Volume 13, Issue 45: November 8, 2011
- Fed Policies: Economic Cure or Political Theater?
- How to Shed Light on Global-Warming Claims
- Libya and the Future of U.S. Warfare
- New Blog Posts
Please join with us to celebrate The Independent Institutes 25th Anniversary Dinner: A Gala for Liberty, November 15th, at the Ritz-Carlton in San Francisco. Honorees Lech Walesa, Mario Vargas Llosa, and Robert Higgs will be presented with the Alexis de Tocqueville Award as champions of individual liberty, entrepreneurship, personal responsibility, civic virtue, and the rule of law.
1) Fed Policies: Economic Cure or Political Theater?
Federal Reserve Chairman Ben Bernanke was a careful student of Fed policy failures when he taught economics at Princeton, in the years before he became the nations central banker. But his announced plan in late September to undertake another effort to revive the moribund economy has some economists wondering whether working in Washington, DC, has encouraged Bernanke to ignore what he knows is true. In particular, Independent Institute Senior Fellow William F. Shughart II chides Bernanke for announcing that the Fed would try to stimulate the economy by reducing long-term interest rates relative to short-term interest rates. Shughart explains that a similar effort undertaken during the first year of the Kennedy administrationdubbed Operation Twistwas a failure.
The reason Operation Twist failed in the 1960s was that, given advance notice of the Feds plan, investors were able to employ profitable counter-strategies to neutralize the effects, Shughart writes. As should be abundantly clear by now, Ben Bernanke is floundering and wants to be seen as doing something to avert a still-possible double-dip recession. Shughart warns that unless Bernanke and his colleagues recognize that their policies have failed, America will be doomed to repeat the mistakes of the past.
Meanwhile, Independent Institute Research Fellow Vern McKinley criticizes the Federal Reserve from a different angle. McKinley has just taken his quest for greater Federal Reserve transparency to the Supreme Court. With the assistance of the public-interest group Judicial Watch, McKinley is asking the Court to require the Fed to release its internal memos concerning the $29 billion bailout of Bear Stearns. Just as the new version of Operation Twist demonstrates that Chairman Bernanke is desperate to show that his agency is busy trying to revive the economy, so bailout memos would likely reveal that bank regulators were desperate to be seen doing somethingeven if they had no evidence that targeted bailouts were necessary to prevent a meltdown of the financial system. Readers can learn more about the bailout scam from McKinleys forthcoming book, Financing Failure: A Century of Bailouts, to be published in early January 2012.
Bernanke Succumbs to Potomac Fever, by William F. Shughart II (The Daily Caller, 11/4/11)
Independent Institute Fellow Vern McKinley Petitions Supreme Court Over Feds Withholding of Bear Stearns Bailout Documents (The Independent Institute, 11/2/11)
Financing Failure: A Century of Bailouts, by Vern McKinley
2) How to Shed Light on Global-Warming Claims
Widely publicized studies released last month by the Berkeley Earth Surface Temperature group noted that data from 70 percent of all U.S. weather stations contained uncertainties of two to five degrees Celsius. Nevertheless, the studies seemed to imply that the data are sufficiently accurate and representative to help scientists discern actual global temperature trends. But are the weather-station data really good enough for the task at hand? Last week, atmospheric physicist S. Fred Singer recommended, in an op-ed for the Wall Street Journal, that climate researchers undertake several additional tests to settle key questions about the reliability of weather-station data. He made new points not raised in his recent Letter to the Editors of the scientific journal Nature, which was reported in last weeks Lighthouse.
In the new op-ed, Singer suggests that scientists examine temperature data according to the latitude of the weather stations and testing for seasonal variations and daytime/nighttime differences. He also urges researchers to test the significance of an urban heat-island effect by looking closely at the locations of weather stations. For example, it is very likely that airports were used as temperature stations in both 1970 and 2000 [the years that some studies use for their temperature data], because airport stations are generally of high quality, Singer writes. But airports are likely warming rapidly because of increasing traffic and urbanization.
Singer says he is skeptical of the Berkeley findings mostly because they disagree with most every other data source I can find. Temperature data collected from weather satellites and weather balloons, for example, show no signs of a warming trend from 1978 to 1997a time period worthy of focus because it is unbiased by the Super El Niño of 1998. Singer writes: The absence of warming [during that period] is in accord with the theory that climate is heavily impacted by solar variability, and agrees with the solar data presented in a 2007 paper by Danish physicist Henrik Svensmark in the journal Proceedings of the Royal Society A.
Why I Remain a Global-Warming Skeptic, by S. Fred Singer (The Wall Street Journal, 11/4/11)
Video: Hot Talk and Cold Science of Global Warming, featuring S. Fred Singer (7/14/11)
Hot Talk, Cold Science: Global Warmings Unfinished Debate, by S. Fred Singer
3) Libya and the Future of U.S. Warfare
The U.S.-NATO victory in Libya may signal a trend in how the West wages war. The war in Libya wasnt the first time the West relied on air power to support local forcesthe interventions in Bosnia and Kosovo are additional examples. But the Libyan campaign has raised the visibilityand for some, the allureof such tactics, and this is something we should find worrisome, according to Independent Institute Senior Fellow Ivan Eland.
Already, some neoconservative and liberal interventionists are calling for the adoption of the Libyan model of warfare in Syria and Somalia. Even if the United States resists the clamor to use drones and air support to aid rebellions and fight insurgents in the immediate future, the temptation to use them years down the road will likely persist. Eland writes: In the future, seeing the success of the model and hoping to cash in on the American desire to remake the world in its own image, other countries and liberation movements will likely call for similar Western interventions.
Interventionists should keep in mind that the dust hasnt settled yet in Libya. When it does, the result could be civil war, intense tribal conflicts, or militant Islamist rule. Whether post-Gadafi Libya falters or flourishes, the public should realize that waging wareven on the Libyan modelcan entail horrific unintended consequences. Even if the United States uses the model in Syria and Somalia, such interventions will merely destabilize the Middle East and East African regions further, Eland writes. Along with the huge expense of providing limited air support, the geopolitical costs of war on the Libyan model should make interventionists think twice. Even entering brushfire conflicts from the air should be a nonstarter, Eland concludes.
Libya Victory Portends Endless Intervention, by Ivan Eland (11/2/11)
The Empire Has No Clothes: U.S. Foreign Policy Exposed, by Ivan Eland
4) New Blog Posts
From The Beacon:
One of Reagan's Greatest Acts on Behalf of American Freedom
Anthony Gregory (11/7/11)
U.S. Economic Recovery Remains Anemic, at Best
Robert Higgs (11/6/11)
Greek Referendum on the Bailout: Good Idea!
Randall Holcombe (11/2/11)
William Shughart (11/2/11)
Stephen Colbert Takes On Occupy Wall Street
David Theroux (11/1/11)
The State of the U.S. Economy
Peter Klein (11/1/11)
From MyGovCost News & Blog:
In This Case, Less Is NOT More
Stephanie Freedman (11/4/11)
The U.S. National Debt Burden per Capita
Craig Eyermann (11/4/11)
Freddie Mac Wants a Bailout of $6 Billion More
David Theroux (11/3/11)
European Central Bank: Draghi Steps into Deeply Entrenched Source of Monetary Evil
Emily Skarbek (11/3/11)
The Independent Institutes Spanish-language blog has surpassed 3 million page views! You can find it here.