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Cato Dispatch for September 21, 2006

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(Links to outside sources were active as of the date of this dispatch; however, not all news sources maintain links to current stories indefinitely. Some links also may require registration.)

China: The Case for Economic Liberalism

"U.S. Treasury Secretary Henry Paulson [today] urged Beijing to open its financial markets wider to foreign competition, saying it would benefit ordinary Chinese," the Associated Press reports. "The secretary was speaking a day after Washington and Beijing announced the launch of a series of regular high-level meetings to discuss major economic issues. Paulson's visit comes amid pressure by Washington for Beijing to rein in soaring trade surpluses and raise the value of its currency, which critics say is intentionally undervalued." 

In his recent testimony before the U.S.-China Economic and Security Review, "China's Financial System and Monetary Policies: The Impact on U.S. Exchange Rates, Capital Markets, and Interest Rates," James Dorn, Cato's vice president for academic affairs stated: "Capital freedom is an important human right and would help undermine the Chinese Communist Party's monopoly on power by strengthening private property rights. A more liberal international economic order is a more flexible one based on market-determined prices, sound money, and the rule of law. We should help China move in that direction not by threats but by example. The U.S. government should begin by reducing its excessive spending and removing onerous taxes on saving and investment." 

In "The Case for Economic Liberalism," Dorn argues: "Congress can best foster sound U.S.-China relations by not treating China as an inevitable enemy and by taking the opportunity to capitalize on China's emergence as a market economy, albeit a 'socialist market economy.' In particular, U.S. policymakers should treat China as a normal rising power, not as a probable adversary; continue to liberalize U.S.-China relations and hold China to its WTO commitments; [and] recognize that advancing economic freedom in China has had positive effects on civil society and personal freedom for the Chinese people." 

No State Education System Left Behind

In today's Washington Post, Bill Bennett and Rob Paige recommend a national test to close achievement gaps in the U.S. educational system: "Washington should set sound national academic standards and administer a high-quality national test. Publicize everybody's results, right down to the school level. Then Washington should butt out. States that prefer to cling to their own standards and tests -- and endure the rules and meddling of federal bureaucrats -- would be free to do so. Some surely would. But many would welcome a new compact with the Education Department."

Neal McCluskey, education policy analyst at the Cato Institute, responds to this article: "On the grounds that current federal policy actually pushes academic standards down, former U.S. secretaries of education Rod Paige and William Bennett argue that the federal government should set one standard for every state in the union. That, to say the least, is a paradoxical solution. It also completely disregards the lessons of public education history. Quite simply, whenever standards are set by government, they eventually scrape lowest-common-denominator levels. It's inevitable, because politics always requires compromised standards that offend no one, but hence stand for very little, and because the groups that benefit from low standards, like education unions and administrator organizations, have the political power to destroy real accountability."

He concludes: "The only way to get high academic standards in American education is by letting parents choose the schools that work best, and pull their children out of those that aren't up to par. Federal standards would do absolutely nothing to make that happen. In fact, they'd only destroy what little choice we have left." 

Civil Liberties to be Detained

"Although the effort has been partly obscured by the highly publicized wrangling over military commissions for war crimes trials, the Bush administration and its allies in Congress are trying to use the same legislation to strip federal courts of their authority to review the detentions of almost all terrorism suspects," reports The New York Times. "If the provision was enacted, it would mean that all of the lawsuits brought in federal court by about 430 detainees at Guantanamo Bay, Cuba, would be wiped from the books."

In "The Imperial Presidency and the War on Terror," Gene Healy, Cato's senior editor, writes: "The administration has argued in federal court that the power to seize an American citizen on American soil, unilaterally designate him an 'enemy combatant,' and hold him for the duration of the war on terrorism is 'a basic exercise of [the president's] authority as Commander in Chief.' The power claimed here amounts to the assertion that the executive branch can serve as judge, jury, and jailer in cases involving terrorist suspects. That power cannot be found in the Constitution. The Bill of Rights does not come with an asterisk reading 'unenforceable during time of war.'" 

In "Assaults on Liberty," Robert A. Levy, senior fellow in constitutional studies at the Cato Institute, argues: "In the post-9/11 environment, no rational person believes that civil liberties are inviolable. After all, government's primary obligation is to secure the lives of American citizens. But when government begins to chip away at our liberties, we must insist that it jump through a couple of hoops. First, government must offer compelling evidence that its new and intrusive programs will make us safer. Second, government must convince us that there is no less invasive means of attaining the same ends. In too many instances, those dual burdens have not been met." 

Nicole Kurokawa, editor, nkurokawa@cato.org