Interview With Students for a Free Tibet

Tim Pawlenty
Minnesota's Vice Presidential Contender

By JOHN FUND

Being on John McCain's short list for vice president makes Tim Pawlenty a busy guy.

One day last week began with a meeting on security for the upcoming Republican convention in St. Paul, Minn., where Gov. Pawlenty will play host. Then it was off to Farmfest, the state's biggest agricultural fair. Following that, a side trip to Iowa where, as national co-chair for Sen. McCain's presidential campaign, he passed out tire gauges as a way of poking fun at Barack Obama's suggestion the energy crisis be addressed by having Americans better inflate their cars.

Zina Saunders

The next day it was off to Washington, D.C., for a speech to GOPAC, a grass-roots conservative training academy, meetings with reporters, and a nationally televised speech at the National Press Club. If there is such a thing as campaigning to become somebody's vice president, Mr. Pawlenty is doing a good job in the auditions.

Not that he will countenance discussion of the subject. At the Press Club, he is asked what the most important qualities a vice presidential candidate should have. "Discretion," he quickly said and then sat down. But Mr. Pawlenty was anything but discrete about his vision for the Republican Party when I caught up with him recently in Colorado Springs, Colo., as he spoke to a group of business leaders and their families.

"I'm the son of a truck driver and a housewife from a meatpacking town," he introduced himself, "who wants to provide a better quality of life for ordinary folks without growing government." His audience stirred: This was clearly a different sales pitch than they were used to. "We must be the party of Sam's Club Republicans, not just country club Republicans," he continued.

In 2002, Mr. Pawlenty invented the term "Sam's Club Republicans" to describe the voters he fears the party is losing. They most likely didn't graduate from college, often hold socially conservative views, struggle to make ends meet, and want a government that delivers real value for their tax dollars and programs that make their lives a little easier without "getting in their face." These swing voters are key to reviving the GOP, which lost independents by 18 points in 2006.

While Mr. Pawlenty tiptoes around the Bush political legacy, he allows that the party's years in power left it with a "name brand a little damaged and out of fresh ideas." Merely retreating to Reagan nostalgia won't do. "I love Ronald Reagan," says Mr. Pawlenty, who at age 47 came of age during the Reagan years. "But we have to recognize that to voters younger than me he is an historical figure."

I ask him later what lessons he imbibed from Reagan. "He was proudly conservative," he replies, "but we sometimes forget he got things done as governor and president that represented compromises. If today you went to someone and outlined Reagan's record without using his name some conservatives would want to throw him out of the party. But he never wavered on core principles and he made the country a better and more conservative place."

Mr. Pawlenty wants people to see him in that light. Minnesota, he's quick to note, is the only state that hasn't voted Republican for president in the last eight elections. But he has won statewide twice in that chilly environment, and currently sports an approval rating of 56%.

Since he took office in 2003, at least one house of the legislature has been controlled by Democrats. Currently, they enjoy near veto-proof majorities in both houses. In the last legislative session, Mr. Pawlenty set a record by vetoing some 70 bills and was only overridden once -- on a gas-tax increase pushed through in the wake of last year's bridge collapse in Minneapolis.

But Mr. Pawlenty says his record is more than just stopping bad ideas. He believes he has stood by the no-new-taxes pledge he took as a candidate, despite having signed a cigarette tax hike that he claimed (and state courts later agreed) was "a health impact fee." He now says the levy "was a bad idea" but notes that it was a way to solve a nine-day government shutdown: "We blocked a lot of other taxes by holding fast everywhere else."

Gov. Pawlenty's tenure can be divided into two parts. In 2003, he roared into office facing a huge budget deficit which he closed by passing a no-growth budget. He signed laws establishing a 24-hour waiting period for abortions, tax-exempt zones for depressed rural areas, and allowing citizens to carry concealed weapons.

After his party lost seats in the 2004 election, he pivoted in a populist direction. He reversed course to back taxpayer funding for new sports stadiums, called for government health insurance to cover all children, and embraced ethanol mandates. He also backed requiring 25% of electricity be produced by renewable fuels by 2025.

But nothing riled conservatives as much as his support for a regional cap-and-trade approach to global warming, which would require companies to pay for the right to make carbon emissions. Mr. McCain also favors cap-and-trade.

Today, in the wake of the U.S. Senate's June failure to pass a cap-and-trade bill, he sounds a tad defensive about his views. "Climate change is occurring in large measure because of natural cycles, but some portion is due to human behavior," he says. "Whatever we ultimately do about it shouldn't imperil the economy or cut back on our ability to produce jobs." While that may not be completely coherent, it demonstrates just how much $4 a gallon gasoline has changed the environmental debate.

Mr. Pawlenty agrees with Mr. McCain's support for more domestic oil exploration; he says he can live with the candidate's opposition to government subsidies or tax credits for the next generation of alternative fuels. His own state government isn't standing in the way of a proposed new coal-based power plant, and Mr. Pawlenty supports nuclear energy.

On health care, Mr. Pawlenty says, "We have to dramatically realign health care so patients and doctors are in charge, not government or insurance bureaucrats." He acknowledges his state could do a better job policing its own health-care program for children, which has become crowded with adults taking advantage of it. This past February, a health-care task force he appointed supported a requirement that everyone in the state buy health coverage, à la Mitt Romney in Massachusetts. Mr. Pawlenty rejected it, saying that a mandate would simply fine or impose criminal penalties on low-income people who can't pay for insurance.

Mr. Pawlenty's blue-collar roots inform his personal beliefs, as well as his political sense that Republicans have no future without making more inroads among working families. He grew up in gritty South St. Paul, his boyhood filled with hockey, fishing and hunting. He became an avid fan of rock music -- leaning towards Van Morrison and Tom Petty.

But he also became the first member of his family to graduate from college. After law school he was a prosecutor. By age 33, he had made partner at a local law firm and been elected to the state House. In 1999, he became his party's majority leader. The next year he became vice president of a local computer technology firm at the height of the Internet bubble. He told the business leaders in Colorado it was a humbling experience to watch a firm of great promise sink. "You need a business plan that provides access to capital and responds to marketplace needs and sharp competition," he says. "I learned a lot about the private sector."

Mr. Pawlenty's easy self-confidence is smoothed over by a hefty helping of Minnesota Nice, the impeccably polite manners of most state natives. "He's a very likable fellow," said GOPAC chairman Michael Steele after Mr. Pawlenty spoke to his group this week. "I think he'd make a great accompaniment to John McCain." Indeed, in many respects Tim Pawlenty could be the ideological son of John McCain, albeit without his combative nature.

"If he had his druthers he'd always do the conservative thing," says David Strom of the Minnesota Free Market Institute. "But if it's a choice between something conservative and something really popular he'll often go with the latter." Despite this tart observation, Mr. Strom is in awe of his governor's political skills. "He's a natural. I'd give him an A-minus for navigating Minnesota's political waters. On issues, I'd give him a B-minus or C-plus, but I'm a tough grader."

Phil Krinkie, a former conservative state legislator who now runs the Taxpayers League of Minnesota, says Mr. Pawlenty "is about the most conservative governor this state could elect. There's an old joke that a Republican in Minnesota couldn't get elected as a Democrat in Mississippi."

In political terms, what would Mr. Pawlenty bring to the McCain campaign? His most important asset would be that he is someone Mr. McCain genuinely likes and trusts -- a wingman he could count on not to upstage him or make rookie mistakes. Mr. Pawlenty lacks foreign policy experience, but is comfortable with the candidate's positions: "The surge in Iraq worked, and John McCain was one of the first to call for it," he told his Colorado audience.

Electorally, there's a chance Minnesota could be in play this fall -- Mr. Bush lost it by less than four points twice. Because of the Minneapolis media market, Mr. Pawlenty is also well known in parts of neighboring Iowa and Wisconsin, two of the closest states in both 2000 and 2004.

The candidate for vice president may not be crucial for either John McCain or Barack Obama, since the vast majority of voters focus on the top-of-the-ticket. But Republicans need to pay attention: Should Mr. McCain become president at age 72, his No. 2 will be a likely contender for a future presidential nomination. "Selections have consequences," notes David Keene, chairman of the American Conservative Union. Ronald Reagan's choice of George H.W. Bush in 1980 "meant we wound up with two Bushes in the White House."

Tim Pawlenty is not every conservative's dream of a leader. But in a time when the party's market share is perilously low, he has a proven record of success in a tough state, and has many more political hits than strikeouts in his record.

"He's thought a lot about the country's political future and how to adapt conservatism to changing demographics and pressures," says Minnesota GOP Congresswoman Michele Bachman, who sometimes tangled with Gov. Pawlenty when she was in the state legislature. She notes his ability to move with equal ease between business audiences and evangelicals like herself.

I might add that those national media figures who lie in wait hoping to sandbag new Republicans on the national stage will have a hard time with the smooth and fluent Mr. Pawlenty. "Sam Club's Republicanism" may be partly a marketing tool. But it will probably play better with voters leery of the GOP than "compassionate conservatism" ever did.

Interview With Students for a Free Tibet

Posted by Hugo Restall

John Hocevar, founder of Students for a Free Tibet, describes the pro-Tibet protest in Tiananmen Square today:

China’s leaders have done a lot to ensure that controversial protests like these don’t take place during the Games. Tibet, where a harsh crackdown continues today, is surely at the top of their list. Although officials have set up three official protest venues for the Games, protesters must formally apply for permission to use them. Mr. Hocevar told me Friday that Students for a Free Tibet had not applied for protest permits because they feared it would be too dangerous for the person submitting the application.

—Leslie Hook

How to Bring Innovative Ideas To a Machine-Politics State

By DAVID FEITH

Louisiana Gov. Bobby Jindal is touted as a possible running mate for Republican John McCain. At 37, Mr. Jindal could bring youth and enthusiasm to the ticket.

But what about the Bayou State? Doesn't it need bright young leaders?

For decades, Louisiana has suffered as its most promising young residents left for better opportunities elsewhere. The result was a state that stagnated while much of the rest of the South prospered. Even before Hurricane Katrina in 2005, it trailed its neighbors in income, education gains and employment. While the U.S. poverty rate has been around 13% for the past decade, Louisiana's has approached 20%.

Barbara Kelley

In May, Mr. Jindal himself lamented the outflow: "[W]e export our cuisine and our music, but we also export the sons and daughters of Louisiana."

But now there is opportunity for change, as a cohort of reformers is working to energize the economy -- and attract new residents -- with free markets and sound policy.

A rising leader among them is Kevin Kane, a native New Yorker smitten with Louisiana since attending Tulane University in New Orleans in the 1980s. Confident the state will reverse course with the right help, Mr. Kane moved with his family to the Big Easy this spring to establish the Pelican Institute for Public Policy, a think tank promoting reforms rooted in market solutions and limited government.

"The whole trend of losing good people to other states has forced a reckoning," Mr. Kane explains, and citizens once apathetic or resigned are increasingly civic- and reform-minded. Community rebuilding efforts after Katrina helped foster this sentiment and, crucially, changes on the political scene may sustain it.

Generations of Louisianans were misgoverned and ignored by fabulously corrupt politicians -- think of the notorious Depression-era "Kingfish" Huey Long, or Edwin Edwards, whose supporters in 1991 rallied around the slogan "Vote for the crook, it's important." (Amazingly, it was. Mr. Edwards narrowly defeated former Ku Klux Klan leader David Duke.)

Today, though, public accountability may be possible. Thanks to new term limits, about half of state legislators are fresh faces who can't rely on de facto life tenure. In February, they passed Mr. Jindal's ethics reform package; now Louisiana's ethics laws rival the nation's best, according to the nonpartisan Center for Public Integrity.

"Having a think tank under Edwin Edwards would have been meaningless," says Stephen Gele, a member of the Pelican Institute's Board of Directors. "You could have done a 50-page paper, but who would have read it? Edwards would have made up his mind over a game of Bourré" -- a Cajun gamblers' pastime, similar to Spades -- "and that would have been the end of it."

"Today there's much more pressure coming from bottom up," Mr. Gele adds, which increases the power of "policy wonks, bloggers and the average citizen." The Pelican Institute plans to marshal that power to focus lawmakers on basics: better government transparency, lower corporate taxes and improved schools.

Of these, education may be most important. When Katrina upended the New Orleans public school system (and teachers union) practically overnight, the state became an education policy laboratory -- and a crucible for the school-choice movement.

New Orleans is now a boom town for charter schools. Louisiana is, as of June, the ninth state to offer school vouchers, through a $10 million Student Scholarships for Educational Excellence Program. The out-the-door line of parents applying for vouchers last month at the Dryades YMCA in New Orleans confirms the appeal of better, more accountable schools. (Unfortunately, the state will give scholarships to only 870 students this year.)

To help it promote its ideas, the Pelican Institute affiliated with the Oregon-based State Policy Network, a small but robust organization that operates as a trade association for the think-tank industry, quietly nurturing free-market affiliates nationwide. Help also came from the innovative Lawrence Reed, of Michigan's Mackinac Center.

Since 1998, Mr. Reed has run a sort of Think Tank U., holding conferences on best practices for hundreds of aspiring opinion makers, including Mr. Kane. Attendees -- who hear that small business owners are reliable donors to free-market causes, and that everyone should periodically reread Friedrich Hayek's "The Road to Serfdom," Frederic Bastiat's essay, "The Candlemakers' Petition," and Leonard Reed's essay, "I, Pencil" -- have come from all 50 states and 44 countries. Among them: a Mongolian prime minister and a Kenyan teacher who became a noted critic of development demigod Jeffrey Sachs.

"We have to be better than our ideological opponents at marketing our ideas," says Mr. Reed, "because we have some pretty tall hills to climb -- things like a general skepticism among mainstream media."

The key task, notes SPN president Tracie Sharp, is "not to put out a bunch of economic gobbledygook -- [but] bring the ivory tower down to earth." For this, Mr. Kane can emulate the Manhattan Institute, the think tank that helped Rudy Giuliani revolutionize New York City in the 1990s. Mr. Giuliani's note-taking at the institute's forums was important, but perhaps more so was City Journal, the institute's magazine and a model of down-to-earth analysis.

The work of this think tank helped reverse a dangerous trend. As institute President Lawrence Mone notes, before Mayor Giuliani's reforms of the 1990s the Big Apple also faced a grave problem of population outflow.

Louisiana is not New York City, of course. But hopefully it too will one day showcase the effectiveness of creative, free-market public policy ideas.

Mr. Feith is a Robert L. Bartley fellow at the Journal this summer.

War in the Caucasus

"War has started," Vladimir Putin said yesterday as Georgian and Russian forces fought over the breakaway Georgian region of South Ossetia. War is certainly what the two countries have seemed to want for some time, and the chances of avoiding a drawn-out conflict now are slim.

It's unclear at this stage which side is more at fault for the current fighting. Georgia says it moved on the South Ossetian city of Tskhinvali yesterday after rebels there broke a cease-fire. But President Mikheil Saakashvili has long pledged to retake South Ossetia and another separatist area, Abkhazia, and may have underestimated Moscow's reaction.

Within hours, Russian tanks crossed the border to bolster Russian "peacekeepers" who have been stirring up trouble in the two regions. Georgia says Russian airplanes bombed Tskhinvali, reversing some Georgian army gains there, as well as air fields in nonseparatist areas. The Georgian air force claims to have shot down at least five Russian planes.

The biggest question now is whether Moscow will simply try to restore the previous status quo in South Ossetia -- with Russia and the rebels controlling most of the territory -- or go further and crush Georgia while deposing Mr. Saakashvili. Russian state TV yesterday reported that Georgian soldiers had killed at least 10 Russian troops and were "finishing off" wounded Russians, a worrisome sign that the Kremlin is trying to inflame public opinion ahead of a major operation. The markets clearly think this is more than a blip; the benchmark Russian stock index shed 6.5% to hit its lowest level since November 2006.

Speaking on CNN yesterday, Mr. Saakashvili compared Russia's actions to "the attack into Afghanistan, in 1979. It's like Czechoslovakia when Soviet and Russian tanks moved in. If they get away with this in Georgia, the world will be in trouble."

He's right about Russian ambitions in his region, but the West has already shown its unwillingness to push back against Moscow in the Caucasus. When the U.S. proposed NATO "membership action plans" for Georgia and Ukraine at an April summit in Bucharest, Germany vetoed the move. Berlin didn't want to anger Moscow, a fact that the Russians surely noticed as they contemplated when, or if, to move against the government of Mr. Saakashvili, who they have long despised as a reformer outside of the Kremlin's orbit.

Western leaders should have seen this coming. Russia has baited the hot-tempered Georgian leader with trade and travel embargoes as well as saber-rattling. Georgia has had to tolerate a few thousand Russian troops on its soil -- only Moscow recognizes the self-declared independence of Abkhazia and South Ossetia. And in April, Russia downed a Georgian drone over Abkhaz -- that is, Georgian -- air space. Russia in recent years has also granted citizenship to the separatists. That looks like premeditation now: Russian President Dmitry Medvedev pledged yesterday to "protect the lives and dignity of Russian citizens, no matter where they are located."

Perhaps Mr. Saakashvili finally snapped and acted first here, as the Kremlin insists. If so, it was a huge mistake, as he has picked a fight with a much larger opponent and damaged his country's chances of joining NATO. The West may support Georgia's territorial integrity, but no one wants war with Russia.

Now it's up to NATO and especially the U.S. to persuade both sides to stand down. President Bush discussed the hostilities with Mr. Putin yesterday in Beijing, where they are attending the Olympics. The prime minister needs to hear that using Ossetia as a pretext for imperialism will have consequences for Russia's relationship with the West.

A WORLD FOOD CRISIS

In just the last six months, rapidly-increasing food prices have caused unrest and riots throughout the world.

• In March, some 10,000 Indonesians demonstrated outside the presidential palace in Jakarta, protesting soya bean prices, which are up 125% since last year.
• In Egypt, 11 people recently died in rioting set off by skyrocketing bread and cereal prices.
• In Haiti, the poorest nation of the Americas, over half the population of 9 million lives on less than $1 a day.

There the price of rice has doubled since December 2007, leading to deadly food riots in which at least 10 people were killed.

In the West African nation of Cameroon, at least 24 people were killed and 1,600 were arrested in recent food riots.

Food riots have also recently broken out in Morocco, Yemen, Mexico, Guinea, Mauitania, Senegal, and Uzbekistan.

Throughout the world, soaring food prices are changing the world�s geopolitical landscape.

7 Causes of the World Food Crisis

The global food crisis is the result of a number of geopolitical and economic factors, including:

Cause #1: Enormous Increases in Global Demand. Not only is the human population growing by millions every year, but many people are becoming much more affluent – increasing the demand for food, energy and other essential commodities.
For example, millions of newly wealthy Indian and Chinese citizens are greatly increasing their consumption of meat, which means lots more grain consumed fattening livestock. In general, more affluent people consume more calories, increasing the demand for food.

Cause #2: Monetary Inflation. On every continent, governments are rapidly inflating their unbacked, paper currencies.
The worst case of monetary inflation is now in Zimbabwe, where inflation is running over 100,000% a year. But many countries are inflating their currencies by 20% to 50%+ a year, destroying the value of savings and earnings, and leading to much higher prices.
Even in the U.S., the real rate of inflation is now well over 10% and could be 20%+ within a few years, according to Shadowstat.com

Cause #3: Big Oil Price Increases. Food production, transportation, and storage is an energy-intensive business – and the price of oil and natural gas have been soaring, up some 80% in the last two years.
Farmers, processors, truckers and retailers have no choice but to pass these huge increases along to consumers, if they want to stay in business.

Cause #4: Drought in Australia. Until recently, Australia was one of the world's major rice exporters. But six years of drought have "reduced Australia's rice crop by 98%." (Source: Keith Gbradsher, "A Drought in Australia, A Global Shortage of Rice," New York Times, 4-17-08.)

Cause #5: Speculative Commodity Bubble. When prices rise quickly for a commodity, investors jump in, pushing up prices further.
The rapid increase in the price of grains over the past few years, have attractive large number of investors, accelerating price increases.

Cause #6: The Ethanol Scam. For the last decade, �green� politicians have been pushing the production of "environmentally-friendly" ethanol, made from crops such as corn. Thus the European Union has mandated that 10% of all fuel produced by 2011 be "bio-fuel". In the U.S., the government has vastly increased production of ethanol with producer subsidies of up to $2 a gallon, causing farmers to divert large amounts of corn from agriculture to fuel.
Without these mandates and subsidies, ethanol would cost too much to be used as fuel.
An unintended consequence of this diversion of corn and other crops into "bio-fuels" has been huge increases in the price of corn and other grains.

Cause #7: Export And Price Controls. In response to rising food prices, more and more countries are placing restrictions on the export of food or freezing food prices.
For example, China, India and Vietnam have all recently banned or restricted the export of some types of rice. And Russia and Kazakhstan have restricted the export of wheat.
Worldwide, some 48 nations now impose export restrictions and domestic price controls.
All these measures are counterproductive. For instance, export restrictions increase food prices by reducing supply.
And price controls (inevitably set below market prices) discourage production, again resulting in shortages and higher prices.

No Relief In Sight

Whatever the cause of soaring food prices, don�t look for prices to come down anytime soon.

The Organization for Economic Cooperation and Development predicts that food prices will continue to rise for at least the next 10 years. The World Bank warns that governments could be toppled in dozens of nations as a result of the food crisis.

A Few Ways To Invest

With a rapidly-rising global population and food production falling behind demand, food prices will likely continue to rise for many years.

Some of the big beneficiaries of this trend are:

Well-managed agricultural and select food-related stocks. As commodity prices have gone up, so have the share price of many agricultural support companies, like seed distributors and pesticide companies. We see a particularly bright future for seed distributors as demand for food increases.

Energy stocks. Many fertilizers use oil-products and agriculture is energy-intensive, pushing up the price of energy stocks. Along with soaring demand for fuel for transportation and power, increased demand from agriculture makes energy stocks a good bet.