush administration?
--Stephen F. Hayes & Thomas Joscelyn
A Hero's Welcome: Britain greets a Guantánamo detainee
A Hero's Welcome, by Janet Daley
Britain greets a Guantánamo detainee
The Weekly Standard, Mar 09, 2009, Volume 014, Issue 24
LondonWell, it wasn't quite Nelson Mandela's release from Robben Island, but the treatment was nearly as reverential. The news channels followed every detail of the progress of Binyam Mohamed, the first detainee released from Guantánamo by the Obama administration, from the moment it was solemnly announced that his plane had left the ground to return him to Britain--the country that had granted him asylum (but not citizenship) before his unfortunately timed journey to Afghanistan in June 2001--until the moment the private jet touched down at RAF Northolt in west London.
It was the works: minute-by-minute live coverage of Mohamed's deplaning, flanked by burly men who ushered him quickly to a waiting car. These proceedings were enlivened by an offstage chorus of demands from Labour MPs, human rights lawyers, and the liberal media that the government and the security services tell all they knew about Britain's alleged role in Mohamed's alleged torture at Guantánamo. A parade of activists, from the openly Trotskyite leaders of the Stop the War Coalition to the usual array of anti-American protesters and always-available legal experts, weighed in with speculation on everything from the released man's mental state after force-feeding during a hunger strike to the judicial implications of Britain's participation in torture.
Particularly notable was the psychologist who specialized in the study of torture victims. He had not met Mohamed, nor did he have any personal knowledge of the specifics of his case, but that did not prevent the BBC news presenter from engaging him in a lengthy discussion of the likely effects on Mohamed of the treatment he might or might not have endured at Guantánamo--which might or might not have involved the active assistance of the British security forces. The final exchange in this rather surreal dialogue went something like this:
BBC: Isn't it possible that a victim of torture could actually be radicalized by his treatment and led into terrorism, even if he had had no inclinations of that kind in the first place?
Psychologist: Oh yes. We often find that torture victims are so alienated by their experience that they turn toward active terrorism.
This speculative analysis is, of course, plausible. It just happens that neither the psychologist nor his inquisitor had the remotest idea whether it applied in any way to Mohamed. They were simply weaving a hypothesis. But the subtext of this flight of fancy is not insignificant: If Mohamed should, in the future, be found to be involved in terrorist activity, it will be argued not that this vindicates the U.S. decision to detain and interrogate him in the first place--but that he was radicalized by his (wrongful) detention and interrogation. So even if he turns out to be a terrorist, it'll be our fault.
By the time the main evening news came on, the BBC coverage had become a bit more skeptical. Judicious doubt was inserted into the accounts given by Mohamed himself and his eager legal team about the treatment he had received and his absolute conviction that British forces had been somehow complicit in it. But after another 24 hours, there was a new hyperbole in Mohamed's descriptions of his torture as "medieval" (the rack?) and an apparent acceptance by much of the media of his confident assertion of British involvement.
No one seemed inclined to ask the obvious question: If he believed so firmly that Britain had betrayed him ("Those I hoped would rescue me were allied with my abusers"), why was he so eager to return and make his home here? One sentence from the Guardian's coverage captures this paradox neatly: "Binyam was 'extraordinarily grateful to be back in Britain,' said [his lawyer] Stafford Smith, who said he had 'zero doubt' Britain was complicit in his client's ill-treatment."
How very strange: to be extraordinarily grateful to be back in a country which you believe to have helped to torture you. Now this is not inconceivable. People often have confused and contradictory emotional reactions to traumatic events. But it does seem odd that, in all the excitement of pursuing the British government over its possible engagement in torture, scarcely anyone has thought to raise this query.
Any doubts about the credibility of Mohamed's testimony were pretty well lost in the scrum of the early coverage. This story has everything: above all, anti-Americanism combined with the delights of British self-flagellation.
As one pundit put it, "Now that Binyam Mohamed has returned to the U.K. from detention at Guantánamo Bay, there must be quite a few Whitehall mandarins--not to mention some ex-ministers--who are wandering Westminster frantically trying to clean the blood from their hands." Bush and Blair meet Lady Macbeth: The image is irresistible.
Janet Daley is a columnist for the Daily Telegraph (London).
Britain greets a Guantánamo detainee
The Weekly Standard, Mar 09, 2009, Volume 014, Issue 24
LondonWell, it wasn't quite Nelson Mandela's release from Robben Island, but the treatment was nearly as reverential. The news channels followed every detail of the progress of Binyam Mohamed, the first detainee released from Guantánamo by the Obama administration, from the moment it was solemnly announced that his plane had left the ground to return him to Britain--the country that had granted him asylum (but not citizenship) before his unfortunately timed journey to Afghanistan in June 2001--until the moment the private jet touched down at RAF Northolt in west London.
It was the works: minute-by-minute live coverage of Mohamed's deplaning, flanked by burly men who ushered him quickly to a waiting car. These proceedings were enlivened by an offstage chorus of demands from Labour MPs, human rights lawyers, and the liberal media that the government and the security services tell all they knew about Britain's alleged role in Mohamed's alleged torture at Guantánamo. A parade of activists, from the openly Trotskyite leaders of the Stop the War Coalition to the usual array of anti-American protesters and always-available legal experts, weighed in with speculation on everything from the released man's mental state after force-feeding during a hunger strike to the judicial implications of Britain's participation in torture.
Particularly notable was the psychologist who specialized in the study of torture victims. He had not met Mohamed, nor did he have any personal knowledge of the specifics of his case, but that did not prevent the BBC news presenter from engaging him in a lengthy discussion of the likely effects on Mohamed of the treatment he might or might not have endured at Guantánamo--which might or might not have involved the active assistance of the British security forces. The final exchange in this rather surreal dialogue went something like this:
BBC: Isn't it possible that a victim of torture could actually be radicalized by his treatment and led into terrorism, even if he had had no inclinations of that kind in the first place?
Psychologist: Oh yes. We often find that torture victims are so alienated by their experience that they turn toward active terrorism.
This speculative analysis is, of course, plausible. It just happens that neither the psychologist nor his inquisitor had the remotest idea whether it applied in any way to Mohamed. They were simply weaving a hypothesis. But the subtext of this flight of fancy is not insignificant: If Mohamed should, in the future, be found to be involved in terrorist activity, it will be argued not that this vindicates the U.S. decision to detain and interrogate him in the first place--but that he was radicalized by his (wrongful) detention and interrogation. So even if he turns out to be a terrorist, it'll be our fault.
By the time the main evening news came on, the BBC coverage had become a bit more skeptical. Judicious doubt was inserted into the accounts given by Mohamed himself and his eager legal team about the treatment he had received and his absolute conviction that British forces had been somehow complicit in it. But after another 24 hours, there was a new hyperbole in Mohamed's descriptions of his torture as "medieval" (the rack?) and an apparent acceptance by much of the media of his confident assertion of British involvement.
No one seemed inclined to ask the obvious question: If he believed so firmly that Britain had betrayed him ("Those I hoped would rescue me were allied with my abusers"), why was he so eager to return and make his home here? One sentence from the Guardian's coverage captures this paradox neatly: "Binyam was 'extraordinarily grateful to be back in Britain,' said [his lawyer] Stafford Smith, who said he had 'zero doubt' Britain was complicit in his client's ill-treatment."
How very strange: to be extraordinarily grateful to be back in a country which you believe to have helped to torture you. Now this is not inconceivable. People often have confused and contradictory emotional reactions to traumatic events. But it does seem odd that, in all the excitement of pursuing the British government over its possible engagement in torture, scarcely anyone has thought to raise this query.
Any doubts about the credibility of Mohamed's testimony were pretty well lost in the scrum of the early coverage. This story has everything: above all, anti-Americanism combined with the delights of British self-flagellation.
As one pundit put it, "Now that Binyam Mohamed has returned to the U.K. from detention at Guantánamo Bay, there must be quite a few Whitehall mandarins--not to mention some ex-ministers--who are wandering Westminster frantically trying to clean the blood from their hands." Bush and Blair meet Lady Macbeth: The image is irresistible.
Janet Daley is a columnist for the Daily Telegraph (London).
The International Criminal Court's attempt to bring Sudanese president Omar al-Bashir to justice backfires
Sudan's Day in Court, by Joseph Loconte
The International Criminal Court's attempt to bring Sudanese president Omar al-Bashir to justice backfires.
The Weekly Standard, Mar 06, 2009 12:00:00 AM
Brushing aside warnings of retaliations against vulnerable refugees, the International Criminal Court issued an arrest warrant this week for Sudanese president Omar al-Bashir for atrocities committed in Darfur. A three-judge panel charged Bashir with war crimes and crimes against humanity for playing "an essential role" in the murder, rape, torture, and displacement of thousands of civilians. Although it is important that an international body has moved against the Sudanese leader--a radical Islamist who has waged war against Christians in the south and Muslims who resist his rule in the north--the court's action is fraught with problems. Already it has exposed the moral liabilities of an international tribunal that lacks any means of enforcement.
For eight months European leaders have pushed for the arrest warrant against the Sudanese president, the first aimed at a sitting head of state. The Economist magazine called it "a pretty clear victory for international human-rights activists." Richard Dicker of Human Rights Watch said the decision "has made Omar al-Bashir a wanted man." Nicholas Kristof, columnist for the New York Times and Pulitzer-prize winner for his commentary on Sudan, saw the ruling as a "step toward accountability and deterrence." Fouad Hikmat of the International Crisis Group expected the court's action to prod the government "to engage the international community a bit more."
ICC enthusiasts should put away the champagne for now. Within minutes of the court's announcement, thousands gathered in Khartoum, the Sudanese capital, to denounce the decision. "We are telling the colonialists we are not succumbing," Bashir said. "We are not submitting. We will not kneel." Within hours, Bashir met with leaders of several humanitarian groups and ordered them to leave the country. Organizations such as Oxfam and Doctors Without Borders--which provide food and medical care for thousands of refugees in Darfur--are apparently being forced out of the region.
As aid workers explain, the Sudanese government despises international relief agencies operating in Darfur. Aid agencies have performed heroic work in keeping alive the very people Bashir and his janjaweed militias have tried to exterminate. Some groups have offered evidence of government-backed raids on refugee camps, embarrassing the regime. Equally important, the physical presence of aid workers has helped discourage attacks on civilians from government forces. "One of the humanitarian services we provide is protection through pressure," a relief worker told me. "That pressure through presence is suddenly gone, and there will be a lot of people vulnerable to attack."
Quite a lot, in fact. Since the civil war erupted in 2003, at least 300,000 people have died and about 2.7 million have been displaced. They live as internal refugees or in camps in Chad and the Central African Republic. They struggle to survive with inadequate sanitation, health care, and food. Women and young girls are often the victims of sexual assault. Humanitarian convoys already face attacks from soldiers, militias, bandits, and rebels. If relief organizations are kicked out of the area, thousands of civilian deaths could follow.
This is what political theorists mean by moral hazard: When a political decision, however just in intent, carries consequences that threaten to frustrate justice and further endanger innocent lives. Some diplomats and relief workers--let's call them moral realists--warned against the ICC's ruling for months. They predicted that Bashir would use the decision as a political rallying cry. They expected the government to expel aid organizations.
It appears that the realists were right. Utopian hopes in the irrepressible power of international edicts are colliding with stubborn facts on the ground. The court has no way to enforce its decisions, no police or military to arrest the accused. The Sudanese government has vowed to ignore the warrant. Although 108 countries are parties to the 2002 Rome Statute that established the court--the United States is not a signatory--many have little interest in apprehending Bashir if he were to set foot on their soil. African Union peacekeepers in Darfur, unable to offer much protection to refugees, have no authority to arrest the president. The international community shows no stomach for military action, such as protecting the "no fly" zones over refugee camps that are being bombed by Sudanese planes.
The upshot is that the International Criminal Court has handed the Sudanese dictator a means to strengthen his reign of terror. As an aid worker told me: "It has created an opportunity for him to pound Darfur and to punish his opponents." Even U.N. Secretary-General Ban Ki-moon, an ICC supporter, criticized the court's ruling as "a serious setback to lifesaving operations in Darfur." Critics fear that it also could disrupt the fragile peace agreement reached between the north and south in 2005.
What does this mean for the credibility of the International Criminal Court? Liberals remain obsessed with the United Nations and other international institutions as the sole repositories of moral authority. We are told that democratic governments--especially the United States, whose "international image" suffered under George W. Bush--lack the standing to challenge even the worst despots. The Washington Post's Colum Lynch summed up this attitude nicely, if unconsciously, in an interview on PBS's Newshour. He was asked whether the United States could press for Bashir's arrest: "It doesn't have the moral high ground to do that," he said, "because it's not a member of the court."
Allow the words to linger: It doesn't have the moral high ground because it's not a member of the court. Here is a presumption posing as an argument. Why should the International Criminal Court, a creature of the diplomatic delusions of European elites, represent the summit of moral wisdom on the world stage? Its judges are not subject to democratic checks and balances. It has yet to secure a successful prosecution. Even the court's supporters admit it has weak oversight provisions. Given its status as a U.N. body, the ICC risks being politicized and turned into a megaphone to excoriate U.S. foreign policy--the fate of the now discredited U.N. Human Rights Council.
There may be ways to prevent these unhappy outcomes for the ICC, but it's worth asking why there isn't an African solution to an African problem, especially the problem of genocide. This latest crisis in Sudan is also a religious crisis--a spiritual struggle within Islam. Most of the news reports this week somehow failed to mention it, but near the center of Sudan's heart of darkness is a violent strain of Islamist ideology. The conflict in Sudan is extremely complex, of course, involving a toxic mix of ethnic, tribal, racial, religious and economic motives. Rebel groups, mostly non-Arab, have felt marginalized from the nation's economic resources. Abuses against civilians have been committed by virtually all sides.
Yet there is little debate that the ideology of the Khartoum government--an Arab regime devoted to the violent imposition of Islamic law--has been a driving force behind the atrocities. It is not only the government that must be confronted, but its political theology.
It is not yet clear that the Obama administration, still finding its foreign policy footing, is prepared for this challenge. When asked at a press conference this week whether the United States would arrest Bashir if he entered the country (to attend a meeting at the United Nations, for example), State Department spokesman Gordon Duguid dodged the question. "Let's ask the lawyers to get us an answer on this so we are not speculating." So much for moral clarity. It will require better answers than that if, as the administration claims, the promotion of human rights is to be "central" to U.S. foreign policy. "I am looking for results," Secretary of State Hillary Clinton said at a State Department event last month. "I am looking for changes that actually improve the lives of the greatest number of people."
If saving and improving lives is the goal in Sudan, then the Obama administration will need to look beyond the International Criminal Court, and look quickly.
Joseph Loconte is a senior research fellow at the King's College in New York City and a frequent contributor to the THE WEEKLY STANDARD Online.
The International Criminal Court's attempt to bring Sudanese president Omar al-Bashir to justice backfires.
The Weekly Standard, Mar 06, 2009 12:00:00 AM
Brushing aside warnings of retaliations against vulnerable refugees, the International Criminal Court issued an arrest warrant this week for Sudanese president Omar al-Bashir for atrocities committed in Darfur. A three-judge panel charged Bashir with war crimes and crimes against humanity for playing "an essential role" in the murder, rape, torture, and displacement of thousands of civilians. Although it is important that an international body has moved against the Sudanese leader--a radical Islamist who has waged war against Christians in the south and Muslims who resist his rule in the north--the court's action is fraught with problems. Already it has exposed the moral liabilities of an international tribunal that lacks any means of enforcement.
For eight months European leaders have pushed for the arrest warrant against the Sudanese president, the first aimed at a sitting head of state. The Economist magazine called it "a pretty clear victory for international human-rights activists." Richard Dicker of Human Rights Watch said the decision "has made Omar al-Bashir a wanted man." Nicholas Kristof, columnist for the New York Times and Pulitzer-prize winner for his commentary on Sudan, saw the ruling as a "step toward accountability and deterrence." Fouad Hikmat of the International Crisis Group expected the court's action to prod the government "to engage the international community a bit more."
ICC enthusiasts should put away the champagne for now. Within minutes of the court's announcement, thousands gathered in Khartoum, the Sudanese capital, to denounce the decision. "We are telling the colonialists we are not succumbing," Bashir said. "We are not submitting. We will not kneel." Within hours, Bashir met with leaders of several humanitarian groups and ordered them to leave the country. Organizations such as Oxfam and Doctors Without Borders--which provide food and medical care for thousands of refugees in Darfur--are apparently being forced out of the region.
As aid workers explain, the Sudanese government despises international relief agencies operating in Darfur. Aid agencies have performed heroic work in keeping alive the very people Bashir and his janjaweed militias have tried to exterminate. Some groups have offered evidence of government-backed raids on refugee camps, embarrassing the regime. Equally important, the physical presence of aid workers has helped discourage attacks on civilians from government forces. "One of the humanitarian services we provide is protection through pressure," a relief worker told me. "That pressure through presence is suddenly gone, and there will be a lot of people vulnerable to attack."
Quite a lot, in fact. Since the civil war erupted in 2003, at least 300,000 people have died and about 2.7 million have been displaced. They live as internal refugees or in camps in Chad and the Central African Republic. They struggle to survive with inadequate sanitation, health care, and food. Women and young girls are often the victims of sexual assault. Humanitarian convoys already face attacks from soldiers, militias, bandits, and rebels. If relief organizations are kicked out of the area, thousands of civilian deaths could follow.
This is what political theorists mean by moral hazard: When a political decision, however just in intent, carries consequences that threaten to frustrate justice and further endanger innocent lives. Some diplomats and relief workers--let's call them moral realists--warned against the ICC's ruling for months. They predicted that Bashir would use the decision as a political rallying cry. They expected the government to expel aid organizations.
It appears that the realists were right. Utopian hopes in the irrepressible power of international edicts are colliding with stubborn facts on the ground. The court has no way to enforce its decisions, no police or military to arrest the accused. The Sudanese government has vowed to ignore the warrant. Although 108 countries are parties to the 2002 Rome Statute that established the court--the United States is not a signatory--many have little interest in apprehending Bashir if he were to set foot on their soil. African Union peacekeepers in Darfur, unable to offer much protection to refugees, have no authority to arrest the president. The international community shows no stomach for military action, such as protecting the "no fly" zones over refugee camps that are being bombed by Sudanese planes.
The upshot is that the International Criminal Court has handed the Sudanese dictator a means to strengthen his reign of terror. As an aid worker told me: "It has created an opportunity for him to pound Darfur and to punish his opponents." Even U.N. Secretary-General Ban Ki-moon, an ICC supporter, criticized the court's ruling as "a serious setback to lifesaving operations in Darfur." Critics fear that it also could disrupt the fragile peace agreement reached between the north and south in 2005.
What does this mean for the credibility of the International Criminal Court? Liberals remain obsessed with the United Nations and other international institutions as the sole repositories of moral authority. We are told that democratic governments--especially the United States, whose "international image" suffered under George W. Bush--lack the standing to challenge even the worst despots. The Washington Post's Colum Lynch summed up this attitude nicely, if unconsciously, in an interview on PBS's Newshour. He was asked whether the United States could press for Bashir's arrest: "It doesn't have the moral high ground to do that," he said, "because it's not a member of the court."
Allow the words to linger: It doesn't have the moral high ground because it's not a member of the court. Here is a presumption posing as an argument. Why should the International Criminal Court, a creature of the diplomatic delusions of European elites, represent the summit of moral wisdom on the world stage? Its judges are not subject to democratic checks and balances. It has yet to secure a successful prosecution. Even the court's supporters admit it has weak oversight provisions. Given its status as a U.N. body, the ICC risks being politicized and turned into a megaphone to excoriate U.S. foreign policy--the fate of the now discredited U.N. Human Rights Council.
There may be ways to prevent these unhappy outcomes for the ICC, but it's worth asking why there isn't an African solution to an African problem, especially the problem of genocide. This latest crisis in Sudan is also a religious crisis--a spiritual struggle within Islam. Most of the news reports this week somehow failed to mention it, but near the center of Sudan's heart of darkness is a violent strain of Islamist ideology. The conflict in Sudan is extremely complex, of course, involving a toxic mix of ethnic, tribal, racial, religious and economic motives. Rebel groups, mostly non-Arab, have felt marginalized from the nation's economic resources. Abuses against civilians have been committed by virtually all sides.
Yet there is little debate that the ideology of the Khartoum government--an Arab regime devoted to the violent imposition of Islamic law--has been a driving force behind the atrocities. It is not only the government that must be confronted, but its political theology.
It is not yet clear that the Obama administration, still finding its foreign policy footing, is prepared for this challenge. When asked at a press conference this week whether the United States would arrest Bashir if he entered the country (to attend a meeting at the United Nations, for example), State Department spokesman Gordon Duguid dodged the question. "Let's ask the lawyers to get us an answer on this so we are not speculating." So much for moral clarity. It will require better answers than that if, as the administration claims, the promotion of human rights is to be "central" to U.S. foreign policy. "I am looking for results," Secretary of State Hillary Clinton said at a State Department event last month. "I am looking for changes that actually improve the lives of the greatest number of people."
If saving and improving lives is the goal in Sudan, then the Obama administration will need to look beyond the International Criminal Court, and look quickly.
Joseph Loconte is a senior research fellow at the King's College in New York City and a frequent contributor to the THE WEEKLY STANDARD Online.
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