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Volume 9, Issue 18: April 30, 2007

  1. European Missile Shield May Pose New Risk for U.S. Security
  2. Inside the Bush Administration
  3. Hurricane Katrina and the Knowledge Problem
  4. REMINDER: Wal-Mart Debate: Richard Vedder vs. Ken Jacobs (Oakland, CA; 5/8/07)

1) European Missile Shield May Pose New Risk for U.S. Security

The Bush administration’s ambitious plan to help build missile-defense facilities in Europe—including missile-detection radar stations in the Czech Republic and anti-missile interceptors in Poland—“will reduce U.S. security, not enhance it,” by deepening U.S. commitments in Eastern Europe and inaugurating a new arms race with Russia, according to Independent Institute Senior Fellow Ivan Eland.

As a consequence of agreeing to station the inceptors in their country, Poland’s leadership “is demanding enhanced U.S. guarantees of protection from Russia,” Eland writes in his latest op-ed. The Czech Republic will likely follow suit. But U.S. security guarantees for these countries could prove counterproductive, as a nervous Russia, feeling increasingly encircled, protests such developments by abandoning its arms control agreements with the United States.

“Small nations have a history of manipulating their protectors,” Eland continues. “They appeal to the protector’s desire to be the ‘Big Man (or Woman) on Campus.’ In the past, Japan has done so when demanding trade concessions from the United States as the price for allowing the United States to retain military bases in Japan, which protect that country. The United States foolishly has agreed to meet Japan’s demands, just as it probably will to win Czech and Polish support for missile defense deployments in their countries.”

“Missile Defense Obsession Lessens U.S. Security,” by Ivan Eland (4/30/07) Spanish Translation

Putting “Defense” Back into U.S. Defense Policy: Rethinking U.S. Security in the Post-Cold War World, by Ivan Eland

The Empire Has No Clothes: U.S. Foreign Policy Exposed, by Ivan Eland

Ivan Eland’s Center on Peace and Liberty


2) Inside the Bush Administration

Top members of the Bush administration met recently with a delegation of private individuals associated with the World Economic Forum. Independent Institute Senior Fellow Alvaro Vargas Llosa, who attended the off-the-record sessions, describes the Bush people he met as surprisingly humble, worldly, and reasonable, despite the administration’s public reputations to the contrary. He examines the gulf between these perceptions in his latest column for the Washington Post Writers Group.

“Members of the administration have a lot more faith in the principles of their foreign policy than in the policy itself,” Vargas Llosa writes writes. “Deep down, some of these cultivated minds understand that Iraq has evolved into the negation of the basic principle on which the occupation rests—the universality of the value of freedom.”

The root of Bush administration’s foreign-policy problems and controversies stems primarily from the weakening of the checks and balances that had constrained power before the terrorist attacks of 9/11. “The lesson,” Vargas Llosa continues, “is that institutions are more important than the personal qualities of the people who govern; the institutions need to be put to good use even in extreme circumstances. The right kind of institutions will limit the havoc that the wrong kind of people in power can cause, and the wrong kind of institutions—or the suspension of limited government in extraordinary circumstances—can move bright people to corner themselves in the way the leaders I had the chance to meet last week have cornered themselves.”

“Inside the Bush Administration," by Alvaro Vargas Llosa (4/25/07) Spanish Translation

Liberty for Latin America: How to Undo Five Hundred Years of State Oppression, by Alvaro Vargas Llosa

Alvaro Vargas Llosa’s Center on Global Prosperity


3) Hurricane Katrina and the Knowledge Problem

As has been widely documented, despite its huge budget and seemingly clear mission, the Federal Emergency Management Association (FEMA) was tragically ineffective prior to and after Hurricane Katrina. Although poor leadership was evident, FEMA’s failures are rooted more deeply in a design that is fundamentally ill-suited for a crisis of such urgency and scope, argue economists Russell S. Sobel and Peter T. Leeson (West Virginia University) in their article “The Use of Knowledge in Natural-Disaster Relief Management,” which was published in the spring 2007 issue of The Independent Review. Moreover, Hurricane Katrina relief efforts, they explain, illustrate how government bureaucracies and non-government groups differ in their ability to gather, evaluate, and act on decentralized, informal knowledge of logistics, local needs, and changing circumstances—in other words, to manage what Nobel economist F. A. Hayek called the “knowledge problem.”

FEMA’s top-heavy, multilayered structure made it hard for its managers to provide accurate and timely answers to such critical questions as: Is there a disaster? What’s needed and who needs it? Is what we’re doing working? Consequently, according to Sobel and Leeson, FEMA’s performance compares poorly with relief efforts run by non-profit organizations, for-profit companies, informal networks, and government employees who worked independently of FEMA.

Days before FEMA personnel reached New Orleans, for example, several unrelated groups had arrived at the beleaguered city and begun relief operations. Many businesses had sent supplies to nearby areas even before Katrina hit: Home Depot sent generators, flashlights, and lumber; phone companies readied mobile cell towers; and insurers flew in agents to prepare to process claims. FEMA also hindered others’ efforts: a sheriff from Indiana followed the agency’s instructions but was buried under its paperwork and never made it to Louisiana. In contrast, a sheriff from Michigan ignored FEMA’s (and his governor’s) protocols and delivered nine truckloads of supplies and thirty-three deputies to New Orleans.

Proposals to improve natural disaster preparedness and response, such as by folding FEMA’s functions into an agency with a larger budget, will likely be futile if they lack measures to prevent “information failures,” Sobel and Leeson conclude.

“The Use of Knowledge in Natural-Disaster Relief Management,” by Russell S. Sobel and Peter T. Leeson (The Independent Review, Spring 2007)

Subscribe to The Independent Review.

“Hurricanes Kill; So Can Hurricane Relief Efforts,” by William F. Shughart II (10/10/05) Spanish Translation

"Public and Private Responses to Katrina: What Can We Learn?" by Mary L. G. Theroux (10/20/05) Spanish Translation


4) REMINDER: Wal-Mart Debate: Richard Vedder vs. Ken Jacobs (Oakland, CA; 5/8/07)

Wal-Mart is both the largest and most controversial retailer in the United States. While many consumers and workers cheer the opening of a Wal-Mart superstore in their area, others worry that negative consequences will result. The controversy is unlikely to go away anytime soon: according to its 2006 Annual Report, in the previous year, Wal-Mart opened 267 supercenters, 24 discount stores, 15 Neighborhood Markets, and 17 Sam's Clubs. New Wal-Mart openings—and efforts by municipal governments to block them—will continue.

How will Wal-Mart fare in the political process? What conditions must prevail for consumers, workers, and communities to thrive? How well do you understand the arguments for and against Wal-Mart?

Please join us for the Independent Policy Forum, “Is Wal-Mart Good or Bad for America? A Debate,” featuring Ken Jacobs and Richard Vedder (Oakland, CA, 5/8/07)


Ken Jacobs is Chair of the U.C. Berkeley Labor Center, and a former member of the Mayor’s Universal Health Care Council in San Francisco. He is the co-author of the studies, “Declining Job-Based Health Coverage for Working Families in California and the United States,” and “Hidden Costs of Wal-Mart Jobs.”

Richard K. Vedder is Senior Fellow at The Independent Institute and Distinguished Professor of Economics at Ohio University. He is the co-author of Out of Work: Unemployment and Government in Twentieth-Century America and The Wal-Mart Revolution: How Big-Box Stores Benefit Consumers, Workers, and the Economy.


Tuesday, May 8, 2007, Reception and book signing: 6:30 p.m., Program: 7:00 p.m.


The Independent Institute Conference Center, 100 Swan Way, Oakland, CA 94621-1428 Map and directions


$15 per person ($10 for Independent Institute members). Special offer: $30 includes admission and one copy of The Wal-Mart Revolution ($25 for Independent Institute Members). Reserve tickets by calling (510) 632-1366 or ordering on-line.

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