Wednesday, September 30, 2009
Mexico's southern border
Lawless roads
Where migrants meet criminals
Only the least of their perilsTRAFFIC is light on the bridge linking Ciudad Hidalgo in Mexico to Tecún Umán in Guatemala. Tricycle-taxi drivers and an armed guard idly stand around in the sun. All the action takes place on the river below. A small flotilla of rafts fashioned from trailer tyres and stacked with sacks of corn floats by, in sight of customs officials. Their cargo is destined for Tecún Umán’s bustling market, which overflows with crackers and bread made affordable by the recent depreciation of Mexico’s peso against the Guatemalan quetzal. “It’s illegal, but it’s a job for these people,” says Antonio Aguilar, the chief of Guatemala’s national police in Tecún Umán. That is one reason why he leaves the 5,000 or so small-time smugglers in this area alone. Another, he admits, is that when one of his predecessors cracked down on smuggling, a mob burnt down the police station.
Migration and the trafficking of drugs and guns across Mexico’s northern border with the United States capture endless headlines. (This week agents fired at three vans containing 74 illegal immigrants as they failed to stop at a border crossing near San Diego.) But many of these problems are quietly mirrored on its southern frontier. This is “a no-man’s land, a wild frontier,” says Conrado Aparicio, a naval commander at Puerto Madero. That is despite recent government attempts to exercise greater surveillance.
Today’s problems date from the 1990s, when traffickers began to move drugs through Central America in response to an American crackdown on their Caribbean routes. After Hurricane Mitch struck in 1998, a torrent of destitute migrants began to head north too. Mexico’s governments have come to accept that if they want the United States to reform its immigration laws and to speed cross-border trade, they have to exercise more control over their own territory.
Mexico’s southern border stretches for 960km (600 miles), snaking through remote highlands and thick jungle. Patrolling it is hard. So the government has sought to erect a “vertical border,” with army and police checkpoints spaced at 25km intervals along roads, as well as the railway that many migrants use after they have crossed the border. This strategy has forced migrants into the hills, where many fall victim to criminal gangs.
The main gang along the border is the Zetas, a group of deserters from a Mexican-army special-forces unit, some of whom were deployed against the Zapatista rising in Chiapas in 1994. They have recruited former Kaibiles, Guatemalan special forces who acquired notoriety during a long civil war against leftist guerrillas, as well as youth gangs.
This mob combines local knowledge, cruelty and violence. It has expanded from smuggling arms and drugs to both trafficking in, and preying upon, migrants. It kidnaps large groups brought across the border by coyotes (human traffickers), taking them to safe houses. The men are tortured, the women raped and ransoms demanded from relatives in the United States. Mexico’s National Human Rights Commission, a quasi-governmental body, recorded 9,758 kidnaps of migrants between September 2008 and February 2009, and calculated the ransoms paid in these cases at $25m.
The government has tried to curb this mayhem. A former state attorney general in Chiapas has been arrested on suspicion of corruption, as has a former federal prosecutor in Quintana Roo. The army boasts of regular seizures of weapons caches from the Zetas. But the mob has hit back with acts of intimidatory violence. In August the body of the director of immigrant affairs in Tapachula, the largest border city, was found in a tub of cement, months after he was kidnapped. The security forces are finding recruitment harder: the Chiapas police have 300 unfilled vacancies. And when they are pursued, the Zetas sometimes skip over the border to Guatemala.
The government has set up squads of orange-clad, unarmed officials called Beta Groups to rescue missing migrants and advise them of the risks, just as it has long done on the northern border. It has also speeded up the issue of visas for temporary workers and residents of the Guatemalan side of the border. But few Central Americans qualify and many enter illegally. Recession and tighter security on the northern border may have reduced the flow of migrants entering the United States. But sadly they have also made it easier for the gangs to recruit.
The Pacific tsunami
Paradise rocked
Over 100 people are killed as tsunamis strike the Pacific
TSUNAMIS that struck in the South Pacific on Tuesday September 29th were nowhere near as devastating as the waves that hit countries around the Indian Ocean in December 2004. Then, an earthquake of 9.0 magnitude caused a tsunami that claimed an estimated 230,000 lives. According to the Pacific Tsunami Warning Centre, the waves this week were triggered by an 8.3 magnitude earthquake that took place some 120 miles (195km) south of the Samoa group of islands (see map). On Wednesday another earthquake, well over 7 magnitude, was reported off Sumatra, in Indonesia.
Over 100 people were thought to have died in Samoa and American Samoa, which together have a population of some 250,000. American Samoa was reportedly hit by four separate waves. Another seven people were killed in Tonga, several hundred kilometres farther south. Witnesses described fleeing from waves 4.5 metres tall which swept people, cars and other debris as far as 100 metres inland. Many Samoan settlements are coastal and both Apia and Pago Pago, the capitals respectively of Samoa and American Samoa, were deluged. Thousands have been made homeless and survivors are said to be sheltering on high ground. Samoan meteorological officials suggest that some victims were killed by a second wave that swept ashore as they gathered fish washed up by the first.
The death toll might have been worse if the waves had struck in darkness rather than the early morning. It helped, too, that some lessons had been learned from previous disasters. A general tsunami alert was issued across the Pacific, as far apart as Hawaii and New Zealand. Samoa itself developed an early-warning system following the 2004 tsunami, based on the sending of text messages to local leaders, followed by the sounding of church bells and sirens. A national drill was held in 2007 after a tsunami had killed over 20 people in the Solomon Islands. But Misa Telefoni, Samoa’s deputy prime minster, said that the speed of Tuesday’s disaster left people with desperately little time to respond. “The ocean went out within five minutes [of the earthquake].”
That suggests that the best protection is training coastal dwellers themselves to recognise the signs of a possible tsunami—such as strong, prolonged ground shaking—and to seek higher ground at once. As with most hazards, the more informed the public are, the better their chances of survival.
Aid will flow quickly to many affected areas. Barack Obama, America’s president, has declared that the situation in American Samoa is a disaster and has promised that federal relief funds will be available. Australia and New Zealand, where many Samoans reside, and Britain reported their citizens to be among the dead. New Zealand’s air force is helping to search for bodies and to transport medical and other aid.
The tsunami is a setback in a region of weak economies: many of the island countries are heavily reliant on aid and remittances. The waves may also raise anxieties in low-lying islands, such as Tuvalu and the Tokelau Islands, that rising sea levels will mean greater threats from the ocean to human life and livelihoods.
Asian currencies
Hot air
The world’s bounciest economies have the most undervalued currencies
ONE of the biggest inconsistencies in the global economy today is the fact that emerging Asian economies have rebounded faster than any other region (the gap between their average growth rate and that of developed economies is likely to hit a record high this year), yet most of their currencies have fallen since 2008 in real trade-weighted terms. By many measures—from The Economist’s Big Mac index to more sophisticated gauges—Asian currencies are among the world’s most undervalued.
Take China, the fastest-sprinting economy. In the three years to July 2008 the yuan climbed by 21% against the dollar. But for the past 14 months it has, in effect, been repegged to the dollar. As a result the slide in the greenback has dragged down the yuan’s trade-weighted value by almost 10% since the start of this year (see chart). Morris Goldstein and Nicholas Lardy of the Peterson Institute for International Economics estimated in July that the yuan was undervalued by 15-25%. Some smaller Asian currencies may be even more undervalued. The IMF calculated in March that by one measure South Korea’s won was 41% below its fair value (its trade-weighted value has since gained about 10%).
The fact that Japan’s new government has allowed the yen to climb against the dollar, even though its economy is weaker, may seem to buck the regional trend. The yen is up by 18% over the past year and touched an eight-month high on September 28th, after comments from Hirohisa Fujii, the new finance minister, appeared to suggest that the government would not intervene to stem the rise. But squeals from Japanese exporters, as well as claims that the government has adopted a new “strong yen” policy, can mislead. Mr Fujii has since denied that he favours a stronger currency, and the yen still looks relatively weak by past standards: its real trade-weighted value has fallen by 7% since January and is below its 15-year average.
Outside Japan, Asian governments have been forced to step up their intervention to hold down currencies as foreign-capital inflows have surged on optimism about recovery. China’s foreign-exchange reserves rose by a record $178 billion in the second quarter, compared with an increase of only $8 billion in the first quarter.
China’s motive for halting the yuan’s rise against the dollar is to stem the collapse in its exports. Its trade surplus in the three months to August was less than half its level a year ago (though its current-account surplus is still likely to amount to a hefty 6% of GDP this year, maintaining upward pressure on the currency). The Chinese government is unlikely to let the yuan start rising again against the dollar until three conditions are met: exports show a year-on year increase, GDP growth hits 10% and inflation turns firmly positive. All three are possible by the end of the year, and there are good reasons to think that the government in Beijing will then relax its exchange-rate policy.
One reason to do so is to curb asset-price bubbles and prevent excessive inflation. Measured by the gap between current interest rates and expected nominal GDP growth in 2010, China has the world’s loosest monetary policy—too loose for its booming economy. But the cost of raising interest rates would be a stronger currency as foreign capital flows in.
A second reason why China may allow a stronger yuan is its desire to increase use of its currency in international trade and finance. In recent months China has allowed cross-border trade with some economies to be settled in yuan; it has raised quotas on share purchases by foreign institutional investors; and on September 28th it sold yuan-denominated government bonds in Hong Kong for the first time. If China wants to make the yuan a global currency this will require further loosening of foreign-exchange controls, and hence revaluation.
Last, but not least, the crisis painfully underlined the limits of export-led growth. China’s proclaimed goal of boosting household spending requires a stronger currency, which would lift consumers’ real purchasing power. If China allows the yuan to rise, other Asian countries are likely to follow suit. Only then will Asia play its full part in global rebalancing.
BREAKING NEWS-Strategic Meeting-FOXNews.com-VIDEO
Obama talks Afghanistan with advisers on war in Afghanistan
more about “Breaking News-Strategic Meeting-FOXNe…“, posted with vodpod
“United In Hate” By Jamie Glazov – - Reviewed By Ralph Peters – - Go to FPM Bookstore to order
UNITED IN HATE
THE LEFT’S LETHAL LOVE AFFAIR
By RALPH PETERS
Last Updated:Sat., Sep. 26, 2009, 06:57pm
If you’ve ever wondered at the delight with which academics excuse Islamist terrorists, or at the callousness with which radical feminists ignore the oppression of Muslim women, or at the gushing adulation the Left devoted to the last century’s worst butchers, from Stalin to Saddam, “United In Hate’ is the book for you.
Radical Leftists have been losing their war against human nature for a long time, but they continue to search desperately for a winning formula. After Stalin, Mao, Uncle Ho, Pol Pot and countless Third World thugs had let them down, they believed they’d found redemption at last on 9/11. Jamie Glazov, the editor of Frontpagemag.com, describes the reaction of Leftist acquaintances to the fall of the Twin Towers: “Never had I seen them so happy, so hopeful and ready for another attempt at creating a glorious and revolutionary future. Without doubt, September 11 represented a personal vindication for them.” Noam Chomsky agreed with Osama that we deserved our misery. Ward Churchill had finally met his love match.
This rigorous, fight-back book dissects the Leftist identity in which personal dissatisfaction and social dysfunction are externalized as the fault of our wicked society an uncanny reflection of the Islamist platform that worldly evil flows from the US and Israel. Glazov is scathing on the inability of Islamists and Western fellow-travelers to form healthy male-female relationships: Sex may (or may not) be OK, but love between a man and a woman threatens the collective.
No matter whether the idealized system is a Communist utopia or an Islamist caliphate, the happy couple is a mortal threat. Worst of all, “The pursuit of happiness implies … that the world can be accepted for what it is,” Glazov argues, “and human beings can be accepted for what they are.”
So the Leftist believer embarks upon “the desperate search for the feeling of power to help him counteract the powerlessness he feels in his own life.” That could equally describe a suicide bomber. You and I may be too stupid to realize we’re miserable or damned, but the American Left and the mullahs are going to perfect us for our own good. The horrific bloodshed along the way is the outcast’s great revenge.
Whether analyzing Code Pink or “Code Sharia,” the book’s descriptions hit the target dead-center again and again: “Like Islamists, Leftists have a Manichean vision that rigidly distinguishes good from evil. They see themselves as personifications of the former and their opponents as personifications of the latter, who must be slated for ruthless elimination.”
Welcome to the hellish alliance that encourages American college brats to root for Hamas andHezbollah. Dead Jews? Today’s Left has no more problem with the Holocaust than Stalin did or Hezbollah’s Hassan Nasrallah does.
Fearlessly, Glazov rips into “the deep-rooted hatred and fear of female sexuality that permeates Islamist-Arabic culture.” But he also unveils our pseudo-feminists who excuse the burqa, genital mutilation, honor killings and general savagery toward Middle-Eastern women, noting that the privileged Americans need to ignore the suffering of their distant sisters in order “to hold onto their self-created victim identity.” If America isn’t so bad, it spoils everything.
I’d quibble with a few propositions: I find all fanatics dangerous, Left or Right but no honest person could deny this book’s validity and power. It’s a serious work by a brave scholar. It’s also fun to read (fun’s another no-no to Islamists and the Left).
Ralph Peters is a Post Opinion columnist and the author of “Looking For Trouble: Adventures in a Broken World.”
Mexico: Emergence of an Unexpected ThreatBy Scott StewartAt approximately 2 a.m. on Sept. 25, a small improvised explosive device (IED) consisting of three or four butane canisters was used to attack a Banamex bank branch in the Milpa Alta delegation of Mexico City. The device damaged an ATM and shattered the bank’s front windows. It was not an isolated event. The bombing was the seventh recorded IED attack in the Federal District — and the fifth such attack against a local bank branch — since the beginning of September.
The attack was claimed in a communique posted to a Spanish-language anarchist Web site by a group calling itself the Subversive Alliance for the Liberation of the Earth, Animals and Humans (ASLTAH). The note said, “Once again we have proven who our enemies are,” indicating that the organization’s “cells for the dissolution of civilization” were behind the other, similar attacks. The communique noted that the organization had attacked Banamex because it was a “business that promotes torture, destruction and slavery” and vowed that ASLTAH would not stop attacking “until we see your ashes.” The group closed its communique by sending greetings to the Earth Liberation Front (ELF), the Animal Liberation Front (ALF) and the “eco-pyromaniacs for the liberation of the earth in this place.” Communiques have also claimed some of the other recent IED attacks in the name of ASLTAH.
On Sept. 22, authorities also discovered and disabled a small IED left outside of a MetLife insurance office in Guadalajara, Jalisco state. A message spray-painted on a wall near where the device was found read, “Novartis stop torturing animals,” a reference to the multinational pharmaceutical company, which has an office near where the IED was found and which has been heavily targeted by the group Stop Huntingdon Animal Cruelty (SHAC). Novartis is a large customer of Huntingdon Life Sciences, the research company SHAC was formed to destroy because Huntingdon uses animals in its testing for harmful side effects of drugs, chemicals and consumer items. A second message spray-painted on a wall near where the device was found on Sept. 22 read, “Novartis break with HLS.” Two other IEDs were detonated at banks in Mexico City on the same day.
These IED attacks are the most recent incidents in a wave of anarchist, animal rights, and eco-protest attacks that have swept across Mexico this year. Activists have conducted literally hundreds of incidents of vandalism, arson and, in more recent months, IED attacks in various locations across the country. The most active cells are in Mexico City and Guadalajara.
For a country in the midst of a bloody cartel war in which thousands of people are killed every year — and where serious crimes like kidnapping terrorize nearly every segment of society — direct-action attacks by militant activists are hardly the biggest threat faced by the Mexican government. However, the escalation of direct-action attacks in Mexico that has resulted in the more frequent use of IEDs shows no sign of abating, and these attacks are likely to grow more frequent, spectacular and deadly.
The Wave
Precisely quantifying the wave of direct-action attacks in Mexico is difficult for a number of reasons. One is that the reporting of such incidents is spotty and the police, the press and the activists themselves are often not consistent in what they report and how. Moreover, is often hard to separate direct-action vandalism from incidents of plain old non-political vandalism or tell the difference between an anarchist IED attack against a bank and an IED attack against a bank conducted by a Marxist group such as the Popular Revolutionary Army (EPR). Then there is the issue of counting. Should a series of five Molotov cocktail attacks against ATMs or the destruction of 20 Telmex phone booths in one night be counted as one attack or as separate incidents?
If we count conservatively — e.g., consider a series of like incidents as one — we can say there have been around 200 direct-action attacks to date in 2009. But if we count each incident separately, we can easily claim there have been more than 400 such attacks. For example, by our count, there have been more than 350 Telmex phone booths smashed, burned or otherwise vandalized so far this year. (Activists will do things like glue metal shavings into the calling-card and coin slots.) However, for the sake of this analysis we’ll go with the conservative number of about 200 attacks.
Now, Telmex seems to be the most popular target so far for direct-action attacks. In addition to hitting phone booths, activists also have attacked Telmex vehicles and offices and have cut Telmex cables. From their statements, the activists appear to hold a special hatred for Carlos Slim, one of the richest men in the world and the chairman of Telmex and several other companies. In many ways, Slim — a patriarchal billionaire industrialist — is the personification of almost everything that the anarchistic activists hate. In addition to Telmex and banks, the activists also have attacked other targets such as restaurants (including McDonald’s and KFC), meat shops, pet shops, fur and leather stores, luxury vehicles, and construction equipment.
The activists’ most common tactics tend to be on the lower end of the violence scale and include graffiti and paint (frequently red to symbolize the blood of animals) to vandalize a target. They also frequently release captive birds or animals as well as use superglue and pieces of metal to obstruct locks, pay phones and ATM card readers. Moving up the violence continuum, activists less frequently will break windows, burn buildings and vehicles, and make bomb threats — there have been at least 157 incidents involving arson or incendiary devices so far in 2009. To help put this into perspective, these activists have conducted more arson attacks in Mexico to date in 2009 than their American counterparts have conducted in the United States since 2001.
At the high end of the violence spectrum are the IED attacks, and this is where there has really been an increase in activity in recent weeks. In the first six months of 2009, there were several bomb threats and hoaxes and a few acid bombs, but only two real IEDs were used. In June, July and August there was one IED attack per month — and so far in September there have been seven IED attacks in Mexico City alone and one successful attack and one attempted attack in Guadalajara. Again, by way of comparison, these eight IED attacks by Mexican activists in September are more than American activists have conducted in the United States since 2001.
Proliferation of IEDs
There are several factors that can explain this trend toward the activists’ increasing use of IEDs. The first is, quite simply, that IEDs generate more attention than graffiti, glue or even an arson attack — indeed, here we are devoting a weekly security report to activist IED attacks in Mexico. In light of the overall level of violence in Mexico, most observers have ignored the past lower-level activity by these activist groups, and IEDs help cut through the noise and bring attention to the activists’ causes. The scope and frequency of IED attacks this month ensured that they could not be overlooked.
The second factor is the learning curve of the cells’ bombmakers. As a bombmaker becomes more proficient in his tradecraft, the devices he crafts tend to become both more reliable and more powerful. The improvement in tradecraft also means that the bombmaker is able to increase his operational tempo and deploy devices more frequently. It is quite possible that the few IEDs that were reported as hoaxes in March, April and May could have been IEDs that did not function properly — a common occurrence for new bombmakers who do not extensively test their devices.
The third factor is thrill and ego. In many past cases, militant activists have launched progressively larger attacks. One reason for this is that after a series of direct-action attacks, the activists get bored doing lower-level things like gluing locks or paint-stripping cars and they move to more destructive and spectacular attacks, such as those using timed incendiary devices. For many activists, there is a thrill associated with getting increased attention for the cause, in causing more damage to their targets and in getting away with increasingly brazen attacks.
Finally, in recent years, we have noted a shift among activist groups away from a strict concern for human life. Many activists are becoming convinced that less violent tactics have been ineffective, and if they really want to save the Earth and animals, they need to take more aggressive action. There is a small but growing fringe of hard-core activists who believe that, to paraphrase Lenin, you have to break eggs to make an omelet.
The Ruckus Society, a direct-action activist training organization, explains it this way in a training document: “There is a law against breaking into a house. However, if you break into a house as part of a greater good, such as rushing into the house to save a child from a fire, it is permissible to break that law. In fact, you can say that there is even a moral obligation to break that law. In the same way then, it is permissible to break minor laws to save the Earth.” In general, activists do not condone violent action directed at humans, but neither do they always condemn it in very strong terms — they often explain that the anger that prompts such violence is “understandable” in light of what they perceive as ecological injustice and cruelty to animals.
In recent years there has been a polarization in the animal rights and environmental movements, with fringe activists becoming increasingly isolated and violent — and more likely to use potentially deadly tools like IEDs in their attacks.
Confluences
The very name of ASLTAH — the Subversive Alliance for the Liberation of the Earth, Animals and Humans — illustrates the interesting confluence of animal rights, ecological activism and anti-imperialism/anarchism that inhabit the radical fringe. It is not uncommon for one cell of independent activists to claim it carried out its attacks under the banner of “organizations” such as ELF, ALF or SHAC. In true anarchistic style, however, these organizations are amorphous and nonhierarchical — there is no single ELF, ALF or SHAC. Rather, the individual activists and cells who act on behalf of the organizations control their own activities while adhering to guidelines circulated in meetings and conferences, via the Internet, and in various magazines, newsletters and other publications. These individual activists and cells are driven only by their consciences, or by group decisions within the cell. This results in a level of operational security that can be hard for law enforcement and security officials to breach.
As noted above, these activists have been far more active in Mexico than they have in the United States. One reason for this is that the operating environment north of the border is markedly different than it is in Mexico. In the United States, the FBI and local and state police agencies have focused hard on these activists, and groups like ELF and ALF have been branded as domestic terrorists. There have been several major investigations into these groups in recent years.
South of the border it is a different matter. Mexican authorities are plagued with problems ranging from drug cartels to Marxist terrorist/insurgent groups like the EPR to rampant police and government corruption. Simply put, there is a vacuum of law and order in Mexico and that vacuum is clearly reflected in statistics such as the number of kidnappings inside the country every year. The overall level of violence in Mexico and this vacuum of authority provide room for the activists to operate, and the host of other crime and violence issues plaguing the country works to ensure that the authorities are simply too busy to place much emphasis on investigating activist attacks and catching those responsible for them. Therefore, the activists operate boldly and with a sense of impunity that often leads to an increase in violence — especially within the context of a very violent place, which Mexico is at the present time.
This atmosphere means that the activist cells behind the increase in IED attacks will be able to continue their campaigns against assorted capitalist, animal and ecological targets with very little chance of being seriously pursued. Consequently, as the IED campaign continues, the attacks will likely become more frequent and more destructive. And given Mexico’s densely populated cities and the activists’ target sets, this escalation will ensure that the attacks will eventually turn deadly.
Obama Is No Radical
But maybe we'd be better off if he were.
The conservative firebrand David Horowitz has declared the Obama White House a "radical regime." For the Republican radio host Sean Hannity, the ousted ex-communist "green jobs" czar Van Jones "signifies the radicalism of this administration." Even Andy Williams, the Branson crooner who sang "Moon River" and "Days of Wine and Roses," has joined the chorus, telling Radio Times this week that Barack Obama is "following Marxist theory."
For a chunk of the right—the portion that defines itself by its opposition to "the left"—that's the best explanation for the country's recent political path: Washington has been seized by radicals. But compared to a real radical, Obama is about as middle of the road as Andy Williams' music.
Yes, he gave a job to Van Jones, and if you search his administration you'll find yet more hires whose views are well to the left of most of the country. If you looked through George W. Bush's administration, you'd find hires with views well to the right of most of the country: Eric Keroack, say, the critic of contraception who landed a job atop the family planning office at the Department of Health and Human Services. It's an ideological spoils system, patronage paid to the factions that make up a party's base. And sometimes it has policy consequences, so it's worth monitoring closely.
Yet most people on the right will tell you, quite accurately, that the Bush years didn't do much to shift the country toward greater social or economic conservatism. I expect most people on the left will say something similar when Obama exits office. Thus far, the president's domestic agenda has been many things, but radical it isn't. Radicals make sudden turns. Obama sometimes slams his foot on the accelerator—just look at projected spending for the next few years—but he hardly ever tries to change direction. Radicals tear down centers of power. When Obama is faced with a crumbling institution, his first instinct is to prop it up.
That was most obviously true with the bailouts, a series of corporate preservation programs that began before he took office and have only increased since then. Candidate Obama voted for the Troubled Asset Relief Program, the 2008 bailout for failing financial institutions, and he personally intervened to urge skeptical liberals to support it. After Congress refused to authorize a bailout of the car companies, Obama followed George W. Bush in ignoring the plain language of the law and funneling funds to them anyway. Like Bush before him, Obama took advantage of such moments to adjust the institutional relationship between these nominally private businesses and the state: firing the head of General Motors, urging the company to consolidate brands, pushing for new controls on Wall Street pay. But the institutions themselves were preserved, in some cases enriched. The radical thing to do would have been to let them collapse.
And no, I'm not using "radical" as a euphemism for "free-market libertarian." A radical Obama still might have extended assistance to the people displaced by the corporate failures, perhaps even setting up a generous guaranteed income scheme. He might have broken up the big banks. He might have done all sorts of things, some wiser than others. But he would not have strengthened the corporate-state partnerships bequeathed to him by Bush.
After the bailouts we had the "stimulus" package, which boiled down to this: You're cutting back on unsustainable consumption? Here: Spend more! Around the same time we got the cash for clunkers program, which took that same impulse and added incentives that undermined the salvage business and the second-hand car trade—markets that are far more decentralized, dynamic, and open to the participation of the poor than the automakers that accepted Obama's largesse.
Now we have health care reform. Here you might actually expect the president to veer in a new direction and let a powerful institution die. After all, it's been only six years since he described himself as "a proponent of a single-payer, universal health care plan," and if he were serious about that it would mean the end of the private health insurance industry. Single payer isn't on the table right now, but liberal Democrats are trying to push a "public option"—a government-run alternative for people who'd like to opt out of the available private plans—into the legislation. And the public option is, in the words of single-payer advocate Mark Schmitt, "a kind of stealth single-payer." So in health care at least, Obama's a radical, right?
I don't think so, for two reasons. First, it's increasingly unlikely that a public option will be a part of the bill that emerges, in which case we'll be left with an enormous boondoggle for the industry: a law requiring every American to buy health insurance or else face legal sanctions. Every other powerful institution in the health sector already supports the president's proposals. Indeed, the Pharmaceutical Research and Manufacturers of America, the American Medical Association, and the Federation of American Hospitals are sponsoring a multi-million-dollar ad campaign on the measures' behalf. If the public-option-free version of ObamaCare becomes the face of reform, don't be surprised if the insurers join them.
Second, and more important, a system with more government-provided insurance, even one with only government-provided insurance, would still accept the institutional premises of the present medical system. Consider the typical American health care transaction. On one side of the exchange you'll have one of an artificially limited number of providers, many of them concentrated in those enormous, faceless institutions called hospitals. On the other side, making the purchase, is not a patient but one of those enormous, faceless institutions called insurers. The insurers, some of which are actual arms of the government and some of which merely owe their customers to the government's tax incentives and shape their coverage to fit the government's mandates, are expected to pay all or a share of even routine medical expenses. The result is higher costs, less competition, less transparency, and, in general, a system where the consumer gets about as much autonomy and respect as the stethoscope. Radical reform would restore power to the patient. Instead, the issue on the table is whether the behemoths we answer to will be purely public or public-private partnerships.
So I can't agree with Horowitz, Hannity, or Andy Williams. The president could pal around with militiamen, hook a money hose from the Treasury to ACORN HQ, and sleep each night with a Zapatista plush doll, but as long as his chief concern is preserving and protecting the country's largest corporate enterprises, the biggest beneficiaries of his reign will be at the core of the American establishment.
Jesse Walker is managing editor of Reason magazine.
When Columbus Discovered Modern Architecture
Private philanthropy transforms a small Midwestern town into an architectural marvel.
In most ways, Columbus is a typical Indiana town. It’s small (population 39,000), the cost of living is low, there’s very little crime, and the leading industries are manufacturing, health care, and construction. But as you emerge from the cornfields that surround Columbus and head into town, things immediately begin to look different.
To the west, Columbus welcomes you along the main highway with an arching 60-foot bridge. To the north is a twisting and fanning bright red triangular suspension bridge. The public library, a square brick building with tall rectangular windows and an open plaza, was designed by the renowned architect I.M. Pei. Noted modernist architect Harry Weese concocted a church and the town’s golf course. Even the city’s six firehouses look distinctive: The first is a brick and glass art deco station finished in 1941; the latest is a sweeping, modern, glass-and-steel structure completed in 1998.
Columbus, improbably, is one of the most architecturally rich towns in America. The American Institute of Architects ranks it the sixth most architecturally innovative city in the country, after Chicago, New York, Washington, Boston, and San Francisco. GQ calls the burg “an essential destination for the study of contemporary design and planning.” Smithsonian says it’s “a veritable museum of modern architecture.” National Geographic Traveler recently placed Columbus 11th in its list of the top 109 worldwide historic destinations, and the town now has six buildings on the registry of National Historic Landmarks.
None of this is due to strict zoning laws or preservationism. Little Columbus became an architectural magnet because J. Irwin Miller, a wealthy industrialist and philanthropist, decided 50 years ago to use his fortune to make his hometown a visually interesting place to live. Miller began with the church he attended, then moved on to public buildings, private businesses, and residences.
Miller, who died in 2004, was the longtime chairman of the Cummins Engine Company, one of the world’s leading manufacturers of diesel engines. He first developed an interest in architecture after taking some classes on the subject as an undergraduate at Yale. In 1942 Miller and his family commissioned a new church for their congregation from the Finnish architect Eliel Saarinen. The result, the First Church of Christ, was one of the first modernist churches in the country. Its design included a simple rectangular tabernacle lined with a grid of reflective windows (in which Saarinen included a cross) and a matching freestanding bell tower. Some religious leaders criticized the nontraditional approach, but the church won praise from architecture critics around the world. It’s now the centerpiece of the town’s architectural tour.
In 1954 Miller decided to do something similar for local public schools, whose boring design he blamed for stifling kids’ creativity. So he made a bargain with the city: The Cummins Engine Foundation would foot the architect’s bill (though not the construction costs) for any new school building, as long as the city selected from a list of architects compiled by the foundation. The bargain soon expanded to other public buildings, and by the 1960s Columbus had become a world-renowned magnet for privately financed modernist design. Even the county jail is art: The Cleveland architect Don M. Hisaka designed a round jail with a recreation area capped by a mesh dome. Some of the locals objected to letting convicts live in such an interesting building, until they were assured the place would look pleasant only from the outside.
Soon Miller was making similar deals with private developers. Cesar Pelli, designer of the Petronas Towers in Kuala Lumpur, created the town shopping mall, featuring a tinted glass panel exterior, arching skylights, and room inside for a sculpture collection. Eero Saarinen (son of Eliel) devised the 1954 Irwin Union Bank and Trust as a statement against the imposing, neoclassical architectural style of most banks of the time. The minimalist glass-and-steel structure sits at a downtown intersection, where glass walls allow both natural light and pedestrian sightlines to penetrate the building.
Columbus officials embrace and encourage the town’s architectural heritage, but they aren’t overly protective of it, as some boutique communities can be. The town still has plenty of strip malls, fast food franchises, and big-box stores, often right alongside its specially commissioned buildings. Some structures designed by Cummins Engine Foundation architects have even been torn down to make way for new development (including the aforementioned mall and a newspaper building). “We really don’t have an area that is designated for architectural viewing,” says Columbus Mayor Fred Armstrong.
That approach results in plenty of inconspicuous surprises: sculptures, mundane businesses with sleek facades, the occasional artistic trash receptacle. “We have your typical small-town zoning laws,” Armstrong says, “but there’s no effort to restrict development for the purpose of architecture. When private companies or churches build, there’s an incentive for them to fit in the scheme of the community, to be part of the tradition. They embrace that and recognize that it’s an important economic development tool.”
Miller understood that too. His aspiration to make Columbus a showcase was driven in part by his love of architecture but also by a desire to make the city a more appropriate setting for a large, international corporation. He needed to give executive talent reasons to settle in a sleepy Midwestern town flanked by farmland and the Hoosier National Forrest.
Despite its architectural reputation, Columbus has never become a heartland bohemia or even a major tourist attraction. Most of southern Indiana’s cultural life lies to the west in Bloomington, home of Indiana University. And tourists tend to skip over Columbus in favor of nearby Nashville, an arts-and-crafts town known for its antique stores and autumn foliage. But Columbus continues to put up interesting buildings. “We have a new senior center, bus terminal, and commons area going up,” Armstrong says. “And the foundation has helped us find architects for all of those.”
Senior Editor Radley Balko (rbalko@reason.com) is an Indiana native.
Purple Politics
Joel Kotkin
Is California moving to the center?
You don't have to be a genius, or a conservative, to recognize that California's experiment with ultra-progressive politics has gone terribly wrong. Although much of the country has suffered during the recession, California's decline has been particularly precipitous--and may have important political consequences.
Outside Michigan, California now suffers the highest rate of unemployment of all the major states, with a post-World War II record of 12.2%. This statistic does not really touch the depth of the pain being felt, particularly among the middle and working classes, many of whom have become discouraged and are no longer counted in the job market.
Even worse, there seems little prospect of an immediate recovery. The most recent projections by California Lutheran University suggest that next year the state's economy will lag well behind the nation's. Unemployment may peak at close to 14% by late 2010. Retail sales, housing and commercial building permits are not expected to rise until the following year.
This decline seems likely to slow--or even reverse--the state's decade-long leftward lurch. Let's be clear: This is not a red resurgence, just a shift toward a more purplish stance, a hue that is all the more appropriate given the economy's profound lack of oxygen.
There is growing disenchantment with the status quo. The percentage of Californians who consider the state "one of the best places" to live, according to a recent Field poll, has plummeted to 40%, from 76% two decades ago. Pessimism about the state's economy has risen to the highest levels since Field started polling back in 1961.
Inevitably, this angst has affected political attitudes. Though still lionized by the national media, Gov. Schwarzenegger's approval ratings have fallen from the mid-50s two years ago into the low 30s. The 12% approval rate for the state legislature, according to a Public Policy Institute of California survey in May, stands at half the pathetic levels recorded by Congress.
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The enviro fringe has blocked major new power plant construction in CA for several decades. No problem, we import power from coal burning plants in the Four Corners area. We are an island where gas....
Moreover, voters now favor lower taxes and fewer services by a 49-to-42 margin--as opposed to higher taxes and more services. Support for ultra-green policies aimed to combat global warming has also begun to ebb. For the first time in years, a majority of Californians favors drilling off the coast. Californians might largely support aggressive environmental protections, but not to the extreme of losing their jobs in the process.
Remarkably, state government seems largely oblivious to these growing grassroots concerns. The legislature continues to pile on ever more intrusive regulations and higher taxes on a beleaguered business sector. Agriculture, industry and small business--the traditional linchpins of the economy--continue to be hammered from Sacramento.
Agriculture now suffers from massive cutbacks in water supplies, brought about in part by drought, but seriously worsened by the yammerings of powerful environmental interests. Large swaths of the fertile central valley are turning into a set for a 21st-century version of Steinbeck's Grapes of Wrath.
At the same time, the state's industrial base is rapidly losing its foundation. Toyota ( TM - news - people ) recently announced it was closing its joint venture plant in Fremont, the last auto assembly operation in the state, shifting production to Canada and Texas. Even the film business has been experiencing a secular decline; feature film production days have fallen by half over the decade, as movie-making exits for other states and Canada.
Most important, California may be undermining its greatest asset: its diverse, highly creative and adaptive small-business sector. A recent survey by the Small Business and Entrepreneurship Council ranked California's small-business climate 49th in the nation, behind even New York. Only New Jersey performed worse.
Regulation plays a critical role in discouraging small-business expansion, a new report from the Governor's Office of Small Business Advocate suggests. Prepared by researchers from California State University at Sacramento, the report estimates that regulations may be costing the state upward of 3.8 million jobs. California currently has about 14 million jobs, down 1 million since July 2007.
Ironically, the regulatory noose is now slated to tighten even further as a result of radical measures--from energy to land use--tied to reducing greenhouse gases. Another study, authored by California State University researchers, estimates these new laws could cost an additional million jobs.
Many in the state's top policy circles, as well as academics and much of the media, dismiss the notion that regulations could be deepening the recessionary pain. Some of this stems from the delusion--always an important factor in this amazing state--that ultra-green policies will actually solidify California's 21st-century leadership. Few seem to realize that other states, witnessing the Golden State's economic meltdown, might not rush to emulate California's policy agenda.
Internally, discontent with the current agenda seems particularly strong in the blue-collar, interior regions of the state. Brookings demographer Bill Frey and I have described this area as the "Third California." In the first part of the decade, this region expanded roughly three times as rapidly as Southern California, while the Bay Area's population remained stagnant.
Today the Third California represents roughly 30% of the state's population, compared with barely 18% for the ultra-blue Bay Area. The most conservative part of the state has skewed somewhat more Democratic in recent elections, largely due to migration from coastal California and an expanding Latino population.
But the intense economic distress now afflicting the interior counties--where unemployment rates are approaching 20%--may now reverse this process. The ultra-green politics embraced by the Democrats' two prospective gubernatorial nominees-Attorney General Jerry Brown and San Francisco Mayor Gavin Newsom--may not appeal much to a workforce heavily dependent on greenhouse-gas-emitting industries like farming, manufacturing and construction.
Eventually, the Democrats may rue their failure to run a pro-business, pro-growth candidate, particularly one with roots in the interior region. This oversight could cost them votes among, say, Latinos, who have been far harder hit by the recession than the more affluent (and overwhelmingly white) coastal progressives epitomized by Brown and Newsom. Along with independents, roughly one-fifth of the electorate, Latinos could prove the critical element in the state's purplization.
This, of course, depends on the Republicans developing an attractive pro-growth alternative. In recent years, the party's emphasis on conservative cultural issues and xenophobic anti-immigrant agitation has hurt the GOP in the increasingly socially liberal and ethnically diverse California.
Although he has proved a poor chief executive, Gov. Schwarzenegger did at least show such a political approach could work. The recent emergence of three attractive Silicon Valley-based candidates, including former eBay ( EBAY - news - people ) CEO Meg Whitman and State Insurance Commissioner Steve Poizner, as well as the likable libertarian-leaning former congressman Tom Campbell, could score well at the polls.
This political course-correction should be welcomed not only by Republicans but by California's moderate Democrats and Independents. However blessed by nature and its entrepreneurial legacy, California needs to move back to the pro-growth center if it hopes to revive both its economy and the aspirations of its people.
Joel Kotkin is a distinguished presidential fellow in urban futures at Chapman University. He is executive editor of newgeography.com and writes the weekly New Geographer column for Forbes. He is working on a study on upward mobility in global cities for the London-based Legatum Institute. His next book, The Next Hundred Million: America in 2050, will be published by Penguin early next year.
A Pragmatic Look at Obama's Pragmatism
By Jonah Goldberg‘When John McCain said we could just ‘muddle through' in Afghanistan, I argued for more resources and more troops to finish the fight against the terrorists who actually attacked us on 9/11, and made clear that we must take out Osama bin Laden and his lieutenants if we have them in our sights," Barack Obama thundered as he accepted the Democratic nomination for president in Denver last year. "John McCain likes to say that he'll follow bin Laden to the gates of Hell. But he won't even go to the cave where he lives."
It was a shabby bit of rhetoric, even for a campaign. Insinuating that McCain, of all people, didn't have the intestinal fortitude to take the fight to bin Laden was not only absurd on its face, it smacked of overcompensation coming from the former community organizer whose greatest foreign-policy passion prior to his presidential bid had been nuclear disarmament.
But the line did what it needed to do: communicate that Obama had the sort of true grit required to fight the good, i.e. popular, war in Afghanistan. That war may or may not be good anymore, but it is most certainly not popular. And so what was for Obama a "war of necessity" has become a de facto war of choice. At least that's the sense one gets as the president is suddenly searching for a politically palatable strategy other than the one he announced months ago.
Now, I think it would amount to both breathtaking cynicism and, far worse, bad policy for Obama to abandon Afghanistan to the Taliban and al-Qaeda. That goes for the "Biden plan," which would amount to little better than a public-relations effort whereby we would score regular symbolic victories while steadily losing the war.
But if it's sincere, I welcome Obama's willingness to rethink his position on an issue in which he invested so much political capital and machismo.
Obama came into office swearing he was a pragmatist who would support any approach that worked. He liked to invoke Franklin Roosevelt as his lodestar, for Roosevelt championed "bold, persistent experimentation." Discussing the economy, Obama told 60 Minutes: "What you see in FDR that I hope my team can emulate is not always getting it right but projecting a sense of confidence and a willingness to try things and experiment in order to get people working again."
That spirit has been woefully lacking in Obama's presidency so far. During the campaign, Obama's top domestic priorities were reform of health care, education, and energy. When an economic crisis that is - according to Obama, at least - second only to the Depression exploded in front of him, Obama the alleged pragmatist concluded that, mirabile dictu, his year-old agenda was the perfect solution.
Obama insisted that as president of both "red" and "blue" America, he was open to ideas from both sides of the aisle. But his stimulus bill was as partisan and one-sided as Democrats claimed George W. Bush's tax cuts were. At least Bush's tax cuts actually cut taxes. It remains to be seen whether Obama's stimulus stimulated anything at all.
After ending the war in Iraq and taking the fight to bin Laden's cave, direct engagement with the Iranian regime was candidate Obama's greatest foreign-policy priority. Partly this stemmed from the fact that he accidentally suggested in a debate that he would meet with Iranian president Mahmoud Ahmadinejad without preconditions. Rather than admit he was wrong, Obama stuck to his idée fixe throughout the campaign.
Since being elected, it seems that his off-the-cuff slipup wasn't that off the cuff. Despite an ever-increasing number of lies, subterfuges, and outrages on the part of the Iranians, the Obama administration has seemed convinced that they can be talked into compliance with the so-called international community.
But the optimist can look at Obama's newfound open-mindedness on Afghanistan and his potential orchestration of international sanctions against Iran as proof that reality is prying him from his ideological cocoon.
Alas, there's another way of reading recent events. Critics always claimed that Obama was a very left-wing fellow who was never the centrist he claimed to be. The pessimist might suspect that Obama's newfound pragmatism only manifests itself when it permits him to abandon the centrist positions that may have helped him get elected but are of no use to him politically anymore. What seemed like principled centrism in 2008 might simply be exposed as left-wing expediency in 2009.
Here's hoping the optimists are right.
Repeating history
Mad men of 1939, 2009
Nineteen thirty-nine was not a good year. World War II started, and much of the world was still in the Depression. The leaders of too many countries were either despots or naive and weak.
And 2009 has not been a good year, considering the global recession. Seventy years later, as in 1939, the leaders of too many countries are either despots or naive and weak. Just look at the performance of the world's leaders at the United Nations and at the Group of 20 summit of major economic powers in Pittsburgh last week.
Crackpots such as Libya's Col. Moammar Gadhafi ranted on while leaders of major countries, including the United States, engaged in meaningless babble about how "we" (i.e. they) will do better this year. The final communique from the G-20 was a long, embarrassing, self-congratulatory statement of how, if it had not been for the wonderful attendees at the meeting, the world economy would be in even worse shape - conveniently overlooking the fact that it largely had been this group of people who had made the mess in the first place. The summit's final, and very predictable, conclusion was that the leaders were going to take away more of our financial freedom and more from our wallets. This is not a good omen for the future.
Too many of today's leaders all too closely resemble the leaders of 1939 and seem equally capable of starting the chain of events that destroyed much of mankind in the 1940s. Iran's Mahmoud Ahmadinejad is the wannabe Adolf Hitler, not only in his hatred of the Jews, but in his plan for eliminating many of them. Hitler had his cult of the master race, which was supposed to govern all of mankind, and Mr. Ahmadinejad has, as his cult, a particular variant of Islam to which all are supposed to submit.
Many considered Hitler a clown and a fool in 1939, much as Mr. Ahmadinejad is portrayed by much of the press today. Germany in 1939 had about the same population as Iran of today. Hitler had a better-trained military, but he did not have a nuclear bomb, which Mr. Ahmadinejad will have soon. Hitler was a master at detecting and exploiting weakness in his opponents, and Mr. Ahmadinejad seems to have much the same talent.
Another 1939 throwback is Hugo Chavez of Venezuela, who is the Benito Mussolini of today - both national socialists, i.e. fascists. Like Mussolini, Mr. Chavez is a despotic clown who can be affable and charming while repressing his citizens. Mussolini had bigger ambitions than Italy, which caused him to first topple the government in Albania and then invade East Africa. Mr. Chavez has not confined his mischief to Venezuela. He has plotted against and engaged in covert operations against several of the democratic countries in Latin America.
Even though there is no Josef Stalin type on the world stage at the moment, the brothers Castro probably would have been capable of the massive crimes of Stalin if only they had a larger country. Like Stalin, Fidel Castro is a hard-core, committed communist, more consumed with his own power than the well-being of his people. The brothers Castro, allied with the younger Mr. Chavez, may succeed in overthrowing governments in Latin America, particularly because they have reason to believe they have little to fear from the new U.S. administration.
Russia's Vladimir Putin seems cut out of the same mold as Japan's Hideki Tojo of 1939. Like Tojo, Mr. Putin has followed the fascist model of putting more emphasis on control of business than actually owning everything, unlike the traditional socialist.
Tojo invaded his neighbors when he thought it would serve his interest, assuming the big powers would tolerate it because they were bogged down with other problems. Mr. Putin has engaged in similar behavior in Georgia and may think he can get away with an invasion of Ukraine, in the same way Tojo correctly assumed that the United States and others would do nothing when he had his Japanese army invade China.
What is particularly disturbing is that President Obama seems to view the world as Britain's Neville Chamberlain did in the late 1930s. Chamberlain's name has become a synonym for the failure of appeasement.
Mr. Obama's dithering on making a decision about Afghanistan, his repeated use of words as a substitute for laying down firm markers in dealing with Iran, and the clumsy way he reneged on the missile-defense commitments to the Poles give the impression that he is made of no sterner stuff and is at least as naive as Chamberlain.
The world became safer when President Reagan and Prime Minister Margaret Thatcher were in power. The world's tyrants were, for good reason, afraid of Reagan and Mrs. Thatcher. As a result, the Cold War ended almost without a shot being fired, and many petty dictators lost power or stayed bottled up in their holes - and freedom blossomed around the world as never before.
Unfortunately, Reagan has died, and Mrs. Thatcher has passed from the world stage, and now the economic and foreign-policy failures of the 1930s seem to be repeated every day - as if no one in power or in the mainstream media remembers (if any of them ever learned) history.
Do we have any indication that Iran's Mr. Ahmadinejad, Venezuela's Mr. Chavez, Russia's Mr. Putin and North Korea's Kim Jong-il have any real fear of Mr. Obama, British Prime Minister Gordon Brown, French President Nicolas Sarkozy and German Chancellor Angela Merkel? Do we have any reason for real confidence that Mr. Obama and his European allies really know what they are doing with both economic and foreign policy?
Richard W. Rahn is a senior fellow at the Cato Institute and chairman of the Institute for Global Economic Growth.
The Real Reasons Behind Fed Secrecy
by Ron Paul
Recently by Ron Paul: We Can End the Fed
Last week I was very pleased that the Financial Services Committee held a hearing on the Federal Reserve Transparency Act, HR 1207. The bill has 295 cosponsors and there is also strong support for the companion bill in the Senate. This hearing was a major step forward in getting the bill passed.
I was pleased that the hearing was well-attended, especially considering that it was held on a Friday at nine o’clock in the morning! I have been talking about the immense, unchecked power of the Federal Reserve for many years, while the attention of Congress was always on other things. It was gratifying to see my colleagues asking probing questions and demonstrating genuine concern about this important issue as well.
The witness testifying in favor of HR 1207 made some very strong points, which was no surprise considering the bill is simply common sense. It was also no surprise that the witness testifying against the bill had no good arguments as to why a full audit should not be conducted promptly. He attempted to make the case that the Fed is already sufficiently accountable to Congress and that the current auditing policy is adequate. The fact is that the Fed comes to Congress and talks about only what it wants to talk about, and the GAO audits only what the current laws allow to be audited. The really important things however, are off limits. There are no convincing arguments that it is in the best interests of the American people for anything the Fed does to be off limits.
It has been argued that full disclosure of details of funding facilities like TALF and PDCF that enabled massive bailouts of Wall Street would damage the financial position of those firms and destabilize the economy. In other words, if the American people knew how rotten the books were at those banks and how terribly they messed up, they would never willingly invest in them, and they would fail. Failure is not an option for friends of the Fed. Therefore, the funds must be stolen from the people in the dark of night. This is not how a free country works. This is not how free markets work. That is crony corporatism and instead of being a force for economic stabilization, it totally undermines it.
If the Fed gave its actual arguments against a full audit, they would not have mentioned anything about political independence or economic stability. Instead they would admit they don’t want to be audited because they enjoy their current situation too much. Under the guise of currency control, they are able to help out powerful allies on Wall Street, in exchange for lucrative jobs or who-knows-what favors later on. An audit would expose the Fed as a massive fraud perpetrated on this country, enriching a privileged few bankers at the top of our economic food chain, and leaving the rest of us with massively devalued dollars which we are forced to use by law. An audit would make people realize that, while Bernie Madoff defrauded a lot of investors for a lot of money, the Fed has defrauded every one of us by destroying the value of our money. An honest and full accounting of how the money system really works in this country would mean there is not much of a chance the American people would stand for it anymore.
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