Cato Daily Dispatch for December 20, 2002
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Bush Administration Urges U.N. to Authorize WarSEC to Announce Settlement with U.S. Securities Firms
Anti-American Sentiment Played Role in South Korean Election
Bush Administration Urges U.N. to Authorize War
The Associated Press reports that "the Bush administration, concluding that Saddam Hussein is not serious about disarmament, turned today to convincing the U.N. Security Council that it should declare Iraq in violation of world demands and authorize war.
"At the same time, a senior administration official said today that President Bush has given the go-ahead to double the 50,000 U.S. troop deployment in the Persian Gulf region in early January. Defense Secretary Donald H. Rumsfeld is expected to sign the formal deployment order in the next week or two as part of what another official called 'a ramping up on various fronts.'
"This situation cannot continue,' Secretary of State Colin Powell said yesterday in describing Iraq's weapons declaration, submitted two weeks ago, as 12,200 pages of lies, gaps and omissions.
"Unless Iraq 'comes clean' in the weeks ahead, 'I'm afraid we should be very discouraged with respect to the prospects of finding a peaceful solution,' Powell said."
Yesterday, Senior Defense Policy Analyst Charles Peña issued the following statement regarding Powell's comments that Iraq is in "material breach" of a U.N. resolution:
"Material breach is the most serious charge the United States can levy against Iraq. It is a necessary condition before the United States can take military action. Given President Bush's 'zero tolerance' policy for any Iraqi deception or denial, it would appear that the wheels have been put in motion for an invasion of Iraq -- perhaps sooner rather than later. But the wisdom of what now seems an inevitable course of action is still questionable, especially after U.S. intelligence officials have warned that Saddam Hussein will pursue a 'scorched earth' strategy, including the use of chemical or biological weapons -- the very thing the U.S. is purportedly trying to prevent by having U.N. weapons inspectors in Iraq."
SEC to Announce Settlement with U.S. Securities Firms
According to SmartMoney, "regulators plan to announce today an agreement with the largest U.S. securities firms that would overhaul Wall Street stock-research practices in a settlement that could cost Wall Street as much as $1.5 billion.
"The historic agreement, the final details of which were being hammered out Thursday night, would force brokerage companies to make structural changes in the way they handle research -- preventing, for instance, analysts from attending investment-banking pitches with bankers. A news conference to announce the long-awaited settlement is expected to be held Friday at the New York Stock Exchange.
"In recent days, Securities and Exchange Commission Enforcement Chief Stephen Cutler, NYSE Chairman Dick Grasso and New York Attorney General Eliot Spitzer put on a final push to jawbone enough Wall Street executives into accepting a deal."
In "Putting The 'Market' In Stock Regulation", Dale Arthur Oesterle argues that "the illusion the SEC is guaranteeing the integrity of exchanges removes an incentive for the exchanges themselves to exercise diligence, lest they lose their customers. Then, when a scandal does occur, the SEC moves in to micromanage exchange rules, which often place costly burdens on exchanges without increasing safety. Unfortunately, the SEC is moving toward more government management when, in fact, markets can best guarantee both the safety and profitability of exchanges."
Cato's Handbook for Congress notes that "part of the government's duty to protect property is to prosecute the kind of direct stock fraud that could occur on securities exchanges. Congress should restrict the SEC to acting against cases of actual fraud."
Anti-American Sentiment Played Role in South Korean Election
The Washington Post reports that anti-American sentiments played a role in the election of South Korean president-elect Roh Moo Hyun. Hyun is "a former labor lawyer who supports continued dialogue with North Korea won a narrow victory in South Korea's presidential election Thursday."
He campaigned "on a vow to draw at least symbolic distance between Washington and Seoul. South Korea has traditionally been one of the United States' most fiercely loyal allies.
"Roh pledged he would represent the 'desperate longing' of South Koreans for a 'more mature relationship' with the United States. He added that he would have to resolve 'the North Korean nuclear issue in a peaceful manner,' and 'strengthen the Korean-U.S.-Japan alliance.' He also repeated his offer to meet the North Korean leader, Kim Jong Il.
"Roh's election creates a significant challenge for the Bush administration, which has been trying to increase pressure on North Korea following disclosures about Pyongyang's secret nuclear weapons project and continued missile sales. U.S. officials are wary of moves that would appear to reward the North Korean government for what they consider bad behavior."
In "Leave Korea to the Koreans", Cato Institute Senior Fellow Doug Bandow says that "it is time for Washington to disengage" from the affairs of the Korean peninsula. "South Korea and its neighbors, rather than America, are the ones that have to deal with future bumps in the Korean road to peace and reunification."
Bandow is also the author of the book Tripwire: Korea and U.S. Foreign Policy in a Changed World, which thoroughly examines the history of U.S. military involvement in South Korea and argues that it is time to recognize that South Korea is capable of defending itself and bring American troops home.
Christopher Kilmer, editor, ckilmer@cato.org
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