The illusion of American moral authority

Imperialism, War
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Barack ObamaLast March, Anthony Gregory questioned if Barack Obama was already a worse president than George W. Bush, noting a long list of dubious accomplishments during Bush’s eight-year tenure.  Prior to his election Obama was highly critical of Bush’s policy on torture and the holding of suspected terrorists indefinitely at Guantanamo Bay without trial.  And one of Obama’s first acts after being sworn in as President was also one of his most dramatic: he signed an executive order banning torture and ordering the closure of Gitmo by 2010.  It was hailed as a bold move to restore the country’s shattered image overseas and bring its prosecution of the war on terror in line with its values on respecting human rights.

What a difference a thousand days as Leader of the Free World makes.

During that time Obama has ordered the killing of an American citizen in Yemen, without due process, based on his alleged association with al-Qaeda.  And in March he made an about-face on his promise to close Gitmo, instead reinstating the military tribunals and continuing Bush’s policy of detaining suspects without trial since they “in effect, remain at war with the United States.”

Now the Senate has granted Obama even greater discretion in arresting and indefinitely holding anyone – even U. S. citizens, despite itsGuantanamo Bay prisoners supporters’ claims to the contrary – suspected of terrorist activity, in approving a defense appropriation bill for 2012 that essentially expands the battlefield for the war on terror to anywhere on the planet, including U. S. soil.  (The Senate rejected an amendment sponsored by Colorado Democrat Mark Udall and Kentucky Republican Rand Paul that would have stripped out the authorization for indefinite detention of terrorism suspects.)  It is an unprecedented expansion of power for a president who campaigned on a promise to restore the country’s “moral authority.”  Yet Obama is simply another in a long line of politicians making promises that could never be kept: it is impossible to regain a moral authority the American empire has never possessed.

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The market giveth and the market taketh away

Business
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Mercy for Animals videoThe media are in a kerfuffle about a short-term egg shortage caused by Target and other supermarket chains dropping a major supplier, Sparboe Farms, following reports that workers at its production facilities abused chickens and failed to follow the company’s animal welfare policy.  The revelations were punctuated by a graphic undercover video released by animal rights group Mercy for Animals, which showed workers stuffing chickens into cramped battery cages, pulling rotting carcasses out of cages, “torturing” birds by swinging them around by their legs, and so on.  No matter how you feel about animal rights, it’s not pleasant to watch.

Sparboe, for its part, has shifted its damage control into overdrive, posting updates about steps it has taken to “rectify problems” and pointing out that it is the first egg supplier to receive USDA certification.  Which, given these reports, provides some insight into the worth of government certifications.

I expect a government response will be forthcoming, and Sparboe may face fines and possibly a regiment of FDA inspectors swarming over its farms in the months to come.  But anything the government can do in its enforcement role pales next to the punishment which can be meted out by the market.  Even if millions of consumers haven’t suddenly adopted veganism in response to the video, they still have let their displeasure be known, and the result is that Sparboe has lost significant business and is now forced to reevaluate its practices in order to regain consumer trust.  Which is exactly as it should be.  No amount of regulatory oversight will prevent every problem in our food supply (this year has also seen the deadliest listeria outbreak, from tainted cantaloupe, since the 1920s), but with the ease with which information disseminates online, the market will help ensure such problems do not go unnoticed by consumers, who are then free to vote their conscience.  If only the market was free to punish every business, no matter how large or small, for bad decisions and unethical practices.

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Five reasons not to support Newt Gingrich for President

Vulgar Politics
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  1. He’s for invading foreign countries to fight “radical Islamists,” except when he’s not.
  2. He suggested instituting the death penalty for drug trafficking in the 1990s.
  3. He supports ethanol subsidies as part of a “low-cost energy program”, which may include a cap-and-trade system, or maybe not.
  4. He’s strongly opposed gay marriage as a threat to traditional American values, which no doubt played a vital role in his three marriages (and extramarital affairs).
  5. In 1994 Gingrich claimed “People like me are what stand between us and Auschwitz.”  He’s right, you know: he probably would be a guard at the front gate.

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Real tax dollars, imaginary threat

Corporatism, Vulgar Politics
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That Barack Obama has handsomely rewarded supporters who bankrolled his presidential campaign is no secret; he’s just the most recent in a very long line of Leaders of the Free World who indulge in political patronage.  It’s a tradition in Washington, like spring cherry blossoms and Congressional sex scandals.

But perhaps having run out of political appointments and “green” energy companies to throw money at, now the Obama administration appears to be just making up opportunities for its supporters, according to a detailed story in the Los Angeles Times:

Over the last year, the Obama administration has aggressively pushed a $433-million plan to buy an experimental smallpox drug, despite uncertainty over whether it is needed or will work.

Senior officials have taken unusual steps to secure the contract for New York-based Siga Technologies Inc., whose controlling shareholder is billionaire Ronald O. Perelman, one of the world’s richest men and a longtime Democratic Party donor.

Smallpox was wiped out in the late 1970s, and no evidence has surfaced that any “rogue nations” or terrorist groups have obtained the virus, which is reportedly held only by the U. S. government and a Russian research institute.  Even if smallpox should surface again, the Feds have stockpiled a billion dollars’ worth of the vaccine, which has a shelf life of decades – quite unlike the drug being developed by Siga, which barely lasts three years.

And it’s uncertain whether it would even be effective, since testing it would require that someone becomes infected with, you know, smallpox.

None of these concerns seemed to deter Health and Human Services officials from securing the funding for Siga, to the point that they essentially created a no-bid opportunity for the pharmaceutical company:

But the federal contract [for developing the antiviral drug] required that the winning bidder be a small business, with no more than 500 employees. Chimerix Inc., a North Carolina company that had competed for the contract, protested, saying Siga was too big.

Officials at the Small Business Administration investigated and quickly agreed, finding that Siga’s affiliation with MacAndrews & Forbes disqualified it.

The Obama administration could have awarded the contract to Chimerix as the only eligible small-business applicant. Or it could have reopened the competition to companies of any size.

Instead, the administration moved to block all companies — except Siga — from bidding on a second offering of the contract.

Read much more here.

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“The mountains are high and the emperor is far away”

(Austrian) Economics, Business
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Reason.com has posted an excellent article on Wenzhou, China, a city built almost entirely upon private enterprise:

For the last 30 years, private citizens in this southeastern China metropolis have largely taken over one of the least questioned prerogatives of governments the world over: infrastructure.

Driving down the cluttered and half-constructed streets of this 3-million-strong boomtown requires frequent U-turns and the patience of Buddha, but every road eventually leads back to a factory. Each factory is in turn surrounded by a maze of roads filled with hundreds of small feeder shops selling spare parts, building materials, and scraps. Every haphazard street in this town seems to have an economic purpose….

Wenzhou shopping districtThe official channels of financing and investment are routinely bypassed, replaced by local institutions with their own governance and lending rules.  It all works, if a bit haphazardly:

Gray-market lenders are often established, though technically illegal, financial institutions that lend primarily working-capital loans at rates as high as 10 percent a month. Contacts often modify interest rates based on how well you know them. Forms of repayment enforcement differ. Weng points out that in a community so dependent on guanxi—relationships—defaulting on a contact’s loan could blackball you from future business opportunities….

Lending also takes place through a number of formal lending institutions that have become informal depositing institutions. Pawnshops in Wenzhou are very different from those in the West. The shops can give out loans of millions of dollars backed by property and stocks, and they can pay depositors interest rates three to four percentage points higher than the official lending rate at banks.

It’s a vivid example of what can be achieved when the central planners are too far away to have much influence and local bureaucrats learn to simply get out of the way.  If only U. S. bureaucracy was so ineffective!

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