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Volume 12, Issue 36: September 7, 2010
- Federal Bailouts Impose Hidden Costs on U.S. Economy
- The Independent ReviewFall Issue Now Available
- Assessing the U.S. Exit from Iraq
- Is Democracy in Venezuela Doomed?
- This Week in The Beacon
1) Federal Bailouts Impose Hidden Costs on U.S. Economy
Federal spending for the recent bailouts has surpassed $3.6 trillionthe cost of World War II in todays dollars. The indirect, long-term costs of the federal bailouts are not trivial either, according to Independent Institute Senior Fellow William F. Shughart II.
First, as a result of the bailouts, private companies that might otherwise have exercised due caution now have incentives to make riskier decisions, knowing that the feds may come to the rescue were something to go wrong. Second, healthier businesses are now less healthy because the bailouts have siphoned off some of the resources they could have used in the absence of the bailouts. Third, political considerations shaped the governments decisions about who does and who doesnt warrant a bailout, thus distorting the political process as well as the economic system.
If private companies find themselves in dire straits, it would be far better to allow the orderly processes of bankruptcy to determine who survives and who fails, writes Shughart. Taxpayers need to understand that the mega-billion-dollar numbers the politicians bandy about, like its only peanuts, is their money that will come out of their pockets, their childrens pockets, and even their grandchildrensyear after year after year, as far as the eye can see.
The Costs of the Federal Bailouts, by William F. Shughart II (Human Events, 8/31/10)
Taxing Choice: The Predatory Politics of Fiscal Discrimination, edited by William F. Shughart II
2) The Independent ReviewFall Issue Now Available
The Fall 2010 issue of the Independent Institutes journal is hot off the press. Here are some of the questions it examines:
- Why has the idea of social justice gained popularity since the 1960s? Read the article.
- Why do F. A. Hayek and Alasdair MacIntyre blame the Enlightenment for the rise of social engineering and ethical nihilism?
- How effective is food safety regulation in the United States?
- How violent was the American West? Read the article.
- Why do public schools often perform poorly?
- Why did Woodrow Wilson abandon the policy prescriptions of classical economics in favor of progressivism? Read the article.
- Which ideals did Rose Wilder Lane promote in the most widely read African American newspaper of her time?
- What unseemly metaphor best conveys the fraud and corruption now rampant in legislative politics?
- Whats right and whats wrong with Hayeks concept of spontaneous order?
- What can the Austrian school of economics tell us about Western literature? Read the review.
- How should the U.S. financial system be fixed? Read the review.
- Why do many intellectuals substitute an economic analysis of the worlds problems with an uninformed moral condemnation? Read the review.
The Independent Review (Fall 2010)
Special offer for first-time subscribers: Subscribe online to The Independent Review and receive two complimentary issuesthe next six issues for the price of four!
3) Assessing the U.S. Exit from Iraq
Last week, President Obama announced the near-complete withdrawal of U.S. combat troops from Iraq, a pull-out that leaves behind 50,000 military trainers and advisersten times the number of U.S. personnel stationed in Saudi Arabia at the time of the 9/11 terrorist attacks. Independent Institute Senior Fellows Ivan Eland and Charles Peña offer their evaluations.
In the final analysis, keeping troopseven as military advisersin Iraq undermines U.S. security, writes Peña. Drawing down from the 140,000 troops that were deployed in Iraq when President Obama took office in January 2009 to 50,000 today is significant progress. But bringing home the last 50,000 troops is just as importantif not more so.
Elands complementary assessment pulls no punches. The Iraq War was not only disastrous, he writes, it was one of the worst strategic blunders in the history of U.S. foreign policy. President Obama should not renegotiate the status of forces agreement with any government in Iraq. He should avoid any long-term U.S. military presence there that could be ensnared in future violence and withdraw the remaining 50,000 troops before the end of the year.
Faux Exit from Iraq, by Charles Peña (9/1/10)
Assessing the Iraq War, by Ivan Eland (9/1/10) Spanish Translation
Recarving Rushmore: Ranking the Presidents on Peace, Prosperity, and Liberty, by Ivan Eland
The Empire Has No Clothes: U.S. Foreign Policy Exposed, by Ivan Eland
Partitioning for Peace: An Exit Strategy for Iraq, by Ivan Eland
4) Is Democracy in Venezuela Doomed?
Venezuelan opposition leader Ramón Guillermo Aveledo says that Hugo Chávez may try to steal this months parliamentary elections.
Chávez has become widely unpopular owing to his use of armed gangs, the rise of deadly violence in the nations capital, economic shortages, a judiciary that answers to political power rather than to the rule of law, and Chávezs cosy relations with Cuba, Nicaragua, and Bolivia, according to Carlos Alberto Montaner, an adviser to the Independent Institutes Center on Global Prosperity.
It is probably not hyperbole to say that the future of Venezuela hinges on the outcome of the September 26 elections. If Venezuelans allow victory to be snatched from them, writes Montaner, the conclusion that democrats will reach is that in the future it will be meaningless to participate in rigged elections where the opposition is trampled before, during and after the trip to the polls.
Will Chávez Steal Parliamentary Elections? by Carlos Alberto Montaner (Miami Herald, 8/31/10)
Liberty for Latin America: How to Undo Five Hundred Years of State Oppression, by Alvaro Vargas Llosa
5) This Week in The Beacon
Read the latest posts on the Independent Institute blog.