Monday, June 29, 2009
Credit where credit is due, as they say.
By midnight tonight, Iraq's cities will again belong to Iraq. The military will stop policing the streets, and shift to ferreting out insurgents in the countryside. Who knows how long that will take. So sure, we've merely moved to "imperial occupation lite," but I'll take it for now.
The problem is that attacks on US troops will continue for as long as we have occupying forces on the ground, and it will be politically difficult to leave as long as attacks on US troops continue (Look! Iraq is unstable! It's on the verge of collapse!). On top of that, insurgent forces will claim "victory" no matter when we leave. It remains the best choice to get ground forces out as soon as logistically possible.
Obama should order a complete withdrawl while he still has the political capital to pull it off. A prolonged retraction will be difficult and bloody. Ultimately, that is the choice Obama has to make: take a cautious approach, saving his approval rating; or withdraw quickly and completely, saving American and Iraqi lives.
The Cato Institute hosted three speakers this Wednesday in the F. A. Hayek Auditorium in its DC office. The topics under discussion were Dr. Paul’s bill to audit the Federal Reserve (HR 1207) and the relationship between the Federal Reserve, the private sector, Congress, and the Treasury.
Dr. Paul’s bill would expand the GAO’s authority to audit the Federal Reserve. The current law, originally passed in 1978, allows only a limited audit process. For instance, the Federal Reserve’s dealings with foreign central banks are not currently subject to audit. HR 1207 removes this and other restrictions, fully opening the Fed’s books to public scrutiny. Dr. Paul stressed that the bill wouldn’t allow Congress to interfere in the Fed’s decision making process; it only makes a full record of the central bank’s activities publicly available.
Appearing on the panel with the Texan congressman were Gilbert Schwartz of Schwartz & Ballen LLP, formerly Associate General Counsel to the Federal Reserve, and Bert Ely, president of Ely & Company, Inc.
Schwartz emphasized that while the Federal Reserve and other agencies were partially to blame for the financial crisis, Dr. Paul’s bill was unnecessary at best and at worst had the potential to hurt the economy by undermining the Federal Reserve’s independence. He pointed out that although the Fed lending to private sector institutions outside of the banking industry is unusual, it is not unprecedented and is authorized by law. Section 13(3) of the Federal Reserve Act authorizes the Fed to lend to businesses “in unusual and exigent circumstances,” and was used to lend to farmers and other business owners in the 1930s. Schwartz also pointed out that some of the expansion in the monetary base has been undercut by $700 billion in increased deposits with the Fed. Although by Schwartz’s admission, the Fed might be criticized for a lack of openness, he saw its intervention as instrumental to preventing a total economic collapse, citing the chaos caused by the collapse of Lehman Brothers as evidence.
The third member of the panel, Bert Ely, pointed out how the balance sheets of the Fed and the Treasury are interconnected and identified several areas where current policy could be reexamined. His central question was whether the Fed’s power to lend to private industry without Congressional approval should exist at all, and whether it makes sense for that power to rest with the Fed rather than another agency such as the Treasury. Ely said that Congress should address these questions and, depending on the answers, change existing laws.
Congressman Paul posed a question which he challenged opponents of his bill to answer. “Why not?” Most objections to an audit don’t hold water. Merely opening the Fed’s books is not an assault on its independence. Concerns that an audit would endanger the trust foreign central banks have in the Fed are based on a slippery-slope scenario where auditing leads to meddling. Paul pointed out that the Fed is losing trust anyway, for reasons unrelated to an audit, and that we shouldn’t be more afraid of exposing the truth than we are of the consequences of potentially shrouding the Fed’s failures in secrecy. The other main argument against an audit is that making the Fed’s internal discussions public would upset the marketplace in ways the Fed would not intend. Paul pointed out that under the current system, rampant guessing surrounds every meeting of the Fed’s directors, and that this has much the same effect. Schwartz added that there was a time when the Fed didn’t even release its interest rate target as determined at an internal meeting until months or years afterwards, and there were doomsday predictions about the effect that making the information known immediately would wreak havoc with the economy. These predictions haven’t panned out, Schwartz said, and there’s no reason to suspect that additional transparency would cause any more speculative behavior than exists currently.
In short, the bill is a common-sense measure. Where disagreements exist, they’re about what to do next. Paul wants to legalize competing currencies; practically, this would mean allowing people to pay their debts in gold and to enter into contracts with payments denominated in gold. He predicts that monetary reform is coming whether we like it or not, and that to prepare, we need to have information about what went wrong in the past as well as a failsafe in the form of a legal competing currency. Regarding the current monetary regime, Paul simply said “this system has ended.” He sees a chain of central bank failures dating back to the Fed’s creation in 1913 as ample evidence, and said of our current crisis, which he views as another failure of the Federal Reserve System, “this is the big one.”
Schultz had a different take. He said that the message that more transparency is needed is getting to the Fed, and said of Paul’s bill, “I’m not sure this legislation corrects the problem.” Ely said that future actions should take into account the many different roles the Fed plays, and that each role should be examined separately.
Regardless of which direction Congress decides to go with monetary policy reform, it is clear that the issue of the Federal Reserve’s role is going to be a part of the national dialogue moving forward. HR 1207 would provide a basis for that discussion. Once we know what the Fed has been up to, we’ll have a better idea of what to do next. Said Paul, “That’s when we’ll have a lot more fun."
An audio recording of the event is available at http://www.cato.org/event.php?eventid=6279.
Monday, June 22, 2009
Words fail. After failing several times due to the decidedly nonstandard spelling, I navigated to the company's webpage, which I am refusing to link to on the grounds that to do so would be morally indefensible. I will, however, quote from their website:
Keep the Positive Energy Going!
O-BAM-AAH!™ Energy Stix seeks to continue the momentum of POSITIVE ENERGY which came to light during the Obama campaign when millions of Americans were inspired to make a difference through volunteering and community involvement.
O-BAM-AAH!™ Energy Stix is designed to emphasize positive energy channeled for personal growth and supporting national and global needs.
OUR MISSION: New Energy for America
To create universal POSITIVE ENERGY, by providing you with an energy supplement that contributes to your individual POSITIVE ENERGY when you need it.
Encourage volunteerism at ANY LEVEL in your community, which can include your neighborhood, your city, or globally.
Contribute to an unwavering positive outlook, regardless of the circumstances.
Promote POSITIVE CHANGE by focusing on what’s right; constant focusing on what is wrong is counterproductive
O-BAM-AAH!™ Energy Stix can contribute by helping with your energy and your mood.
It's the CHANGE America needs NOW.
I had never really bought it when people tried to point out that Obama wasn't so much a person as a brand. Politicians have been coming up with slogans and carefully marketing themselves for generations.
But there's something different about Obama. He didn't stop at the usual trappings--buttons, signs, slogans--the man had a logo, for starters. And it feels, at least here in Washington, like he's still campaigning. There are "Obama" wares in almost every gift shop, people are wearing Obama t-shirts, the whole drill. Now, it isn't as though this is the first time we've had a product try to latch itself onto a President's popularity; Theodore Roosevelt and teddy bears are probably the most well-known example. In terms of cults of personality, though, Obama is in elite company if we're talking about Roosevelt as the closest analogue. The man more or less single-handedly formed a third party and attempted to win election to a third term as President.
I don't want to blow this out of proportion; in the grand scheme of things, O-BAM-AAH Energy Stix (with POSITIVE ENERGY) are pretty clearly a flash in the pan. But my thinking has changed on the Obama phenomenon. It is a cult, but not in the "drink the Kool Aid" sense. It's a cult like the iPod is a cult, like Coca Cola is a cult, like Nike is a cult. Americans have been using brands to define themselves for years now. The only difference with Obama is that he's selling a service, not a product.
Vote Obama! Now with 33% more "Yes we can!"
Monday, June 15, 2009
My first blog post for CEI's OpenMarket.org has been approved and posted. Considering it was submitted around 5:30 and posted late this evening, I should probably thank someone tomorrow. In any case, if you're here you probably enjoy reading my political musings, so head on over and check it out.
Friday, June 12, 2009
A majority of House members now cosponsor the bill!
Also, the Senate version (sponsored by Bernie Sanders) has gained its first cosponsor, Jim Demint (R-SC). The battle now shifts to getting the house bill to the floor and building momentum behind the Senate version.
I had lots of "interny" things to do in the afternoon. I carried boxes all over the place, put name tags into name tag holders, and unpacked the swag. Each attendee got a mini lava lamp (these were the subject of many off-color jokes by staff and guests alike) and an anniversary-themed "Enjoy Capitalism" shirt similar to the ones you can buy at the Bureaucrash store. The miniature lava lamps looked pretty neat stacked up in the spare cardboard boxes we used to move them into the dining room. Whenever a box got nudged, they'd start glowing in synchronization with each other.
After that, I helped put programs and swag at each table. Then starting around 6:00 I started directing people from the elevator to the reception area. This meant I missed out on the open bar, but oh well, such is the life of an intern. After about an hour of that, we started herding folks into the dining room, and dinner started.
There were over 500 people in the room. The main course was black sea bass with parmesan risotto, braised leeks, asparagus spears, red peppers, and saffron sauce. There were speakers and video presentations throughout the evening. The most talked-about presentations were the keynote speaker's address and the "It's a Wonderful Institute" video.
The keynote speech was given by John Allison, chairman of BB&T bank, whose analysis of the bailouts would have made Ayn Rand proud. He explained that the government had forced healthy banks to take TARP funds--at interest--so that receiving TARP money wouldn't automatically stigmatize a business. This goes a long way towards explaining how some institutions are ready to repay TARP money.
The "It's a Wonderful Institute" video was a humorous look at what America would be like without CEI there to fight for liberty. It starred the Institute's own Ryan Radia, who is responsible for such things as referring to CEI as "The Institute" and the extensive use of the adjective "honorable" by CEI members.
The evening closed with CEI's video promoting "Human Achievement Hour," a response to the "Earth Hour" put on by various environmentalist groups. This was followed by a toast.
After dinner, everyone headed back to the reception area for an afterparty. There was an open bar, live music, an ice sculpture, and funky furniture. I was able to enjoy a scotch rocks and later a gin and tonic. Everyone seemed to be in good spirits coming out of the dinner.
The party was scheduled to last until 1 AM, although I had to leave around 11:30 to catch the Metro back to the office. I joined up with the other interns and headed out. All said, it was a very cool experience, and everyone I've talked to seems to have enjoyed it.
Tuesday, June 9, 2009
Well, I didn't see that one coming.
Sweden's Pirate Party will be filling at least one seat in the European Parliament. The party advocates the abolition of the patent system, major reform of copyright law, and greater privacy protection for Internet users.
My discussion of the party's success has triggered several discussions about intellectual property issues. I have some misgivings about whether an idea can coherently be called property. Most definitions of property I've seen are something along the lines of "the result of mixing one's intellectual or physical effort with natural resources," or some such thing. It seems more likely to me that IP is a utilitarian construct intended to either encourage creativity or line the pockets of the well-connected, depending on how cynical you are. In light of the fact that I've talked more about IP in the past two days than I had in the past year, I'd say that the Pirate Party is a great success. Avast, ye land lubbers! Prepare to be boarded!
In related news, my favorite MEP was reelected. This is Mr. Hannan's second appearance on the blog, and I hope not his last. Find his characteristically amusing and lucid acceptance speech below.
Wednesday, June 3, 2009
Or it could be a sign he really doesn't like Barack Obama all that much. Or both. Either way.
The AP story contains several quotes from "analysts" fully deserving of the scare quote treatment. Either they are blind enough to actually believe that Obama differs substantively from his Republican predecessor on foreign policy, or they are disingenuous enough to knowingly shower a series of misrepresentations and falsehoods on the American public.
"Obama's election is just about the worst thing that could have happened to these guys," said Tom Sanderson, a terrorism expert at the Washington-based Center for Strategic and International Studies. "They knew right away that his election undermined a key part of their argument that the U.S. was anti-Islamic, that the U.S. was racist."This election was a win-win for al-Qaeda. Bin Laden is trying to bankrupt the US by drawing it into unpopular, unwinnable military conflicts in deserts and mountains on the other side of the globe. McCain would have chased Bin Laden "to the gates of hell," at which point presumably he would have given up quietly, and Obama has shown no willingness to end the "Global War on Terror" begun by his predecessor. Make no mistake: this is a game where the only way to win is to refuse to play.
But back to the article. If a PR blitz by al-Qaeda is evidence that the organization is worried about Obama making diplomatic inroads, then what do we make of Obama's own PR campaign?
His speech at Cairo University Thursday is part of a campaign to prove he differs from former President George W. Bush, whose invasion of Iraq and aggressive counterterrorism tactics stoked Muslim ire and helped al-Qaida rally support.Obama can talk all he wants, but how do we expect the Muslim world to hear his soothing voice over the rattle of American machine guns and the explosive roar of American bombs? The al-Qaeda propaganda writes itself.
Obama has refused to investigate the torture of Muslims at Guantanamo and in secret facilities, has expanded the war in Afghanistan (which is now essentially also a war in Pakistan), and has not pulled US troops out of Iraq. The popularity his overtures have won him will only last so long. After that, the cycle that starts with US interventionism, continues with the creation of new terrorists, and ends with the murder of Americans will continue unabated.
Expect all but the most principled and astute liberal commentators to continue searching for excuses for the "peace candidate" to avoid having to admit that their messiah is a warmonger with a silver tongue. Expect the neocons to desperately nitpick at every decision Obama makes in a farcical attempt to make him appear "soft on terror" compared to their political allies.
To the families of our dead soldiers, and those of the dead civilians in Iraq and elsewhere, Obama will seem neither peaceful nor soft on anything.
Tuesday, June 2, 2009
The good news is that the Chinese seem to have a pretty good handle on what ails the US: what increasingly appears to be an unserviceable debt.
It’s “very natural” for the world to be concerned about the U.S. government’s spending and planned record fiscal deficit, Yu said...The other good news is that they aren't buying the Obama administration's rhetoric about reducing the deficit.
The bad news is that they're likely just setting up for a massive power grab.
It may be helpful if “Geithner can show us some arithmetic,” said Yu. “We need to know how the U.S. government can achieve this objective.”
The deficit is projected to reach $1.75 trillion in the year ending Sept. 30 from last year’s $455 billion shortfall, according to the Congressional Budget Office.
Central bank Governor Zhou Xiaochuan has proposed a new global currency to reduce reliance on the dollar.In any case, a skittish China is bad news for US central economic planners. In order to avoid an inflationary disaster should the economy begin to recover, the Fed will have to find someone willing to buy US debt other than itself. As things stand right now, that's a dicey proposition.