Tuesday, September 29, 2009

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WTO Forum - Trade and Development

Aid for Trade Global Review 2009

Fox’s Affirmative Action Baby Whines – by David Horowitz

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Marc Lamont Hill has responded to my Newsreal post about The O’Reilly Factor’s decision to make him their black in residence and to provide him a whole segment recently to share with us his views of the crisis with Iran. I pointed out that Hill’s expertise, such as it is, is hip-hop culture — the very low end, in other words, of popular music which is better known as rap. Why was Hill on at all? Because he’s Fox’s black academic. But what kind of academic? With an expertise in rap music, Hill has a professorship at Columbia University, illustrating my often made observation that our liberal arts colleges have fallen to their lowest intellectual level in 100 years.

marc-lamont-hill

My objection to Hill’s appearance as a rap professor pontificating about geopolitical issues is it fed the soft racism of low expectations and that it was in fact an insult to all those black academics who would actually have had something intelligent to say about the Iran crisis.

Hill has now had the bad judgment to respond to my post on his Twitter. This has revealed another side of Hill which is equally illuminating. His Twitter web page is wall-papered with one of his heroes, Assata Shakur — a fugitive killer, wanted for the cold-blooded murder of a New Jersey state trooper in 1973. She has been protected for all the intervening years by the most sadistic dictator in the Americas, Fidel Castro.

So here’s another dimension to the poor judgment Fox has shown in selecting

The image of Assata Shakur, the Castro-protected fugitive, that wallpapers Hill's Twitter page.The image of Assata Shakur, the Castro-protected fugitive, that wallpapers Hill’s Twitter page.

Marc Lamont Hill, out of all the black intellectuals available, to talk about cultural issues (let alone international affairs.) Hill is one of a community of black intellectuals promoted well beyond their abilities — Michael Eric Dyson and Cornel West are two obvious others — who are poisoning the minds of black youth with the idea that politically correct murderers like Assata Shakur are heroes, and patriotic Americans are devils incarnate. Of course confronting O’Reilly — and cherishing his air time and Fox stipend — Hill is far more moderate on TV than he probably is in his classroom or at the public speaking venues his gig on Fox makes possible.

Hill’s twitter reply to my post is typical in its illiteracy. He says I’ve made a career out of calling people Communists and anti-Semites, as though such people don’t exist. In fact, if his admiration for a murderer in the protection of a Communist dictator is any indication, he understands that Communists do exist but just doesn’t think they deserve to be condemned. Someone like myself who has the bad manners to point out their existence, therefore, must be ared-baiter or, better yet, a “McCarthyite.”

Unholy Alliance - Radical Islam and the American Left by David Horowitz

Hill’s second complaint is that I wrote a book called Unholy Alliance about radical Islam but I’m not an expert in Islam. This is supposed to take the heat off him for making inane comments on the Iranian crisis. Actually, my book — which he obviously didn’t read — is about theAmerican left — not Islam — and is an attempt to explain its tacit alliance with the Islamic totalitarians of al-Qaeda and Hamas. This is a subject I happen to be an expert on. I have studied the American left longer and know more about it than Professor Hill does about hip-hop culture or, for that matter, about me.

Germany Moves Right – by Jacob Laksin

german

One of the ironies of the Obama administration’s experiment with European-style social democracy – complete with growing government, higher taxes, and increased regulation – is that it comes at a time when Europe is moving away from that very model. The latest example comes from Germany where, in a transformative general election this weekend, the voters of Europe’s largest economy decided that they wished to stay that way.

When the results were in, Germans had elected the so-called “black-yellow” coalition of Chancellor Angela Merkel’s centrist Christian Democrats (CDU) and the libertarian-leaning Free Democrats (FDP), while handing the country’s largest left wing-party, the Social Democrats (SPD), their worst defeat in the sixty-year history of the German Federal Republic. The election marks the ascent of a German government unbeholden to the anti-capitalist dogmas and factional loyalties that have stalled reform of the country’s unsustainably bloated welfare state under previous ruling coalitions.

Aside from Merkel, who won her second term as chancellor, the big winner in the election was the FDP. Not only did the party exceed pollsters’ expectations, but it will now have the chance to exert real influence over German economic policy. The FDP’s free-market friendly leader, Guido Westerwelle, a reformist who calls for lower taxes and for relaxing Germany’s rigid labor laws, bids fair to become the next foreign minister and vice chancellor. The party also is likely to get cabinet posts with a role in shaping economic policy.

The upsides, for Germany’s economic growth and for its global competitiveness more broadly, could be considerable. The FDP is often referred to as Germany’s “pro-business” party, but it is perhaps more accurate to say that it is the country’s pro-market party. Bucking the traditional European embrace of interventionist government, Westerwelle has long advocated a shift towards “less taxation, less government, and deregulation,” as he put it in a 2003 speech.

Nor has the FDP diluted its economic prescriptions as a result of the global financial crisis. If anything, the party has urged a more restrained response from governments, with Westerwelle warning that they should resist the temptation “to be a player in the market as well as the referee” – a position less-than-harmonious with the Obama administration’s approach of nationalizing troubled industries.

By contrast, the FDP wants the German government to do less. That would mean, most crucially, less regulation. One problem area concerns Germany’s cumbersome labor laws, which make it a challenge for businesses to hire and fire new workers, and thus feed a cycle of unemployment and business flight that prevents economic growth. A tax burden that drives away investment is another flaw of the current system. According to the Economist, the bureaucracy required to pay Germany’s corporate tax runs companies $28 billion a year. Facing such costs, it’s no wonder that German companies choose to relocate operations to Eastern Europe, India, and Asia. Not least, the FDP has called for the deregulation of state-run companies. Deutshe Bahn, Germany’s massively indebted railway operator, is a prime candidate for privatization, and has remained under government ownership thanks chiefly to the obstructionism of the German Left.

Of course, even for center-right government, scaling down the size of the state will not be easy. Germany’s powerful unions stand poised to block the new government’s reforms. But in pledging to forge ahead with her plans to cut taxes and deregulate the labor market, Chancellor Merkel has gotten a boost from the defeat of the SPD, her unruly former coalition partner.

In what the German press uniformly described as a “debacle,” the SPD was roundly thrashed at the polls. As recently as 2005, the SPD was riding high, with one of its own, Gerhard Shroeder, installed as chancellor. Four years on, the SPD cannot win enough support to be included in the governing coalition. In a particularly poignant measure of the party’s fall from prominence, even Schroeder’s former economics minister, Wolfgang Clement, voted for Westerwelle and the FDP in the weekend election.

The election result is more than a political setback for the SDP. It is also a blow for its vision of a perpetual welfare state and an activist government to manage the economy. Although the SPD did its level best during the recent election to stoke the class resentments that underpin that vision, urging higher taxes on the rich and a new tax for stock exchange trades, the message failed to galvanize enough voters.

That the election represented something more decisive than a temporary power shift was tellingly affirmed up by Merkel’s SPD rival, Frank-Walter Steinmeier, who lamented that the election result was “a bitter day for the social-democracy.” The old European politics are out of fashion, ousted by a platform of limited government, tax-cutting, and deregulation that seems closer to an American ideal.

So much the stranger, then, that the Obama administration has adopted the former. This divide has been evident for some time. When the administration passed its $787 billion package earlier this year, it urged Germany to emulate its big-spending ways. Instead, Merkel passed a smaller, more targeted, $124 billion stimulus. When the Obama administration then pressed for another round of stimulus spending, Merkel resisted. “If we want to actually strengthen the effect of such packages you simply have to implement them and not talk about the next one before the first has actually taken effect,” Merkel warned. Evidence suggests that Merkel had the better of that argument. While the US economy is still ailing, Germany has, however tentatively, emerged from the worldwide recession.

Germany’s election suggests that there is an economics lesson to be learned from Europe. It’s just not the lesson that the Obama administration seems bent on teaching the country.

Whose Conspiracy? – by David Horowitz

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Question: What’s the difference between the Clintons’ “vast right wing conspiracy” and Joe McCarthy’s “conspiracy so immense”? Actually, and despite a lot of liberal obfuscation on the subject, the conspiracy McCarthy was referring to was real. The Communist Party was a conspiratorial organization by any definition of the term and was run (and financed) by Moscow, America’s mortal enemy at the time. There is no disputing these facts.

Hillary’s conspiracy on the other hand (and Bill’s this weekend) are the Clintons’ inventions. Or rather invention, since Bill’s remarks today are about the alleged conspiracy to which Hillary referred. That conspiracy was supposed to have fraudulently concocted Bill’s liason with Monica — the phrase was in fact a claim that Bill’s adulteries with which Hillary was entirely familiar were made up out of whole cloth by “the vast right wing conspiracy” in order to discredit her husband and defeat his progressive agendas.

Hillary was lying both about the affair and about right-wingers making it up. So Bill’s new lie — also a claim that the conspirators are out to thwart Obama’s progressive agendas — is just a doubling down to deflect attention from the disaster that Obama’s presidency is rapidly becoming. Funny that the witch-hunt which the Clinton are attempting to incite is unnoticed by the same liberals — uh progressives — who have pretended all these years that the communist conspiracy never existed. (And just in case there are any trolls from the Village Voicelurking — this doesn’t mean I think McCarthy did no wrong.)

Netanyahu’s Quiet Success – by Daniel Pipes

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Almost unnoticed, Binyamin Netanyahu won a major victory last week when Barack Obama backed down on a signature policy initiative. This about-face suggests that U.S.-Israel relations are no longer headed for the disaster I have been fearing.

Four months ago, the new U.S. administration unveiled a policy that suddenly placed great emphasis on stopping the growth in Israeli “settlements.” (A term I dislike but use here for brevity’s sake.) Surprisingly, American officials wanted to stop not just residential building for Israelis in the West Bank but also in eastern Jerusalem, a territory legally part of Israel for nearly thirty years.

Secretary of State Hillary Clinton launched the initiative on May 27, announcing that the president of the United States “wants to see a stop to settlements – not some settlements, not outposts, not natural growth exceptions,” adding for good measure, “And we intend to press that point.” On June 4, Obama weighed in: “The United States does not accept the legitimacy of continued Israeli settlements. … It is time for these settlements to stop.” A day later, he reiterated that “settlements are an impediment to peace.” On June 17, Clinton repeated: “We want to see a stop to the settlements.” And so on, in a relentless beat.

Focusing on settlements had the inadvertent but predictable effect of instantly impeding diplomatic progress. A delighted Mahmoud Abbas of the Palestinian Authority responded to U.S. demands on Israel by sitting back and declaring that “The Americans are the leaders of the world. … I will wait for Israel to freeze settlements.” Never mind that Abbas personally had negotiated with six Israeli prime ministers since 1992, each time without an offer to stop building settlements: why should he now demand less than Obama?

In Israel, Obama’s diktat prompted a massive popular swing away from him and toward Netanyahu. Further, Netanyahu’s offer of even temporary limitations on settlement growth in the West Bank prompted a rebellion within his Likud Party, led by the up-and-coming Danny Danon.

Poster showing Barak Obama in Arab headdress, seen in downtown Jerusalem on June 14, 2009.

The geniuses of the Obama administration eventually discerned that this double hardening of positions was dooming their naïve, hubristic plan to settle the Arab-Israeli conflict within two years. The One’s reconciliation with reality became public on Sept. 22 at a “summit” he sponsored with Abbas and Netanyahu (really, a glorified photo opportunity). Obama threw in the towel there, boasting that “we have made progress” toward settlement of the Israeli-Palestinian conflict and offering as one indication that Israelis “have discussed important steps to restrain settlement activity.”

Those eight words of muted praise for Netanyahu’s minimal concessions have major implications:

  • Settlements no longer dominate U.S.-Israel relations but have reverted back to their usual irritating but secondary role.
  • Abbas, who keeps insisting on a settlement freeze as though nothing has chaed, suddenly finds himself the odd man out in the triangle.
  • The center-left faction of the Obama administration (which argues for working with Jerusalem), as my colleague Steven J. Rosen notes, has defeated the far-left faction (which wants to squeeze the Jewish state).

Ironically, Obama supporters have generally recognized his failure while critics have tended to miss it. A Washington Post editorial referred to the Obama administration’s “miscalculations” and Jonathan Freedland, a Guardian columnist, noted that “Obama’s friends worry that he has lost face in a region where face matters.”

In contrast, Obama critics focused on his announcing, just one day after the mock summit, that “America does not accept the legitimacy of continued Israeli settlements” – a formulaic reiteration of long-established policy that in no way undoes the concession on settlements. Some of those I admire most missed the good news: John Bolton, former U.S. ambassador to the United Nations, stated that Obama “put Israel on the chopping block,” while critics within the Likud Party accused Netanyahu of having “prematurely celebrated” an American policy shift. Not so. Policy winds can always change, but last week’s capitulation to reality has the hallmarks of a lasting course correction.

I have repeatedly expressed deep worries about Obama’s policy versus Israel, so when good news does occur (and this is the second time of late), it deserves recognition and celebration. Hats off to Bibi – may he have further successes in nudging U.S. policy onto the right track.

Next on the agenda: the Middle East’s central issue, namely, Iran’s nuclear buildup.

Merkel Has New Chance to Deliver on Old Promises: Matthew Lynn

Commentary by Matthew Lynn

Sept. 29 (Bloomberg) -- Not many politicians get a dress rehearsal for government. German Chancellor Angela Merkel is one of them.

In retrospect, the first four years of Merkel’s time in office might well prove to be a trial run. Now with a successful campaign for re-election behind her, and at the head of a center-right government rather than the uneasy “grand coalition” with Social Democrats of her first term, she has a chance to show what she is genuinely made of.

In her next term, she has the opportunity to be what she promised four years ago: a reforming, pro-business leader in the style of Margaret Thatcher of the U.K. two decades ago.

Germany certainly needs it. So does Europe.

The pace of change in Germany has been glacial. It needs a dynamic liberalizing of its market to unleash the kind of entrepreneurial vigor that transformed its economy in the 1950s.

The euro-area economy needs one country to lead it. France under President Nicolas Sarkozy appears to have lost interest in economic progress. The U.K. looks set to spend a decade dealing with the mess created by the credit crunch. Spain is in an even worse mess. If any country is going to have the capacity to lead Europe out of this recession, it can only be Germany.

Will it happen?

The opportunity is certainly there.

Easy Victory

The German elections held over the weekend turned into an easy victory for the center-right. Instead of having to govern in coalition with the Social Democrats, the way is now clear for Merkel to form a coalition with the pro-market Free Democratic Party. The pressure on the new government will be coming from the right, not from the left.

Moreover, the left now looks to be permanently fractured. The Social Democrats scored a dismal 23 percent of the vote. That wasn’t so much because Germans have drifted right, as because the left has split. The anti-capitalist Left Party won 11.9 percent while the Greens scored 10.7 percent. That matters. With the left broken into three parties, it is unlikely it can win power again for at least a generation. Merkel, together with the FDP, now have the chance to shift Germany dramatically in a pro-market direction.

That doesn’t mean it will happen. The markets were disappointed by Merkel’s first term. After campaigning on a radical platform, prompting hopes among investors, she turned into a traditional German consensus politician. That might have been because she was hemmed in by a coalition with the Social Democrats. It might be because those are her core beliefs. We are probably about to find out.

‘Far-Reaching Reforms’

“A CDU/CSU-FDP coalition could bring about far-reaching reforms,” Barclays Plc Chief Economist Thorsten Polleit said in a note to investors on the elections.

Indeed it could. The Free Democrats promised tax reform, with a top rate of 35 percent for income tax, and a bottom rate of 10 percent. A plan like that would almost make Germany a tax haven. It might even turn Frankfurt back into a major financial center once again: just think about the comparison with the top tax rate of 50 percent planned for London’s financiers.

It is unlikely that Merkel will allow her partners in government to push through anything too radical. Even so, the stage does seem set for a tax-cutting administration, and one that is more willing to take on the entrenched power of the trade unions. After all, the Free Democrats actually increased their votes in the election. That gives them power and momentum, always the two crucial factors in politics.

What Germany Needs

There is little debate about the kind of reform that Germany needs.

Its big-company, export-led, manufacturing-dominated economy must be reinvented for the 21st century. It needs small companies that concentrate as much on design and marketing as on precision engineering; more-flexible employment rules to create new jobs as fast as it gets rid of old ones; a financial sector that can deliver plenty of capital to entrepreneurs; a retail sector that gets Germans shopping again; and a tax system that rewards work and success, instead of punishing it.

The rest of the world tends to view Germany as an intensively conservative country, wedded to its social-market model. But, of course, in the 1950s it was one of the most creatively entrepreneurial countries in the world. With the right policies it can be again.

German Impact

Germany has a chance to influence how the global economy develops in the next five years in two significant ways.

When political leaders talk about rebalancing the global economy, they tend to be referring to China. Yet Germany is the other big economy with a huge trade surplus. A tax-cutting, growing, consuming Germany would be a big step toward that rebalanced economy.

And it could take over the leadership of a European economy that looks bereft of inspiration. With the U.K. and Spain, the powerhouses of the continent’s growth in the past decade, stuck in recessions that could last for years, growth has to come from somewhere. Germany is the only realistic option.

Now it is up to Merkel and her new allies to deliver.

Free from the shackles of her centre-left coalition, Germany's leader can launch a bold new era

Alan Posener

It's the morning after in Germany. All through the campaign, the chattering and writing classes were moaning that the election thing was a bore – we were going to get Angie as chancellor no matter how the election turned out. Well, Angie we got. But the country has woken up to the fact that Merkel II is going to lead a very different coalition to that led by Merkel I. And given her chameleon-like capacity for adapting, Angela Merkel could yet turn out to be Germany's Maggie Thatcher.

Goodness knows, the country needs a shake-up. The economic crisis has exposed Germany's vulnerability to international markets. The social safety net may have cushioned the impact of the industrial downturn, but the costs are horrific, and the Opel fiasco illustrates the dangers of relying too much on engineering skills and industrial prowess. Anything we can do, the Chinese can do better. And cheaper. But the whole system, from education via immigration to taxation, is geared to producing, protecting and pampering the famed Facharbeiter, the skilled industrial worker, and the mammoth companies that employ him (it's still mostly him, as it is in the German boardroom).

Smaller entrepreneurs and professionals have been squeezed from all sides: overtaxed, burdened by high payments for the social system, strict rules on hiring and firing and minimum wages – and unable to get hold of credit. The resulting frustration has led to the rise of the liberal Free Democrats, Merkel's new partners in government.

As well as lower taxes, a reform of costly healthcare and a more Anglo-Saxon approach to the labour market, the new government will probably want to keep Germany's nuclear plants running longer, to keep energy prices down and meet carbon targets. Look for an emphasis on competitiveness rather than consensus; growth rather than greenery; smart social systems rather than solidarity.

Merkel II, as Germans are just beginning to realise, means the end of an era: 11 years of Social Democrats in power (seven with the Greens, four with Merkel's Christian Democrats). It's not far-fetched to say that the era of New Labour is coming to an end in Europe. Tony Blair hijacked Conservative positions and profited from capitalism's 20-year boom. In Germany, Gerhard Schröder did much the same. Now David Cameron is hijacking New Labour's positions, as Merkel has been hijacking Social Democrat positions, with devastating effect. In opposition, Labour and the Social Democrats will inevitably drift to the left; in Germany, this will include some kind of rapprochement with the ex-Communist Left party – which should make them unelectable for the next decade.

In Europe a triumvirate of Merkel, Nicolas Sarkozy and Cameron – backed by José Manuel Barroso, the newly elected commission president – should ensure that the EU becomes leaner, meaner and more competitive. Germany's incoming foreign minister, Guido Westerwelle, is inexperienced, but Merkel has always been her own foreign minister, so don't expect any major changes.

The foreign policy challenges, however, are huge. It's becoming more and more apparent that Barack Obama is determined not to let foreign entanglements get in the way of his domestic agenda. In this, he is more like George Bush before 9/11 than Europeans care to recognise. Similarly, Obama seems to reason that the best way to get the Europeans to do more for international security is for America to do less. That could backfire. Europeans love to complain about the US as the world's sheriff, but they are reluctant to pin on the deputy's star. If Merkel can help Europe rise to the occasion, she may yet earn herself a place in history.

The threat of 'stealth jihad'

A Denver airport shuttle driver from Afghanistan who plotted to blow up subway trains in New York City. A Jordanian who tried to destroy one of Dallas' tallest skyscrapers. An American who thought he was detonating a truck bomb aimed at a federal courthouse in Springfield, Ill.

Law enforcement authorities who successfully stymied these attacks have been at pains to emphasize that there are no connections between the three.

Of course there are.

Maybe it will prove to be the case that the three suspects at the heart of these interrupted plots - Najibullah Zazi, Hosam Maher Husein Smadi and Michael C. Finton (also known as Talib Islam) - had no connection in a tactical or operational sense.

Still, it is absurd, and extremely dangerous, to insist that they are not connected in at least one way: What apparently animated all three of these suspects (and perhaps a number of others believed to have been involved in the New York plot who are still at large) is the seditious, supremacist theo-political-legal program authoritative Islam calls Shariah.

Shariah requires its adherents to engage in jihad - the struggle to bring about the triumph of Islam worldwide through whatever means are available. Shariah explicitly calls for the use of violent techniques designed to instill terror in those who stand in the way of a global Muslim theocracy.

Lethal truck bombs, pellet-laced explosive vests and backpacks and bombs or hijackers aboard aircraft already have been used for this purpose. It is a matter of time before vastly more destructive weapons of mass destruction (chemical, biological, radiological or nuclear) become available to jihadists who believe that, pursuant to Shariah, they are fulfilling Allah's will when they kill "infidels" or otherwise force them to submit to Islam.

Even more insidious, though, is what Robert Spencer calls "stealth jihad." This practice involves using myriad nonviolent measures to insinuate Shariah into non-Muslim societies. Adherents demand such concessions as special treatment for them and their faith in public spaces, private corporations, schools, communities and government at every level.

The prime mover behind these demands is the Muslim Brotherhood, an organization that shares the violent jihadists' commitment to advance Shariah's end state of a global caliphate, but seek (for the moment, at least) to do so nonviolently.

The successful prosecution last year of one Brotherhood front, the Holy Land Foundation, established that the organization's mission is "to destroy Western civilization from within ... by its own miserable hand."

What happens as tolerant democratic societies try to accommodate themselves to the stealthy form of jihad, backed by the persistent threat of the violent form - if not its actual occurrence, can be seen in much of Western Europe. For example, France now has 751 zones urbaines sensibles - Muslim-only areas that amount to "no-go" zones for French authorities.

In these zones, Shariah rules instead of the laws of the host government, at the expense most notably of women's rights, due process and public order (especially for Jews, Christians and other non-Muslims).

To be sure, accommodations to date to Shariah have not metastasized in the United States to nearly this extent. There are, however, numerous worrisome examples of concessions that have been made here, too.

To cite a few: Taxpayer-financed foot baths for Muslims installed at state universities; corporations providing Muslim-only prayer rooms and time off for prayers; government-sanctioned discrimination by taxi drivers against passengers deemed "impure" (haram) because they have alcohol or dogs; unhygienic practices in food plants to accommodate the preferences of Muslim workers; government-offered Shariah-compliant mortgages; Islamic proselytizing in public school curricula, etc.

The failure by U.S. and other governments' officials to recognize the connection between Shariah and jihad (of either the violent or stealthy kind) is like a refusal to acknowledge that there is a common virus causing an outbreak of swine flu.

How could the medical establishment hope to identify appropriate prophylactic measures (for instance: Keep children in school or shut the schools down? Take antibiotics or not?) if it were not permitted to understand the nature of the virus? There certainly would be little chance of developing effective vaccines under those circumstances.

We face approximately the same problem if we require our law enforcement, intelligence, homeland security and military personnel to behave as though there is no toxic virus - think of it as the "anti-swine flu," since pork is the ultimate in haramunder Shariah - animating those seeking to destroy us, our government and our freedom-loving way of life.

At best, we will be able to stop some of the attacks the jihadists are plotting against us. We certainly will not be able to defeat the disease and thereby protect Western civilization from its potential for truly pandemic virulence.

Our natural allies in taking such a stance against Shariah are the many millions of Muslims around the world whose practice of their faith does not involve adherence to this medieval, barbaric and totalitarian program.

Indeed, most Muslim immigrants in America came here to get away from Shariah in their native lands. Only by differentiating such Muslims from the carriers of this lethal virus can we hope to inoculate them against the spread of the disease - and enlist their help in protecting the rest of us by keeping American Shariah-free.

Frank J. Gaffney Jr. is president of the Center for Security Policy, a columnist for The Washington Times and host of the nationally syndicated program, "Secure Freedom Radio."

Entrevista Premio Nobel de economia Parte 2 de 3 - Septiembre 23, 2009

Entrevista Premio Nobel de economia Parte 1 de 3 - Septiembre 23, 2009

Entrevista Premio Novel Parte 3 de 3 - Septiembre 23, 2009

The Myth of U.S. Government Benevolence (Part 1 of 3)

The Myth of U.S. Government Benevolence (Part 2 of 3)

The Myth of U.S. Government Benevolence (Part 3 of 3)

Ron Paul 9/28/2009 The Real Reasons Behind The Federal Reserve's Secrecy

Government Extortion: Egyptian-Style and American-Style

by Mark R. Crovelli

Government Extortion, Egyptian-Style

On my return voyage from Egypt last week, I was treated to a good, old-fashioned police shakedown at Cairo International Airport. I was in transit from Amman, Jordan at the time, and I was trying to make my way to a different terminal in order to catch my connecting flight stateside. Unfortunately for me, the administrators of Cairo International Airport have not deemed it necessary to set up a transportation system between the terminals of the airport for transit passengers, so travelers wishing to change terminals need to miraculously find out which of the four terminals they are flying out of, and find someone who can "arrange" transportation for them.

After miraculously discovering that my flight was departing out of terminal 1, I scrounged around until I finally found a member of the airport staff willing to arrange transportation for me. He informed me, however, that I would have to wait in the passport control annex for eight hours (just before my departure time) before anyone would be willing to take me to the other terminal. After I told him I would need to eat at some point during the eight hour wait, he finally consented to allow me to go up to the food court of the terminal I was currently in, if I would promise to return in six hours’ time. My word was promptly given, and I was allowed to enter a remote security screening area.

As soon as I entered the screening area I knew that I was in a vulnerable position. The metal detector operator and the x-ray operator were conversing loudly when I entered into the room, alone, but they stopped talking entirely when they caught sight of me. I placed my backpack on the conveyor and walked through the metal detector acutely aware of their stares, how American I looked at the time, and how isolated the three of us were in that remote part of the airport.

I did not set off the metal detector as I passed through, but I was nevertheless directed to raise my arms for a pat-down. My tin of smokeless tobacco piqued the screener’s interest, as did the lump in my front pocket, and he motioned for me to remove them for inspection. The contents of the tobacco tin fascinated both of them. They passed it back and forth, sniffing it while laughing and wincing at the spicy odor. One motioned to me questioningly whether the tobacco was meant for chewing, making a chomping movement with his jaws. In reply, I motioned to him that the tobacco was meant to be placed inside the lower lip, and I made the motion of spitting like an old western cowboy. Both of them laughed, and the tobacco was returned to me.

The contents of my front pocket were of even more interest to them. I had stupidly placed a large folded wad of American 20’s in my pocket, along with my wallet, which was overflowing with Egyptian pounds (a lot of paper, to be sure, but really only worth about $20 US). The metal detector operator sighed when he saw the wad of foreign green paper, and couldn’t help releasing the word "moneeey" softly in my native tongue. The x-ray operator responded to the sight of the green paper by calling me over for a bag inspection.

He wasn’t concerned in the slightest about the metal objects I had in my bag. He was only concerned with the tins of tobacco he had seen on the screen. He pulled them out and looked at them intently once again with a childlike grin on his face. I kept repeating the word tobacco to reassure him that it was not some sort of crazy American intoxicant, to which he nodded understandingly and started speaking to the metal detector operator in Arabic interspersed with the word "tobacco."

The tins were returned to me, to the great exasperation of the metal detector operator. He shouted playfully at the x-ray operator with a broad smile on his face, making motions to me that he wanted to confiscate the tobacco. The x-ray operator nevertheless allowed me to pack everything up, and I assumed they were done having their fun with the dumb American. As I prepared to leave, however, the x-ray operator said to me very quietly "Meester." I looked up at him as I shouldered my backpack and he leaned forward with his right hand outstretched, his thumb rubbing the tips of his index and middle fingers.

As an American, I am not particularly well practiced in the art of furtive bribery. To be sure, I recognize that international sign for bribery when I see it, but, since I am never forced to pay that type of bribe in my native country, I am not exactly clear about how to do it in practice. Do you negotiate the price? Should bribes be paid in the extortionist’s own currency, or does etiquette allow for the use of other currencies? Do you need to cleverly conceal the money in the palm of your hand before handing over?

Given my lack of experience in the art of bribery, I can perhaps be forgiven for handling the robbery rather ungracefully. At first, I simply blurted out "I don’t have any money on me right now," a response I’d been unthinkingly repeating in Egypt to the flocks of trinket dealers and con men who try to take advantage of foreign tourists. Fortunately, neither of the men spoke English and my faux pas went unnoticed, but they were still standing there waiting for me to hand over some cash. I didn’t have any choice about paying them something. After all, they were in a position where they could have taken as much money out of my pocket as they wanted, or taken anything else if they so wished, and I would have been completely powerless to stop them. We were completely alone and no one would have known they were robbing me, and I doubt that any officials would have even cared had they known. So, I reached in my pocket, pulled out some Jordanian Dinars, clumsily put a wad of them into the man’s hand, and thus paid a ransom in order to keep my own property.

Government Extortion, American-Style

The idea of bribing government officials and police officers seems incredibly foreign and ridiculous to ordinary Americans. Indeed, to be extorted into paying money to a person who is supposedly employed to protect you in order to keep him from harming you, seems like the height of outrageous corruption. And so it is, but Americans are hopelessly naïve if they think that their government does not engage in extortion on a regular basis as well. To be sure, the American brand of government extortion does not occur in dimly-lit back rooms or on the shoulder of the highway, with government officials secretly demanding cash from their prey, as is the case in Egypt, Mexico, and countless other countries in the so-called "developing" world. On the contrary, American-style government extortion usually occurs above the board, for everyone to see. It just goes by more polite labels, such as "permit fees," "licensing fees," or "registration fees."

In order to see why these hallowed American "institutions" are extortionary in exactly the same manner as the actions of my friends at Cairo International Airport, let’s have a closer look at what the classic case of extortion entails. As in my experience in Egypt, extortion occurs when a person uses the power of his position in order to extract money (or tobacco, favors, et cetera) from a hapless person who is subject to his power. Extortion thus always entails the threat of force, because the victim is acutely aware that the extortionist can and almost certainly will use the power of his position to harm him if he does not hand over whatever is demanded. This is clearly what occurred to me at Cairo International Airport, because I was intensely aware that if I did not hand over some cash I would have been subject to some harsher treatment at the hands of my extortionists – like the confiscation of even more of my property, or a stint in jail if I fought off their attempts to seize my property and was consequently charged with assault.

As was previously noted, there exists relatively little extortion in the United States in the form of government employees individually seeking bribes from individual victims. Instead, government extortion in the United States is usually a group action, parading as an act for the benefit of the victims themselves. Consider, for example, the case of landowners in the United States who wish to build on or otherwise alter their own property. They are the owners of the property, and as such, ought to have the right to alter or improve their property in any manner they wish – indeed, if they do not possess this right, they are not in actuality the owners of the property. In the U.S. (and many other so-called "developed" nations), however, property owners are required to get permission from various government agencies in order to build on their own properties. Obtaining permission means buying a permit from whatever government agency demands payment. If the property owner should choose not to pay the "fee," and thereby obtain permission to build on or alter his own land, he faces the possibility of having the property seized (or more of his money in the form of fines) – all for building on or altering his own property. This is true of virtually any alteration a man might wish to make to his property – from building a cabin on his mountain ranch, building a sunroom off his kitchen, remodeling his bathroom, or even replacing his roof. This is extortion, pure and simple, because the landowner only pays the money in order to bribe the government agency to not harm him even more severely.

The same is of course true with regard to vehicle, gun or bicycle "registration" laws. Registering one’s gun, bike or car with whichever government agency demands payment means buying a "registration certificate" of some form or another from the government agency. This, too, is a case of extortion pure and simple, because the car, gun or bike owner only pays the "fee" in order to keep the government agency from inflicting even more harm on him – like seizing his gun or car, fining him even larger sums of money, or putting him in prison for not paying the bribe, I mean "registration fee," beforehand. Like my friends in Cairo, the government agencies essentially tell their victims to pony up a relatively small amount of cash now, or face having worse things happen to them in the future at the hand of the government itself.

The same is even more obviously true with regard to trade-licensing requirements enforced by government agencies. Under these laws, workers in a given trade are required to obtain "licenses" from whatever government agency demands payment in order to work in the trade. Obtaining a license means buying a fancy "certificate" of some sort from whichever government agency or agencies purport to know whether he knows the trade. The worker does not buy the license in order to make himself any better off; on the contrary, he simply buys the license in order to avoid having the government agency seize all of his hard-earned income, fine him into bankruptcy, or lock him up in jail for having worked "illegally." In some circumstances, the worker does buy the license in an attempt to make himself better off, but he does so in the devious hope that the government agency will persecute his competitors for not having bought the fancy certificate. In that case, the "licensed" workers collude with the government in the extortion of "unlicensed" workers, but the overall situation is no less extortionary on that account. As in the previous examples, trade-licensing laws are a form of extortion pure and simple.

Conclusion

For Americans who are completely unaccustomed to being coerced into paying bribes to police officers or bureaucrats, it can be jarring and angering to encounter the practice in foreign countries. Upon reflection, however, it should be viewed as just another example of government extortion – an activity the various governments here in the United States excel at and practice on a daily – nay, hourly – basis. It does not make the extortion any less sickening or wrong simply because the perpetrators in this country are an army of indifferent, glassy-eyed bureaucrats rather than the individual smirking border guards or Federales of other countries. Extortion is extortion, and it should not make us feel any better about the practice or superior to other countries, just because virtually everyone gets extorted equally in this country, whereas the extortion in other countries is often sporadic and unevenly distributed. If anything, other countries’ form of extortion is superior to our own institutionalized form, because at least some lucky people are able to evade this form of robbery abroad.

All this should not be taken as an endorsement of government extortion in other countries and a condemnation of our own forms of government extortion here in the United States. Quite the reverse, this should be taken as a warning that extortion and robbery are often all around us in this world, even in places most Americans have never thought of looking. The greatest perpetrators of this crime are undeniably the sundry governments that infest every nook and cranny of the world – and this is overlooking the most widespread and invidious form of extortion that each and every government that has ever existed thrives on: taxation.

So, the next time you get hustled or shaken down as a tourist abroad, calm yourself and remember that their crime is no worse than those perpetrated on you at your local DMV, City Hall, or IRS office.

Exploiting Public Ignorance

by Walter Williams

How can political commentators, politicians and academics get away with statements like "Reagan budget deficits," "Clinton budget surplus," "Bush budget deficits" or "Obama's tax increases"? The only answer is that they, or the people who believe such statements, are ignorant, conniving or just plain stupid.

Article I, Section 7 of the U.S. Constitution reads: "All bills for raising revenue shall originate in the House of Representatives; but the Senate may propose or concur with amendments as on other Bills." A president has no power to raise or lower taxes. He can propose tax measures or veto them but since Congress can ignore presidential proposals and override a presidential veto, it has the ultimate taxing power. The same principle applies to spending. A president cannot spend a dime that Congress does not first appropriate. As such, presidents cannot be held responsible for budget deficits or surpluses. That means that credit for a budget surplus or blame for budget deficits rests on the congressional majority at the time.

Thinking about today's massive deficits, we might ask: Where in the U.S. Constitution is Congress given the authority to do anything about the economy? Between 1787 and 1930, we have had both mild and severe economic downturns that have ranged from one to seven years. During that time there was no thought that Congress should enact New Deal legislation or stimulus packages along with massive corporate handouts. It took the Herbert Hoover and Franklin Roosevelt administrations to massively intervene in the economy. As a result, they turned what might have been a two or three-year sharp downturn into a 16-year depression that ended in 1946. How they accomplished that is covered very well in a book authored by Jim Powell titled "FDR's Folly." Here's my question: Were the presidents in office and congresses assembled from 1787 to 1930 ignorant of their constitutional authority to manage and save the economy?

If you asked President Obama or a congressman to cite the specific constitutional authority for the bailouts, handouts and corporate takeover, I'd bet the rent money that they would say that their authority lies in Article I, Section 8 of the Constitution that reads: "The Congress shall have Power To lay and collect Taxes, Duties, Impost, Excises to pay the Debts and provide for the common Defense and general Welfare of the United States." They'd tell you that their authority comes from the Constitution's "general welfare" clause. James Madison, the father of our constitution, explained, "If Congress can do whatever in their discretion can be done by money, and will promote the general welfare, the government is no longer a limited one possessing enumerated powers, but an indefinite one subject to particular exceptions." He later added, "With respect to the two words 'general welfare,' I have always regarded them as qualified by the detail of powers connected with them. To take them in a literal and unlimited sense would be a metamorphosis of the Constitution into a character which there is a host of proofs was not contemplated by its creators." Thomas Jefferson said, "Congress has not unlimited powers to provide for the general welfare, but only those specifically enumerated."

That means only those powers listed.

The Constitution provides, through Article V, a means by which the Constitution can be altered. My question to my fellow Americans whether they are liberal or conservative: Has the Constitution been amended to permit Congress to manage the economy? I'd also ask that question to members of the U.S. Supreme Court. I personally know of no such amendment. What we're witnessing today is nothing less than a massive escalation in White House and congressional thuggery. Secure in the knowledge that the American people are compliant and willing to cast off the limitations imposed on Washington by the nation's founders, future administrations are probably going to be even more emboldened than Obama and the current Congress.


Born in Philadelphia in 1936, Walter E. Williams holds a bachelor's degree in economics from California State University (1965) and a master's degree (1967) and doctorate (1972) in economics from the University of California at Los Angeles.

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America's Mobocracy

by Edward Cline

There are three overlooked or un-emphasized facets of the Obama administration and Congress's breathless rush to seize everything in the country that is not nailed down -- health care, car production, the used or “clunker” car market, executive pay -- the list may prove to be endless, and there may be nothing that is not nailed down exempt from their avarice. These facets should be the principal foci of critics to the point of obsession.

A minor facet of the Obama administration itself is the Chicago “gangster government” character of his White House staff and his cabinet and departmental appointees. Not all of his appointees are from Chicago. They just have that odor about them, of professional political parasites who have scurried in and out of sight and up and down the totem pole of Washington politics over the years as their chosen career choices, to a soul advancing or pimping for collectivism, most of them never having worked a productive day in their lives. Heading the list is chief-of-staff Rahm Emanuel, who has all the charm and savvy of Meyer Lansky. (One can legitimately wonder if the grandfather of “community organizing,” Saul Alinsky, and Lansky traded pointers on political activism. They were Chicago contemporaries.)

The President and his wife, Michelle, of course, live like royalty and behave like it. There are the appointed thirty-two “czars” lording it over the American economy, and then there are Michelle’s twenty-two staffers who aid her in her “social” life, all of whose salaries are paid by taxpayers -- not all of them in Chicago.

The first major facet is that, if there is a crisis in any realm over which the government seeks to expand its power to control, the problem can be traced to government controls in the first place. The minuscule, hardly noticeable controls of yesteryear, when men wore handlebar moustaches and labored to write laws in un-air-conditioned chambers, have grown into a forest of lacerating rose bushes without the benefit of roses. This facet has been admirably dwelt on by better analysts than me, but it has not been emphasized by Tea Party organizers or critics to the level it deserves. It does no good to be preoccupied by cost analyses and projected debt and the like, if they are not accompanied by the moral argument. After all, if mere facts had the power to persuade the minds of our governing elite, why are they so immune to and proof against those facts?

If emails, faxes, hand-written letters, unruly townhall meetings, and demonstrations outside of legislators’ offices and the like are beginning to cause some Senators and Congressmen to think twice about the feasibility of their grandiose plans to transform the country from a republic of free individuals to a highly policed and costly hospital regime, forcing them to acknowledge the role of force and fiat law for the “public good” and how that presumptive power has exacerbated existing problems or has simply created them out of whole cloth, ought to underscore the unlikelihood that if they vote for the hospital regime in any form, they in turn will be voted out of office. Our elitist cadre will be obliged to contemplate being forced to make a living in the private sector which they once presumed to “manage,” but which their actions have helped to tie into several Gordian knots.

The second facet is that when the White House and Congress prescribe socialism (a.k.a. “progressivism”) and legislate to that end, they do it for free. It costs them nothing. They do it with taxpayer money. And, whatever destruction they cause, they are indemnified from the consequences. Ted Kennedy will die without ever having been punished for his crimes. Nancy Pelosi and Barbara Boxer and Henry Waxman will return to California and live the high life on a pension and enjoy health care packages few productive persons could ever afford. Barney Frank and Bernard Bernanke will fade into comfortable retirements and, like Bill Clinton and George H.W. Bush, embark on lucrative speaking careers. Barack and Michelle will traipse back to their Chicago mansion on a pension, as well, and begin to solicit donations for the Obama Presidential Library.

This will ever be a conflict between the “governed” and the government for as long as fiat powers are sanctioned or tolerated by the electorate. It is an unfair contest between the government and the electorate. Those who advocate and pass laws destructive of freedom, property, happiness and the ownership of one’s life, work on the money extorted from those who are the subjects or targets of the destructive law. It is time that the thinking electorate woke up to this rigged game and forced the culprits to acknowledge the fact, as well. Think of it: It cost legislators nothing to regulate or ruin your life. You, on the other hand, must, with countless others, invest time, effort, and money in opposing their plans, besides paying their salaries and getting the check for all their fringe benefits, including first-class health care. And you invest your time, effort and money with no guarantee that it will accomplish anything. Ayn Rand called it the “sanction of the victim.” General Patton might liken it to supplying Nazi artillery and Panzer tanks with ordnance with which to blast advancing American forces.

The culprits should be forced to stammer transparent irrelevancies and more obvious lies, and plot to rush undetected from home to office and back again, to avoid being cornered by the citizenry’s cattle prods and pitchforks. They should be compelled to feel, for once, powerless, redundant and extraneous. They should be forced to feel mean, small and despised beyond redemption and reclamation.

The third facet concerns the motivation behind all the coercive legislation passed, most recently under the reigns of Bush I, Clinton I, Bush II, and now Bush III (a.k.a. Obama). Tea Partiers should make the key connection between “reform” of the health care system (or of “reform” of anything that attracts a Congressman’s attention, for he has nothing else to do in Washington or a state capital or a municipal headquarters but to think up “crises” needing “reform”), and the compulsory nature of such “reform.” Why would politicians bother with “reform” if force were not the key ingredient in the “reform”? There would be no point in their debating “reform” if they did not assume they would have the power to coerce everyone into participating in it. They are not working to extend liberty, but to put fetters on it or to extinguish it altogether. Be warned: Any “compromise” between the Blue Dog Democrats, the Republicans, and the Democrats must by necessity retain the element of coercion, no matter how watered down or conciliatory or “humane” they word the compromise.

Further, the element of coercion or legalized extortion in such legislation should be the main tip-off. Tea Partiers should ask: If the proposed legislation is so efficacious and practical, why, for all the puffery about it being voluntary, would it rely on force? Why would its advocates insist that participation be made mandatory? A secondary tip-off is the fact that those proposing or voting for such legislation notably ensure that they are exempt from all its provisions. Organizers should ask themselves: If this idea is so good, why do Congressmen keep their distance from it? Why do they not want to take part in what they wish to force everyone else to participate in? Is there something so seriously wrong with it that they would no more want to buy it than they would a used car from Richard Nixon?

Yes. There is something wrong with it. The element of force guarantees its impracticality and its character as a moral and economic fraud -- just as robbing a bank or a 7-11 is immoral and an impractical way to “make a living.” Waxman, Pelosi, Dodd, Obama, Frank and the rest of the “progressive” crew, all know this. They are not idiots. The only village idiots party to the fraud are those members of the news media who shill for the plan with looks of urgency -- an urgency that does not dwell on the insidiously evil aspects of the plan, chief among which are its compulsory provisions.

Edward Cline is a novelist who has written on the revolutionary war period. He is author of the Sparrowhawk series of novels set in England and Virginia in the Revolutionary period, the detective novel First Prize, the suspense novel Whisper the Guns, and of numerous published articles, book reviews and essays.

The Brainy Bunch

by Thomas Sowell

Many people, including some conservatives, have been very impressed with how brainy the president and his advisers are. But that is not quite as reassuring as it might seem.

It was, after all, Franklin D. Roosevelt's brilliant "brains trust" advisers whose policies are now increasingly recognized as having prolonged the Great Depression of the 1930s, while claiming credit for ending it. The Great Depression ended only when the Second World War put an end to many New Deal policies.

FDR himself said that "Dr. New Deal" had been replaced by "Dr. Win-the-War." But those today who are for big spending like to credit wartime big spending for bringing the Great Depression to an end. They never ask the question as to why previous depressions had always ended on their own, much faster than the one under FDR, and without government intervention or massive government spending.

Brainy folks were also present in Lyndon Johnson's administration, especially in the Pentagon, where Secretary of Defense Robert McNamara's brilliant "whiz kids" tried to micro-manage the Vietnam war, with disastrous results.

There is usually only a limited amount of damage that can be done by dull or stupid people. For creating a truly monumental disaster, you need people with high IQs.

Such people have been told all their lives how brilliant they are, until finally they feel forced to admit it, with all due modesty. But they not only tend to over-estimate their own brilliance, more fundamentally they tend to over-estimate how important brilliance itself is when dealing with real world problems.

Many crucial things in life are learned from experience, rather than from clever thoughts or clever words. Indeed, a gift for the clever phrasing so much admired by the media can be a fatal talent, especially for someone chosen to lead a government.

Make no mistake about it, Adolf Hitler was brilliant. His underlying beliefs may have been half-baked and his hatreds overwhelming, but he was a genius when it came to carrying out his plans politically, based on those beliefs and hatreds.

Starting from a position of Germany's military weakness in the early 1930s, Hitler not only built up Germany's war-making potential, he did so in ways that minimized the danger that his potential victims would match his military build-up with their own. He said whatever soothing words they wanted to hear that would spare them the cost of military deterrence and the pain of contemplating another war.

He played some of the most highly educated people of his time for fools-- not only foreign political leaders but also members of the intelligentsia. The editor of The Times of London filtered out reports that his own foreign correspondents in Germany sent him about the evils and dangers of the Nazis. In the United States, W.E.B. Du Bois-- with a Ph.D. from Harvard-- said that dictatorship in Germany was "absolutely necessary to get the state in order."

In an age when facts seem to carry less weight than the visions of brilliant and charismatic leaders, it is more important than ever to look at the actual track records of those brilliant and charismatic leaders.
After all, Hitler led Germany into military catastrophe and left much of the country in ruins.

Even in a country which suffered none of the wartime destruction that others suffered in the 20th century, Argentina began that century as one of the 10 richest nations in the world-- ahead of France and Germany-- and ended it as such an economic disaster that no one would even compare it to France or Germany.

Politically brilliant and charismatic leaders, promoting reckless government spending-- of whom Juan Peron was the most prominent, but by no means alone-- managed to create an economic disaster in a country with an abundance of natural resources and a country that was spared the stresses that wars inflicted on other nations in the 20th century.

Someone recently pointed out how much Barack Obama's style and strategies resemble those of Latin American charismatic despots-- the takeover of industries by demagogues who never ran a business, the rousing rhetoric of resentment addressed to the masses and the personal cult of the leader promoted by the media. But do we want to become the world's largest banana republic?


Thomas Sowell has published a large volume of writing. His dozen books, as well as numerous articles and essays, cover a wide range of topics, from classic economic theory to judicial activism, from civil rights to choosing the right college.

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