Cowardly New World — March 11 was
the day the War on Terror celebrated its six-month birthday, and a day for the
pundits to comment on the war has been going. We've now destroyed the Taliban
government, which we helped to create, and destroyed the fighting ability and
most of the soldiers of al Quaeda, which we didn't help to create. It has been a
swell war so far.
The few casualties we've had have pretty much been
accidents, and there's been lots of good television, thanks to precision bombing
(not quite as sharp as the stuff on a teenager's X-Box, but still pretty cool)
and all those pictures of Afghan women grateful to walk with naked faces after
years of hiding behind Taliban-imposed veils.
Our airports feel a lot
safer, now that the National Guard's weekend warriors are standing next to every
security checkpoint with machine guns and cammies. Sure, it's a little more
difficult to fly (not to mention going to a football game), but it's worth it to
know we're secure. Meanwhile, people who look as if they might be Arabs are
stopped, searched, and even held by the police at whim. There have also been a
few incidents of, well, murder of innocent foreign-looking people. It's a small
price to pay.
President Bush — the same president who was seen by the
media and most of his fellow citizens as a so-so leader and, well, perhaps, a
little slow — now polls out as one of the three greatest presidents in
American history. Congress also enjoys new esteem, thanks to its willingness to
pour money into the war and to give new powers to the police.
If press
reports are to be believed, we are now ready to go into extra innings and attack
Iraq, as soon as we can manufacture enough smart bombs. (We used up our inventory
in Afghanistan.) And after Iraq, we'll go for Iran, then North Korea. Or maybe
North Korea and then Iran.
The war that was born with the outrageous
attack on Sept. 11 is now a robust baby boy, bursting with testosterone, ready to
conquer the world as soon as he grows up.
Welcome to Pax Americana. Enjoy
yourself.
If you value human liberty, however, this is not a good time for
you. War has always been conducive to the growth of government power and the War
on Terror is no exception. At every level, government officials have used the war
to rationalize increases in their revenue and power. Three days after Sept. 11,
the University of Washington announced that to prevent terrorist attacks at
football games, people attending them would no longer be permitted to possess
politicalĘpamphlets. Last week in San Francisco, armed federal agents moved in on
a medical marijuana garden, arresting the people who were growing the herb for
free distribution to cancer victims. California voters legalized medical
marijuana five years ago, but until last week federal authorities were reluctant
to overrule state law by violent means. But the War on Terror provided an
opportunity. "History teaches us that in a time of national emergency, and we
have seen that since Sept. 11, a nation's moral values are clarified." Thus drug
czar Asa Hutchinson, explaining his philosophy of human life.
And it's not
just cancer victims who are now the enemy. It's every American who values
freedom-- as Attorney General Ashcroft reminded us: "To those . . . who scare
peace-loving people with phantoms of lost liberty, my message is this: your
tactics only aid terrorism, for they erode our national unity and diminish our
resolve. They give ammunition to America's enemies and pause to America's
friends."
The enemy is also every member of America's productive class.
Government spending in the name the War on Terror has been tremendous, and it
will increase still further as the war goes on. It's an open secret — so
open that it's been published on the front page of the Wall Street Journal —
that a huge portion of the increased military spending is pork, plain and simple,
and fights terror no more than do the restrictions on free parking at
airports.
How long will the War on Terror last? Members of the governing
class, aware of the opportunities that war offers for the aggrandizement of their
own wealth and power, hope it will last forever. America's destiny, they seem to
think, is to rule the world, eradicating governments that they themselves don't
like, installing new ones that they do, arresting people on the high seas and
even in other countries.
This is a new kind of imperialism. The United
States has no desire to bring the world under its direct government. In this
democratic era, doing that would mean letting people in other countries vote in
our elections, which would certainly threaten the job security of the governing
class. And it would mean extending the "safety net" of welfare benefits to
everyone, something that Americans could afford only at the price of a huge
reduction in their standard of living. Americans are merely to be the world's
privileged elite, and they will pay for this exalted status merely with the coin
of liberty. And — with the exception of a few bad people, like me, who "give
ammunition to America's enemies"-- they will pay that price willingly and even
happily — R.W. Bradford
| Fred L. Smith is
president of the Competitive Enterprise Institute.
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George "Smoot Hawley" Bush — The
Bush administration's decision to abandon its free trade position to protect the
domestic steel industry is distressful. Even Clinton didn't give in to this
special interest pleading. But it appears that taxing consumers to help the steel
unions is more important than letting the free market work, at least to the Bush
team. The decision was totally political. The last election was close.
Bush barely carried Ohio and West Virginia and he narrowly lost Pennsylvania.
Restricting steel imports is expected to improve his prospects in these states in
2004. It goes without saying that politics always trumps economics in
Washington. Whether this turns out to be good politics remains to be seen.
Bush's move undermined his stance on trade here and abroad and triggered outraged
cries from the European Union, Brazil and other nations — and may yet
trigger a response of further trade restrictions. Certainly, it will encourage
other U.S. businesses to seek protection, every one of which will make America a
less prosperous place. And he didn't have to turn to protectionism to
cover his political rear. The trade laws permit the president to offer any type
of relief to a distressed industry. He could have suspended some of the more
costly environmental regulations affecting the steel industry. Bush is a good
communicator. He could have given a useful talk explaining that trade protection
is wrong, akin to banning German or Norwegian contestants from participating at
the recent winter Olympics. Sure we'd win more metals but it would reduce the
value of the games. Besides, we're already in one war; the last thing we
should be doing is triggering a trade war. — Fred L. Smith
Where were the inside traders when we needed them?
— Contrary to what you hear from just about every politician and
every pundit, the Enron collapse suggests that less regulation might make future
disasters of this type less likely. Enron, like most companies, sought to
minimize liabilities on its balance sheet by transferring debts and risks to
external parties. As most readers of business pages know by now, the entities to
which Enron transferred many of its liabilities were creatures of Enron itself.
Shifting risks to such entities is merely internal bookkeeping and has no net
benefit. Shell games like this come close (or perhaps exceed) the threshold for
fraud and the courts will be deciding whether stupidity or criminality is the
more plausible explanation. But fraud isn't new and laws against that problem
have long existed. No new regulations are needed here. But other
regulations may have deadened the markets ability to detect Enron's problems
earlier when they were less severe and when corrections would have been less
costly. After all, some people knew much of the Enron story much earlier, indeed
at a time when Enron's share price was rising sharply. But markets are efficient
and knowledge that a company is in trouble inevitably results in people selling
the stock, driving down its price. What made it possible for Enron stock to soar
to the $90 range while it was getting into worse and worse shape?
Certainly the laws against insider trading are part of the reason this happened.
After all, the rationale for such laws is that no one should be allowed to profit
from information garnered because of one's special position within the firm. It
wouldn't be fair! Outsiders can gain from acquiring knowledge but insiders, who
we would expect to know more, can't. Had Enron insiders been able to sell
based on their realization that the firm was in trouble, Enron's share prices
would never have soared so high and fewer investors would have rushed to purchase
the stock. And, of course, the investors would have experienced lower paper
losses when the share prices did drop. Instead, the share price increased rapidly
throughout 2000 — creating the bubble. The Enron employees who thought they
were rich soon found they weren't, and lots of other people lost money.
As Hayek and the Austrian economists spent their lives explaining, markets are
best viewed as institutions that communicate information about the value of goods
and services. If there is no ability to exchange goods, then that knowledge
cannot exist. Under current law, outside investors can invest (or disinvest) in a
firm based on their knowledge about it. But those in the best position to learn
critical information about a firm face major barriers to using and profiting from
such information. Not surprisingly, many insiders — managers, employees,
auditors, and investment analysts — find it less worthwhile to dig deep to
find the real status of the firm. The executives'positions depend upon the firm's
success. If they are unable to profit from bad news, they will tend to hide it,
hoping they can turn the situation around. The result of insider trading
laws is that less energy is put into assessing the viability of firms. And, thus,
stock values are always somewhat distorted. In most cases, those distortions are
minor. In the Enron case, they were massive — and that fact turned a problem
into a disaster. — Fred L. Smith
| Ralph Reiland is
a Pittsburgh restarauteur. |
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Laughing yet? — Anyone notice that
it's getting pretty creepy around the edges? First, from the libertarian
right, Lew Rockwell, president of the Ludwig von Mises Institute, is tallying up
the goodies that'll flow our way if the terrorists blow up D.C. "Let's
say that Washington really was incinerated," writes Rockwell. "As difficult and
alarming as this sounds, we live in times when horrible realities confront us
every day. It is time that we deal frankly and honestly with the ugly
prospect." And, frankly, Rockwell sees more doughnut than hole if, praise
be to Allah, the entire American capitol is turned into a radioactive dust bowl:
"The first thing that would happen is that your personal income would rise equal
to the 40 percent you currently pay Washington in taxes. Because there would be
nowhere to actually send the checks — excise taxes, income taxes, and
payroll taxes would be meaningless." He's serious. And retirement would be
better: "Instead of having to wait for politicians to give us 'private accounts'
for some portion of Social Security, we'd get real privatization with no FICA at
all." And if the wackos keep coming, to kill us all? No way, says
Rockwell, not after they see we don't mean business: "The country would be
immediately vulnerable to attack by terrorists! On the other hand, there would be
no one to enforce sanctions against Iraq, pay the troops in Saudi Arabia, or fund
the settlements on the Gaza Strip, so the terrorists would lose their rationale
for suicide bombings and the like. They might just choose to go home to their
wives and kids." Imagine that. These single-minded nutballs, after
knocking down the World Trade Center, after running a passenger jet into the
Pentagon, after leveling D.C., "might just choose" to head on back to their caves
to keep a lid on their women and make sure no kids are flying kites.
Granted, Lew Rockwell does hate the government. He hates taxation. He hates all
the D.C. alphabet agencies. And he really hates how the bureaucrats have messed
up his retirement money. But still, nuking D.C.? That's one hell of a path to
privatization. And why would the 40% in federal taxes go to zero? Wouldn't
it go 60%, or 80%, if we had to replace everything? Or do we just bulldoze it all
into one giant pile and leave it for the next civilization to clean up?
Just as nuts on the left is award-winning columnist and cartoonist Ted Rall, busy
of late keeping the readers of the Washington Post, Los Angeles Times and New
York Times in stitches with comic strips about the women who lost their husbands
on Sept. 11. "Terror Widows" starts with a drawing of a woman with dollar bills
flying over her head, and these opening words: "They're eerily calm. They smile
and crack jokes and laugh out loud. They're the scourge of the media." The
next frame shows a woman speaking behind a glut of TV microphones. Her words: "Of
course it's a bummer that they slashed my husband's throat — but the worst
was having to watch the Olympics alone." Next frame, a sketch of a woman
sitting on a couch with armfuls of overflowing cash. Her words: "I keep waiting
for Kevin to come home, but I know he never will. Fortunately, the $3.3 million I
collected from the American Red Cross keeps me warm at night." In the
final frame, a woman is being interviewed. "The unbearable grief of the empty
spot in your conjugal bed must weigh down your heart with unimaginable pain." The
woman's answer: "Huh? Oh yes, definitely." She's wearing the words "YOUR AD HERE"
emblazoned across the front of her sweater. A week later, Rall followed up
with some fun comics about dead American troops. "Postmodern Heroes" starts with
a sketch of two soldiers. The one in the USMC t-shirt says, "The REAL heroes
didn't make it — they died for US." Next frame, the two soldiers are
looking at a photo of a dead colleague. "That's my old buddy Joey from Queens. No
one knew as many bad jokes. Died in a helicopter crash . . . mechanical
problems." Next frame, a photo of another dead soldier. Asks soldier one:
"Hey! Isn't that Big Ben? He loved his whiskey." Soldier two: "Sure is! Ben's
helicopter went down on the way to Afghanistan. Rotor trouble, you know."
Next frame, a newspaper headline: "First Female Casualty." Soldier one: "Well, at
least Brenda got to die in battle." Soldier two: "Not quite. She feel out of a
helicopter OVER a battle." Soldier one: "Oh right — she killed Ken when she
hit." Final frame: "Actually, Ken's chopper fell apart at high altitude.
Brenda took out a DIFFERENT helicopter." Laughing yet? Mr. Rall's
funnies are syndicated in nearly 100 American cities. In 1995, he won first place
in the Robert F. Kennedy Journalism Awards for Cartoons. In 1996, he was one of
three finalists for the Pulitzer. Today, his wrap up: "I think this country died
quite some time ago, and I can't say I'm terribly sad about it." Laughing
yet? — Ralph Reiland
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