Volume 11, Issue 22: June 1, 2009
- News of Economic Recovery Warrants Skepticism
- Losing Ground in the Middle East
- Colombia Needs Principle over Politics
- Economics Seminar for Students (June 4, Oakland, CA)
- This Week in The Beacon
1) News of Economic Recovery Warrants Skepticism
Market prognosticators who claim that an economic recovery is at hand have probably have it all wrong. This shouldn’t be surprising. According to Independent Institute Research Fellow Dominick Armentano, most of the economists and stock-market analysts who say the economy is recovering were caught off guard when the housing market collapsed, taking many financial institutions and other sectors of the economy.
Armentano cites two reasons to be skeptical about recent reports of recovery. First, the federal government’s massive infusion of liquidity into the financial system is creating a new round of unsustainable investment, just as the unsustainable housing boom itself was created by the Federal Reserve’s earlier expansion of credit. Second, recent massive increases in federal spending will eventually drive up interest rates. In other words, both monetary and fiscal policies are laying the foundation for more economic trouble ahead.
“A sustainable economic recovery requires that the credit-dependent industries (housing, autos, construction) and their suppliers shrink back to levels of production that are consistent with current incomes and current levels of savings,” writes Armentano. “All of this is painful but necessary. And any government attempt to make (consumer) credit more available through bailouts, subsidies and regulations is counterproductive to any real recovery.”
“Economic Recovery? Not So Fast,” by Domick Armentano (5/26/09)
“The Contradictions of Secretary Geithner,” by D. W. MacKenzie (5/20/09)
“Anatomy of a Train Wreck: Causes of the Mortgage Meltdown,” by Stan J. Liebowitz (10/3/08)
2) Losing Ground in the Middle East
Last week, Secretary Clinton reiterated President Obama’s call for Israel to halt the growth of Israeli settlements in the West Bank. As Prime Minister Netanyahu has indicated, however, the White House’s plea will go unheeded, just as previous Israeli administrations ignored similar requests from previous U.S. administrations.
If Palestinian statehood is an eventuality, as many Israelis believe, then grabbing decent land in the occupied territories, although wrong, is understandable, according to Ivan Eland, director of the Independent Institute’s Center on Peace & Liberty. But the more fundamental issue for Americans is why the United States continues to meddle in the Israeli-Palestinian conflict, given its intractability and the array of other issues of greater importance for Americans.
U.S. policy toward Palestine “is costly, a waste of time, and of no help to the real interests of the Palestinian or Israeli people,” writes Eland. “The United States should follow the physician’s motto of ‘do no harm’ and withdraw from the field.”
“The Israeli-Palestinian ConflictWhy the U.S. Should Care Less,” by Ivan Eland (6/1/09))
The Empire Has No Clothes: U.S. Foreign Policy Exposed, by Ivan Eland
Ivan Eland on C-SPAN2. Interview by Rep. Ron Paul
Partitioning for Peace: An Exit Strategy for Iraq, by Ivan Eland
3) Colombia Needs Principle over Politics
Colombian president Alvaro Uribe hopes to run for re-election next year, but in order to do so a quarter of the electorate would need to approve a constitutional referendum permitting him the possibility of another term. Should they? Uribe claims he must stay in office in order to continue fighting Marxist terrorists and fostering a business climate conducive to economic growth, but many other candidateshis former defense secretary among themare perfectly capable of pursuing those goals just as effectively.
Colombia’s voters should turn a deaf ear to Uribe’s plea because, according to Independent Institute Senior Fellow Alvaro Vargas Llosa, something more fundamental is at stake: the rule of law.
Ironically, Uribe’s previous upholding of the rule of law is at the root of the country’s recent progress. Writes Vargas Llosa: “Many of the ugly truths in Colombian societythe umbilical cord linking the paramilitary groups to the establishment, the abuses committed by the armed forces, the widespread corruption originated in drug moneyhave come to the surface because of policies that facilitated the involvement of judicial institutions in what used to be beyond the reach of the law and because, unlike [Venezuela’s Hugo] Chavez, Uribe has not sent journalists into exile or expropriated media outlets.”
For that reason, Colombians should prevent Uribe from trying to re-write the constitution. Concludes Vargas Llosa: “If he goes ahead with the referendum and wins, the rule of law will have suffered and his Marxist foes will have snatched victory from the jaws of defeat.”
“Uribe Must Be Stopped,” by Alvaro Vargas Llosa (5/27/09) Spanish Translation
Liberty for Latin America: How to Undo Five Hundred Years of State Oppression, by Alvaro Vargas Llosa
Lesson from the Poor: The Triumph of the Entrepreneurial Spirit, edited by Alvaro Vargas Llosa
Video: “Latin America in the Post-Bush Era,” featuring Alvaro Vargas Llosa and Mark Weisbot
4) Economics Seminar for Students (June 4, Oakland, CA)
When it comes to explaining the causes of and solutions to today’s challenging economic problems, most news coverage has fallen far short. Nor has sufficient coverage been given to the ethical dimensions of federal economic policies. How can students make sense of the barrage of analyses much of it contradictory -- with which they are bombarded? The key is in understanding basic economic and moral principles.
The Independent Institute, the Institute for Principle Studies, and EconomicThinking.org have teamed up to offer a three-hour seminar for high-school and college students, “Understanding Today’s Economy,” to be held at the Independent Institute in Oakland, Calif., on Thurs., June 4, from 4:30 to 7:30 p.m.
Topics & speakers:
- Introduction: Why Economics Matters More Than Ever Greg Rehmke
- The Auto Industry Bailouts: A Principled Critique Mike Winther
- Would Energy Independence Make America More Secure? Brian Gothberg
- Ordered Liberty: Insights from Classic Authors José Yulo
- Concluding Remarks: Can Government Be Held Accountable? Anthony Gregory
When: Thurs., June 4, 2009, 4:00 7:30 p.m.
Where: The Independent Institute, 100 Swan Way, Oakland, CA 94610
Seminar Fee: $5 per person. Includes pizza dinner!
RSVP required: 510-632-1366 or events @independent.org
This special seminar is also an excellent opportunity for students and their parents to preview the upcoming Challenge of Liberty Summer Seminars, which will feature most of the speakers on this week’s program, along with a few more.
Session I: June 15-19; Session II: August 10-14
5) This Week in The Beacon
If you haven’t done so yet, please be sure to check out the past week’s offerings from the Independent Institute’s blog, The Beacon.
- “Rearranging the Chairs on the Deck of the Titanic,” by William F. Shughart II (6/1/09)
- “Obamacare Will Help the Economy,” by Randall Holcombe (6/1/09)
- “Security Theater in Three Airports: Istanbul, Paris, and Atlanta,” by Robert Higgs (5/31/09)
- “Our Major Surprise in Asia Minor,” by Robert Higgs (5/30/09)
- “You Go, Gordon Gekko!,” by Peter Klein (5/30/09)
- “A Timely Economics Seminar for Homeschoolers,” by Carl Close (5/29/09)
- “Resistance, Assimilation and Honor: An Excerpt from C. S. Lewis,” by Art Carden (5/27/09)
- “Venezuelan Government Continues Intimidation Campaign,” by Gabriel Gasave (5/27/09)