Spike Lee has reminded us of his longtime, and all too predictable, belief that Cleopatra was black on the occasion of Liz Taylor’s funeral. This instantly brought to mind Zora Neale Hurston’s pithy retort to similar claims by W.E.B. DuBois: “I resent his putting that Greek slut, Cleopatra, into the same race as me.”
Friedrich Hayek, the Nobel-prize-winning Austrian economist (and now YouTube sensation), upheld economic competition and opposed government policies that reduced it. In his surprise bestseller, The Road to Serfdom, he argued that central planning would undermine competition, hamper the economy, and lead to pressures for more and more measures that would enhance the power of the government at the expense of individual liberty. Competition, he wrote, “is the only method by which our activities can be adjusted to each other without coercive or arbitrary intervention of authority.”
What would Hayek, who died in 1992, have said about last year’s legislative overhaul of the healthcare and financial sectors? In a nicely done recent paper, Peter J. Wallison, a scholar at the American Enterprise Institute, makes a good case that the great economist would have opposed both measures as anti-competitive.
The regulatory overhaul of the financial sector—the Dodd-Frank Wall Street Reform and Consumer Protection Act—would enable the government to directly control financial companies it deems “systematically important” because their failure could destabilize the US financial system. Wallison describes several ways in which this provision of the Dodd-Frank Act would undermine competition in the financial sector, but I found this passage of his especially helpful:
In return for the Fed’s protection against failure and competition, the largest financial firms in the US economy will be inclined to follow the government’s directions on how to conduct their business. For example, if a smaller financial firm is failing, the Fed will be able to induce one of the larger firms to acquire it; if a country is having difficulty selling its bonds, the Fed will be able to get some of the firms it is regulating to invest in those securities. These are not fantasies. In the past, when the Fed was regulating only bank holding companies, it induced them—in the interest of stability in financial markets—to lend to countries that were having difficulty meeting their international payment obligations.
By contrast, the Patient Protection and Affordable Care Act (“colloquially known as ObamaCare, even though the president never submitted his own plan”) would impair competition in a different way—namely, by hampering an effective price system, Wallison argues.
Wallison mentions several provisions of ObamaCare that would undermine competitive prices. One, for example, would require health insurers to “spend at least 85 percent of premiums on ‘activities that improve health care quality’ (the Medical Loss Ratio, or MLR) for large-group insurance,” he writes. Here I found Wallison’s analysis particularly illuminating, if a bit dry (emphasis added to help readers navigate around the wonkier parts):
With the MLR, for example, the government’s rules on what goes into the numerator and denominator of this ratio will determine the profitability of individual companies and whether they will be able to participate at all in a competitive system. Speaking generally, the numerator of the MLR will be only what the government considers as “activities that improve health care quality.” Immediately we see that price competition is impaired because consumers have no choice on this issue; the services they want may not be available simply because the government has determined that they do not “improve health care quality.” In addition, companies will have to price their services to ensure that they meet the minimum MLR in any year or be forced to rebate premiums. This immediately distorts the pricing system by introducing an element that has nothing to do with what consumers are willing to pay for insurance services. Finally, many companies that offer specialized services that do not fall into this category may have to abandon the services entirely, thus restricting not only competition for those services specifically, but also–if those firms sell out to competitors or otherwise leave the business–the competition that comes from the number of competitors in a market. Say, for example, that an insurer offers a doctor-referral service, and that service is not included among the items that the government considers an activity “that improves health care quality.” The insurer, then, would likely abandon that service because its cost would then have to be paid out of its 15 percent of premium revenue that is available for both administration and profits. Abandoning that service would reduce competition among insurers for the most effective referral services.
Both ObamaCare and the Dodd-Frank Act were touted as measures that would give consumers greater “protection” and “affordability.” But if Wallison’s analysis is correct, each of these legislative landmarks will undermine economic competition and thereby act against the interests of consumers.
Start one.
The day before Obama bombed Libya, 3/4 of Americans opposed U.S. intervention.
Today, 60% of Americans favor it.
A whopping shift of about 35%—meaning more than a third of Americans changed their minds about U.S. intervention, once the bombs began falling. Surreal.
Operation Odyssey Dawn—the bizarrely named military attack upon Libya—is a relatively small war. It is only because of this that Obama partisans are getting away with not calling it a war at all. It is indeed tiny compared to the operations in Iraq and Afghanistan. It pales in comparison to the great U.S. wars of the 20th century that each inspired a slew of movies and stand as major watersheds in American history, with lasting impacts on our culture and social consciousness.
Yet this infant war has almost surely cost hundreds of millions of dollars already and will likely cost billions before it’s over.
Let’s put this in perspective. Republicans, holding high the banner of fiscal discipline, recently targeted National Public Radio for spending cuts. Now, I always opposed federal funding for this or any other media outlet. And I suspect NPR will only improve, freed from the stigma of being governmental, a heavy price to pay for the mere 2% or so of its budget that directly came from Washington, DC. (Even the executive who recently resigned, having been caught lambasting the tea party, agreed that NPR would have been better off with no federal funding.)
But how much did NPR cost taxpayers? Last year, the news organization got $5 million from the federal government. That’s the cost of about three or five Tomahawk missiles, 112 of which Obama launched into Libya just over the weekend. This means the savings to taxpayers from eliminating federal funding for NPR—over a period of 25 or so years—was offset by this one “limited” military activity, itself just the beginning of one relatively minor military engagement.
(Incidentally, House Majority Leader Eric Cantor, in defending the cuts to NPR, said, “why should we allow taxpayer dollars to be used to advocate one ideology?” I couldn’t agree more. But why should we allow taxpayers dollars to be used to enforce one ideology—namely, the ideology of warfarism—through the implementation of war? I know, this is not a fair question, since it places under scrutiny the whole ethical basis behind taxation itself and the whole rationale of statism.)
Back to Libya, the financial costs alone will likely climb, since the administration doesn’t really seem to have any sort of clearly defined mission, other than the end of Gaddafi’s oppressive treatment of his subjects, which I do not expect to end until Gaddafi’s out of power. Will this war cost more than a billion? More than $10 billion? Perhaps it will fall far short of the price tags we have become accustomed to in connection with today’s wars—price tags reaching hundreds of billions or even trillions of dollars over the years. Still, is it not quite a significant thing that the president can simply expend such resources—hundreds of millions of dollars—toward violent ends, all on his own say-so, and yet he has the nerve to call out businessmen and CEOs for their alleged greed and disregard for other people’s money? Is it not humorous, in a black-comedy sort of way, that today’s Republicans are mostly caught between defending these expensive military operations while opposing smaller pet spending projects or, even more absurdly, attacking Obama for spending money on this war while ignoring the even more expensive imperial projects of his predecessor? And is it not obscene that in today’s climate of surreal fiscal recklessness and institutionally ubiquitous insolvency, a few hundred million amounts to much less than rounding error? But nevertheless: a splendid little war here and another one there, and pretty soon you’re talking about real money.
In 1943, a team of chemists at Harvard University led by Louis Fieser produced napalm, and thereby beat out competing teams at DuPont and Standard Oil in a government competition for its development. Like many scientists who have worked on weapons development for the government, Fieser was unapologetic, even when the U.S. military’s use of napalm in the Vietnam War became a focus of protest against the war in general and the product’s manufacturer Dow Chemical in particular.
In Fieser’s view, he had simply solved a technical problem that the government wanted solved. What the government did with his “solution” was not his concern. Similarly, legions of other scientists have shrugged off responsibility or even concern for the hideous consequences of their scientific work, most notably perhaps in the development of nuclear weapons. Some take pride in helping to “save American lives,” notwithstanding the suffering and loss of life their creations facilitate among human beings who have committed the crime of being something other than American.
In the immediate aftermath of 9/11, Americans were gripped by hysteria, unsure of where and when the next attack might come. Nothing contributed to this climate of fear as did the anthrax attacks that began exactly one week after the Twin Towers fell. Five were killed, seventeen others were infected, and letters containing the bacteria were sent to news stations and Senators, causing a general upset.
It was assumed by most at the time that the source of the anthrax was similar to that of the 9/11 attacks—Muslim extremists bent on killing and terrorizing Americans on their own soil. Some commentators assumed it was the mark of Saddam Hussein. Some thought the source was Afghanistan. The fear was stark—Americans in October were frightened that the toxin would be found in Halloween candy, and institutions were especially cautious about opening the mail.
It’s been years since anyone has even cared about anthrax. Nowadays, we go to the airport and take off our shoes, because one guy a decade ago almost hurt some people with a shoe bomb on a plane. We have to put our lotions and toothpaste in plastic bags, and are limited to 3 oz for such gels and liquids, because of a single incident in 2006 that probably posed no real threat to anyone. They irradiate and pat us down at the airports, just in case any of us is planning to reenact the failed attempt of the Christmas 2009 “Underwear Bomber”—even though the TSA’s new methods might not even have caught him. And yet, no one seems the least bit afraid of anthrax.
Had the likely suspect of the anthrax attacks been a Middle Easterner, upset about US foreign policy—or “who hated us for our freedoms,” as the War Party puts it—you can probably bet that we would still be forced to endure absurd impositions to protect us from this cattle disease. But the man everybody now says did it was, in fact, an American—a scientist for the Army who was working on a vaccine for anthrax and allegedly wanted Americans to recognize how important his work for a cure was by showing us the danger of the disease. Now the media tell us that this guy had shown multiple signs of severe mental issues and should never have been allowed near anything as dangerous as anthrax in the lab.
This raises a few questions:
(1) Why are we not supposed to fear the influence of the US military and its record of fomenting terrorism? We are told to fear radical mosques and travelers from certain countries and other supposed hotbeds of pro-terrorist extremism. But from the Gulf War veteran Timothy McVeigh’s mass murder at Oklahoma City in 1995 to the Army psychiatrist who killed thirteen at Fort Hood, as well as this Army scientist supposedly behind the anthrax attacks, one conclusion we are never supposed to reach is that there is something about the military that encourages violence against the innocent—as though it should be hard to draw such a connection based on what the US military regularly does. A few abortive attempts to cause mayhem on planes have led to policies that make it harder for civilians to board planes. Have the repeated violent acts by unstable military personnel inspired the government to make it any harder for people to join the military? Certainly not the last time I checked.
(2) How can we trust the US Army to protect us if it cannot even keep people as disturbed as Dr. Bruce Ivins away from government supplies of biological weapons? This is the military that Bush sent into Iraq to find WMD that did not exist. But has anyone actually checked out all the people who have control over America’s unparalleled stockpile of biological, chemical and nuclear weapons?
(3) At the risk of sounding a bit conspiratorial, is it not a bit suspicious that Ivans killed himself in 2008 and is now said to have acted alone in the anthrax attacks? The new evidence seems mostly circumstantial—that the guy was mentally troubled. But this doesn’t necessarily provide any more proof than we already had. Ivans’s colleagues had questioned the official story, saying the timeline when he supposedly weaponized the anthrax didn’t add up, and asking for more evidence from the FBI’s investigation. That investigation ended last year, but a panel has called into question the confidence behind its findings. Some will find it beyond the pale to question the government like this, but when we consider that the official story is a mentally ill Army scientist was behind the attacks all by himself, perhaps it is fair to raise our eyebrows when we’re then told, “That’s all there is to it; nothing more to see here; move right along.”
(4) When will the American people become less willing to sacrifice significant amounts of what remains of their liberty in the name of fighting terrorism, when according to the government’s official line on the most significant terrorist attack on American soil since 9/11, the culprit was an agent of the government trying to scare the American people into accepting the importance of his government work?
“The president does not have power under the Constitution to unilaterally authorize a military attack in a situation that does not involve stopping an actual or imminent threat to the nation.”
—Senator Barack Obama, December 20, 2007
On March 19, 2011, the exact anniversary day of the beginning of the war in Iraq, Barack Obama launched an unconstitutional war in Libya without congressional debate or authorization and instead claimed an illegal right to do so based on U.N. approval. As the Independent Institute has noted repeatedly (see here, here, here, here, and here), if U.S. officials believe there is a just cause for authorizing force to be used against perceived national-security threats, the U.S. Constitution provides in Article I, Section 8, Clause 11, for the Congress to grant “Letters of Marque and Reprisal” to authorize bonded private parties to seek out and stop such threats. This provision, which today would overcome the 1939 Neutrality Act‘s ban of non-governmental armed involvement by American citizens in foreign conflicts, means that no taxpayer funds would be utilized, only those specific threats can be targeted and that if innocent others are harmed, the private parties involved would themselves be held accountable.
Such an approach should have been used after 9/11 in targeting Al Qaeda instead of the gigantic, trillion-dollar, 7-year war in Iraq and 10-year war in Afghanistan, which have utterly failed to capture or stop Bin Laden and the leadership of Al Qaeda. Now, Obama has expanded U.S. interventionism in the Mideast to an unprecedented level in a yet further grasp for the Imperial Presidency and is doing so even as the U.S. government is facing record financial insolvency. Yes, the mass-murdering tyrant Muammar Abu Minyar al-Gaddafi should be stopped and could be targeted, but not at the cost of the Constitution, rule of law, the killing of innocent people, and the liberties and safety of the people of America and the Mideast. The end never justifies the means. (Every means is an end in itself and any moral standard used to justify any end also exists for every means.) And if humanitarian reasons were solely behind Obama’s actions in Libya, why are no similar moves occurring in Syria, Bahrain, and elsewhere where citizen uprisings are also being brutally crushed by dictatorships?
Here with Jon Stewart and Aasif Mandvi from The Daily Show on Comedy Central is an insightful and satirical segment on Obama’s illegal war:
Here also are recommended books critiquing such folly:
The Empire Has No Clothes: U.S. Foreign Policy Exposed, by Ivan Eland
Opposing the Crusader State: Alternatives to Global Interventionism, edited by Robert Higgs and Carl P. Close
Resurgence of the Warfare State: The Crisis Since 9/11, by Robert Higgs
Partitioning for Peace: An Exit Strategy for Iraq, by Ivan Eland
In the next years, if you find someone online defending the warfare state, it just might be a government propagandist. The web persona might be a complete fake, even the product of a computer program concocted by the US military “to influence internet conversations and spread pro-American propaganda,” reports the Guardian.
It has become fashionable since 2001 or so to call the situation in America”Orwellian,” but before long, we will need another term, one that refers specifically to post-9/11 America and can be used to describe other phenomena of a similarly creepy and dystopian nature. Even Orwell could not predict what the U.S. has become—the military spies on the American people, federal officials irradiate and molest airline passengers en masse, the state borrows and inflates and spends to undo a crisis caused by borrowing, inflating and spending, and, by the way, we have always been at war with Libya.
Yet there is something especially unsettling about the prospect of government infiltrators in civil society. They have long existed, but the post-9/11 drive to put them in positions of trust—package carriers, cable installers and telephone repairmen—whereby they would have access to Americans’ homes, seemed a bit too Stasi-like even for the American people, some of whose outrage apparently inspired Bush to cancel that program.
[Cross-posted in the March 22 issue of The Lighthouse, the Independent Institute’s weekly email newsletter. Sign up for your free subscription here.]
We are delighted to announce the publication of the Spring 2011 issue of the Independent Institute’s peer-reviewed journal, The Independent Review, edited by Senior Fellow Robert Higgs. This issue’s articles and book reviews deal with the following questions:
MyGovCost.org Director and Independent Research Fellow Emily Skarbek was a guest on the Heartland Institute’s Budget & Tax News podcast. Click to listen to her commentary on the roots of our current spending crisis, what’s at stake in the Congressional budget war, and how to use the Institute’s very timely and user-friendly Government Cost Calculator:
[audio: 2010_12_02_skarbek_mygovcost.mp3]Listen also to Senior Fellow William Shughart discuss financial developments at General Motors and Chrysler, the real issues at stake in the TARP debate, and how Obama’s bailouts are negatively affecting the limping economy:
[audio: 2010_12_24_shughart_mygovcost.mp3]
