Archives: 05/2009

Brother, Can You Spare A Trillion?

With the economy in a deep recession and policymakers turning to massive government intervention in an attempt to create jobs and bolster the financial system—it feels like the 1930s all over again.  Today’s new New Deal is rapidly unfolding, with the Obama administration and many lawmakers making it clear that any question of the success of FDR’s New Deal policies was resolved long ago: government intervention worked, and history bears repeating.  

However, there are deep disagreements about the New Deal, and whether Roosevelt’s policies deepened the depression and delayed recovery. 

Join us at the Cato Institute on June 1 to be a part of a highly informative half-day conference. Recognized national experts will discuss the economic and legal impact of the New Deal, and how its legacy is being used and misused to shape policy responses to current economic hardships.

Name That Company: Fiasco

NPR asks listeners what the new company created by President Obama out of the remains of the Chrysler corporation, to be controlled by the United Auto Workers, funded by the American taxpayers, and managed by Fiat, should be called.

One listener suggested AutomObama, with the slogan ”You’ll Be Paying on It for Years.” Another offered “FIAT: Fix It Again, Barack.”

Of course, the name Fiat works pretty well for this new company. After all, “fiat” means, according to Webster’s, ” a command or act of will that creates something without or as if without further effort” or ”an authoritative or arbitrary order.” (And note that when you look up “fiat” in Webster’s, you get an ad for the new company.)

But it’s hard to beat the name suggested by most listeners: Fiasco.

Pakistan’s Critical Hour

I’m sympathetic to Ahmed Rashid’s arguments expressed in today’s Washington Post. The Pakistani journalist argues that President Obama’s plan to dedicate $1.5 billion annually to Pakistan in non-military spending “will also affect America’s image in Pakistan and the region.” However, I’m having trouble with his previous point: “The speed and conditions with which Congress provides emergency aid to Islamabad will affect the Pakistani government and army’s ability and will to resist the Taliban onslaught.”

For many years, the U.S. government has shoveled billions of dollars in aid to Pakistan (almost $20 billion since 9/11). Certainly in the tribal areas, non-military aid directed to education and comprehensive study programs can help to mitigate the spread of militancy among younger generations. But a coherent distribution mechanism must be in place or else no one in Pakistan will benefit. Given the problems of corruption and mismanagement afflicting the distribution of military aid, why should we expect the distribution of non-military aid to be more effective? Besides, there is very little Washington can do to “affect” Pakistan’s “will” to resist the Taliban. Ahmed Rashid, General Petraeus, and many others are correct to conclude that to be truly effective at combating internal insurgencies, Pakistan must re-orient its military away from conventional threats-such as India-and toward the low-intensity guerilla insurgency the army is presently ill-equipped and poorly trained to fight. But before Pakistan gains the capability to attack insurgents they must first find the willingness to do so.

With regards to the general alarm about militant incursions into valleys outside of Swat, this is certainly warranted. Militants have burned down or blown up over 200 schools, beheaded opponents, and forces tens of thousands to flee. But like I mentioned to my good friend and colleague, Ed Crane, the Taliban have no F-16s, no tanks and no means of taking over a country of 172 million people. India was certainly instrumental in the break up of Pakistan in 1971. But even India failed to conquer a large part of West Pakistan or takeover the country entirely. Granted, these militants are scary folks, but we need a bit of nuance on the whole “Pakistan is imploding” meme coursing through the Beltway. As I elaborate here, “Balkanization” of Pakistan, which I foresee as a distinct possibility, is much different then seeing the complete collapse of civilian and tribal administration.

Also, if America is worried about Pakistan’s imminent demise, U.S. policymakers and defense planners must understand that the coalition’s presence in Afghanistan threatens to further destabilize Pakistan. The vast majority of Pakistanis are not radical. But the spread of tribal militias in the northwest, tens of thousands of refugees (and certainly some militants) fleeing into major cities from aerial drone strikes, and widespread distrust of America’s intentions in the region, all place undue stress on a nation already divided, weak and fragile. As I argue in my recent policy analysis:

President Obama remains unequivocal in his commitment to continue airstrikes. But he and his policy planners must recognize that continuing airstrikes will undermine the authority of President Zardari, as well as Obama’s ability to coordinate policies effectively with Pakistan’s civilian and military leaders. The president’s national security team must understand that the struggle against extremism would best be waged by bolstering Islamabad’s ability to compete with militants for political authority in FATA. If his administration simply increases attacks from pilotless drones, it will only push more wavering tribes further into the Taliban camp, continue his predecessor’s policy of dictation, rather than cooperation, and undermine the perception within the Pakistani body politic that Obama can change U.S. policy toward the Muslim world.

Aside from ceasing aerial drone strikes, another way to help America’s image is in the region is for prominent U.S. decision-makers to stop publicly speculating about the fate of their democracy, as Petraeus did last week. America has a history of sponsoring insurgents, financing coups, and funding internal dissidents against democratically-elected leaders. Regardless of intent, Washington is perceived as being blatantly manipulative and endorsing a military takeover when we make reckless statements like this.

Checker Finn Is 99.44 Percent Right

Fordham Foundation president Checker Finn notes today that recent upticks on the National Assessment of Educational Progress cannot be reasonably credited to the No Child Left Behind act (hat tip to Bill Evers). The NCLB, President Bush’s signature education initiative, was supposed to improve student achievement through bureaucratic accountability measures.

But after noting that NCLB’s proponents can’t back up their claims that the law is working, Finn suggests that we need an “education-achievement ‘audit agency’ to sort out the claims and counterclaims about student performance.”

Maybe. But Amazon.com didn’t have to be told by a federal product quality audit czar to allow its customers to rate the products it sells. They’ve done it because it’s good business. In fact, no matter what product or service you’re interested in, there are resources on the Web to find out virtually anything you could possibly want to know about it. Reviews by users, professional reviews, criticism from competitors…. As a result, consumers are better informed than ever before.  Except in education, which operates outside the free enterprise system.

Sure, we could add a bureaucratic audit agency and hope that it will make our bureaucratic education accountability law accountable, and that that, in turn, will make our bureaucratic education system efficient and innovative.

Or we could just do what we know already works in every other sector of the economy: let consumers choose, and make it easy for a diversity of public and private schools compete to serve them.

Libertarian Wisdom

From Will Saletan at Slate:

the tricky thing about official intervention is that once the state gets its foot in the door, you don’t necessarily get to dictate what it can and can’t do.

He’s talking about how “For the usual incoherent combination of lefty reasons—not enough private discrimination in working conditions, too much private discrimination in family values–” he ”felt the urge to support regulation of the [surrogate motherhood] industry,” but then he read about Chinese police kicking in doors and forcing surrogate mothers to abort their babies, and realized that wasn’t “the kind of policing liberals have in mind when they call for tighter regulation of the fertility industry.”

But the lesson is broader, of course. It applies to health care, education, energy, faith-based organizations, and just about any enterprise you let the state take a role in.

New At Cato

For more commentary, visit Cato’s op-ed archive.

  • Appearing on Fox News, foreign policy analyst Malou Innocent discusses the recent violence in Pakistan.
  • In the American Spectator, Doug Bandow questions the reasons why the U.S. is still a member of NATO.
  • Randal O’Toole argues that high-speed rail is not the solution to efficiency and environmental problems in the Cleveland Plain Dealer.
  • In The Washington Times, Nat Hentoff argues that officials who sanctioned and participated in torture should not be allowed to use the “just following orders” excuse.
  • In today’s Cato Daily Podcast, Mark Calabria discusses the Troubled Asset Relief Program.