Bagram, Habeas, and the Rule of Law
Andrew C. McCarthy has an article up at National Review criticizing a recent decision by Obama administration officials to improve the detention procedures in Bagram, Afghanistan.
McCarthy calls the decision an example of pandering to a “despotic” judiciary that is imposing its will on a war that should be run by the political branches. McCarthy’s essay is factually misleading, ignores the history of wartime detention in counterterrorism and counterinsurgency, and encourages the President to ignore national security decisions coming out of the federal courts.
More details after the jump.
Filed under: Foreign Policy and National Security; Law and Civil Liberties
Brother, Can You Spare A Trillion?
With the economy in a deep recession and policymakers turning to massive government intervention in an attempt to create jobs and bolster the financial system—it feels like the 1930s all over again. Today’s new New Deal is rapidly unfolding, with the Obama administration and many lawmakers making it clear that any question of the success of FDR’s New Deal policies was resolved long ago: government intervention worked, and history bears repeating.
However, there are deep disagreements about the New Deal, and whether Roosevelt’s policies deepened the depression and delayed recovery.
Join us at the Cato Institute on June 1 to be a part of a highly informative half-day conference. Recognized national experts will discuss the economic and legal impact of the New Deal, and how its legacy is being used and misused to shape policy responses to current economic hardships.
Filed under: Finance, Banking & Monetary Policy; Government and Politics; Tax and Budget Policy
Like FDR — In a Really Bad Way
President Barack Obama based his candidacy in part on the promise to set a new tone in Washington. But we saw a much older tone emerge with his demonization of hedge funds over the Chrysler bankruptcy. Reports the Washington Post:
President Obama’s harsh attack on hedge funds he blamed for forcing Chrysler into bankruptcy yesterday sparked cries of protest from the secretive financial firms that hold about $1 billion of the automaker’s debt.
Hedge funds and investment managers were irate at Obama’s description of them as “speculators” who were “refusing to sacrifice like everyone else” and who wanted “to hold out for the prospect of an unjustified taxpayer-funded bailout.”
“Some of the characterizations that were used today to refer to us as speculators or to say we’re looking for a bailout is really unfair,” said one executive who spoke on condition of anonymity because of the sensitivity of the matter. “What we’re looking for is a reasonable payout on the value of the debt . . . more in line with what unions and Fiat were getting.”
George Schultze, the managing member of the hedge fund Schultze Asset Management, a Chrysler bondholder, said, “We are simply seeking to enforce our bargained-for rights under well-settled law.”
“Hopefully, the bankruptcy process will help refocus on this issue rather than on pointing fingers at lenders,” he said.
I won’t claim any special expertise to parse who is responsible for what in the crash of the U.S. (meaning Big Three) auto industry. However, attacking people for exercising their legal rights and trashing those who make their business investing in companies hardly seems like the right way to get the U.S. economy moving again.
During the Depression, FDR’s relentless attacks on business and the rich almost certainly added to a climate of uncertainty that discouraged investment during tough times. Why put your money at real risk when the president and his cohorts seem determined to treat you like the enemy? While President Obama need not treat gently those who contributed to the current crisis by acting illegally or unscrupulously, he should not act as if those who simply aren’t willing to turn their economic futures over to the tender mercies of the White House are criminals.
We’ve just lived through eight years of bitter partisan warfare. The president shouldn’t replace that with a jihad against businesses that resist increased government direction of the economy.
Filed under: Finance, Banking & Monetary Policy; Government and Politics; Law and Civil Liberties
NEA Asks President to Nationalize Industries
The NEA demands that “a dying laissez faire must be destroyed,” and calls on the president to nationalize the credit agencies, utilities and major industries (see AP story at right), and we hear hardly a peep from the punditocracy. Strange.
Well, okay, I’m not actually surprised. This is a real story that actually ran on March 1st… 1934. I tweaked the image to refer to president Obama rather than FDR.
It’s taken three quarters of a century, but the NEA’s plan to nationalize the credit agencies and major industries seems to have finally gotten under way, particularly given the recent assertion of federal control over GM.
One advantage of the delay is that we now have generations of experience with another state-run industry, education, as a guide for what to expect from the latest state takeovers.
And since the president (Obama, not FDR) is starting with GM, it seems only fitting to take a look at the public schools of Detroit. Rather than give you the typical statistical wonkery, though, I thought I’d point readers to this compelling photo essay.
After flipping through it, do you think the Detroit auto industry would have worked better over these past 75 years if it had been run like the Detroit public schools?
New on YouTube: Roosevelt v. Reagan
Cato Executive Vice President David Boaz debates Heather Boushey, senior economist at the Center for American Progress, over the legacies of Presidents Franklin Roosevelt and Ronald Reagan.
In light of the current economic crisis, who serves as the better role model for President Obama?
For more videos, subscribe to Cato’s YouTube channel.
What Did the New Deal Do?
There has been much recent debate about whether or not President Franklin Roosevelt’s New Deal policies increased the nation’s economic pain during the Great Depression or led to its end. In today’s Cato Daily Podcast, Regulation Magazine managing editor Thomas A. Firey reveals why erroneous stories about the effects of the New Deal survive despite decades of economic research that tell a different, more nuanced story:
Listening to the fight today among commentators on the left and the right talking about the New Deal and making various claims about it, as far as a stimulus—they’re almost all wrong, and what’s most disturbing to me as an economic historian is this is actually pretty well-plowed ground, so I don’t know how they can be wrong and how no one’s calling them out on it….
…The two stylized stories, the one that nothing got better and the other that the New Deal miraculously fixed everything—both are very clearly wrong when you look at the numbers. But no one wants to tell the real story, because, first of all, it doesn’t fall nicely in an ideological story on either side, and, second of all, it requires work. You have to read stuff and do research and care about the facts, and, let’s be honest, in this political environment, very few people do those things or care about the facts.
More from Firey on the effects of the New Deal.
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Did the New Deal ‘Help’?
While Barack Obama’s economics team hammers out its $800 billion fiscal stimulus plan, the commentariat is battling over the effectiveness of what some consider the prototype stimulus package, the New Deal.* The suppressed (and problematic) conclusion to all this punditry seems to be: Because government spending under the New Deal helped/didn’t help to end the Great Depression, the Obama stimulus plan will/won’t help to end the current recession.
One of the opening salvos was this exchange between George Will (anti-New Deal) and Paul Krugman (pro). More recently, New York Times editorial board member Adam Cohen (pro) wrote this column, responding to an op-ed by former Business Week bureau chief Andrew Wilson (anti) in the Wall Street Journal.
So who’s right? Did New Deal government spending “help,” as Cohen puts it?
To answer that, we first have to define Cohen’s term — what would it mean to say that government spending under the New Deal “helped”? Two possibilities come to mind:
- New Deal spending boosted consumption, thereby increasing production, reducing unemployment, and ending the Depression.
- New Deal spending aided people who would have otherwise been destitute during the Depression.
The first sense considers the New Deal as a stimulus program to revive the economy; the second considers it as a welfare program to aid the poor. The two notions are far from equivalent. My reading of the literature suggests that the New Deal did little as an economic stimulus, but it did provide welfare benefits.
Read the rest of this post »
Filed under: Finance, Banking & Monetary Policy; Government and Politics; Tax and Budget Policy
What Is It Good For? Centralizing Power.
The Politico reports that Vice President-elect Joe Biden has been comparing our current economic troubles to the 9/11 attacks.
“We’re at war,” Biden told congressional leaders of both parties during their sit-down with Barack Obama in the Capitol, according to two sources familiar with the exchange.
Libertarians and conservatives who fear that Obama’s inauguration heralds the coming of a new New Deal have new cause for discomfort, then. FDR’s embrace of the war metaphor was central to building support for the New Deal:
Franklin Delano Roosevelt, elected in a landslide in 1932, wasn’t the only political figure to analogize America’s economic collapse to an attack by a hostile power; his predecessor Hoover had made the comparison regularly. F.D.R. employed the war metaphor far more effectively, however. Roosevelt’s first inaugural address tends to be remembered as an attempt to calm the public, a warning against “fear itself.” The martial metaphors that appear throughout the speech make clear, though, that F.D.R. wanted fear replaced by collectivist ardor. Americans were to move forward as “a trained and loyal army,” with “a unity of duty hitherto evoked only in time of armed strife.” Should the normal balance of legislative and executive powers prove insufficient, Roosevelt concluded, “I shall ask the Congress for the one remaining instrument to meet the crisis–broad Executive power to wage a war against the emergency, as great as the power that would be given to me if we were in fact invaded by a foreign foe.
Two days after his inauguration, Roosevelt used the Trading with the Enemy Act to order the closure of all American banks. Passed during World War I, the act was designed to restrict trade with hostile foreign powers “during the time of war.” Ignoring that limitation, Roosevelt wielded it in peacetime against Americans. It would not be the last time his administration would invoke powers forged in the Great War to battle the Depression. “Progressives turned instinctively to the war mobilization as a design for recovery,” wrote historian William Leuchtenburg in his essay “The New Deal and the Analogue of War,” “There was scarcely a New Deal act or agency that did not owe something to the experience of World War I.”
Of course, viewing anything Joe Biden says as an example of calculated rhetoric may be a mistake. As the character Hesh Rabkin once noted of the Sopranos matriarch Livia, “Between brain and mouth there is no interlocutor.”
Filed under: Cato Publications; General; Government and Politics
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