With “Friends” Like Saudi Arabia, the United States Doesn’t Need Enemies

One striking feature of the first debate featuring the top tier GOP presidential candidates was how many of them described Saudi Arabia and its allies in the Persian Gulf as “friends” of the United States.  And clearly that is a bipartisan attitude.  Obama administration officials routinely refer to Saudi Arabia as a friend and ally, and one need only recall the infamous photo of President Obama bowing to Saudi King Abdullah to confirm Washington’s devotion to the relationship with Riyadh.

It is a spectacularly unwise attitude.  As Cato adjunct scholar Malou Innocent and I document in our new book, Perilous Partners: The Benefits and Pitfalls of America’s Alliances with Authoritarian Regimes, Saudi Arabia is not only an odious, totalitarian power, it has repeatedly undermined America’s security interests.

Saudi Arabia’s domestic behavior alone should probably disqualify the country as a friend of the United States.  Riyadh’s reputation as a chronic abuser of human rights is well deserved. Indeed, even as Americans and other civilized populations justifiably condemned ISIS for its barbaric practice of beheadings, America’s Saudi ally executed 83 people in 2014 by decapitation.

In addition to its awful domestic conduct, Riyadh has consistently worked to undermine America’s security.  As far back as the 1980s, when the United States and Saudi Arabia were supposedly on the same side, helping the Afghan mujahedeen resist the Soviet army of occupation, Saudi officials worked closely with Pakistan’s intelligence agency to direct the bulk of the aid to the most extreme Islamist forces.  Many of them became cadres in a variety of terrorist organizations around the world once the war in Afghanistan ended.

Saudi Arabia’s support for extremists in Afghanistan was consistent with its overall policy.  For decades, the Saudi government has funded the outreach program of the Wahhabi clergy and its fanatical message of hostility to secularism and Western values generally.  Training centers (madrassas) have sprouted like poisonous ideological mushrooms throughout much of the Muslim world, thanks to Saudi largesse.  That campaign of indoctrination has had an enormous impact on at least the last two generations of Muslim youth.  Given the pervasive program of Saudi-sponsored radicalism, it is no coincidence that 16 of the 19 hijackers on 9-11 were Saudi nationals.

Riyadh also has shown itself to be a disruptive, rather than a stabilizing, force in the Middle East.  Not only has Saudi Arabia conducted military interventions in Bahrain and Yemen, thereby eliminating the possibility of peaceful solutions to the bitter domestic divisions in those countries, the Saudi government helped fund and equip the factions in Syria and Iraq that eventually coalesced to form ISIS.  Although Saudi officials may now realize that they created an out-of-control Frankenstein monster, that realization does not diminish their responsibility for the tragedy.

In light of such a lengthy, dismal track record, one wonders why any sensible American would regard Saudi Arabia as a friend of the United States.  We do not need and should not want such repressive and untrustworthy “friends.”

Rain on EPA’s Parade

No, the “waters of the United States” subject to Clean Water Act regulation do not include things like dry land over which water occasionally flows. That’s the conclusion of a federal judge who just put on hold the Environmental Protection Agency’s latest power grab.

The Clean Water Act empowers EPA and the Army Corps of Engineers to regulate the use of private property that affects “navigable waters,” which the Act defines as “the waters of the United States.” In late June, EPA and the Corps finalized a rule defining that term. This was, they said, a boon to those potentially subject to CWA regulation, because “the rule will clarify and simplify implementation of the CWA consistent with its purposes through clearer definitions and increased use of bright-line boundaries…and limit the need for case- specific analysis.”

In reality, it was yet another step in what the Supreme Court called “the immense expansion of federal regulation of land use that has occurred under the Clean Water Act.” The rule extends federal regulation—and prohibitions on land use—to “tributaries,” which it defines as anything that directly or indirectly “contributes flow” to an actually navigable body of water or wetland and “is characterized by the presence of the physical indicators of a bed and banks and an ordinary high water mark.” The point of that legalese is to reach things like “perennial, intermittent, and ephemeral streams”—in other words, areas that aren’t really “waters” at all. The broader the definition, the more land that is subject to CWA permitting requirements and, ultimately, EPA control.

The problem for the federal government is that the Supreme Court rejected basically the same expansive approach in a 2006 case, Rapanos v. United States. In a separate opinion that some believe to be controlling, Justice Kennedy explained that, to be within the reach of the Act, a water must, at the least, “significantly affect the chemical, physical, and biological integrity of other covered waters more readily understood as ‘navigable.’”

Judge Ralph Erickson recognized that the new rule “suffers from the same fatal defect.” It “allows EPA regulation of waters that do not bear any effect on the ‘chemical, physical, and biological integrity’ or any navigable-in-fact water.” That includes “vast numbers of waters that are unlikely to have a nexus to navigable waters within any reasonable understanding of the term.” In other words, EPA is overreaching once again.

Federal Nuclear Clean Up: $150 Billion

Cleaning up the government’s nuclear weapons sites has become a vast sinkhole for taxpayer dollars. The Department of Energy (DOE) spends about $6 billion a year on environmental clean up of federal nuclear sites. These sites were despoiled in the decades following World War II with little notice taken by Congress. Then during the 1980s, a series of reports lambasted DOE for its lax safety and environmental standards, and federal polices began to change.

Since 1990, federal taxpayers have paid more than $150 billion to clean up the mess from the government’s nuclear sites, based on my calculations. Unfortunately, many more billions will be likely needed in coming years, partly because DOE management continues to be so poor.

A 2003 GAO report (GAO-03-593) found that “DOE’s past efforts to treat and dispose of high-level waste have been plagued with false starts and failures.” And a 2008 GAO report (GAO-08-1081) found that 9 out of 10 major clean up projects “experienced cost increases and schedule delays in their life cycle baseline, ranging from $139 million for one project to more than $9 billion for another.”

The largest of the nuclear clean up sites is Hanford in Washington State. One facility at the site has ballooned in cost from $4.3 billion in 2000 to $13.4 billion today (GAO-13-38). Overall, $19 billion has been spent cleaning up the Hanford site since 1989, and the effort continues to face huge problems (GAO-15-354).

The Washington Post reported yesterday:

A nearly completed government facility intended to treat the radioactive byproducts of nuclear weapons production is riddled with design flaws that could put the entire operation at risk of failure, according to a leaked internal report.

A technical review of the treatment plant on the grounds of the former Hanford nuclear site identified hundreds of “design vulnerabilities” and other weaknesses, some serious enough to lead to spills of radioactive material.

The draft report is the latest in a series of blows to the clean-up effort at Hanford, the once-secret government reservation in eastern Washington state where much of the nation’s plutonium stockpile originated. Engineers have struggled for years to come up with a safe method for disposing of Hanford’s millions of gallons of high-level radioactive waste, much of which is stored in leaky underground tanks.

Obviously this is a complex task, but a former Clinton administration DOE official told the newspaper that DOE:

“has proven to be incapable of managing a project of this magnitude and importance,” Alvarez said. “The agency has shown a long-standing intolerance for whistleblowers while conducting faith-based management of its contractors regardless of poor performance. This has bred a culture in which no safety misdeed goes unrewarded.”

Obama Administration Declares War on Franchisors and Subcontractors

In a series of unilateral moves, the Obama administration has been introducing an entirely new regime of labor law without benefit of legislation, upending decades’ worth of precedent so as to herd as many workers into unions as possible. The newest, yesterday, from the National Labor Relations Board, is also probably the most drastic yet: in a case against waste hauler Browning-Ferris Industries, the Board declared that from now on, franchisors and companies that employ subcontractors and temporary staffing agencies will often be treated as if they were really direct employers of those other firms’ workforces: they will be held liable for alleged labor law violations at the other workplaces, and will be under legal compulsion to bargain with unions deemed to represent their staff. The new test, one of “industrial realities,” will ask whether the remote company has the power, even the potential power, to significantly influence working conditions or wages at the subcontractor or franchisee; a previous test sought to determine whether the remote company exercised “ ‘direct and immediate impact’ on the worker’s terms and conditions — say, if that second company is involved in hiring and determining pay levels.”

This is a really big deal; as our friend Iain Murray puts it at CEI, it has the potential to “set back the clock 40 years, to an era of corporate giants when few people had the option of being their own bosses while pursuing innovative employment arrangements.”

  • A tech start-up currently contracts out for janitorial, cafeteria, and landscaping services. It will now be at legal risk should its hired contractors be later found to have violated labor law in some way, as by improperly resisting unionization. If it wants to avoid this danger of vicarious liability, it may have to fire the outside firms and directly hire workers of its own.
  • A national fast-food chain currently employs only headquarters staff, with franchisees employing all the staff at local restaurants. Union organizers can now insist that it bargain centrally with local organizers, at risk for alleged infractions by the franchisees. To escape, it can either try to replace its franchise model with company-owned outlets – so that it can directly control compliance – or at least try to exert more control over franchisees, twisting their arms to recognize unions or requiring that an agent of the franchiser be on site at all times to monitor labor law compliance.

Writes management-side labor lawyer Jon Hyman:

If staffing agencies and franchisors are now equal under the National Labor Relations Act with their customers and franchisees, then we will see the end of staffing agencies and franchises as viable business models. Moreover, do not think for a second that this expansion of joint-employer liability will stop at the NLRB. The Department of Labor recently announced that it is exploring a similar expansion of liability for OSHA violations. And the EEOC is similarly exploring the issue for discrimination liability.

And Beth Milito, senior legal counsel at the National Federation of Independent Business, quoted at The Hill: “It will make it much harder for self-employed subcontractors to get jobs.” What will happen to the thriving white-van culture of small skilled contractors that now provides upward mobility to so many tradespeople? Trade it in for a company van, start punching someone’s clock, and just forget about building a business of your own.

What do advocates of these changes intend to accomplish by destroying the economics of business relationships under which millions of Americans are presently employed? For many, the aim is to force much more of the economy into the mold of large-payroll, unionized employers, a system for which the 1950s are often (wrongly) idealized.

One wonders whether many of the smart New Economy people who bought into the Obama administration’s promises really knew what they were buying.

Internet Industry More Popular Than Ever-60% Have Favorable View

New polling from Gallup finds that more Americans view the internet industry favorably than any time since Gallup began asking the question in 2001. Today, 60% of Americans have either a “very positive” or “somewhat positive” view of the industry, compared to 49% in 2014.

Favorability toward the Internet industry has ebbed and flowed during the 2000s, but today marks the most positive perception of the industry. Compared to other industries, Gallup found that the Internet industry ranks third behind the restaurant and computer industries.

Perceptions have improved across most demographic groups, with the greatest gains found among those with lower levels of education, Republicans and independents. It is likely these groups are “late adopters” of technology and have grown more favorable as they’ve come to access it. Indeed, late adopters have been found to be older, less educated and more conservative. Pew also finds that early users of the Internet have been younger, more urban, higher income Americans, and those with more education. Indeed, as Internet usage has soared from 55% to 2001 to 84% in 2014, many of these new users come from the ranks of conservative late adopters.

These data suggest the more Americans learn about the Internet the more they come to like it and appreciate the companies who use it as a tool to offer consumer goods and services.

Please find full results at Gallup.

Research assistant Nick Zaiac contributed to this post.

Time To Remove U.S. Sanctions On Sudan

KHARTOUM, SUDAN—Like the dog that didn’t bark in Sir Arthur Conan Doyle’s tale, little advertising promotes American goods in Khartoum. Washington has banned most business with Sudan.

As I point out on Forbes: “Sanctions have become a tool of choice for Washington, yet severing commercial relations rarely has promoted America’s ends. Nothing obvious has been achieved in Sudan, where the U.S. stands alone. It is time for Washington to drop its embargo.

The Clinton administration first imposed restrictions in 1993, citing Khartoum as an official state sponsor of terrorism. The Bush administration imposed additional restrictions in response to continuing ethnic conflict.”

U.S. sanctions are not watertight, but America matters, especially to an underdeveloped nation like Sudan. At the Khartoum airport I spoke with an Egyptian businessman who said “sanctions have sucked the life out of the economy.” A Sudanese economics ministry official complained that “Sanctions create many obstacles to the development process.” In some areas the poverty rate runs 50 percent.

Ironically, among the strongest supporters of economic coercion have been American Christians, yet Sudanese Christians say they suffer from Washington’s restrictions. Explained Rev. Filotheos Farag of Khartoum’s El Shahidein Coptic Church, “we want to cancel all the sanctions.”

Washington obviously intends to cause economic hardship, but for what purpose? In the early 1990s Khartoum dallied with Islamic radicalism. However, that practice ended after 9/11. The administration’s latest terrorism report stated: “During the past year, the government of Sudan continued to support counterterrorism operations to counter threats to U.S. interests and personnel in Sudan.”

Today Washington’s main complaint is that Khartoum, like many other nations, has a relationship with Iran and Hamas. Yet Sudan has been moving closer to America’s alliance partners in the Middle East—Egypt, Saudi Arabia, and the other Gulf States. In Libya Khartoum has shifted its support from Islamist to Western-backed forces.

Economic penalties also were used to punish the government for its brutal conduct in the country’s long-standing ethnic wars. However, a peace agreement ultimately was reached, leading to the formation of the Republic of South Sudan (recently in the news for its own civil war).

A separate insurgency arose in Sudan’s west around Darfur starting in 2003. Also complex, this fighting led to the indictment of Sudanese President Omar al-Bashir by the International Criminal Court. But the Darfur conflict has subsided.

Some fighting persists along Sudan’s southern border, particularly in the provinces of Blue Nile and South Kordofan (containing the NubaMountains). Although still awful, this combat is far more limited, indeed, hardly unusual for many Third World nations.

There’s no obvious reason to punish Khartoum and not many other conflict-ridden states. Nor have sanctions moderated Sudan’s policies.

Why do sanctions remain? A Sudanese businessman complained: “You said to release south of Sudan. We did so. What else is necessary to end sanctions?”

Is there any other reason to maintain sanctions? Politics today in Sudan is authoritarian, but that has never bothered Washington. After all, the U.S. is paying and arming Egypt, more repressive now than under the Mubarak dictatorship.

Khartoum also has been labeled a “Country of Particular Concern” by the U.S. Commission on International Religious Freedom. Yet persecution problems are worse in such U.S. allies as Pakistan and Saudi Arabia.

The only other CPCs under sanctions are Iran and North Korea—for their nuclear activities. Ironically, by making the penalties essentially permanent the U.S. has made dialogue over political and religious liberty more difficult.

Among the more perverse impact of sanctions has been to encourage Khartoum to look for friends elsewhere. State Minister Yahia Hussein Babiker said that we are “starting to get most of our heavy equipment through China.” Chinese were a common sight and my hotel’s restaurant offered Chinese dishes. Across the street was the “Panda Restaurant.”

Khartoum deserves continued criticism, but sanctions no longer serve American interests.  Washington should lift economic penalties against Sudan.

Solyndra: A Case Study in Green Energy, Cronyism, and the Failure of Central Planning

Back in 2011 I wrote several times about the failure of Solyndra, the solar panel company that was well connected to the Obama administration. Then, as with so many stories, the topic passed out of the headlines and I lost touch with it. Today, the Washington Post and other papers bring news of a newly released federal investigative report:

Top leaders of a troubled solar panel company that cost taxpayers a half-billion dollars repeatedly misled federal officials and omitted information about the firm’s financial prospects as they sought to win a major government loan, according to a newly-released federal investigative report.

Solyndra’s leaders engaged in a “pattern of false and misleading assertions” that drew a rosy picture of their company enjoying robust sales while they lobbied to win the first clean energy loan the new administration awarded in 2009, a lengthy investigation uncovered. The Silicon Valley start-up’s dramatic rise and then collapse into bankruptcy two years later became a rallying cry for critics of President Obama’s signature program to create jobs by injecting billions of dollars into clean energy firms.

And why would it become such a rallying cry for critics? Well, consider the hyperlink the Post inserted at that point in the article: “[Past coverage: Solyndra: Politics infused Obama energy programs]” And what did that article report?