Tag: intervention

Week in Review: A Speech in Cairo, an Anniversary in China and a U.S. Bankruptcy

Obama Speaks to the Muslim World

cairoIn Cairo on Thursday, President Obama asked for a “new beginning between the United States and Muslims around the world,” and spoke at some length on the Israeli-Palestinian conflict, Iran, Iraq, and Afghanistan. Cato scholar Christopher Preble comments, “At times, it sounded like a state of the union address, with a litany of promises intended to appeal to particular interest groups. …That said, I thought the president hit the essential points without overpromising.”

Preble goes on to say:

He did not ignore that which divides the United States from the world at large, and many Muslims in particular, nor was he afraid to address squarely the lies and distortions — including the implication that 9/11 never happened, or was not the product of al Qaeda — that have made the situation worse than it should be. He stressed the common interests that should draw people to support U.S. policies rather than oppose them: these include our opposition to the use of violence against innocents; our support for democracy and self-government; and our hostility toward racial, ethnic or religious intolerance. All good.

David Boaz contends that there are a number of other nations the president could have chosen to deliver his address:

Americans forget that the Muslim world and the Arab world are not synonymous. In fact, only 15 to 20 percent of Muslims live in Arab countries, barely more than the number in Indonesia alone and far fewer than the number in the Indian subcontinent. It seems to me that Obama would be better off delivering his message to the Muslim world somewhere closer to where most Muslims live. Perhaps even in his own childhood home of Indonesia.

Not only are there more Muslims in Asia than in the Middle East, the Muslim countries of south and southeast Asia have done a better job of integrating Islam and modern democratic capitalism…. Egypt is a fine place for a speech on the Arab-Israeli conflict. But in Indonesia, Malaysia, India, or Pakistan he could give a speech on America and the Muslim world surrounded by rival political leaders in a democratic country and by internationally recognized business leaders. It would be good for the president to draw attention to this more moderate version of Islam.

Tiananmen Square: 20 Years Later

tsquare1It has been 20 years since the tragic deaths of pro-democracy protesters in Tiananmen Square in June 1989, and 30 years since Deng Xiaoping embarked on economic reform in China. Cato scholar James A. Dorn comments, “After 20 years China has made substantial economic progress, but the ghosts of Tiananmen are restless and will continue to be so until the Goddess of Liberty is restored.”

In Thursday’s Cato Daily Podcast, Dorn discusses the perception of human rights in China since the Tiananmen Square massacre, saying that many young people are beginning to accept the existence of human rights independent of the state.

A few days before the anniversary, social media Web sites like Twitter and YouTube were blocked in China. Cato scholar Jim Harper says that it’s going to take a lot more than tanks to shut down the message of freedom in today’s online world:

In 1989, when a nascent pro-democracy movement wanted to communicate its vitality and prepare to take on the state, meeting en masse was vital. But that made it fairly easy for the CCP to roll in and crush the dream of democracy.

Twenty years later, the Internet is the place where mass movements for liberty can take root. While the CCP is attempting to use the electronic equivalent of an armored division to prevent change, reform today is a question of when, not if. Shutting down open dialogue will only slow the democratic transition to freedom, which the Chinese government cannot ultimately prevent.

Taxpayers Acquire Failing Auto Company

After billions of dollars were spent over the course of two presidential administrations to keep General Motors afloat, the American car company filed for bankruptcy this week anyway.

Last year Cato trade expert Daniel J. Ikenson appeared on dozens of radio and television programs and wrote op-eds in newspapers and magazines explaining why automakers should file for bankruptcy—before spending billions in taxpayer dollars.

Which leaves Ikenson asking one very important question: “What was the point of that?

In November, GM turned to the federal government for a bailout loan — the one final alternative to bankruptcy. After a lot of discussion and some rich debate, Congress voted against a bailout, seemingly foreclosing all options except bankruptcy. But before GM could avail itself of bankruptcy protection, President Bush took the fateful decision of circumventing Congress and diverting $15.4 billion from Troubled Asset Relief Program funds to GM (in the chummy spirit of avoiding tough news around the holidays).

That was the original sin. George W. Bush is very much complicit in the nationalization of GM and the cascade of similar interventions that may follow. Had Bush not funded GM in December (under questionable authority, no less), the company probably would have filed for bankruptcy on Jan. 1, at which point prospective buyers, both foreign and domestic, would have surfaced and made bids for spin-off assets or equity stakes in the “New GM,” just as is happening now.

Meanwhile, the government takeover of GM puts the fate of Ford Motors, a company that didn’t take any bailout money, into question:

Thus, what’s going to happen to Ford? With the public aware that the administration will go to bat for GM, who will want to own Ford stock? Who will lend Ford money (particularly in light of the way GM’s and Chrysler’s bondholders were treated). Who wants to compete against an entity backed by an unrestrained national treasury?

Ultimately, if I’m a member of Ford management or a large shareholder, I’m thinking that my biggest competitors, who’ve made terrible business decisions over the years, just got their debts erased and their downsides covered. Thus, even if my balance sheet is healthy enough to go it alone, why bother? And that calculation presents the specter of another taxpayer bailout to the tunes of tens of billions of dollars, and another government-run auto company.

GM’s Nationalization and China’s Capitalists

GM’s restructuring under Chapter 11 includes plans to sell off the Hummer, Saab, and Saturn brands. Well, just one day after GM’s bankruptcy filing, a Chinese firm has come forward with a $500 million offer to purchase Hummer. The prospective buyer is Sichuan Tengzhong Heavy Industrial Machinery Co Ltd, a manufacturing company in western China, which hopes to become an automaker.

Not only is the Hummer offer the first bid for a GM asset in bankruptcy, but the bidder is foreign. Not only is the bidder foreign, but Chinese. And not only is the bidder Chinese, but the Hummer was first developed by the U.S. military. Thus, this is certain to be characterized as a national security matter, and the Committee on Foreign Investment in the United States (CFIUS) will have to review the proposal. There should be little doubt that the economic nationalists will be out in full force, warning CFIUS against transferring sensitive technologies to Red China.

Let me offer two quick points, as the bulging veins in my temples pulsate with disdain for official Washington.

First, if this deal is rejected (even if the bidder is scared away by detractors), any remaining credibility to the proposition that the United States will once again become that beacon on a hill, exemplifying for the world the virtues of free markets and limited government, will vanish into the ether. There has been too much U.S. hypocrisy on free trade and cross-border investment and too much double talk about the impropriety of government subsidizing national champions, that another indiscretion in a high profile case will blow open the already-bowing flood gates to economic nationalism worldwide. Considering that U.S. companies sell five times as much stuff to foreigners through their foreign subsidiaries than by exporting from the United States, investment protectionism is as advisable as nationalizing car companies.

Second, the willingness of this Chinese company to purchase Hummer serves as a stark reminder of what could have been. Had George W. Bush not allocated TARP money to GM last December, in circumvention of Congress’s rejection of a bailout, then GM likely would have filed for bankruptcy on January 1. At that point, there would likely have been plenty of offers from foreign and domestic concerns for individual assets to spin off or for equity stakes in the New GM. There would have been plant closures, dealership terminations, and jobs losses, as there is under the nationalization plan anyway. But taxpayers wouldn’t be on the hook for $50+ billion, a sum that is much more likely to grow larger than it is to be repaid. It is also a sum that will serve as the rationalization for further government interventions on GM’s behalf.

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.

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.

Withdrawing from Afghanistan

Oh, the war in Afghanistan. The more I learn, the more I’m convinced that we need to get out.

As I described the situation to my Cato colleague Chris Preble, for lack of a better analogy, the Afghanistan–Pakistan border is like a balloon: pushing down on one side forces elements to move to another — it doesn’t eliminate the threat.

The fate of Pakistan — a nuclear-armed Muslim-majority country plagued by a powerful jihadist insurgency — will matter more to regional and global stability than economic and political developments in Afghanistan. But if our attempts to stabilize Afghanistan destabilize Pakistan, where does that leave us? Like A.I.G., is Afghanistan too big to fail? No.

President Obama earlier this month issued a wide-ranging strategic review of the war and the region, and declared “the core goal of the U.S. must be to disrupt, dismantle, and defeat al Qaeda and its safe havens in Pakistan, and to prevent their return to Pakistan or Afghanistan.” But al Qaeda, as we very well know, is a loosely connected and decentralized network with cells in over 60 countries. Amassing tens of thousands of U.S. and NATO troops in one country — or any country — is unnecessary.

Until Pakistan’s intelligence agency, the ISI, changes priorities, this is a stalemate and we are throwing soldiers into a conflict because policymakers fear that, if we leave, it will get worse. Sound familiar?

The only military role necessary in Afghanistan is trainers and assistance for the Afghan military, police, and special forces tasked with discrete operations against specific targets. The bulk of the combat forces can and should be withdrawn.

As for Pakistan’s impulsive act of gallantry in Buner this week, that’s certainly welcome news. But Mukhtar Khan, a Pakistani freelance journalist whom I’ve talked to on numerous occasions, records here that last year in Buner, a lashkar (tribal militia) successfully beat back the Taliban’s incursions.

Thanks to the Swat Valley peace deal between pro-Taliban TNSM founder Sufi Mohammad and the Pakistani government, militants have spilled back into Buner, killing policemen and terrorizing locals. What’s especially troubling this time around is that the spread from Swat into Buner brings militants closer to Mardan and Swabi, which leads directly to the four-lane motorway running from Peshawar to Islamabad. (I took the picture above when I was on the motorway to Peshawar last August.)

Overall, I’m not optimistic that the Pakistani government’s effort in Buner changes the grand scheme of things. Unless the intervention is coupled with a comprehensive shift in Pakistan’s strategic priorities, which means a move away from allowing its territory to act as a de facto sanctuary for militants undermining U.S. and NATO efforts in Afghanistan, then these sporadic raids tell us nothing about their leaders’ overall commitment to tackling terrorism.

For instance, Pakistan’s Supreme Court recently ordered the release of hard-line cleric Maulana Abdul Aziz on bail. Aziz was a leading figure from the Lal Masjid (Red Mosque) massacre of July 2007 and faces several charges, including aiding militants. For an idea of how pervasive militant sympathies go, when the Islamist political party Jamiat-Ulema-e-Islami was in power in North-West Frontier Province, a Pakistani territory adjacent to the ungoverned tribal areas, its leaders proselytized in mosques about the need for jihad in Afghanistan. In addition, when Abu Musab al-Zarqawi, the head of al Qaeda in Mesopotamia, was killed in Iraq, their parliament observed a two-minute moment of silence.

If leaders within Pakistan’s military and intelligence establishments are serious about combating extremism, it will take more than periodic military moves into restive areas. We will not know for the next several months whether they have abandoned their lackadaisical attitude toward extremism.

Mueller on Afghanistan

John Mueller, who has been helping out with Cato’s counterterrorism project, has a short essay in Foreign Affairs questioning the premise behind continuing the war in Afghanistan. That is: Al Qaeda would gain haven in Afghanistan absent a U.S. ground presence and use it to attack us here.

Mueller says that the Taliban would not be dumb enough to again offer aid and comfort to the wackos whose attacks brought the U.S. intervention that swept them from power before. I think this overstates the extent to which our enemy in Afghanistan is a singular entity with one way of thinking about its interests, rather than an amalgam of militias that view the utility of cooperation with foreign jihadists in varying ways. But the general point is mostly right.  Advances in UAV technology alone make a replay of the 1990’s impossible.

Mueller’s argument is badly needed in official places like Foreign Affairs where the “failed states are always terrorist havens” thesis is gospel. One can usefully export it to Somalia. The al-Shabab group’s loose ties to Al Qaeda are producing calls for U.S. intervention, despite the lack of evidence that international terrorists are using Somalia as a training ground or could.