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Volume 7, Issue 38: September 19, 2005

  1. Price Controls Won't Help Katrina Recovery
  2. Suspected Terrorists Deserve Due Process
  3. Democratic Hallucinations in Afghanistan and Iraq
  4. PLOWSHARES AND PORK BARRELS -- New Book Scrutinizes U.S. Farm Policy

1) Price Controls Won't Help Katrina Recovery

"Governments from the Gulf Coast to California are urging investigations of 'price-gouging,' but gas, hotel, water, and other price increases after Katrina are not a moral failing by companies. They are an economic necessity," write Independent Institute Research Fellow Benjamin Powell and Adjunct Fellow Art Carden in a new op-ed.

Powell and Carden explain that although 23 states have enacted "anti-gouging" laws, these laws are counterproductive because they discourage merchants from keeping their stores open in the aftermath of natural disasters and from shipping "groceries, water, and emergency supplies to where they are most urgently needed."

Higher prices on commodities in short supply also encourage consumers to purchase only the quantities necessary to satisfy their most urgently felt needs. Thus, encouraging people to report to the government any instances of "price gouging" -- or worse, having the government prosecute the sellers -- harms the disaster survivors by making goods even more scarce than they already are.

"Similarly, in Texas, according to a spokesman for the state attorney general, they were investigating 'low-end' motels that doubled prices in response to increased demand from Louisiana refugees," Powell and Carden continue. "But these higher hotel prices encourage families to rent one room where they might have rented two, leaving more rooms for other hurricane victims. Letting prices increase is the most effective way to encourage people to conserve the resources that have become scarce because of Katrina."

See "Legislating Price Controls Won’t Aid Katrina Recovery," by Benjamin Powell and Art Carden (9/13/05)
"Los Controles de Precios Establecidos por Ley No Ayudarán a Recuperarse de Katrina"

Center on Entrepreneurial Innovation (Benjamin Powell, director)


2) Suspected Terrorists Deserve Due Process

The Fourth Circuit Court of Appeals recently upheld the federal government's authority to detain indefinitely terrorist suspect Jose Padilla without having to charge him with committing a crime. The administration has deemed Padilla -- an American citizen -- to be an "enemy combatant" subject to military confinement and has denied him access to legal counsel.

"But how do the judges even know that Padilla is guilty?" asks Research Analyst Anthony Gregory in a new op-ed. "Terrorism is a monstrous crime, and those guilty of it hardly merit our sympathy," he continues. "But without due process, it is impossible to protect the innocent. The whole reason we have due process is that the power of government cannot be trusted with unchecked absolute power over life and liberty."

The Western legal tradition has several legal safeguard to protect innocent citizens from overly aggressive government prosecutors, Gregory notes. The government has denied such due process protections to Padilla yet honored those protections in other recent terrorism cases -- e.g., convicted Oklahoma City bomber Timothy McVeigh, "twentieth hijacker" Zacarias Moussaoui, and four men accused last month of conspiring to attack National Guard buildings, synagogues, and an Israeli consulate.

Gregory concludes: "If the government has evidence of Padilla’s wrongdoing, it should bring him to trial. If it does not, it should let him go. The concept that the mere utterance of 'enemy combatant' can keep a man indefinitely deprived of a lawyer, a trial, or even a Habeas Corpus hearing flies in the face of hundreds of years of procedural precedent and is more fitting of a Communist tyranny than a free country."

See "Suspected Terrorists Deserve Due Process," by Anthony Gregory (9/15/05)
"Aquellos Sospechados de Terroristas Merecen el Debido Proceso"


3) Democratic Hallucinations in Afghanistan and Iraq

Military sources have talked recently about reducing U.S. troop levels in Iraq and Afghanistan, but such chatter has less to do with improved security in those countries (in fact, insurgent attacks in both countries are as bloody as ever) and more to do with insulating Republicans from the criticisms of Democrats during the run-up to next November's elections, according to Ivan Eland, director of the Independent Institute's Center on Peace & Liberty.

Those who claim that Iraq and Afghanistan are on their way toward becoming stable, liberal democracies are ignoring the evidence, Eland argues. In Afghanistan, the central government over President Hamid Karzai is weak in most of the country, and in Iraqi, Sunni Arab dissatisfaction with the proposed constitution could lead to even greater levels of violence.

"As a demonstration of how bad things are, the best outcome for the United States in Iraq might be the constitution's defeat," writes Eland in his latest op-ed. "If rejection occurred, negotiations among the Kurds, Shi'a, and Sunni Arabs would have to begin again."

But this isn't the picture that some U.S. military leaders are painting. For example, Major General Rick Lynch, the senior military spokesman in Iraq, claimed that insurgent leader Zarqawi "is on the ropes" -- hype reminiscent of the U.S. government's "credibility gap" during the Vietnam War, according to Eland.

"U.S. credibility gaps are yawning in both Afghanistan and Iraq at a time when the public at home is already restless about such foreign entanglements and when the Bush administration seems to have no coherent long-term plan to extricate the United States with dignity from such quagmires. To those who lived through the 1960s and early 1970s, the situation is unfortunately all too familiar," Eland concludes.

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

Center on Peace & Liberty (Ivan Eland, director)


4) PLOWSHARES AND PORK BARRELS -- New Book Scrutinizes U.S. Farm Policy

We are pleased to announced the publication of the new Independent Institute book, PLOWSHARES AND PORK BARRELS: The Political Economy of Agriculture, by Independent Institute Research Fellows E. C. Pasour, Jr. and Randal R. Rucker, a fascinating and systematic look at the byzantine transfer program known as U.S. farm policy.

“What makes Pasour and Rucker’s approach particularly valuable, is not only the facts presented and analytical findings but even more the line of argument in which it is embedded,” writes Bruce L. Gardner, interim dean at the University of Maryland's College of Agriculture and National Resources, in the book’s foreword.

PLOWSHARES AND PORK BARRELS begin by showing how the political process differs from the market process -- and how this difference helps explain the overspending bias in agricultural policy and the persistence of farm programs long after the nation recovered from the ruinous conditions of the 1930s that precipitated their enactment. It then examines price supports, marketing orders, commodity programs, food stamp and other subsidized food programs, trade protectionism, crop insurance, subsidized credit, conservation programs, research and education programs, and taxation.

Farm programs not only have failed to achieve their stated objectives, frequently they are inconsistent. Price supports and food assistance programs, for example, often serve to increase product prices, whereas subsidized credit, conservation subsidies, subsidized crop insurance, and publicly financed research and educational activities, place downward pressure on product prices. The greatest irony of all, however, may be that the object of so much popular sympathy -- the small, family farmer -- ultimately receives a very small proportion of government payments to farmers. Three-quarters of all government farm payments go to the largest 17 percent of U.S. farms.

Other findings presented in PLOWSHARES AND PORK BARRELS include the following:

* U.S. farmers have not become less dependent on government farm programs in the past decade. Although many fundamental changes were made in the 1996 farm bill, government spending reached near-historic highs during the late 1990s. Moreover, the 2002 farm bill reversed many of the 1996 changes and increased the level of funding for many farm programs.

* In 2004, the total value of export subsidies for farm products, including credit guarantees, was about $5 billion. These subsidies are inconsistent with the WTO objective of liberalizing foreign trade. U.S. and European agricultural policies remain a perennial obstacle to WTO attempts to reduce trade barriers.

For a detailed summary of PLOWSHARES & PORK BARRELS: The Political Economy of Agriculture, by E. C. Pasour, Jr. and Randal R. Rucker, see

For the table of contents and purchasing information, see


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