No Pain No Gain. By Seth Cropsey
Taking the fight to the pirates
The Weekly Standard, Apr 10,. 2009 4:15:00 PM
Barack Obama's good luck holds steady. When, for the first time in more than two centuries, pirates seized an American-flagged ship on April 8th, the 20-man American crew recaptured their ship hours later a few hundred miles east of the Somali coast. Although the captain remained a hostage, the recapture of the Maersk Alabama, a 17,000 ton container ship with a cargo of humanitarian assistance destined for Kenya, diminished potential public interest to a single individual, just as Iran's jailing of a single American journalist in late January relieved the new administration of having to address a crisis magnified by a large number of hostages. In the short term, the narrowing of these incidents to a couple of American citizens buys the Obama administration time as they search for solutions. The larger picture is more ominous.
The principles that are being tested in Iran and off the coast of Somalia hold no matter how many Americans are wrongfully detained by hostile governments or international outlaws: the United States is obliged to protect its innocent citizens. Failing to do so effectively invites more and bigger trouble. A similar principle applies to Chinese naval vessels' harassing of the unarmed U.S. Naval Survey ship, Impeccable, in international waters off Hainan island early in March. The Obama administration made diplomatic remonstrances and sent a destroyer to the area. This is not likely to have impressed China's leaders. The result is that there will be more such incidents--and not only in international waters near China--that test American resolve.
The hijacking of the Alabama offers President Obama an exceptional opportunity to act resolutely, justly, and effectively in reducing the likelihood of more attacks against American--and other--ships off the increasingly dangerous coast of east Africa, near one of the world's most important oceanic choke points: the Strait of Bab al Mandeb where the Red Sea empties into the Gulf of Aden. Some 20,000 vessels, most of them on their way to or from the Suez Canal or the Straits of Hormuz, pass through the gulf each year.
The ocean area that has become the pirates' hunting ground is immense, between one and 2.5 million square miles. In land terms, this ranges between roughly twice the size of India, and--at the lower end--an area about that of Argentina. NATO patrols the region with five ships besides three frigates from the European Union. The U.S. Navy maintains a presence of between five and 10 vessels. Notwithstanding, Lt. Nathan Christensen, the spokesman for the U.S. Navy's Fifth Fleet, noted that "we can't be everywhere at once," a remark that, while not aimed at the Pentagon's coming budget battle, is particularly appropriate given the slow, unabated shrinkage of the U.S. combat fleet. Lt. Christensen pointed out that the U.S. naval combatant nearest the Alabama when it was commandeered about 280 miles southeast of the Somalia pirate center, Eyl, was approximately 330 miles away at the time of the attack.
The U.S. and its allies are not the only contributors to the western Indian Ocean anti-piracy mission. China, India, Japan, and Russia as well as other nations have sent naval vessels to help secure the area.
Diplomatic efforts have paralleled naval ones. The United Nations Security Council in December 2008 unanimously passed Resolution 1851 whose title page "authorizes states to use land-based operations in Somalia." Subsequent language muddies this apparently tough grant of international authority requiring such government authority as exists in the minimally functional Somali state to notify the U.N. in advance of actual military operations. But since the resolution neither addresses nor prohibits less red-tape-bound military means, these remain possible. The same Security Council resolution directly supports international naval action to discourage piracy off the Somali coast.
Still, Secretary of State Clinton seems uncomfortable. She told a news conference on 9 April that "the administration is seeking a 21st century response" to piracy.
What could this mean? The basic requirements that senior Obama administration officials, including the president, have set as a standard for conducting foreign policy are all in place. The participation of many different navies off the Somali coast is diverse and multi-lateral. The U.N. has authorized the use of force against the pirates. Solid reason exists for taking full advantage of the careful work that preceded these measures: an attempt was made in international waters to steal American property, and an assault was made on an American crew. The American captain remains a hostage of the pirates.
Certainly, negotiations should continue for the captain's release and return. But, what then? Does a "21st century" response mean that with the crew and ship safely returned, the case is dismissed and we go about our business? This will guarantee more attacks on U.S.-flagged ships and American merchant marine sailors.
It will add to the appearance that the new administration's idea of a "21st century" response is one in which there are no consequences for those who violate international laws and customs in crossing the United States.
There are plenty of other reasonable alternatives that would send a clear message. If the pirates who seized the Alabama can be apprehended and transferred to a U.S. Navy ship, Title 18 of the U.S. Code allows them to be brought to the U.S. and, if found guilty, imprisoned for life. A more convincing approach would be to use the same unmanned aerial vehicles that have been operational since U.S. involvement in Bosnia to target pirates in the centers where they are known to congregate on land. Special operations missions could accomplish similar objectives, albeit with less plausible deniability.
Punishing the guilty would do justice, increase respect for the Obama administration while conforming to its standard of soliciting international approval, and decrease the likelihood of repeated attacks against Americans abroad. It might also provide the same benefit for mariners aboard ships carrying the flags of other states who go about their business peacefully in the region. This is more likely to increase respect for the administration abroad than ignoring direct challenges to the U.S. and packaging such sideways glances as policy that befits the 21st century.
Least likely to produce positive tangible result are approaches that bypass the administration's own foreign policy standard of multilateralism and UN sanction in pursuit of the additional and dubious requirement that wrongdoers escape serious consequences for their action.
The destroyer that was sent to the aid of Alabama is the U.S.S. Bainbridge. The ship was named for Captain William Bainbridge who served several tours in the American naval expeditions that eventually used force successfully to end the Barbary pirates' threat to American merchant shipping in the Mediterranean during the first two decades of the 1800s. Sometimes the 19th century, including the statesmanship of Thomas Jefferson and James Madison, is the most appropriate model for U.S. policy.
Seth Cropsey is a Senior Fellow at the Hudson Institute and served as a naval officer and as deputy undersecretary of the Navy in the administrations of Ronald Reagan and George H. W. Bush.
Saturday, April 11, 2009
Analysis: Diminishing “Geneva rights”? General Noriega and extradition
Analysis: Diminishing “Geneva rights”? By Lyle Denniston
SCOTUS Blog, Friday, April 10th, 2009 9:33 pm
Excerpts:
From early in the U.S. government’s detention of individuals rounded up in the “war on terrorism,” the prisoners have been attempting to gain the protection of a major human rights treaty: the series of agreements known as the Geneva Conventions – a part of international law for 60 years. The Conventions bar the use of torture, abuse, humiliation and acts of indignity against those held in captivity during wartime.
[...]
However, in a filing with Judge Walton on Thursday, the Obama Administration — in its first formal argument on the point in court — took the position that Geneva rights cannot be enforced in court by detainees as they challenge their confinement. That is a position the Bush Administration had taken repeatedly. And that position has just gained new support in a federal appeals court, the Eleventh Circuit Court based in Atlanta.
The Circuit Court ruling, issued Wednesday, did not involve Guantanamo prisoners (the case, in fact, involved former Panamanian dictator Manuel Noriega, who is trying to prevent his transfer to France to be tried on new criminal charges). Nevertheless, the decision formed a part of the Obama Administration’s argument Thursday in opposing court enforcement of Geneva rights.
In the course of making that point, the new Justice Department put new stress on a more sweeping legal claim (also made repeatedly by the Bush Administration). The argument is that the courts have no authority, in detainee cases, to rule on the conditions of confinement at Guantanamo Bay.
Congress, the new filing argued, took away that authority in the Military Commissions Act of 2006, and the Supreme Court did not restore it last June in Boumediene v. Bush, recognizing habeas rights for Guantanamo prisoners.
Specifically at issue before Judge Walton is the Third Geneva Convention, formally known as the Geneva Convention Relative to the Treatment of Prisoners of War. The judge called for new briefs on a long-standing claim by the detainees to Geneva rights.
The detainees’ lawyers, in response last month, contended that the Convention does apply at Guantanamo, that U.S. courts may enforce those rights, and that, if the U.S. military is unwilling to obey the Convention there, the detainees should either be transferred to another country or sent to their home countries.
Countering that argument on Thursday, the Justice Department asserted that the Geneva plea is essentially a plea for the courts to oversee conditions of confinement. That is not within the reach of a judge in ruling on a habeas challenge, the Department contended.’
While complying with the Third Convention “constitutes an important and longstanding commitment of the United States,” the Department said, it is not enforceable by private individuals suing in court — especially those pursuing habeas petitions. It was on that point that the Department cited the new Eleventh Circuit decision in the Noriega case.
“The habeas statute,” the Department argued more broadly, “can b e used only to challenge the fact, duration, or location of confinement, not conditions of confinement.” And, it added, Congress in passing the Military Commissions Act nearly three years ago declared that no individual, captured anywhere in the world, may seek to enforce Geneva rights in U.S. courts.
The brief sought also to rely on a ruling earlier in the week, in Kiyemba v. Obama, finding that the U.S. government has broad authority to transfer detainees out of Guanantamo, against their wishes, without “second-guessing” by the courts. That decision, the Department said, makes clear that the Supreme Court’s Boumediene decision was limited only to the fact and length of detention, and not to anything beyond that.
[...]
SCOTUS Blog, Friday, April 10th, 2009 9:33 pm
Excerpts:
From early in the U.S. government’s detention of individuals rounded up in the “war on terrorism,” the prisoners have been attempting to gain the protection of a major human rights treaty: the series of agreements known as the Geneva Conventions – a part of international law for 60 years. The Conventions bar the use of torture, abuse, humiliation and acts of indignity against those held in captivity during wartime.
[...]
However, in a filing with Judge Walton on Thursday, the Obama Administration — in its first formal argument on the point in court — took the position that Geneva rights cannot be enforced in court by detainees as they challenge their confinement. That is a position the Bush Administration had taken repeatedly. And that position has just gained new support in a federal appeals court, the Eleventh Circuit Court based in Atlanta.
The Circuit Court ruling, issued Wednesday, did not involve Guantanamo prisoners (the case, in fact, involved former Panamanian dictator Manuel Noriega, who is trying to prevent his transfer to France to be tried on new criminal charges). Nevertheless, the decision formed a part of the Obama Administration’s argument Thursday in opposing court enforcement of Geneva rights.
In the course of making that point, the new Justice Department put new stress on a more sweeping legal claim (also made repeatedly by the Bush Administration). The argument is that the courts have no authority, in detainee cases, to rule on the conditions of confinement at Guantanamo Bay.
Congress, the new filing argued, took away that authority in the Military Commissions Act of 2006, and the Supreme Court did not restore it last June in Boumediene v. Bush, recognizing habeas rights for Guantanamo prisoners.
Specifically at issue before Judge Walton is the Third Geneva Convention, formally known as the Geneva Convention Relative to the Treatment of Prisoners of War. The judge called for new briefs on a long-standing claim by the detainees to Geneva rights.
The detainees’ lawyers, in response last month, contended that the Convention does apply at Guantanamo, that U.S. courts may enforce those rights, and that, if the U.S. military is unwilling to obey the Convention there, the detainees should either be transferred to another country or sent to their home countries.
Countering that argument on Thursday, the Justice Department asserted that the Geneva plea is essentially a plea for the courts to oversee conditions of confinement. That is not within the reach of a judge in ruling on a habeas challenge, the Department contended.’
While complying with the Third Convention “constitutes an important and longstanding commitment of the United States,” the Department said, it is not enforceable by private individuals suing in court — especially those pursuing habeas petitions. It was on that point that the Department cited the new Eleventh Circuit decision in the Noriega case.
“The habeas statute,” the Department argued more broadly, “can b e used only to challenge the fact, duration, or location of confinement, not conditions of confinement.” And, it added, Congress in passing the Military Commissions Act nearly three years ago declared that no individual, captured anywhere in the world, may seek to enforce Geneva rights in U.S. courts.
The brief sought also to rely on a ruling earlier in the week, in Kiyemba v. Obama, finding that the U.S. government has broad authority to transfer detainees out of Guanantamo, against their wishes, without “second-guessing” by the courts. That decision, the Department said, makes clear that the Supreme Court’s Boumediene decision was limited only to the fact and length of detention, and not to anything beyond that.
[...]
U.S. resists rights at Bagram Air Base in Afghanistan
U.S. resists rights at Bagram. By Lyle Denniston
SCOTUS blog, Saturday, April 11th, 2009 9:20 am
The Justice Department, saying top officials have authorized a swift appeal, asked a federal District Court judge on Friday to put on hold a ruling that would extend some constitutional rights to detainees being held by the U.S. military at Bagram air base in Afghanistan.
At stake, the Department said in a new filing in U.S. District Court, is whether the constitutional right to challenge detention should be extended “for the first time to a theater of war on foreign territory over which the United States exercises neither de jure nor de facto sovereignty.” The Department insisted that the Bagram detention site was not being used just to put prisoners beyond the reach of U.S. courts.
It sought an order by District Judge John D. Bates to certify the issue to the D.C. Circuit Court even though the Bagram detainees’ case is still in a pre-trial stage. “If the Court of Appeals determines that these [detainees] cannot invoke the constitutional privilege of the writ of habeas corpus, then this Court would have no jurisdiction to proceed and litgation of these habeas cases will end,” the filing said.
The Department also asked Judge Bates to stay his ruling while the appeal goes forward, stopping all proceedings in his Court. It said that U.S. Solicitor General Elena Kagan authorized the plea “to seek an expedited appeal.”
“If this Court were to proceed with these cases during the pendency of the appeal,” the motion argued, “the Court would impose serious practical burdens on, and potential harm to, the Government and its efforts to prosecute the war in Afghanistan.”
The document brought the first full statement from the Obama Administration on its views about detainees in a U.S. military prison at the air base outside Kabul. Previously, the Administration had simply told Judge Bates, without elaboration, that it would follow the Bush Administration view that the Bagram prisoners have no rights to assert in U.S. courts.
White House officials also had said, when President Obama took office, that they did not expect to make any decisions about the Bagram prison for perhaps six months. The future of Bagram detainees is one of the issues now being reviewed by a task force studying detainee policy worldwide.
In Judge Bates’ ruling on April 2 (see this post), he concluded that the Supreme Court’s decision last June in Boumediene v. Bush involving rights for detainees at Guantanamo Bay laid down a legal framework that should be applied to Bagram, too, and perhaps other sites around the world where the U.S. military has significant control.
The judge had found that the government would not be faced with major difficulties if the habeas pleas of three Bagram detainees went forward in court. The Justice Department disagreed in its filing on Friday.
Responding in court to these three cases, ”and to the potentially large number of other petitions filed by Bagram detainees who may now allege that they are similarly situated,” the Department argued, “would divert the military’s attention and resources at a critical time for operations in Afghanistan, potentially requiring accomodation and protection of counsel and onerous discovery.”
Judge Bates had limited his ruling to just three Bagram detainees, saying they were not nationals of Afghanistan and had been captured elsewhere and simply transferred to Bagram for detention. Bagram, however, holds somewhere around 600 detainees; it is unknown how many of them would fit in the category covered by Bates’ decision; the judge himself said it would apply to only a limited number there.
The standard for allowing a pre-trial appeal to go ahead in federal courts is whether the dispute involves a “controlling question of law” about which there is substantial disagreement, and whether such an immediate appeal would help toward a final ruling of the controversy.
The Department contended that the issue of the Bagram detainees’ rights meets that standard. The question of the District Court’s jurisdiction over Bagram prisioners, it said, is a controlling legal issue.
It also argued that the Bagram situation is very different from that previaling at Guantanamo leading to the Supreme Court’s Boumediene decision. It also contended that it is not clear that the place where a detainee was captured has anything to do with the legality of detention.
Opinions also diverge, the Department contended, on whether Judge Bates’ ruling “encroaches on military judgments about where to detain an individual captured during an ongoing war.” There are “many legitimate reasons, having nothing to do” with trying to manipulate courts’ powers over detainees, on why the military chooses a particular site for holding a particular prisoner.
The document described a series of possible inhibitions of military choices about capturing and detaining individuals in wartime situations. Among them was a complaint that extending habeas to Bagram might keep the military from sending to Bagram individuals captured in Pakistan, whether the military does not have facilities for screening or detaining prisoners.
In asking permission for a swift appeal and for a stay of District Court proceedings, the Department said the Bagram detainees’ lawyers had said they would oppose the requests.
SCOTUS blog, Saturday, April 11th, 2009 9:20 am
The Justice Department, saying top officials have authorized a swift appeal, asked a federal District Court judge on Friday to put on hold a ruling that would extend some constitutional rights to detainees being held by the U.S. military at Bagram air base in Afghanistan.
At stake, the Department said in a new filing in U.S. District Court, is whether the constitutional right to challenge detention should be extended “for the first time to a theater of war on foreign territory over which the United States exercises neither de jure nor de facto sovereignty.” The Department insisted that the Bagram detention site was not being used just to put prisoners beyond the reach of U.S. courts.
It sought an order by District Judge John D. Bates to certify the issue to the D.C. Circuit Court even though the Bagram detainees’ case is still in a pre-trial stage. “If the Court of Appeals determines that these [detainees] cannot invoke the constitutional privilege of the writ of habeas corpus, then this Court would have no jurisdiction to proceed and litgation of these habeas cases will end,” the filing said.
The Department also asked Judge Bates to stay his ruling while the appeal goes forward, stopping all proceedings in his Court. It said that U.S. Solicitor General Elena Kagan authorized the plea “to seek an expedited appeal.”
“If this Court were to proceed with these cases during the pendency of the appeal,” the motion argued, “the Court would impose serious practical burdens on, and potential harm to, the Government and its efforts to prosecute the war in Afghanistan.”
The document brought the first full statement from the Obama Administration on its views about detainees in a U.S. military prison at the air base outside Kabul. Previously, the Administration had simply told Judge Bates, without elaboration, that it would follow the Bush Administration view that the Bagram prisoners have no rights to assert in U.S. courts.
White House officials also had said, when President Obama took office, that they did not expect to make any decisions about the Bagram prison for perhaps six months. The future of Bagram detainees is one of the issues now being reviewed by a task force studying detainee policy worldwide.
In Judge Bates’ ruling on April 2 (see this post), he concluded that the Supreme Court’s decision last June in Boumediene v. Bush involving rights for detainees at Guantanamo Bay laid down a legal framework that should be applied to Bagram, too, and perhaps other sites around the world where the U.S. military has significant control.
The judge had found that the government would not be faced with major difficulties if the habeas pleas of three Bagram detainees went forward in court. The Justice Department disagreed in its filing on Friday.
Responding in court to these three cases, ”and to the potentially large number of other petitions filed by Bagram detainees who may now allege that they are similarly situated,” the Department argued, “would divert the military’s attention and resources at a critical time for operations in Afghanistan, potentially requiring accomodation and protection of counsel and onerous discovery.”
Judge Bates had limited his ruling to just three Bagram detainees, saying they were not nationals of Afghanistan and had been captured elsewhere and simply transferred to Bagram for detention. Bagram, however, holds somewhere around 600 detainees; it is unknown how many of them would fit in the category covered by Bates’ decision; the judge himself said it would apply to only a limited number there.
The standard for allowing a pre-trial appeal to go ahead in federal courts is whether the dispute involves a “controlling question of law” about which there is substantial disagreement, and whether such an immediate appeal would help toward a final ruling of the controversy.
The Department contended that the issue of the Bagram detainees’ rights meets that standard. The question of the District Court’s jurisdiction over Bagram prisioners, it said, is a controlling legal issue.
It also argued that the Bagram situation is very different from that previaling at Guantanamo leading to the Supreme Court’s Boumediene decision. It also contended that it is not clear that the place where a detainee was captured has anything to do with the legality of detention.
Opinions also diverge, the Department contended, on whether Judge Bates’ ruling “encroaches on military judgments about where to detain an individual captured during an ongoing war.” There are “many legitimate reasons, having nothing to do” with trying to manipulate courts’ powers over detainees, on why the military chooses a particular site for holding a particular prisoner.
The document described a series of possible inhibitions of military choices about capturing and detaining individuals in wartime situations. Among them was a complaint that extending habeas to Bagram might keep the military from sending to Bagram individuals captured in Pakistan, whether the military does not have facilities for screening or detaining prisoners.
In asking permission for a swift appeal and for a stay of District Court proceedings, the Department said the Bagram detainees’ lawyers had said they would oppose the requests.
China's Naval Gambit - A challenge to America's dominance of the seas
China's Naval Gambit, by Michael Mazza
A challenge to America's dominance of the seas.
Weekly Standard, Mar 08, 2009 12:00:00 AM
The future of America's long-running dominance of the seas is under threat. The Department of Defense reported recently that the Chinese navy is continuing to modernize at a rapid clip. It is adding guided missile destroyers and nuclear and diesel-electric attack submarines to its fleet, and is developing over-the-horizon radars and next-generation anti-ship cruise missiles, and possibly even the first ever anti-ship ballistic missile. Not only have Chinese ships recently harassed unarmed U.S. naval vessels in the South China Sea, but according to reports emanating from Japan, China will likely complete construction on two conventional aircraft carriers by 2015, and will begin construction on two more nuclear carriers in 2020.
Recently, an influential People's Liberation Army (PLA) publication put these power projection plans in context. The newspaper described the concept of a "national interest frontier": national defense will be extended to include all areas of the globe where China has interests.
Unfortunately, these developments have received little attention in the United States. China, the thinking goes, presents only a potential long-term threat and its efforts to build carriers are not as frightening as North Korean and Iranian efforts to develop nuclear weapons arsenals. But China is already a nuclear power, and its ambitions far outreach those of its erstwhile friends in Pyongyang or its newfound friends in Iran.
Indeed, while the prospect of nuclear-armed rogues is alarming, China's rise provides a great threat to broader U.S. interests and to global stability and security. As a country whose "behavior as a responsible stakeholder has yet to be consistently demonstrated," as PACOM commander Admiral Timothy Keating has said, China's plan to acquire carriers should be raising alarm bells.
To be sure, China's efforts to develop a modernized, deployable fleet are not entirely unreasonable. China's economy is heavily dependent on maritime trade, and thus the safeguarding of shipping lanes is critical to Chinese security. One cannot fault China for sending destroyers to East African waters to protect its merchant fleet.
But given the many divergent U.S.-Chinese interests, it is important to consider the downsides of China's future naval plans. Protection of China's merchant fleet is certainly not the PLA Navy's only reason for building carriers and deploying ships far outside its territorial waters. China is acting to alter the balance of power in Asia and working to diminish U.S. presence in the region. The PLA has engaged in a significant build-up over the past twenty years. China's Air Force is on pace to have the largest air fleet in the region within the next decade. Their navy is developing blue-water capabilities, deploying new submarines at an unparalleled rate, and, now, is determined to add aircraft carriers to its fleet. And the PLA has modernized and grown its strategic conventional and nuclear missile force. In short, China is developing considerable power projection capabilities at a time when it faces no discernable external threats. Its cutting edge cyber and space weaponry are explicitly aimed at attacking American vulnerabilities. While China's strategic plans are not made public, the nature of its military build-up suggests that China is intent on reasserting itself as the dominant power in Asia. Only the United States stands in its way.
The forthcoming construction of Chinese carriers is thus not a welcome development. China has not shied away from gunboat diplomacy in the past, and the harassment of the USNS Impeccable, for example, shows that a growing Chinese naval presence in Asia is not a stabilizing force. "The Impeccable incident," Admiral Keating said, "is certainly a troubling indicator that China, particularly in the South China Sea, is behaving in an aggressive, troublesome manner, and they're not willing to abide by acceptable standards of behavior or rules of the road." The American navy must keep a close eye on its Chinese counterpart.
Since the end of World War II, the United States has been responsible for securing the seas in the Asia-Pacific. The presence of PLA Navy carriers will significantly complicate that mission. The idea that Chinese carriers will some day soon patrol the Asian seas is causing heartburn in Taiwan, Japan, Southeast Asia, and India as well. India is already concerned about China's increasing reach into the Indian Ocean; carriers in those waters would almost certainly spark a more spirited naval arms race. It is the U.S. Navy's security guarantee that has prevented such arms races since World War II, and has allowed the region to grow increasingly peaceful; this is why Asia is home to so many economic success stories, China included. Chinese carriers, and advancing "national frontier interests," can only destabilize the Asia-Pacific and lead it down a path that no state--save perhaps the People's Republic--wants to follow.
China's acquisition of carriers will not only destabilize the Asia-Pacific. Once the PLA Navy has deployed nuclear carrier battle groups, other regions could be within reach. China's naval capabilities could complicate the U.S. ability to take military action, both in the Pacific and elsewhere. Should the time ever come, for example, when Washington must seriously contemplate military action against Iran or terrorist training camps in Africa, how will the calculus change if there is a Chinese carrier in the Persian Gulf or the Mediterranean?
Given China's massive military build-up, its lack of military transparency, and its often provocative external behavior, Beijing simply cannot be counted on to act responsibly as a global power. China's neighbors are right to view its actions, its motives, and its explanations with suspicion, and America must do the same. A world in which Chinese carrier battle groups roam the seas is a less stable, less secure world. Unfortunately, there is likely little that can be done to prevent this eventuality. As the Defense Department has reported, the Chinese shipbuilding industry's ability to produce carriers is not in doubt, and the PLA has already begun training navy pilots to operate carrier-borne aircraft.
Fortunately, we do still have time to prepare countermeasures. It will be at least six years until China has carriers that are ready to sail, and longer still until they are operationally effective. Eleven more years will pass before construction on nuclear carriers even begins. But America cannot be lax in preparing for this eventual challenge. U.S. military planners must now determine what is needed to counter the threat posed by Chinese carriers.
President Obama must not allow short-term economic and security interests to blind him to long-term defense needs. We all hope China will prove itself to be a responsible great power in the years to come. But hope is no basis for policy.
Michael Mazza is a research assistant at the American Enterprise Institute.
A challenge to America's dominance of the seas.
Weekly Standard, Mar 08, 2009 12:00:00 AM
The future of America's long-running dominance of the seas is under threat. The Department of Defense reported recently that the Chinese navy is continuing to modernize at a rapid clip. It is adding guided missile destroyers and nuclear and diesel-electric attack submarines to its fleet, and is developing over-the-horizon radars and next-generation anti-ship cruise missiles, and possibly even the first ever anti-ship ballistic missile. Not only have Chinese ships recently harassed unarmed U.S. naval vessels in the South China Sea, but according to reports emanating from Japan, China will likely complete construction on two conventional aircraft carriers by 2015, and will begin construction on two more nuclear carriers in 2020.
Recently, an influential People's Liberation Army (PLA) publication put these power projection plans in context. The newspaper described the concept of a "national interest frontier": national defense will be extended to include all areas of the globe where China has interests.
Unfortunately, these developments have received little attention in the United States. China, the thinking goes, presents only a potential long-term threat and its efforts to build carriers are not as frightening as North Korean and Iranian efforts to develop nuclear weapons arsenals. But China is already a nuclear power, and its ambitions far outreach those of its erstwhile friends in Pyongyang or its newfound friends in Iran.
Indeed, while the prospect of nuclear-armed rogues is alarming, China's rise provides a great threat to broader U.S. interests and to global stability and security. As a country whose "behavior as a responsible stakeholder has yet to be consistently demonstrated," as PACOM commander Admiral Timothy Keating has said, China's plan to acquire carriers should be raising alarm bells.
To be sure, China's efforts to develop a modernized, deployable fleet are not entirely unreasonable. China's economy is heavily dependent on maritime trade, and thus the safeguarding of shipping lanes is critical to Chinese security. One cannot fault China for sending destroyers to East African waters to protect its merchant fleet.
But given the many divergent U.S.-Chinese interests, it is important to consider the downsides of China's future naval plans. Protection of China's merchant fleet is certainly not the PLA Navy's only reason for building carriers and deploying ships far outside its territorial waters. China is acting to alter the balance of power in Asia and working to diminish U.S. presence in the region. The PLA has engaged in a significant build-up over the past twenty years. China's Air Force is on pace to have the largest air fleet in the region within the next decade. Their navy is developing blue-water capabilities, deploying new submarines at an unparalleled rate, and, now, is determined to add aircraft carriers to its fleet. And the PLA has modernized and grown its strategic conventional and nuclear missile force. In short, China is developing considerable power projection capabilities at a time when it faces no discernable external threats. Its cutting edge cyber and space weaponry are explicitly aimed at attacking American vulnerabilities. While China's strategic plans are not made public, the nature of its military build-up suggests that China is intent on reasserting itself as the dominant power in Asia. Only the United States stands in its way.
The forthcoming construction of Chinese carriers is thus not a welcome development. China has not shied away from gunboat diplomacy in the past, and the harassment of the USNS Impeccable, for example, shows that a growing Chinese naval presence in Asia is not a stabilizing force. "The Impeccable incident," Admiral Keating said, "is certainly a troubling indicator that China, particularly in the South China Sea, is behaving in an aggressive, troublesome manner, and they're not willing to abide by acceptable standards of behavior or rules of the road." The American navy must keep a close eye on its Chinese counterpart.
Since the end of World War II, the United States has been responsible for securing the seas in the Asia-Pacific. The presence of PLA Navy carriers will significantly complicate that mission. The idea that Chinese carriers will some day soon patrol the Asian seas is causing heartburn in Taiwan, Japan, Southeast Asia, and India as well. India is already concerned about China's increasing reach into the Indian Ocean; carriers in those waters would almost certainly spark a more spirited naval arms race. It is the U.S. Navy's security guarantee that has prevented such arms races since World War II, and has allowed the region to grow increasingly peaceful; this is why Asia is home to so many economic success stories, China included. Chinese carriers, and advancing "national frontier interests," can only destabilize the Asia-Pacific and lead it down a path that no state--save perhaps the People's Republic--wants to follow.
China's acquisition of carriers will not only destabilize the Asia-Pacific. Once the PLA Navy has deployed nuclear carrier battle groups, other regions could be within reach. China's naval capabilities could complicate the U.S. ability to take military action, both in the Pacific and elsewhere. Should the time ever come, for example, when Washington must seriously contemplate military action against Iran or terrorist training camps in Africa, how will the calculus change if there is a Chinese carrier in the Persian Gulf or the Mediterranean?
Given China's massive military build-up, its lack of military transparency, and its often provocative external behavior, Beijing simply cannot be counted on to act responsibly as a global power. China's neighbors are right to view its actions, its motives, and its explanations with suspicion, and America must do the same. A world in which Chinese carrier battle groups roam the seas is a less stable, less secure world. Unfortunately, there is likely little that can be done to prevent this eventuality. As the Defense Department has reported, the Chinese shipbuilding industry's ability to produce carriers is not in doubt, and the PLA has already begun training navy pilots to operate carrier-borne aircraft.
Fortunately, we do still have time to prepare countermeasures. It will be at least six years until China has carriers that are ready to sail, and longer still until they are operationally effective. Eleven more years will pass before construction on nuclear carriers even begins. But America cannot be lax in preparing for this eventual challenge. U.S. military planners must now determine what is needed to counter the threat posed by Chinese carriers.
President Obama must not allow short-term economic and security interests to blind him to long-term defense needs. We all hope China will prove itself to be a responsible great power in the years to come. But hope is no basis for policy.
Michael Mazza is a research assistant at the American Enterprise Institute.
Libertarian views on UN's Global Green New Deal for Sustainable Development
The U.N.’s Global Green Raw Deal. By Patrick J. Michaels
Planet Gore/NRO, Thursday, April 09, 2009
Day by day, our government is taking more and more control over once-private corporations, with plenty of green strings attached. GM will be required to produce more hybrid cars that people won’t buy. Employee compensation will be determined by federal fiat. “Everyone will be better off.”
Not surprisingly, the United Nations has just jumped on President Obama’s hybrid bandwagon, demanding yet another trillion dollars (coming mostly from you-know-who) to fund “A Global Green New Deal for Sustainable Development.” Translation: The U.S. will provide funds to poorer nations so that they, too, can tell their private companies what to make, whom to employ, and how much to pay them. The U.N. wants your money pronto, by the end of next year.
The U.N.’s “deal” really amounts to drastic interference in the development of other nations that are neither recipients of nor contributors to the cool Trillion. India’s Tata Motors has just unveiled a $2,000 mini-car, which could be a hit in a lot of poor countries. China’s Cherry is poised for a global pounce as soon as liquidity reappears. But the U.N. proposes to spend our money fighting “automobiles, which are environmentally harmful,” promoting instead a “shift to clean public transport” which they then call “clean fuel buses.”
Huh? So the UN is hoping to close developing markets in poor countries to developing producers in countries a tier or two up the economic ladder, and then substitute a nonexistent technology?
Our researchers are still busy at work trying to figure out what a “clean fuel bus” is. It can’t be one run on ethanol, because that takes more energy to produce than we currently get out of it. If it‘s run on electricity produced by solar panels, the physics become daunting. An array required to run just one bus for 100 miles per day would stretch over ten miles. And where would the energy come from at night?
Like Obama’s initiatives, the U.N.’s purpose is to provide “green jobs.” Nothing new here. Germany put in a similar program a few years ago, sending out an army of people otherwise employed or not employed to install solar panels. German taxpayers subsidized each of these 35,000 jobs at $170,000 apiece. Now the UN wants to do the same with your money — all over the world.
Worse still, the “Green New Deal” wants energy subsidies from you — called global “feed-in tariffs” — to boost inefficient energy sources. This reverse tariff would “overcome” the “difficulty” of noncompetitive energy, providing guaranteed purchase prices to producers in developing countries for a period of 20 years. The electricity would then be sold to final consumers at a lower price.
What’s the difference between a “feed-in” tariff and a real one? There isn’t one. It basically says that anyone who has cheaper electricity for sale across national borders need not apply. As is the case with Obama’s cap-and-trade energy taxes here in the States, the U.N. says their tax on us is “desirable on climate-related grounds.”
Nothing is new here. The U.N. is hoping for more green stimulus from an already overstimulating and intrusive president, and returning more of the same: higher taxes, and technologies that won’t work and that will cost a fortune.
— Patrick J. Michaels is senior fellow in environmental studies at the Cato Institute and author of the forthcoming Climate of Extremes: Global Warming Science They Don’t Want You to Know.
Planet Gore/NRO, Thursday, April 09, 2009
Day by day, our government is taking more and more control over once-private corporations, with plenty of green strings attached. GM will be required to produce more hybrid cars that people won’t buy. Employee compensation will be determined by federal fiat. “Everyone will be better off.”
Not surprisingly, the United Nations has just jumped on President Obama’s hybrid bandwagon, demanding yet another trillion dollars (coming mostly from you-know-who) to fund “A Global Green New Deal for Sustainable Development.” Translation: The U.S. will provide funds to poorer nations so that they, too, can tell their private companies what to make, whom to employ, and how much to pay them. The U.N. wants your money pronto, by the end of next year.
The U.N.’s “deal” really amounts to drastic interference in the development of other nations that are neither recipients of nor contributors to the cool Trillion. India’s Tata Motors has just unveiled a $2,000 mini-car, which could be a hit in a lot of poor countries. China’s Cherry is poised for a global pounce as soon as liquidity reappears. But the U.N. proposes to spend our money fighting “automobiles, which are environmentally harmful,” promoting instead a “shift to clean public transport” which they then call “clean fuel buses.”
Huh? So the UN is hoping to close developing markets in poor countries to developing producers in countries a tier or two up the economic ladder, and then substitute a nonexistent technology?
Our researchers are still busy at work trying to figure out what a “clean fuel bus” is. It can’t be one run on ethanol, because that takes more energy to produce than we currently get out of it. If it‘s run on electricity produced by solar panels, the physics become daunting. An array required to run just one bus for 100 miles per day would stretch over ten miles. And where would the energy come from at night?
Like Obama’s initiatives, the U.N.’s purpose is to provide “green jobs.” Nothing new here. Germany put in a similar program a few years ago, sending out an army of people otherwise employed or not employed to install solar panels. German taxpayers subsidized each of these 35,000 jobs at $170,000 apiece. Now the UN wants to do the same with your money — all over the world.
Worse still, the “Green New Deal” wants energy subsidies from you — called global “feed-in tariffs” — to boost inefficient energy sources. This reverse tariff would “overcome” the “difficulty” of noncompetitive energy, providing guaranteed purchase prices to producers in developing countries for a period of 20 years. The electricity would then be sold to final consumers at a lower price.
What’s the difference between a “feed-in” tariff and a real one? There isn’t one. It basically says that anyone who has cheaper electricity for sale across national borders need not apply. As is the case with Obama’s cap-and-trade energy taxes here in the States, the U.N. says their tax on us is “desirable on climate-related grounds.”
Nothing is new here. The U.N. is hoping for more green stimulus from an already overstimulating and intrusive president, and returning more of the same: higher taxes, and technologies that won’t work and that will cost a fortune.
— Patrick J. Michaels is senior fellow in environmental studies at the Cato Institute and author of the forthcoming Climate of Extremes: Global Warming Science They Don’t Want You to Know.
California Wants to Ban Your Big Screen TV - This nanny state plan arrives in the name of energy efficiency
California Wants to Ban Your Big Screen TV. By Steven Titch
This nanny state plan arrives in the name of energy efficiency
Reason, April 9, 2009
They are coming for your television. The Orange County Register reports the California Energy Commission is considering banning the sale of big-screen TV sets that don't meet new, higher energy efficiency standards.
The proposed regulations will make many big-screen sets illegal. By 2011, the commission wants all large-screen TVs to use 33 percent less power. By 2013, sets must consume 49 percent less power. The bureaucrats say the regulations will reduce global warming and save consumers $18 to $30 a year.
If the law was enacted today, the Consumer Electronics Association says about 25 percent of TVs would be non-compliant, most of those being sets with screens of 40-inches or more. Considering that most manufacturers already work to meet voluntary Energy Star standards, it is questionable how much more state agencies can demand from manufacturers without forcing them to pass on these added costs to consumers, which means more expensive TVs.
There is also a huge question about how such a law would be enforced. Many California consumers would simply choose to purchase non-compliant TVs on the Internet, or drive to stores in nearby Nevada, Arizona or Oregon. As a result, local California-based retailers, who provide jobs and income to state residents, stand to lose the most from the ban.
The Energy Commission insists that it is not "banning" big screen TVs, but simply setting higher efficiency standards. But setting standards that few, if anyone, can actually meet is really just prohibition by another name.
The energy commissioners are really concerned about our prosperity. They fret that too many people are buying bigger TVs, hooking them up to Digital Video Recorders (DVRs), cable boxes, computers and digital cameras. We simply can't have that. These home electronics now consume about 10 percent of household electricity, according to PG&E. So here comes the state's nanny to tell taxpayers how they should be using electricity and to tell us we are using too much of it watching big screen TVs.
Ironically, these nanny-state tactics are unnecessary. Bureaucrats don't have to browbeat consumers into saving energy. The cost of power isn't getting any less expensive. You don't have to buy into the global warming doctrine to want to lower your electricity bills.
Many television manufacturers, well aware that their customers want to save money, are developing organic light-emitting diode (OLED) televisions that are much more power efficient than today's sets.
And Wired.com points out "most of the TVs that would be banned by the proposal would be larger TVs that are already losing steam in the market anyway... consumers are already ahead of the game here. No matter what happens with the proposal, energy-hogging TVs will be gone within two years."
As usual, customers and companies are ahead of the bureaucrats. To cover the added $18 to $30 yearly cost of that big screen TV, people might choose to turn down the air conditioner, do a better job turning off the lights around the house, or waiting until the dishwasher is full before running it. People can find plenty of ways to be economical when they have to. They might even choose compact fluorescent light bulbs.
Just as the commission seeks to ban big televisions, the state legislature tried a similar tactic with attempts to ban incandescent light bulbs. But the legislature wisely stopped short of an outright ban in favor of a list of requirements that light bulbs must meet in the future. That list, however, was intentionally malleable so businesses and consumers would have some flexibility. Legislators, unlike the energy commissioners, are elected officials and need to be somewhat sensitive to what voters want.
If the energy commission moves to ban big screens, I suspect the commissioners will learn Californians take their televisions very seriously.
Steven Titch is a policy analyst at Reason Foundation. This column first appeared at FreedomPolicitics.com.
This nanny state plan arrives in the name of energy efficiency
Reason, April 9, 2009
They are coming for your television. The Orange County Register reports the California Energy Commission is considering banning the sale of big-screen TV sets that don't meet new, higher energy efficiency standards.
The proposed regulations will make many big-screen sets illegal. By 2011, the commission wants all large-screen TVs to use 33 percent less power. By 2013, sets must consume 49 percent less power. The bureaucrats say the regulations will reduce global warming and save consumers $18 to $30 a year.
If the law was enacted today, the Consumer Electronics Association says about 25 percent of TVs would be non-compliant, most of those being sets with screens of 40-inches or more. Considering that most manufacturers already work to meet voluntary Energy Star standards, it is questionable how much more state agencies can demand from manufacturers without forcing them to pass on these added costs to consumers, which means more expensive TVs.
There is also a huge question about how such a law would be enforced. Many California consumers would simply choose to purchase non-compliant TVs on the Internet, or drive to stores in nearby Nevada, Arizona or Oregon. As a result, local California-based retailers, who provide jobs and income to state residents, stand to lose the most from the ban.
The Energy Commission insists that it is not "banning" big screen TVs, but simply setting higher efficiency standards. But setting standards that few, if anyone, can actually meet is really just prohibition by another name.
The energy commissioners are really concerned about our prosperity. They fret that too many people are buying bigger TVs, hooking them up to Digital Video Recorders (DVRs), cable boxes, computers and digital cameras. We simply can't have that. These home electronics now consume about 10 percent of household electricity, according to PG&E. So here comes the state's nanny to tell taxpayers how they should be using electricity and to tell us we are using too much of it watching big screen TVs.
Ironically, these nanny-state tactics are unnecessary. Bureaucrats don't have to browbeat consumers into saving energy. The cost of power isn't getting any less expensive. You don't have to buy into the global warming doctrine to want to lower your electricity bills.
Many television manufacturers, well aware that their customers want to save money, are developing organic light-emitting diode (OLED) televisions that are much more power efficient than today's sets.
And Wired.com points out "most of the TVs that would be banned by the proposal would be larger TVs that are already losing steam in the market anyway... consumers are already ahead of the game here. No matter what happens with the proposal, energy-hogging TVs will be gone within two years."
As usual, customers and companies are ahead of the bureaucrats. To cover the added $18 to $30 yearly cost of that big screen TV, people might choose to turn down the air conditioner, do a better job turning off the lights around the house, or waiting until the dishwasher is full before running it. People can find plenty of ways to be economical when they have to. They might even choose compact fluorescent light bulbs.
Just as the commission seeks to ban big televisions, the state legislature tried a similar tactic with attempts to ban incandescent light bulbs. But the legislature wisely stopped short of an outright ban in favor of a list of requirements that light bulbs must meet in the future. That list, however, was intentionally malleable so businesses and consumers would have some flexibility. Legislators, unlike the energy commissioners, are elected officials and need to be somewhat sensitive to what voters want.
If the energy commission moves to ban big screens, I suspect the commissioners will learn Californians take their televisions very seriously.
Steven Titch is a policy analyst at Reason Foundation. This column first appeared at FreedomPolicitics.com.
Amazon Experts Cautious on Climate Threat
Amazon Experts Cautious on Climate Threat, by Andrew Revkin
Dot Earth/TNYT, April 7, 2009, 2:54 pm
The lure of the “front-page thought” — for both scientists and the press — was very much on display at the recent Copenhagen summit on climate change. Presentations and speeches were followed by a wave of coverage, primarily in Europe, focused on what many papers said was strong new evidence of pending climate calamity.
Some scientists who attended the meeting pushed back. Mike Hulme of the University of East Anglia criticized efforts to cast the six-point manifesto released at the meeting’s end as the product of a broad consensus (simultaneously published on the Prometheus blog). Other scientists, who study facets of how global warming could affect things that matter — in particular the Amazon rain forest — criticized what they saw as overstatements coming out of the meeting and have now followed up afresh.
Yadvinder Malhi, a professor of ecosystem science at the University of Oxford, and Oliver Phillips, a professor of tropical ecology at the University of Leeds, have written a response to a story in the Guardian on a modeling study that projected that the Amazon forest was poised to die off. The scientists contend in a response published today in the paper that the single study, not yet peer reviewed, was laced with uncertainties downplayed both by the scientists describing it and the resulting news story.
(Dr. Malhi also contributed to my recent article assessing what is, and isn’t known, about possible tipping points related to global warming.)
Here’s the take-home point from Dr. Malhi and Dr. Phillips:
Forest dieback is a possibility that should not be ignored, and the probability increases with increasing air temperatures; but it is not inevitable. What is clear is that climate change magnifies the threat from advancing agricultural development, as a drier Amazon will burn more easily….
Climate change is undeniably a serious threat, and our comments should not be seized upon as an excuse for delay or inaction. Rather, conserving Amazonian forests both reduces the carbon dioxide flux from deforestation, which contributes up to a fifth of global emissions, and also increases the resilience of the forest to climate change. The potential impacts of climate change on the Amazon forest must be a call to action to conserve the Amazon, not a reason to retreat in despair.
Dot Earth/TNYT, April 7, 2009, 2:54 pm
The lure of the “front-page thought” — for both scientists and the press — was very much on display at the recent Copenhagen summit on climate change. Presentations and speeches were followed by a wave of coverage, primarily in Europe, focused on what many papers said was strong new evidence of pending climate calamity.
Some scientists who attended the meeting pushed back. Mike Hulme of the University of East Anglia criticized efforts to cast the six-point manifesto released at the meeting’s end as the product of a broad consensus (simultaneously published on the Prometheus blog). Other scientists, who study facets of how global warming could affect things that matter — in particular the Amazon rain forest — criticized what they saw as overstatements coming out of the meeting and have now followed up afresh.
Yadvinder Malhi, a professor of ecosystem science at the University of Oxford, and Oliver Phillips, a professor of tropical ecology at the University of Leeds, have written a response to a story in the Guardian on a modeling study that projected that the Amazon forest was poised to die off. The scientists contend in a response published today in the paper that the single study, not yet peer reviewed, was laced with uncertainties downplayed both by the scientists describing it and the resulting news story.
(Dr. Malhi also contributed to my recent article assessing what is, and isn’t known, about possible tipping points related to global warming.)
Here’s the take-home point from Dr. Malhi and Dr. Phillips:
Forest dieback is a possibility that should not be ignored, and the probability increases with increasing air temperatures; but it is not inevitable. What is clear is that climate change magnifies the threat from advancing agricultural development, as a drier Amazon will burn more easily….
Climate change is undeniably a serious threat, and our comments should not be seized upon as an excuse for delay or inaction. Rather, conserving Amazonian forests both reduces the carbon dioxide flux from deforestation, which contributes up to a fifth of global emissions, and also increases the resilience of the forest to climate change. The potential impacts of climate change on the Amazon forest must be a call to action to conserve the Amazon, not a reason to retreat in despair.
The Housing Crisis Isn't A Crisis - Stand back, says Todd Zywicki, and let the markets clear
The Housing Crisis Isn't A Crisis. By Peter Robinson
Stand back, says Todd Zywicki, and let the markets clear.
Forbes, Apr 10, 2009, 12:01 AM EDT
Law professor Todd Zywicki of George Mason University is composing a book, Bankruptcy Law and Policy in the Twenty-First Century, in which Zywicki picks a couple of fascinating fights.
One involves former Fed Chairman Alan Greenspan; the other, the entire band of academics, former business executives and career bureaucrats who make up the Obama administration's economic apparat.
Zywicki's altercation with Greenspan requires a word of background.
After retiring from the Fed in 2006, Greenspan enjoyed the kind of semi-divine status that used to be reserved for Roman emperors. Then a number of economists, notably John Taylor of Stanford, began to argue that the monetary policy Greenspan pursued from 2001 to 2004, when Greenspan expanded the money supply dramatically, represented a proximate cause--maybe even the principal cause--of the housing bubble.
Last month, Greenspan descended from his plinth to defend himself. As Fed chairman, he had only lowered short-term interest rates, he argued in the Wall Street Journal, not the long-term rates on which mortgage prices are based. "No one, to my knowledge," Greenspan huffed, "employs overnight interest rates--such as the Fed Funds rate--to determine the capitalization rate of real estate."
Enter Todd Zywicki.
"What Greenspan overlooks," Zywicki says, "are adjustable-rate mortgages. ARMs are really sensitive to shorter-term interest rates."
"Look at the data going back to nineteen-eighties," Zywicki continues. "When the spread between regular mortgages and ARMs is less than about 150 basis points, people tend to take out regular mortgages. But when that spread widens, they switch to ARMs.
"What Greenspan did was artificially drive down the prices of ARMs, widening the spread. Low interest rates on ARMs enabled ordinary Americans to get bigger mortgages than they would otherwise have believed they could afford. That pushed up home prices. And that created the updraft that brought in speculators."
From loose money to cheap ARMs to rising housing prices.
"Nobody acted nefariously," Zywicki says. "Greenspan was trying to save the economy, not wreck it. But he still created a bubble."
This brings us to Zywicki's disagreement with the Obama administration. Treasury Secretary Timothy Geithner, Director of the National Economic Bureau Lawrence Summers and the other adepts in the administration all argue that the bursting of the housing bubble amounts to a national tragedy. According to President Obama himself, the "crisis" is "unraveling homeownership, the middle class and the American Dream itself."
Zywicki's reply? Nonsense.
His research has revealed three distinct types of housing markets--and only one of the three shows real signs of distress. Even then, that distress is only in a limited number of areas.
The first type of market behaves the way markets are supposed to behave, with smooth adjustments between supply and demand. When prices rose in places such as Dallas and Charlotte, builders constructed new houses. When prices softened, builders stopped. "Prices in these markets rose gradually," Zywicki says, "and now they're settling back to earth. There hasn't been any tragedy."
The second type of market, which appears in New York, Boston, San Francisco and Washington, D.C., demonstrates a long history of price volatility. "The housing stock in these markets is constrained," Zywicki says, "either by geography--San Francisco is surrounded on three sides by water, for example--or land use controls." When demand in such a market increases, prices soar. And when demand weakens, prices plummet.
"But the people who live in these markets expect big price swings," Zywicki says. "They've learned to live with them. They're holding onto their homes because they're confident prices will eventually recover. Again, there hasn't been any tragedy."
The third type of market displays both the ability to expand the supply of houses that characterizes the first type of market and the price swings that characterize the second type. "Type three markets," Zywicki says, "are concentrated in the Sun Belt. Ordinary investors seem to have calculated that a lot of people would either retire or buy second homes in these places. And when prices went up, speculators moved in. Pure bubbles developed."
In type three markets, hundreds of thousands of new homes went up. This oversupply will now keep prices low for years. "Las Vegas, Phoenix, Tampa--those are the places you'll find the tragedies," Zywicki says.
Instead of frightening people by talking about the end of the American dream, Zywicki argues, the Obama administration should offer reassurance, stressing the specific, limited nature of the foreclosure problem. "Heck," Zywicki says, "41 out of the 50 states have foreclosure rates below the national mean."
Next, the administration should think long and hard about just who it wishes to bail out and why. "If we bail out anybody, they should only be people who want to stay in their homes but can't make the payments, not people who could make the payments but want to walk," Zywicki argues. The administration should consider helping homeowners, in other words, but not speculators--"and if you put no money down and don't have any equity in your house, you're not a homeowner."
The most important step the administration could take? To resist intervening in the housing market as a whole.
"Assistance for the relatively small number of people who are facing really tragic circumstances makes sense," Zywicki says, "but if the administration tries to push overall housing prices back up, it will only be asking for trouble. We overbuilt. That's the reality. And not even Obama can change it."
In short, the administration should learn from the example of Alan Greenspan. Even when it intervenes in the economy with the very best of intentions, the government has a way of producing disastrous consequences.
Stand back, says the professor at George Mason University--stand back and let the markets clear.
Peter Robinson, a research fellow at the Hoover Institution at Stanford University and contributor to RobinsonandLong.com, writes a weekly column for Forbes.
Stand back, says Todd Zywicki, and let the markets clear.
Forbes, Apr 10, 2009, 12:01 AM EDT
Law professor Todd Zywicki of George Mason University is composing a book, Bankruptcy Law and Policy in the Twenty-First Century, in which Zywicki picks a couple of fascinating fights.
One involves former Fed Chairman Alan Greenspan; the other, the entire band of academics, former business executives and career bureaucrats who make up the Obama administration's economic apparat.
Zywicki's altercation with Greenspan requires a word of background.
After retiring from the Fed in 2006, Greenspan enjoyed the kind of semi-divine status that used to be reserved for Roman emperors. Then a number of economists, notably John Taylor of Stanford, began to argue that the monetary policy Greenspan pursued from 2001 to 2004, when Greenspan expanded the money supply dramatically, represented a proximate cause--maybe even the principal cause--of the housing bubble.
Last month, Greenspan descended from his plinth to defend himself. As Fed chairman, he had only lowered short-term interest rates, he argued in the Wall Street Journal, not the long-term rates on which mortgage prices are based. "No one, to my knowledge," Greenspan huffed, "employs overnight interest rates--such as the Fed Funds rate--to determine the capitalization rate of real estate."
Enter Todd Zywicki.
"What Greenspan overlooks," Zywicki says, "are adjustable-rate mortgages. ARMs are really sensitive to shorter-term interest rates."
"Look at the data going back to nineteen-eighties," Zywicki continues. "When the spread between regular mortgages and ARMs is less than about 150 basis points, people tend to take out regular mortgages. But when that spread widens, they switch to ARMs.
"What Greenspan did was artificially drive down the prices of ARMs, widening the spread. Low interest rates on ARMs enabled ordinary Americans to get bigger mortgages than they would otherwise have believed they could afford. That pushed up home prices. And that created the updraft that brought in speculators."
From loose money to cheap ARMs to rising housing prices.
"Nobody acted nefariously," Zywicki says. "Greenspan was trying to save the economy, not wreck it. But he still created a bubble."
This brings us to Zywicki's disagreement with the Obama administration. Treasury Secretary Timothy Geithner, Director of the National Economic Bureau Lawrence Summers and the other adepts in the administration all argue that the bursting of the housing bubble amounts to a national tragedy. According to President Obama himself, the "crisis" is "unraveling homeownership, the middle class and the American Dream itself."
Zywicki's reply? Nonsense.
His research has revealed three distinct types of housing markets--and only one of the three shows real signs of distress. Even then, that distress is only in a limited number of areas.
The first type of market behaves the way markets are supposed to behave, with smooth adjustments between supply and demand. When prices rose in places such as Dallas and Charlotte, builders constructed new houses. When prices softened, builders stopped. "Prices in these markets rose gradually," Zywicki says, "and now they're settling back to earth. There hasn't been any tragedy."
The second type of market, which appears in New York, Boston, San Francisco and Washington, D.C., demonstrates a long history of price volatility. "The housing stock in these markets is constrained," Zywicki says, "either by geography--San Francisco is surrounded on three sides by water, for example--or land use controls." When demand in such a market increases, prices soar. And when demand weakens, prices plummet.
"But the people who live in these markets expect big price swings," Zywicki says. "They've learned to live with them. They're holding onto their homes because they're confident prices will eventually recover. Again, there hasn't been any tragedy."
The third type of market displays both the ability to expand the supply of houses that characterizes the first type of market and the price swings that characterize the second type. "Type three markets," Zywicki says, "are concentrated in the Sun Belt. Ordinary investors seem to have calculated that a lot of people would either retire or buy second homes in these places. And when prices went up, speculators moved in. Pure bubbles developed."
In type three markets, hundreds of thousands of new homes went up. This oversupply will now keep prices low for years. "Las Vegas, Phoenix, Tampa--those are the places you'll find the tragedies," Zywicki says.
Instead of frightening people by talking about the end of the American dream, Zywicki argues, the Obama administration should offer reassurance, stressing the specific, limited nature of the foreclosure problem. "Heck," Zywicki says, "41 out of the 50 states have foreclosure rates below the national mean."
Next, the administration should think long and hard about just who it wishes to bail out and why. "If we bail out anybody, they should only be people who want to stay in their homes but can't make the payments, not people who could make the payments but want to walk," Zywicki argues. The administration should consider helping homeowners, in other words, but not speculators--"and if you put no money down and don't have any equity in your house, you're not a homeowner."
The most important step the administration could take? To resist intervening in the housing market as a whole.
"Assistance for the relatively small number of people who are facing really tragic circumstances makes sense," Zywicki says, "but if the administration tries to push overall housing prices back up, it will only be asking for trouble. We overbuilt. That's the reality. And not even Obama can change it."
In short, the administration should learn from the example of Alan Greenspan. Even when it intervenes in the economy with the very best of intentions, the government has a way of producing disastrous consequences.
Stand back, says the professor at George Mason University--stand back and let the markets clear.
Peter Robinson, a research fellow at the Hoover Institution at Stanford University and contributor to RobinsonandLong.com, writes a weekly column for Forbes.
Politics is driving the destruction of the District's school voucher program
Presumed Dead. WaPo Editorial
Politics is driving the destruction of the District's school voucher program.
WaPo, Saturday, April 11, 2009; A12
EDUCATION SECRETARY Arne Duncan has decided not to admit any new students to the D.C. voucher program, which allows low-income children to attend private schools. The abrupt decision -- made a week after 200 families had been told that their children were being awarded scholarships for the coming fall -- comes despite a new study showing some initial good results for students in the program and before the Senate has had a chance to hold promised hearings. For all the talk about putting children first, it's clear that the special interests that have long opposed vouchers are getting their way.
Officials who manage the D.C. Opportunity Scholarship Program sent letters this week to parents notifying them that the scholarships of up to $7,500, were being rescinded because of the decision by the Education Department. Citing the political uncertainty surrounding vouchers, a spokesperson for Mr. Duncan told us that it is not in the best interest of students and their parents to enroll them in a program that may end a year from now. Congress conditioned funding beyond the 2009-10 school year on reauthorization by Congress and approval by the D.C. Council. By presuming the program dead -- and make no mistake, that's the insidious effect of his bar on new enrollment -- Mr. Duncan makes it even more difficult for the program to get the fair hearing it deserves.
That's not to mention the impact of the last-minute decision on these families. Many of the public charter schools already have cut off enrollments for the upcoming school year; the deadline for out-of-boundary transfers for the public schools has passed. No doubt Mr. Duncan is right about possible disruption for new students if the program were to end. But scholarship officials have been upfront with parents about the risks, and the decision really should be theirs. Let them decide whether they want to chance at least one year in a high-quality private school versus the crapshoot of D.C. public schools.
That, after all, is what this program is about: giving poor families the choice that others, with higher salaries and more resources, take for granted. It's a choice President Obama made when he enrolled his two children in the elite Sidwell Friends School. It's a choice Mr. Duncan had when, after looking at the D.C. schools, he ended up buying a house in Arlington, where good schools are assumed. And it's a choice taken away this week from LaTasha Bennett, a single mother who had planned to start her daughter in the same private school that her son attends and where he is excelling. Her desperation is heartbreaking as she talks about her daughter not getting the same opportunities her son has and of the hardship of having to shuttle between two schools.
It's clear, though, from how the destruction of the program is being orchestrated, that issues such as parents' needs, student performance and program effectiveness don't matter next to the political demands of teachers' unions. Congressional Democrats who receive ample campaign contributions from the National Education Association and the American Federation of Teachers laid the trap with budget language that placed the program on the block. And now comes Mr. Duncan with the sword.
Politics is driving the destruction of the District's school voucher program.
WaPo, Saturday, April 11, 2009; A12
EDUCATION SECRETARY Arne Duncan has decided not to admit any new students to the D.C. voucher program, which allows low-income children to attend private schools. The abrupt decision -- made a week after 200 families had been told that their children were being awarded scholarships for the coming fall -- comes despite a new study showing some initial good results for students in the program and before the Senate has had a chance to hold promised hearings. For all the talk about putting children first, it's clear that the special interests that have long opposed vouchers are getting their way.
Officials who manage the D.C. Opportunity Scholarship Program sent letters this week to parents notifying them that the scholarships of up to $7,500, were being rescinded because of the decision by the Education Department. Citing the political uncertainty surrounding vouchers, a spokesperson for Mr. Duncan told us that it is not in the best interest of students and their parents to enroll them in a program that may end a year from now. Congress conditioned funding beyond the 2009-10 school year on reauthorization by Congress and approval by the D.C. Council. By presuming the program dead -- and make no mistake, that's the insidious effect of his bar on new enrollment -- Mr. Duncan makes it even more difficult for the program to get the fair hearing it deserves.
That's not to mention the impact of the last-minute decision on these families. Many of the public charter schools already have cut off enrollments for the upcoming school year; the deadline for out-of-boundary transfers for the public schools has passed. No doubt Mr. Duncan is right about possible disruption for new students if the program were to end. But scholarship officials have been upfront with parents about the risks, and the decision really should be theirs. Let them decide whether they want to chance at least one year in a high-quality private school versus the crapshoot of D.C. public schools.
That, after all, is what this program is about: giving poor families the choice that others, with higher salaries and more resources, take for granted. It's a choice President Obama made when he enrolled his two children in the elite Sidwell Friends School. It's a choice Mr. Duncan had when, after looking at the D.C. schools, he ended up buying a house in Arlington, where good schools are assumed. And it's a choice taken away this week from LaTasha Bennett, a single mother who had planned to start her daughter in the same private school that her son attends and where he is excelling. Her desperation is heartbreaking as she talks about her daughter not getting the same opportunities her son has and of the hardship of having to shuttle between two schools.
It's clear, though, from how the destruction of the program is being orchestrated, that issues such as parents' needs, student performance and program effectiveness don't matter next to the political demands of teachers' unions. Congressional Democrats who receive ample campaign contributions from the National Education Association and the American Federation of Teachers laid the trap with budget language that placed the program on the block. And now comes Mr. Duncan with the sword.
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