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Archive for October, 2010

Erratic Karzai

The specter of Vietnam hangs over our war in Afghanistan. First came the questions:

  • Will we lose another war?
  • Should we escalate this conflict, or get out?
  • Will this war become a quagmire?

Then came some contrasts:

  • The terrain is a lot different.
  • The Cold War is over, so a superpower confrontation isn’t in the background.
  • We haven’t lost as many soldiers in Afghanistan. Moreover, we have an all volunteer force now, and a relatively small number are deployed to the war zone.

In one respect, though, perhaps the most important one, you can see a similarity between the two conflicts that should give us pause. In both wars, our principal aim was not to conquer or occupy foreign territory. Our principal aim in Afghanistan, as in Vietnam, is to quell an insurgency and maintain a strong, stable government friendly to our interests. We failed to accomplish that in Vietnam, and thus lost the war. All the political signs right now indicate that we will fail to accomplish that aim in Afghanistan as well.

We have backed Hamid Karzai’s government in Kabul. The people who live in the region have many reasons to regard the government in Kabul as illegitimate. One important reason is that we back it. It’s a weak government in many respects, but one move on our part would make it more stable and acceptable to Afghans: we could stop backing it.

We back Hamid Karzai because he’s our only option. Never formulate your strategy in a way that limits your options. Do the opposite: formulate a strategy that leaves you multiple paths to your goal. What is our goal in Afghanistan? We want no more attacks on our homeland to originate from that region. Do we have to back Hamid Karzai and his government to accomplish that aim? You tell me.

Hamid Karzai has done everything a human being can reasonably do to tell us he does not want our backing. You have to ask what else he could do to get our attention. What if he were to denounce us in public, saying that our presence in his country is bad for his government and for all Afghanis? He’s done that. What if he were to tell us he’d like us to leave as soon as we can, because our presence in his country just leads to more and more killing? He’s done that. What if he stole an election with vote fraud so blatant that even his own cronies couldn’t defend it, then told us to mind our own business when we asked what’s going on? We all know he’s done that, too.

What’s our explanation for this behavior? We say he’s erratic. That implies that he doesn’t know his own mind. It implies that he can’t form a plan and stick with it. Erratic suggests he’s not reliable, not serious, not credible. I don’t know, but the record of what he has said in public seems pretty consistent to me. He doesn’t want us in his country anymore. Yes, we do protect him from the Taliban, but he doesn’t seem to be so worried about that. From his actions and his words, he appears more worried about the Americans in his country than about the Taliban.

Now we learn that his government receives bags of cash every year from Iran, our arch-enemy in the region. When the New York Times calls him on it, he says, “What’s the big deal? The U. S. government knows about this. I told them myself when I was in Washington.” Wow, that looks good for everybody doesn’t it? The American government knows that Iran funds the government in Kabul to the tune of two million or more a year, and we’re all okay with that?

You can’t fault Iran for wanting to advance its interests in Afghanistan. Moreover, Kabul would be ungracious to refuse a gift like that. Money is short, Kabul has big bills to pay, and Iran isn’t asking much in return. But you gotta wonder, do we really have a clear idea of what we’re doing over there? Honestly. When we leave, Iran’s still going to be there, like a good neighbor. Do we think Karzai will keep taking money from us after we leave because he likes us better?

If our main goals are to make Karzai’s government self-sufficient and friendly to the United States, we need to think of some different goals. If our main strategy to accomplish our goals is to apply military pressure to the Taliban, train the Afghan armed forces, provide security and fund development projects in Afghanistan, we may want to look at the result to see if the strategy is working. If we were to ask Karzai in private if he thinks the strategy is working, I don’t think he’d say yes.

When our client says that he takes money from our enemy and adds that we’ve known about that for quite a while, you have to take another look at both our ends and our means. We already gave Iran a big opportunity to expand its regional might when we attacked Iraq. Now perhaps we can balance things out and give Iran some room to run on the other end of the field. But then, if you have a client who’s erratic, what can you do?

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Grand Rapids Woman Harassed by Fair Housing Do-Gooder

The tax-exempt non-profit Fair Housing Center (FHC) of West Michigan recently filed a housing discrimination charge against a Grand Rapids, Michigan women (let’s call her Victim) who posted an advertisement on her church’s bulletin board looking for a “Christian” roommate.  According to Nancy Haynes of the FHC, because Victim’s ad specifically states she is offering only for a “Christian” individual to apply it is a strict violation of the federal Fair Housing Act.  Truth be told, the only violation in this situation is of Victim’s constitutional rights.

In the first place, the Fair Housing Act is unconstitutional.  I know I sound like a broken record.  Article 1 Section 8 of the Constitution does not mention the regulation of housing as an enumerated power of Congress.  Thus, housing falls under the jurisdiction of state power in our system of federalism.  Since the ad in question is not a violation of Michigan state law the actions of the FHC of West Michigan amount to little more than legal harassment of a property owner.

Naturally, that is not the way Ms. Haynes sees it.  She does admit that Victim “…can actually, in practice, not rent to a non-Christian.  But she can’t make the statement.  The statement alone is a violation of the act.  What she can do in practice she can’t make a statement about”.  This is sort of like the “don’t ask, don’t tell” of the rental housing business.  What sense does it make?  It seems the law was only written to make lawyers rich.  What else is new, right?  In essence, the Fair Housing Act is not about anti-discrimination after all – it is solely about political correctness.  This, of course, makes all the politicians who over the decades have proclaimed the law fights discrimination in housing liars.  Surprise, surprise!

Whatever the Fair Housing Act does it is also unconstitutional because it violates the constitutional rights of property owners.  Freedom of speech and the free exercise of one’s religion are bedrock rights held by every American.  Victim is being denied both by the Fair Housing Act.  What’s more, the 5th and 14th Amendments to the Constitution prohibit the deprivation of life, liberty, and property without “due process of law”.  Victim has not been accused of a crime and has not been afforded due process of law.  By placing stipulations on how Victim can use her property the government is essentially depriving her of the full use thereof.

The big question is, how did we get to this point in America?  How is it that a church parishioner who is simply looking for a roommate of the same faith got so entangled in a legal quagmire?  It’s quite simple.  There has been an erosion of property rights in America since the Civil Rights Act of 1964 was signed into law.  The Act rightly banned government from passing laws which segregated lunch counters, water fountains, and buses, but it went too far when it reclassified certain private property as public property, thus violating the constitutional rights of property owners.  In other words, as repugnant as discrimination is, Congress had no constitutional right to force any business owner to serve anyone they didn’t want to.  The 1964 Act opened the floodgates for violations of property rights like the one experienced by Victim.

In the final analysis, Congress does not have the authority to regulate housing let alone pass laws that violate the constitutional rights of Americans.  But, since at least the 1960s that is precisely what it has done.  Instead of letting the free market and local communities deal with undesirable behavior, Washington uses force to tread upon the constitutional rights of our friend Victim and millions of others.  Until Americans elect property rights representatives to Congress the violations will continue.  So in the meantime be careful about how you use your own property.

Article first published as Grand Rapids Woman Harassed by Fair Housing Do-Gooder on Blogcritics.

Kenn Jacobine teaches internationally and maintains a summer residence in North Carolina

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Another Unfunded Mandate that Should be Nullified

In 2003, the Bush Department of Transportation issued an unfunded mandate ordering all states and local governments to change their millions of street signs from all-capital letters to signs with a mix of capitals and lower case lettering.  So for instance, PERRY ST. would have to become Perry St.  It seems the know-it-all bureaucrats at the Federal Highway Administration conducted a study that indicated it takes drivers a few extra milliseconds to read all-cap words.  Thus, those signs have been determined to be a safety hazard since the extra time it takes to read street signs means drivers spend less time with their eyes on the road .  According to Transportation Secretary Ray LaHood, “Safety is this department’s top priority.  These new and updated standards will help make our nation’s roads and bridges safer for drivers, construction workers and pedestrians alike.”

An interesting question is, who thinks up these issues to study in the first place?  I mean do bureaucrats have that much time on their hands that they can think up and then conduct research on whether the size of letters determines how long it takes people to read street signs?

Another question is, on what Constitutional basis does the Department of Transportation rely on to force state and local governments to comply with its sign mandate?  Even if your interpretation of the interstate commerce clause was incorrect and you believed it gave the feds jurisdiction over regulating all commerce between states, most of the roads covered in this mandate are local and not involved in any interstate commerce of any kind.

Of course, the federal government’s interpretation of the interstate commerce clause is a fallacious one anyway.  The clause was intended to give the Congress power to ensure free trade between the states which was a common problem under the Articles of Confederation.  James Madison in Federalist Paper 45 set the record straight as far as the Founders’ intentions were concerned about federal power,

“The powers delegated by the proposed Constitution to the federal government are    few and defined. Those which are to remain in the State governments are numerous and indefinite. The former will be exercised principally on external objects, as war, peace, negotiation, and foreign commerce; with which last the power of taxation will, for the most part, be connected. The powers reserved to the several States will extend to all the objects which, in the ordinary course of affairs, concern the lives, liberties, and properties of the people, and the internal order, improvement, and prosperity of the State.”

Since roads and highways do not fall under the subjects of “war, peace, negotiation, and foreign commerce” and they do fall under “improvement and prosperity of the State” if he were alive today Madison would agree that the Department of Transportation shouldn’t even exist let alone have the right to place mandates on the states.

But, of course in our contemporary political climate Constitutionalism means little.  Congress and the Executive Branch violate the Constitution all the time without any after thoughts.  So, let me try a different angle.  In economics there is something called opportunity cost.  It has to do with possessing scarce resources and facing a decision on how to use those resources.  The more resources you spend on one choice leaves less to spend on others so you have to decide which choices’ benefits are most valuable to you.  The federal government is leaving the states very little choice.  All states are on fixed budgets.  Unlike the federal government, states cannot simply fire-up the printing presses of the central bank.  In this current depression, states especially are having to make some tough choices about funding.  Facing dwindling tax revenues and unable to raise taxes, they must still fund schools, police, and many social services.   By mandating that states spend millions to change street signs the federal government is forcing states to cut funding for necessary human services.

We can’t expect bureaucrats to do the right thing and cancel an unfunded mandate that is so outrageous and harmful to the states in these trying times.  After all they are just unelected leeches on society.  But where is Congress?  Doesn’t it care that precious resources are being diverted away public safety, kids and the elderly?  Republicans in Congress should especially be willing to take a stand.  It was their own Bush Administration that initiated the mandate in 2003 and they are the ones always talking a good game about small, limited government.  This would be an easy unfunded mandate to protest since the Democrats would have little ammunition to play their typical race-baiting, fear mongering games.  But, no, there are no signs that relief will be forthcoming from Congress.  Seems the only recourse for the states if they have any gumption is to nullify the mandate.  They should tell the feds to quit violating their constitutional powers and refuse to fund the signs.  This would put the feds in their place and give the decision making for state spending back to the people where it belongs.
Kenn Jacobine teaches internationally and maintains a summer residence in North Carolina

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As the health care debate came to its surreal end earlier this year, I had to remind myself that I was from Massachusetts. That was bound to color my perspective. But honestly, nothing Massachusetts has served up prepares us for what we’ll see if we try to implement a similar system country wide.

When the Massachusetts plan took effect in 2007, I thought: what do you expect? This is the People’s Republic of Massachusetts. This is the same place where rich people in Cambridge still think it’s okay to have rent control. One stupidity leads to another. For all that, I never thought Democrats in Congress, and Democrats who support the Democrats in Congress, would be so stupid as to enact a plan like the one they did. Completely blind to their foolishness, they even pointed to the Massachusetts plan as a model for federal health care reform!

The Massachusetts plan is a slow motion train wreck, to be kind about it. It’s supposed to save money, but of course it costs way more than the state can afford. The plan is supposed to make health care accessible, but access to regular health care is still endlessly complicated, especially for people who don’t have employer based health plans. The plan is supposed to be comprehensive, but people who are unemployed, who may be employed part-time or seasonally, or who work as independent contractors are stuck with financial burdens difficult to bear. God help you if you don’t have a regular job with benefits. The state will come after you to make you pay a fine for not having health coverage.

Even more significantly, the state wrangles with health insurers about coverage for small business employees. The insurers put in for something like 268 specific rate increases for small business plans. The mere number of applications suggests the level of detail in the state’s oversight. Well let the negotiations begin. The state denies most of the requested increases. The insurers say we can’t cover our costs at the old rates. The state says, “Tough, sell the insurance at the old price.” The insurers object that they can’t do business at a loss. The state says, in effect, “You’re just a bunch of money grubbers anyway, and we’re going to make you sell this insurance.” You can see where this dispute is headed: nowhere. Meantime the small business employees must wonder if they’ll be fined for not having health insurance!

We’ve seen this kind of thing before. The state comes in saying it’ll make things better, and it makes things worse. It says it stands for the little guy, and the little guy gets crushed. It says it’ll take care of all the complications – all the rules and oversight and management of financial transactions – and it leaves another costly trail of failure, disappointment, and questions about how things could go so wrong.

Remember how the congressional leadership crowed when health care reform passed? They pointed to Medicare as a wonderful first step, to the Massachusetts plan as the future of health care, and to their own legislation as a crowning success. They hugged and smiled and overflowed with good feeling for each other. Just ten months later, the same members of Congress are up for reelection, and they’re not so smug and smiley anymore. Some of them will lose their seats because of their stupidity. Whatever happens in the November elections, we have to get rid of this health care reform, fast. Some three million people may have to live in the People’s Republic of Massachusetts, but do we want hundreds of millions in the entire United States to suffer a similar loss of freedom?

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Statist Policies Cause More Harm Than Good

When will those that call on government to solve all of our problems ever learn that they cause more harm than good?  They cannot use government to solve one problem without causing others.  They cannot attempt to help one group without hurting another.  They continue to advocate using government in areas it doesn’t belong which only leads to more suffering for all of us.

The proof is in the pudding.  Take the continuing housing crisis for instance.  Housing prices continue to fall.  This is exacerbating foreclosures and statists would claim preventing economic recovery.  So over the last two and half years the federal government has attempted to stabilize housing prices by keeping interest rates low, providing tax credits for first time buyers, and cajoling lenders to modify millions of mortgages to prevent foreclosure.

At the same time, a massive housing glut existed due to the building frenzy of the Fed induced boom years.  Understandably, since the crisis hit lenders have tightened lending standards as a reaction to their past sins.  This has caused a shortage of qualified buyers to purchase homes.  In other words, there are not enough buyers in the market with enough money and good credit to buy up the surplus houses so the economy can recover.

Of course, government policy has it all backwards.  The Obama Administration has attempted to help irresponsible home buyers at the expense of everyone else.  It has attempted to keep the housing bubble inflated with its policies.  This attempt to stabilize housing prices has no doubt prolonged the recession indefinitely because in order for recovery to take place it is obvious that prices need to fall further.  They need to fall so all the surplus housing can be bought up.  But with lending standards tightening (rightly so) there are not enough eligible buyers to suck them up.

The correct policy from the start of the recession would have been to allow the market to correct itself.  This is what recessions are for – like throwing up during the flu to rid the organism of bad matter.  Obviously housing prices are still overvalued because we still have a glut and prices are still falling.  Econ 101 teaches that to eliminate oversupply the market must lower prices and that prices will continue to fall until the point of equilibrium – that point where ideally supply meets demand. Thus current falling home prices are regrettably important right now to allow the housing market to recover.  Housing will not recover until prices align with market conditions no matter how hard Obama and Bernanke try to defy the market.  Yes, foreclosures will increase further and people will be hurt but as prices fall farther more Americans will be able to qualify for loans they can afford.  Surplus houses will be purchased at current market prices not the artificially high government contrived prices.  Recovery will begin to appear.  Statist cannot have it both ways – they cannot stabilize house prices while at the same time eliminate the housing surplus.  Prices must fall further to allow consumers to enter the market, buy up the surplus housing (mal-investment of the boom), and allow recovery to begin in the housing market.

The current housing crisis is bad enough but probably the greatest example of statists trying to have it both ways and failing miserably is their perpetuation of the myth that you can have high taxes, an abundance of regulations and full employment all at the same time.  Case in point, according to confidential internal documents of Toyota obtained by Congress in February of this year, company executives  were quoted as saying Toyota faced a “changing political environment” as one of its main challenges and expected a “more challenging regulatory” environment under the Obama administration’s encouragement.  Whether Toyota pulls production out of the United States like so many other companies have done is unclear.

And the companies that remain in the U.S. do face daunting red tape and high costs associated with hiring and retaining labor   Commenter Lew Rockwell has identified 11 “barriers” to full employment in the U.S.

  • The high minimum wage that knocks out the first several rungs from the bottom of the ladder;
  • The high payroll tax that robs employees and employers of resources;
  • The laws that threaten firms with lawsuits should the employee be fired;
  • The laws that established myriad conditions for hiring beyond the market-based condition that matters: can he or she get the job done?;
  • The unemployment subsidy in the form of phony insurance that pays people not to work;
  • The high cost of business start-ups in the form of taxes and mandates;
  • The mandated benefits that employers are forced to cough up for every new employee under certain conditions;
  • The withholding tax that prevents employers and employees from making their own deals;
  • The age restrictions that treat everyone under the age of 16 as useless;
  • The social security and income taxes that together devour nearly half of contract income;
  • The labor union laws that permit thugs to loot a firm and keep out workers who would love a chance to offer their wares for less.

What statists don’t understand is that labor is a commodity like steel and copper.  When government increases the cost of labor through taxes and regulations it causes unemployment.  At this very moment, firms are squeamish about hiring for the reason stated in the aforementioned Toyota memo – the Obama Administration’s inclination to increase laws and regulations.  At the end of the day, statists talk a good game about being interested in providing full employment, but their actions speak louder than words.  Their policies of more regulation and higher taxation are destructive to the domestic labor market.

Instead, in these economic hard times the federal government should gradually repeal all unconstitutional federal legislation dealing with the regulation of business and hiring.  Those issues are the jurisdiction of the states.  With federal barriers to full employment broken down, states would enter into a healthy competition for business and workers.  The national employment situation would improve and the most business/labor friendly states would probably even attract some of those companies that previously left the country to set up shop in their jurisdiction.

To be sure, there are many other examples of statist policies which attempt to solve one problem while causing others.  Government stimulus programs which attempted to jump-start the economy during this recession have only wasted trillions and put us deeper into debt.  Cash for Clunkers, meant to stimulate the car buying market has caused a shortage of used cars negatively affecting the working poor.  Obamacare, enacted to provide more Americans with health care, has actually led to McDonalds dropping coverage for 30,000 of its employees and to many insurance companies dropping child only policies in reaction to the mandate banning insurance companies from turning down children with pre-existing conditions.  Yes, government meddling usually has the opposite effect of what was intended and it causes a lot of damage.  If only statists could understand this and stop causing so much harm.

Article first published as Statist Policies Cause More Harm Than Good on Blogcritics

Kenn Jacobine teaches internationally and maintains a summer residence in North Carolina

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