July 10, 2009 6:37PM

Week in Review: Stimulus, Sarah Palin and a Political Conflict in Honduras

Obama Considering Another Round of Stimulus

With unemployment continuing to climb and the economy struggling along, some lawmakers and pundits are raising the possibility of a second stimulus package at some point in the future. The Cato Institute was strongly opposed to the $787 billion package passed earlier this year, and would oppose additional stimulus packages on the same grounds.

"Once government expands beyond the level of providing core public goods such as the rule of law, there tends to be an inverse relationship between the size of government and economic growth," argues Cato scholar Daniel J. Mitchell. "Doing more of a bad thing is not a recipe for growth."

Mitchell narrated a video in January that punctures the myth that bigger government “stimulates” the economy. In short, the stimulus, and all big-spending programs are good for government, but will have negative effects on the economy.

Writing in Forbes, Cato scholar Alan Reynolds weighs in on the failures of stimulus packages at home and abroad:

In reality, the so-called stimulus package was actually just a deferred tax increase of $787 billion plus interest.

Whether we are talking about India, Japan or the U.S., all such unaffordable spending packages have repeatedly been shown to be effective only in severely depressing the value of stocks and bonds (private wealth). To call that result a "stimulus" is semantic double talk, and would be merely silly were it not so dangerous.

In case you’re keeping score, Cato scholars have opposed government spending to boost the economy without regard to the party in power.

For more of Cato’s research on government spending, visit Cato.org/FiscalReality.

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July 2, 2009 8:50AM

New Government of Honduras Takes a Wrong Turn

Facing mounting international pressure to reinstall a would-be despot, the provisional government of Honduras is taking a very wrong turn by asking the National Assembly to temporarily extend curfew powers and limit basic individual liberties.

The government claims that the measures, which will be in place for 72 hours, are justified to prevent any civil unrest given the imminent return of former president Manuel Zelaya to the country.  However, the provisional authorities are actually undermining the rule of law and constitutional liberties that they claimed to be protecting when removing Zelaya from power last Sunday.

The individual rights and liberties that would be affected: the inviolability of homes, the right to protest peacefully, the guarantee against being held for more than 24 hours without charges, and the freedom to move around the country undisturbed.

These actions are unjustified. By moving to take away civil liberties from Hondurans, the provisional government undercuts its moral standing vis-à-vis the increasingly autocratic rule of Manuel Zelaya it came to replace. Even if these measures are meant to be temporary, history shows that once a government claims emergency powers, it is very hard to completely relinquish them once the “emergency” is gone.

Moreover, these restrictions do little service to the argument of the new Honduran government that Zelaya’s removal was not a military coup d'état. Having the army policing the streets and curbing the free movement of people and their right to protest peacefully gives the impression that the military is in charge and calling the shots.

The Honduran government should scrap these measures and reassure the population that their individual rights and liberties guaranteed under the Honduran constitution will be fully respected.

June 29, 2009 1:58PM

Honduras’ President Is Removed from Office

Honduran President Manuel Zelaya is just the latest democratically elected Latin American leader to violate his country’s constitution in order to achieve his political goals. Both he and the practice of democracy in Honduras are now paying the price.

The removal from office of Zelaya on Sunday by the armed forces is the result of his continuous attempts to promote a referendum that would allow for his reelection, a move that had been declared illegal by the Supreme Court and the Electoral Tribunal and condemned by the Honduran Congress and the attorney general. Unfortunately, the Honduran constitution does not provide an effective civilian mechanism for removing a president from office after repeated violations of the law, such as impeachment in the U.S. Constitution. Nonetheless, the armed forces acted under the order of the country’s Supreme Court, and the presidency has been promptly bestowed on the civilian figure -- the president of Congress -- specified by the constitution.

Restoration of stable democracy in Honduras could benefit from two things: one, the Electoral Tribunal and Congress calling for general elections earlier than they are scheduled in November; and two, an international condemnation of moves by strongarm figures like Zelaya to undermine democratic institutions and the rule of law.

June 29, 2009 1:41PM

Spinning…When a President who Seeks Dictatorial Powers in an Illegal Move Is Removed by the Congress and by the Supreme Court, Is it a “Military Coup”?

The media discussion of events in Honduras is remarkably confused. Here’s CNN:

The president of the U.N. General Assembly scheduled a noon session Monday to discuss the situation in Honduras, following a military-led coup that ousted the sitting president.

and

Micheletti, the head of Congress, became president after lawmakers voted by a show of hands to strip Zelaya of his powers, with a resolution stating that Zelaya “provoked confrontations and divisions” within the country.

….

The coup came on the same day that he had vowed to follow through with a nonbinding referendum that the Honduran Supreme Court had ruled illegal.

Imagine that George Bush, Barack Obama, Bill Clinton, Ronald Reagan or some other American president had decided to overturn the Constitution so that he could stay in power beyond the constitutionally limited time. To do that, he orders a nationwide referendum that is not constitutionally authorized and blatantly illegal. The Federal Election Commission rules that it is illegal. The Supreme Court rules that it is illegal. The Congress votes to strip the president of his powers and, as members of Congress are not that good at overcoming the president’s personally loyal and handpicked bodyguards, they send police and military to arrest the president. Now, which party is guilty of leading a coup?

This is another example of populist, dictatorial, anti-democratic thought parading as “democratic.” I discuss the issue in my recent lecture on enduring democracy in New Delhi.