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Volume 7, Issue 14: April 4, 2005

  1. Bush-league Trade Policies
  2. WMD Commission Reforms Would Make Spy Agencies Even Less Agile
  3. Event: Liberty for Latin America

1) Bush-league Trade Policies

The abolition of 30-year-old import quotas in January has led to a surge in the importation of inexpensive textiles and clothing from China. Unfortunately, rather than rejoice about how this good fortune helps American consumers and many employers, the Bush administration has responded by announcing that it would monitor Chinese textile imports and consider implementing "safeguard quotas."

"If imposed, these restrictions will harm consumers and fail to protect America's total number of jobs," writes Benjamin Powell, director of the Independent Institute's Center on Entrepreneurial Innovation, in a new op-ed.

Powell explains that the harm done by the now-defunct Multi-Fiber Agreement (MFA) was significant -- executives in the retail industries estimate that it added 23 percent to the cost of textile goods sold in the United States. Conversely, the elimination of the MFA quotas has contributed to falling apparel prices -- at a time when the overall consumer price index has increased modestly.

"A survey of major textile importers by Goldman Sachs found that their costs would decline by 5 to 15 percent without quotas," writes Powell. "Wall Street analysts predict retail clothing prices will drop by 5 to 11 percent with an end to the MFA if no new restrictions are imposed."

Because the benefits of more imports at lower prices are plainly visible, Powell infers that politics, not sound economics, provides the motivation for the administration's announcement.

"In its first term the Bush administration wavered on free trade policy with U.S. steel," writes Powell. "Now it should make a serious commitment to free trade instead of pandering to textile interest groups. Imposing restrictions would cost jobs in textile-using industries and other export industries, harm U.S. consumers, and make the U.S. less productive. With economic policies such as this, it's no wonder that the Economist magazine referred to the administration's economic staff as 'Bush league.'"

See “'Bush League' Trade Policy," by Benjamin Powell (4/4/05)

For more on trade, see


2) WMD Commission Reforms Would Make Spy Agencies Even Less Agile

Neither the recommendations issued last week by the WMD Commission nor President Bush's insistence that he is already implementing the reforms should make us feel more secure, Ivan Eland, senior fellow and director of the Independent Institute's Center on Peace & Liberty, argues in his latest op-ed.

Like the 9/11 Commission, the Commission on the Intelligence Capabilities of the United States Regarding Weapons of Mass Destruction called for "expanding an already swollen intelligence bureaucracy rather than putting it on a much-needed diet," writes Eland.

Among the WMD Commission's recommendations are the creation of "a new National Intelligence University, a directorate in the CIA to supervise the nation's human spying, a national security directorate in the FBI, a long-term analysis unit that would not have to bother with day-to-day intelligence, a National Counter Proliferation Center to coordinate government efforts to counter WMD, a non-profit research institute to encourage dissenting views, and an open source directorate to snare intelligence information from newspapers, TV, and the internet," writes Eland.

Yet these reforms would help not one bit if intelligence analysts felt pressure to tell their political bosses what they wanted to hear, as may have happened in the pre-war presidential intelligence briefings on Iraq's weapons programs. "Perhaps the intelligence agencies should be made more independent of presidential authority, much like regulatory boards," Eland suggests.

"And to improve the speed of interagency coordination against an agile terrorist foe, we should put the bloated intelligence bureaucracies on a diet by reducing and streamlining the number of agencies. Unlike typical foreign government adversaries, terrorists don't need to complete a lot of paperwork before attacking. A nimble enemy demands leaner government agencies to counter it," Eland concludes.

See "Another Commission Recommends Bureaucratic Buffet to Fix U.S. Intelligence," by Ivan Eland (4/4/05)

Recent op-eds by Ivan Eland:

"Three Strikes for Empire," by Ivan Eland (3/28/05)

"Free Trade vs. National Security: Is There Really a Contradiction?" by Ivan Eland (3/21/2005)

To purchase THE EMPIRE HAS NO CLOTHES: U.S. Foreign Policy Exposed, by Ivan Eland, see

To purchase PUTTING "DEFENSE" BACK IN U.S. DEFENSE POLICY, by Ivan Eland, see

"The Way Out of Iraq: Decentralizing the Iraqi Government," by Ivan Eland

Center on Peace & Liberty


3) Event: Liberty for Latin America

Alvaro Vargas Llosa to Address Independent Policy Forum (5/3/05)

Just a few years ago, Latin America was thought to be moving toward prosperity, but the euphoria was short lived. From Patagonia to the Rio Grande, the sweeping reforms that promised economic growth have borne little fruit. Why did the reforms of the late 20th century, seen at the time as a universal model for underdeveloped countries, fail in Latin America? Why do Latin America's democracies often act like dictatorships while its private enterprises act like government bureaucracies? What principles must be adopted to bring prosperity to the region?

Please join us as leading Latin American political journalist ALVARO VARGAS LLOSA (author of the new book LIBERTY FOR LATIN AMERICA) diagnoses the region's deep-seated malady and proposes genuine reform, liberalizing and decentralizing its institutions and empowering its 500 million people.


A native of Peru, ALVARO VARGAS LLOSA was trained at the London School of Economics and has worked for over fifteen years as a journalist in Latin America, Europe, and the United States, appearing in both print and broadcast media. Among other books, he is the co-author of GUIDE TO THE PERFECT LATIN AMERICAN IDIOT. In 2003, the Association of Ibero-American Journalists honored him with its Freedom of Expression Award. He is currently a senior fellow at the Independent Institute.

Tuesday, May 3, 2005
Reception and book signing: 6:30 p.m.
Program: 7:00 - 8:30 p.m.

The Independent Institute Conference Center
100 Swan Way
Oakland, CA 94621-1428
For a map and directions, see

TICKETS: $15 per person ($10 for Independent Institute Members). Special Offer: Admission with a copy of LIBERTY FOR LATIN AMERICA is $35 ($30 for members) -- a 40% savings on the book. Reserve tickets by calling (510) 632-1366 or ordering online at

Praise for the book, LIBERTY FOR LATIN AMERICA: How to Undo Five Hundred Years of State Oppression, by Alvaro Vargas Llosa (Farrar, Straus and Giroux, 2005):

"An important contribution to the present debate on the causes of Latin America's poor economic and social performance.”
--ERNESTO ZEDILLO, former president of Mexico

“This is an intriguing manifesto, passionately argued.”
--Samuel Dillon, Pulitzer Prize winner and former Mexico City Bureau Chief, THE NEW YORK TIMES

“Why does 'everything' in Latin America usually fail? Vargas Llosa has a daring, but coherent, explanation.”
--Carlos Alberto Montaner, THE MIAMI HERALD

“The most profound, enlightening book available on Latin America.”
--William Ratliff, Research Fellow, Hoover Institution

For more information about this event, see

Also see, "The Return of Latin America's Left," by Alvaro Vargas Llosa (NEW YORK TIMES, 3/22/2005)

For Jorge Dominguez's review of LIBERTY FOR LATIN AMERICA, by Alvaro Vargas Llosa (WASHINGTON POST 3/13/05)

To purchase LIBERTY FOR LATIN AMERICA: How to Undo Five Hundred Years of State Oppression, by Alvaro Vargas Llosa, see
Also available in Spanish as RUMBO A LA LIBERTAD:


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