Archives: 07/2017

Liu Xiaobo: A Voice of Freedom

The death of Liu Xiaobo from liver cancer on July 13, under guard at a hospital in Shenyang, marks the passing of a great defender of freedom—a man who was willing to speak truth to power. As the lead signatory to Charter 08, which called for the rule of law and constitutional government, Liu was sentenced to 11 years in prison for “inciting the subversion of state power.” Before his sentencing in 2009, Liu stood before the court and declared, “To block freedom of speech is to trample on human rights, to strangle humanity, and to suppress the truth.” With proper treatment and freedom, Liu would have lived on to voice his support for a free society. 

While Liu’s advocacy of limited government, democracy, and a free market for ideas won him the Nobel Peace Prize in 2010, China’s leadership viewed him as a criminal and refused to allow him to travel to Oslo to receive the award. Instead, the prize was placed on an empty chair at the ceremony, a lasting symbol of Liu’s courage in the face of state suppression. Beijing also prevented liberal Mao Yushi, cofounder of the Unirule Institute, from attending the ceremony to honor Liu. 

IdealMentre

The mistreatment of Liu, and other human rights’ proponents, is a stark reminder that while the Middle Kingdom has made significant progress in liberalizing its economy, it has yet to liberate the minds of the Chinese people or its own political institutions. 

The tension between freedom and state power threatens China’s future. As former premier Wen Jiabao warned in a speech in August 2010, “Without the safeguard of political reform, the fruits of economic reform would be lost.” Later, in an interview with CNN in October, he held that “freedom of speech is indispensable for any country.”

Article 33, Section 3, of the PRC’s Constitution holds that “the State respects and protects human rights.” Such language, added by the National People’s Congress in 2004, encouraged liberals to test the waters, only to find that the reality did not match the rhetoric.

The Chinese Communist Party pays lip service to a free market in ideas, noting: “There can never be an end to the need for the emancipation of individual thought” (China Daily, November 16, 2013). However, Party doctrine strictly regulates that market. Consequently, under “market socialism with Chinese characteristics,” there is bound to be an ever-present tension between the individual and the state.

In an interview with the Wall Street Journal (September 22, 2015), President Xi argued that “freedom is the purpose of order, and order the guarantee of freedom.” The real meaning of that statement is that China’s ruling elite will not tolerate dissent: individuals will be free to communicate ideas, but only those consistent with the state’s current interpretation of “socialist principles.” 

Locking Up Kingpins Causes Violence

This story from the WSJ claims that 

the extradition of Joaquín “El Chapo” Guzmán, Mexico’s long-dominant drug lord, has led to an explosion of violence in his home state of Sinaloa, the birthplace of the country’s narcotics industry.

Rival factions are fighting over Mr. Guzmán’s billion-dollar empire as he awaits trial in solitary confinement inside a high-security prison in New York. He was extradited to the U.S. in January on drug-trafficking and murder charges.

This explanation for increased violence in Mexico is exactly what one would predict from this Cato Research Brief, by economists Jason Lindo and Maria Padilla-Romo:

We find that the capture of a [Drug Trafficking Organization] (DTO) leader in a municipality increases its homicide rate by 80 percent, and this effect persists for at least 12 months. Consistent with the notion that the kingpin strategy destabilizes an organization, we also find that these captures significantly increase homicides in other municipalities with the same DTO presence. In particular, we find that homicide rates in neighboring municipalities with the same DTO presence rise 30 percent in the six months after a kingpin capture before returning to expected levels. Further, kingpin captures cause homicide rates to grow over time (to 18 percent above expected levels 12 or more months after a capture) for more-distant municipalities with the same DTO presence. We find little evidence of increased homicide in neighboring municipalities where the captured leader’s DTO did not have a presence.

Disputes between rival suppliers occur in all industries; but in legal ones, the disputes take the form of advertising wars and lawsuits, not violence. See also this old paper of mine on the same subject.

Don’t Let Me Be Misunderstood: Misread and Missed Signaling

Three days after North Korea successfully tested an intercontinental ballistic missile two U.S. B-1B Lancer bombers flew from Guam to South Korea and dropped guided bombs on a target range. This isn’t the first time the B-1B has “sent a message” to Kim Jong-Un, and it likely won’t be the last, but what message do these bomber flights actually send? Do the flights indicate that efforts to drive a wedge in the U.S.-South Korea alliance won’t work? Are they a demonstration of American capacity to destroy North Korea’s nuclear forces early in a conflict without relying on U.S. nuclear weapons? Something else? All or none of the above?

The number of messages that the bomber flights could be sending reflects the fact that signaling is hard. States use displays of military power as a tool to communicate their intentions or positions to friends and adversaries alike, but these messages can easily be misread or even completely missed by the target. A recent book on nuclear weapons and coercive diplomacy by Todd Sechser and Matthew Fuhrmann contains multiple case studies of crises involving nuclear threats where signals were frequently misread or missed entirely.*

CBP Dodges Sen. Wyden’s Electronic Searches Question

Sen. Ron Wyden (D-OR) is concerned about Customs and Border Protection’s (CBP) searches of travelers’ electronic devices at the border and ports of entry. CBP’s responses to Wyden’s queries about such searches are illuminating but far from reassuring.

In February, Sen. Wyden sent a letter to Department of Homeland Security (DHS) Secretary John Kelly, asking a range of questions about searches of electronic devices. DHS responded to this letter, but the agency’s response didn’t satisfy Sen. Wyden, who posed some followup questions to CBP acting commissioner, Kevin McAleenan.

McAleenan’s answers to Sen. Wyden’s questions are revealing, in part because of what they don’t discuss.

The answers begin by noting that the Supreme Court recognizes the CBP’s “broad scope” of authority to conduct border searches.

Trump Administration Proposes Massive Cuts to TSA VIPR Teams

I think this is the first official act of the Trump administration that I can honestly say I can get behind, and enthusiastically. According to the Washington Post, Trump’s budget plan would dramatically cut funding for TSA’s roving Fourth Amendment violation squads, better known as “Visible Intermodal Prevention and Response” (VIPR) teams. From the Post story:

Under the proposed budget, VIPR funding would drop to $15 million from $58 million and the number of VIPR teams would be cut to 8 from 31, with 277 full-time positions being eliminated, according to the report. The Democratic staff members of the Senate Homeland Security Committee say in the report they were told that even though federal officials say eight VIPR teams can “maintain an acceptable security posture,” the three-quarters funding cut will “limit” the presence of teams nationwide.

I would’ve preferred the complete abolition of these ineffectual, costly teams–which have never stopped a single terrorist attack but which have often caused havoc at the transportation hubs they’ve haunted. But these cuts are a welcome, significant step in the right direction, and the administration is to be commended for making this move.

The International Monetary Fund Accidentally Provides Strong Evidence for the Laffer Curve

As a general rule, the International Monetary Fund is a statist organization. Which shouldn’t be too surprising since its key “shareholders” are the world’s major governments.

And when you realize who controls the purse strings, it’s no surprise to learn that the bureaucracy is a persistent advocate of higher tax burdens and bigger government. Especially when the IMF’s politicized and leftist (and tax-free) leadership dictates the organization’s agenda.

Which explains why I’ve referred to that bureaucracy as a “dumpster fire of the global economy” and the “Dr. Kevorkian of global economic policy.”

I always make sure to point out, however, that there are some decent economists who work for the IMF and that they occasionally are allowed to produce good research. I’ve favorably cited the bureaucracy’s work on spending caps, for instance.

But what amuses me is when the IMF tries to promote bad policy and accidentally gives me powerful evidence for good policy. That happened in 2012, for example, when it produced some very persuasive data showing that value-added taxes are money machines to finance a bigger burden of government.

Well, it’s happened again, though this time the bureaucrats inadvertently just issued some research that makes the case for the Laffer Curve and lower corporate tax rates.

HASC vs. SASC on BRAC

Neither of the defense bills (National Defense Authorization Acts, NDAAs) wending their way through the House and Senate grant the Pentagon the authority to reduce excess infrastructure. Military leaders have asked for such permission for many years, but Congress has stubbornly refused. An amendment sponsored by Rep. Tom McClintock (R-CA) would have stripped the language from the House NDAA that blocks a new Base Realignment and Closure (BRAC) round. That amendment failed yesterday by a vote of 175-248.

Before the vote, the House Armed Services Committee issued a “BRAC Facts” one pager to preempt the McClintock amendment and other attempts to resolve the impasse between Congress and military leaders over BRAC.

The one pager includes a few facts, but is selective to the point of misleading. For example, it states that Secretary of Defense James Mattis “does not have confidence in DOD BRAC assessments.” And quotes Mattis as saying “I am not comfortable right now that we have a full 20 some percent excess.” 

But the SecDef also said that a new BRAC round could save the Pentagon $2 billion a year. In written testimony last month, Mattis called BRAC “a cornerstone of our efficiencies program” and necessary to “ensure we do not waste taxpayer dollars.” Granting the Pentagon authority to reduce overhead, Mattis continued, “is essential to improving our readiness by minimizing wasted resources and accommodating force adjustments.” He observed, “Of all the efficiency measures the Department has undertaken over the years, BRAC is one of the most successful and significant.”

Meanwhile, deputy defense secretary Robert Work has also called for BRAC. “Spending resources on excess infrastructure does not make sense,” he wrote last year. In short, it simply isn’t accurate to imply that current Pentagon leaders doubt whether the military has more bases than it needs. And that is true even if the military were to grow in the next few years, as the HASC claims it must.