A FACTUAL ECONOMIC COMPARISON OF CAPITALISM WITH SOCIALISM

I. INTRODUCTION

Before 1990 there was doubt as to the relative validity between market capitalism and state socialism. When the Soviet Union failed the socialist economic system proved unworkable. Now there exists only one economic system: free market capitalism based on the principles of classical liberal economic theory (referring to people that support free trade and open markets, economic as well as civil liberties, rather than the current American sense of politically left of center)

The free market is a complex and counterintuitive economic organization based on self-regulation. Socialism belongs to the history of ideas and is hardly a science. There are still idealists and ideologues, mostly in leftist’s universities and in some Third World countries that prefer superficially better organized systems ruled from the top down, who dream of a cleaner world more just and more spiritual. They believe that because the world economy has entered a period of slowing growth the free market has failed.

The 2007 financial crisis, generated by so called “derivatives”, is a defect in an imperfect system but it is hardly a failure of the free market organization. The free market operates through cycles caused by trial and error, innovation, and imperfections caused by state and human intervention causing ups and downs in the economy (The Austrian school of economics would certainly agree with this statement). The manner in which “derivatives” were implemented is such a failure of innovation. There will always be risks, cycles and downturns.

Some people are inclined towards free market solutions, others toward state intervention. Although generally this intervention does not advocate replacing the free market economy with a centrally planned one such as state socialism, the actions and the structure of the Fed, the structure of the fractional banking system, and the take over of private entities and other policies of the current leftist administration appear to have gone beyond mere regulation to protect the free market and are de facto state socialism. My preference is to let the market clean up the mess and select the winners and the losers or at the most to limit state interference to regulations guaranteeing the future competition and vitality of the free market economy. Politicians should not become businessman and businessman should not become politicians.

With that warning I proceed to discuss with facts the superior efficiency of market economies vis-à-vis defunct state socialism as a historical matter. From the historical point of view it is clear that we need some type of minimal government to protect liberty and prevent the powerful from oppressing the individual, ensuring that one person’s freedom does not encroach in the freedom of other people. There is nothing intrinsically wrong with voluntary cooperation growing through success and governed by people’s voluntary actions determined by the decentralized decisions of millions of people with the liberty to proceed by trial and error, without having to ask permission from rulers at the central committee or the government house. It is no big wonder however that politicians, be they republican democrats, liberal leftists or socialists, feel that they loose power to ordinary citizens whenever we talk about capitalist freedom. On the other hand, the capitalism that I refer here does not fully exist, not even in this United States of America.

The capitalism that I mean is a free market economy, with free competition based on the right to use one’s property and the freedom to negotiate, to enter into agreements, and to start new business activities. I do not mean a market where the capitalist joins forces with the government or lobbies for benefits from legislators, that is not a market economy but a mixed economy where businessman and politicians confuse their roles. I believe in man’s capacity for achieving great things resulting from simple free interactions and exchanges that unleash individual creativity that has led us already to amazing economic, scientific and technical advances. I mean freedom and voluntary relations in all fields; in the cultural arena it means freedom of expression and of the press; in the political arena it means republican democracy and the rule of law; in the social arena it means the right to live according to one’s own values and to choose one’s own company; and in the market it means capitalism and free market. Such a society gives people the right to choose what matters to them.

However, even though limited, those still living in countries where there is no individual freedom of choice, like some of the Third World countries for example, are delivered from an existence of abject poverty, filth, ignorance, and powerlessness, when they are able to be employed, borrow money from banks, attend school, and make money.

Socialism arose originally on English soil through a group of young deadbeats and intellectuals who called themselves “Fabians.” The Fabian Society included famous personalities such as founder George Bernard Shaw, H. G. Well, Virginia Woolf, Sydney and Beatrice Webb, and even Bertrand Russell for a time. These figures served as the main voices of socialism in both England and the United States.

With the exception of officially shunning noisy or violent revolution Fabians Socialist adopted the basic doctrines of Marxism including the inevitability of socialism in the future. This involved the rejection of the basic Christian doctrine of private property and ownership, as well as the overturning of the social order in most other areas: finance, education, politics, family, sex, etc. The Fabians, however, endeavored to advance this agenda without appearing to oppose the traditional system; they hoped to advance Marxism without being detected as Marxists.

According to Wikipedia, Socialism refers to various theories of economic organization advocating public or direct worker ownership and administration of the means of production and allocation of resources, and a society characterized by equal access to resources for all individuals with an egalitarian method of compensation. Contrary to popular belief, socialism is not a political system; it is an economic system distinct from capitalism.

Most socialists share the view that capitalism unfairly concentrates power and wealth among a small segment of society that controls capital and derives its wealth through exploitation, creates an unequal society, does not provide equal opportunities for everyone to maximize their potentialities and does not utilize technology and resources to their maximum potential nor in the interests of the public.

Therefore socialists advocate the creation of a society that allows for the widespread application of modern technology to rationalize economic activity by eliminating the anarchy in production of capitalism, allowing for wealth and power to be distributed based on the amount of work expended in production, although there is considerable disagreement among socialists over how and to what extent this could be achieved, and whether increased production should be the main goal of socialists.

Socialism advocates a degree of social interventionism and economic rationalization (usually in the form of economic planning), as contrasted to the free individualism, competition, non-welfare limited intervention of the state, the so called market anarchy or chaos in production of capitalism regulated by prices and profit.

Some socialists advocate complete nationalization of the means of production, distribution, and exchange; others advocate state control of capital within the framework of a market economy. Socialists inspired by the Soviet model of economic development have advocated the creation of centrally planned economies directed by a state that owns all the means of production. Others, including Yugoslavian, Hungarian, German and Chinese Communists in the 1970s and 1980s, instituted various forms of market socialism, combining co-operative and state ownership models with the free market exchange and free price system (but not free prices for the means of production). Social democrats propose selective nationalization of key national industries in mixed economies, while maintaining private ownership of capital and private business enterprise. Social democrats also promote tax-funded welfare programs and regulation of markets. Many social democrats, particularly in European welfare states, refer to themselves as socialists, introducing a degree of ambiguity to the understanding of what the term means. Libertarian socialism (including social anarchism and libertarian Marxism) rejects state control and ownership of the economy altogether and advocates direct collective ownership of the means of production via co-operative workers’ councils and workplace democracy.

Modern socialism originated in the late 18th-century intellectual and working class political movement that criticized the effects of industrialization and private ownership on society. The utopian socialist, including Robert Owen (1771–1858), tried to found self-sustaining communes by secession from a capitalist society. Henri de Saint Simon (1760–1825), the first individual to coin the term socialism, was the original thinker who advocated technocracy and industrial planning. The first socialists predicted a world improved by harnessing technology and combining it with better social organization, and many contemporary socialists share this belief. Early socialist thinkers tended to favor an authentic meritocracy combined with rational social planning, while many modern socialists have a more egalitarian approach.

Vladimir Lenin, perhaps influenced by Marx's ideas of "lower" and "upper" stages of socialism, later used the word "socialism" as a transitional stage between capitalism and communism.

II. THE RICH ARE GETTING RICHER, AND THE POOR ARE GETTING POORER

The rich are getting richer, TRUE; the poor are getting poorer, FALSE. On the contrary global misery has diminished especially in Asia, “On Asian Time: India, China, Japan 1966-1999”, by author Lasse Berg and photographer Stig Karlsson; Unless otherwise indicated the facts and figures hereinafter come from The United Nations Development Program (UNDP) and the World Bank; World Development Indicators 2000.

Since 1965 the income of the average world citizen has doubled. The income of the poorest fifth of the world population more than doubled. The wealth of the Western countries increased by 40%, Latin America by 60%, Africa by 80%, Asia increased by an astonishing 300%. Angus Maddison. The World Economy Historical Statistics (Paris OECO, 2003), p. 234. Former World Bank economist Surjit S. Bhalla found that poverty had fallen precipitously, from a level of 44 percent in 1980 to 13% at the end of 2002.

The above decreases in poverty are connected with economic growth. In East Asia, China, and India poverty has been most effectively combated. The great majority of people the world over desire better material conditions, freedom of choice, freedom from coercion, a secure existence, a good standard of living, freedom to feed and educate themselves, to obtain health care and freedom to shape one’s own life.

The world wide improvement in the human condition is reflected in a very rapid growth of average life expectancy and the reduction of hunger. Thirty years ago 37 percent of the population of the developing countries was afflicted with hunger. Today’s figure is 17% and the number is rapidly declining. It is expected to decline to 10% by 2015. The ranks of the hungry diminished by an average of 3 million every year, at the same time that the world’s population grew by about 800 million. In Latin America it has fallen from 19 to 10 percent since 1970. Global food production has doubled in the last 50 years and in the developing countries it has tripled. Old land is being farmed more efficiently, and prices have fallen by half. Higher-yield, more- resistant crops have been developed, at the same time as sowing, irrigation, manuring, and harvesting methods have improved dramatically, new efficient strains of wheat in the developing countries have earned nearly $5 billion to farmers.

Major famine disasters and water shortages have declined largely as a result of the spread of democracy. Starvation has occurred in states of practically every kind-communist regimes like the Soviet Union, dictatorial states like North Korea, colonial empires, technocratic dictatorships, and ancient tribal societies. In all cases they have been centralized, authoritarian states that suppressed free debate and the workings of the free market. There has never been a famine disaster in a democracy even in India or Botswana that are comparatively poor. The reason is simple: The people are free and would vote out leaders if they fail to address food distribution problems. In a socialistic system like the Soviet Union dictators couldn’t care less.

III. THE BUSINESS OF EDUCATION.

In many countries the poorest people have no education at all. Poor families cannot send their children to school, either because school is too expensive to afford at all or because the return on education is insufficient. In spite of the success of free market education the world over, the myth of market socialism still survives in many countries especially in Latin America, in the niche of education.

The market socialist attempts to reconcile the irreconcilable, efficiency with centralization. He believes that economics is like a shopping mall where one can select the most advantageous products, public ownership along with democracy, and full education along with market efficiency. But the economy is not a supermarket. It is a system where the economy along with education ought to be left to private enterprise and capitalism along lines similar to the system that exist in Chile [We discuss this issue later on another occasion].

The result in many Latin American countries is predictable: trashy productivity, poor quality, stagnation, long waiting lines, inefficiency, and distribution by favors to the elites in a society of privilege.

It is no surprise that education improves and is extended with increases in wealth going hand in hand with the expansion of the free market economy. In India, for example, children from the wealthiest 15 percent of families receive 10 years more schooling than those from the poorest 15 percent, and in Latin America almost everywhere education reflects economic inequalities which in turn reinforces the inequalities. The universities are excellent, especially the private and expensive ones and private expensive schools are of very high quality. Public schools, on the other hand, belong to the poor and are either average or below average quality. Unfortunately the elites reinforce this disparity, which reinforces their privileges. Quality mass education would strengthen entrepreneurship and defuse social unrest while the rising level of education stimulates even more economic growth, wealth and democracy. This is shown by the following world statistics and facts.

With the exception of South Africa, participation in elementary education has come close to 100 percent in the whole world. Enrollment in high school education rose from 27 percent in 1960 to 67 percent in 1995. Illiteracy diminished from 70 percent of the population of the developing world in 1950 to 23 percent today. In the developing countries, by birth years, there was 75 percent illiteracy in 1925; 52 percent in 1948; and 20 percent in 1970. (Source United Nations Educational, Scientific and Cultural Organization, The World Education Report 2000 (Paris: UNESCO publishing, 2000).

But trade alone will not necessarily create dynamic development in an oppressive society like those in some of the Latin American countries. If a country is static and characterized by privileged elites the population must acquire liberty and the opportunity of economic participation. A commitment to education and free markets is needed.

The Marxist academics who developed the theory of dependence disagree however, they argue that if free trade is allowed industrialization will never happen because the only resource is raw materials, therefore free trade should not be allowed to protect native industry behind high tariff walls and native industry should be expanded to manufacture goods that would otherwise have to be imported. They apply this policy of protectionism trying to abolish trade in selected areas while in the most stupid of manners retain the privilege of the elite and get orgasmic about national interventionism. At the same time the tribal chief diverts discontent by pointing to outside enemies to protect himself; the outside enemy is usually the United States of America; the tribal chief and his breed protect themselves also by bribes in the distribution of resources and employment and by dissipating the nation’s treasury. They burn money in military expenditures rather than in education, forgetting, or more likely never realizing, that education, through the creation of entrepreneurs in every individual is the greatest factor of production in any economy. Investing in education and making the public schools more productive increases scholastic performance, as evidenced by the examples of school vouchers in Chile, the state of Florida, USA and the Milwaukee school system in Milwaukee, Wisconsin, USA. Furthermore, investing in education does not necessarily increase public expenditures as evidenced by Charter schools (schools created by a private enterprise but operating within the public school system) which generally cost less to the public than traditional schools in the USA. I will present a critique of this theory in another occasion when I discuss the Chilean example.

IV. DEMOCRATIZATION, SOCIALISM AND CAPITALISM

Capitalism is like a watch. If it is properly tuned it will operate with precision. If any part, a cog or spring for example, is worn or if there is a bit of sand or dirt in the mechanism it will not operate efficiently and if the damage or the dirt is excessive it will stop operating completely. Capitalism is a system with its own internal coherence: private property, competition, freedom of information, and freedom of prices and of transactions. Socialism makes the system stop operating completely.

The mechanism of capitalism or free trade is prices. Nobody said it better than Frederick Hayek. To set prices a centralized state would require perfect knowledge of the desires and behaviors of all individuals at a given moment and would have to be able to predict their future behavior and desires. Even if the economic and all other data were available, it is not, the most powerful computer in the world could not begin to manage the unlimited amount of data, not even for a moment, much less in a dynamic mode that fluctuates from moment to moment. That is why the socialist system broke down in the Soviet Union.

Socialism is also a system. Janos Kornai, the best economist of socialism, devoted his life to the study from inside the communist system in Hungary to the transition between socialism to capitalism, and analyzed it better than anyone. Kornai had long predicted the demise of the closed socialist system in which no element can be modified or removed without the whole system crumbling, nor can the system be reformed. In Kornai’s view, there is not, nor can there be, in theory or in practice, any economic system aside from capitalism and socialism. Within each system, one can find national variants, but these never affect the foundations of the particular system. There is no third way, such as, for example, “market socialism” or “European socialism.” No one can remain suspended between the two for long.

In a socialist system private property is abolished to some degree or another. Socialist economies never innovate since there is no incentive to innovate. Everything is copied or stolen from capitalism. Prices and salaries are artificial. Information is repressed, the press is censored and travel is prohibited. The worker has almost no buying power, rare consumer products were distributed to those who stood in line and as special favors. Repression is the essence of the socialist system. Tyranny is essential, more under Stalin, less under Castro. In fact without tyrants socialism cannot exist.

Once it became clear to everyone that the socialist system failed when compared with the capitalist system socialist began introducing market mechanism without relinquishing state ownership in one manner or another and with different degrees and types of human endeavors . The object was to have efficiency along with centralization, full employment along with market efficiency, equality along with innovation, competition without the profit motive, state ownership without creative destruction, public ownership along with democracy. The problem however is that one cannot reconcile the irreconcilable. One cannot have efficiency along with centralization; Repression of any kind is abnormal and does not reflect true human nature. To repress freedom of the press, or of expression, or of information, wears down one of the cogs of the capitalist watch. The watch will not operate with the same optimal efficiency. To repress democracy or the rule of law wears down another cog and the watch likewise operates inefficiently. To repress the right to choose one’s own associations or choice of faith or personal values likewise wears down another cog. State control of health and education or the school that one will attend or its quality is one more cog similarly affected, and to repress the free market itself is the ultimate irony itself, the sin of pure socialism and the breakdown of the whole watch of capitalism in the worst manner.

It is clear that capitalism can exist, even though with diminished efficiency, with some of the cogs being fully operational or repressed. It is even clear that capitalism can exist with great diluted efficiency during more or less lengthy periods of transformation even without democracy. On the other hand it is also very clear that there can be no democracy without free markets or capitalism. Never before in the history of mankind have democracy, universal suffrage, and the free formation of opinion been as widespread as today. The accelerating spread of information and ideas throughout the world, coupled with increased education and growing prosperity makes this an unavoidable result.

Universal suffrage was unknown less than a century ago; emperors and kings ruled the world; women were excluded; with a few exceptions totalitarian states have collapsed and there are no more colonial powers. In 2002 there were 121 democracies with 3.5 billion people, or about 60% of the world’s population. Source: Freedom House, “Democracy’s century: A Survey of Global Political Change in the 20th Century” (New York: Freedom House, 2000), http://www.freedomhouse.org/reports/century/pdf. There were 47 countries that violated basic human rights. Among the worst were Burma, Cuba, Iraq, Libya, North Korea, Saudi Arabia, Sudan, Syria, and Turkmenistan, that were also the least oriented towards free market economies and this was the state of affairs in most of the world only 20 or 30 years before. In 1973 only 20 countries with populations of more than a million were democratically governed. Source: Freedom House, Freedom in the World 2002 (New York: Freedom House, 2002), http://www.freedomhouse.org/research/freeworld/2002/web.pdf.

During the 1990s the number of free states in the world increased by 21, at the same time as the number of unfree ones declined by 3. The number of wars diminished by half during the last 10 years. Among the causes for these results is that democracies do not make war among themselves, and international trade makes conflicts less attractive. Freedom of movement and free trade diminishes the desire to annex other countries and other resources. When there is trade there is no need for soldiers. There are instead multinational corporations, investment and privately owned resources that create democratized mutually dependent societies. In the local arena, the number of internal wars fell from 20 to 13 between 1991 and 1998. Nine of these conflicts took place in Africa, the world’s least democratized, least capitalistic and with the least stable and democratic institutions. Regardless of the degree of repression involved socialism of whatever variety causes inefficiencies in the market. On the other hand, even if imperfect, there cannot be a democracy without a decrease of repression, and an increase of efficiency and justice.

V. A BLUEPRINT FOR NICARAGUA

Nicaragua is the second poorest country after Haiti in the Americas. According to the CIA Fact Book, inflation averaged 8.1% from 2000 through 2006. As of 2007, Nicaragua's inflation stands at 9.8%. The World Bank also indicates moderate economic growth at an average of 5% from 1995 through 2004. In 2005 the economy grew 4%, with overall GDP reaching $4.91 billion. In 2006, the economy expanded by 3.7% as GDP reached $5.3 billion. As of 2008, it stands at $6.5 billion.

According to the PNUD, 48% of the population in Nicaragua live below the poverty line, 79.9% of the population live with less than $2 per day, unemployment is 3.9%, and another 46.5% are underemployed (2008 est.). As in many other developing countries, a large segment of the economically poor in Nicaragua are women. In addition, a relatively high proportion of Nicaragua's homes have a woman as head of household: 39% of urban homes and 28% of rural homes. According to UN figures, 80% of the indigenous people (who make up 5% of the population) live on less than $1 per day. According to the FAO, 27% of all Nicaraguans are suffering from undernourishment; the highest percentage in Central America.

It may be enlightening to compare the East Asian “miracle” with Nicaragua. In 1960 South Korea was as poor as Nicaragua. Today South Korea is 25 times wealthier than Nicaragua and has a standard of living comparable to that of Portugal. The Taiwanese were poorer than Nicaragua. Today they are as rich as the Spaniards. At the end of the Second World War, Japan was in ruins and the Asians countries that had been recently occupied by Japan were destitute, starving and deeply miserable, much poorer than Nicaragua. Since 1960 these East Asian “miracle economies” have had annual growth rates between 6 and 7 percent, their incomes have doubled every decade, savings and investment, and exports exploded, they have quickly industrialized increasing economic equality without significant redistribution, poverty has rapidly decreased, in Indonesia the proportion living in absolute poverty fell from 58 to 15 percent, in Malaysia from 37 to 5 percent, average life expectancy rose from 56 to 71 years, between 1960 and 1990 countries like Taiwan, South Korea, Thailand and Indonesia have democratized transforming themselves from a secluded command economy to an open capitalistic economy, former colonies like Singapore and Hong Kong are now as prosperous as their former colonizers. How could things go so well for Asia and so poorly for Nicaragua?

What distinguishes the Asian tigers from Nicaragua? It is not government intervention since both South Korea and Japan after the war and Nicaragua had government intervention in the regulation of banks, investing and protecting chosen industries, although Indonesia, Malaysia and Thailand got their economies started with much less intervention. Nicaragua had its own Sandinista-Contra war but the economy is not moving.

To begin with the first thing that distinguished the Asian tigers from Nicaragua was their commitment to establishing and protecting the rights of ownership creating a legal code that protects enterprise and competition, a stable monetary policy and low inflation.

The second thing that distinguished the Asian tigers from Nicaragua was the implementation of universal quality education geared to producing peoples skilled as entrepreneurs and capable of developing their countries. The governments concentrated on elementary universal education, but left higher education to PRIVATELY funded competitive markets attuned to the market needs of the economy. It is not enough for education to be universally available. Schools have to be of good quality. This is in part a function of the schools' status as public institutions whose teachers are almost impossible to fire. Part of the solution lies in freedom of choice, enabling families to take control of schools from the national authorities and the school bureaucracy, perhaps through a voucher system as in Chile, Sweden, The state of Florida and the school district of Milwaukee, Wisconsin in the USA.

The third thing that distinguishes the tigers from the pussies was the introduction of reforms that deprived the old elites of the land and privileges of the past enabling the entire population to participate in the economy. Farmers could dispose of their surplus while saving and investing as they saw fit and made them interested in improving the efficiency of agriculture, increasing yield, releasing manpower for industry and increasing the demand for industrial goods. The tigers were more interested in creating job opportunities than in setting minimum wages and regulating the labor market, providing work for most people and wages that rose with productivity. They eliminated regulations, licenses and permits to start up business promoting freedom of enterprise. Any individual citizen could start a legal business with a minimum of red tape without elaborate controls and price regulations. In Hong Kong one could start a business and afterwards inform the authorities in order to obtain a permit. Can we say the same for Nicaragua where corruption flourishes and bribes or favoritism is necessary to obtain a permit?

The fourth thing distinguishing the tigers from the pussies was that, although they still had tax credits and subsidies, they were able to steer them into the private sector while avoiding cronyism, nepotism, vested interests, while focusing on genuinely productive achievements responsive to the exigencies of the market economy. Prices are more market driven than in Nicaragua, without price controls, attracting investment where the market determined that they were more likely to succeed and where comparative advantage lies.

The fifth thing distinguishing the tigers from the pussies is that the government did not intervene to protect existing business from the competition of the market and regarded the ability to compete internationally as crucial for business. The Japanese government let large corporations go bankrupt if they did not have profit potential. South Korea shut down firms that were unable to produce for an open market including the government itself shutting down subsidies and expenditures that threatened economic stability and avoiding budget crises and inflation.

Sixth, the Asian tigers are furiously committed to integration with the international economy welcoming investment by foreign companies. They are some of the world’s most export-oriented economies. The more that trade is a larger percentage of GDP the faster the economic growth has been.

Seventh, the tigers have applied tariff barriers against imports to a much lesser degree than Nicaragua and dropped the barriers much earlier. Instead of pursuing self-sufficiency and avoiding trade the tigers encouraged exports, abolished permit requirements and exempted exporters and their suppliers from import duties while tariffs on capital goods have been low. According to the index of openness of Jeffrey Sachs and Andrew Warner, Harvard economists, the tigers were among the first economies that reduced tariffs, abolished quotas, freed exports and deregulated foreign exchange. Hong Kong has the most liberal trade policy of any other country in the world. Nicaragua was a late comer beginning in 1990, and has now begun to suffer a reversal with the current administration (See the decrease in GDP beginning in 2005 according to the World Bank in the first paragraph above).

Furthermore, in Nicaragua, people borrow and invest less, in the short and long term, than in Asia, about 3 times less than they do in China which becomes evident in the lack of industrialization and inferior infrastructure, and invest less in basic and mass education so as to increase human capital and reduce social inequality and discrimination which in turn leads to an economy based on inequality and pure extraction and consumption which in turn reinforces the inequalities. In Nicaragua, the public schools are the preserve of the poor.

In Nicaragua there is less short and long investment, partly because the disincentive of the high tax on business to finance oversized and useless state sectors that attempt by major financial expenditures to appease social unrest and major protest movements is very high, much higher than in Asia. In Nicaragua the complexity of the procedure to create or to close a business, discourage their creation. That is the reason that in Nicaragua about half the business are informal in an effort to avoid taxes and not subject to the rule of law and its bureaucratic administration. In Nicaragua, whatever entrepreneurs there are, prefer the short term, or foreign investment, or consumption rather than the long term because the future remains totally uncertain.

In Nicaragua social injustice is tolerated which is the cause of the many socialist revolutions particularly by the exploitation of the indigenous people, the large agricultural enterprises and on the extraction of rents, and minerals. In Nicaragua this is mostly done through transfer of the rents to the bureaucracy or from the private aristocracy to the public aristocracy, without bringing the great masses of the people into the process of economic development and without the dynamics of a free market like in Asia. In Nicaragua they distribute public jobs and subsidies to buy votes and to defuse social protests particularly aggravated by concentrations of the poor people in the cities in the shantytowns.

Free enterprise is the essential and indispensable element of development. Free enterprise is specializing and making oneself dependent on world trade. Free enterprise is not ultra-protectionism nor government control of the economy. It is not “import substitution” with the government building up native industry behind high tariff walls and expanding it by starting to manufacture goods that would otherwise be imported. Free enterprise is not self-sufficiency and development is not found in the “development theory” either.

The export of a few raw materials, such as coffee, bananas, sugar, cotton and gold alone will not bring a broad national development like the Asian tigers experienced unless the society change from a feudal society of privilege to a society of free trade. Nicaragua is static and characterized by enormous privileges and discrimination; trade alone will not solve the problems of such an oppressive society. The landlord class that owns enormous tracks of land is inefficient, the superabundance of labor, the legions of destitute unskilled workers that work such lands, the lack of incentive to reinvest of the landlord class, eliminates dynamic competition, prevents innovation, prevents incomes from growing and lowers the demand for manufactured goods. Protecting native industry by sky-high tariff walls with no pressure from competition generates complacency, prevents technical or organizational development; instead it merely expands the outmoded and inefficient previously existing industry; raises local prices, decreases the incentive to export while the economy becomes politicized as the government attempts to direct manpower, prices and production to encourage industrialization; strong interest groups are formed; and distribution is governed more and more by politics than by market forces.

In Nicaragua under this protectionist system those who do not occupy a privilege position or are members of powerful coalitions-Miskitos, rural workers, small entrepreneurs, and the hovel town population around Managua- lag further behind; when inflation accelerates to finance unnecessary government military expenditures or ostentatious but unproductive showcase projects whatever small savings exist is obliterated as the currency collapses.

Government interventionism in Nicaragua unbalances the market forces. Consumer pay exorbitant prices in shops while big industrialists grow richer behind the tariffs and affect industry as well that needs things like buses or trucks for transportation of goods. Even the foreign firms that invest in Nicaragua do not care since without competition they quickly adjust to the local policy of favoritism and specialize in obtaining permits, cheap credits, special prices, and public contracts doled out by the government. Without competition there is no need to specialize or improve efficiency and without innovation there is no pressure from the healthy pressure of constructive destruction or the benefit of economies of scale. The more this continues the less Nicaragua is able to face international competition and becomes more dependent on privileges and tariffs. The end result is that the possibilities of developing the industries capable of competing internationally disappear and millions of people move to city slums.

It is only liberalization and free trade that will allow Nicaragua to grow. The day that Nicaragua removes tariffs and quotas unilaterally and the day that any citizen of Nicaragua can start a business first and apply for a permit later will be a day to celebrate.

Chile replaced its authoritarian economic policy with free trade and liberalization around 1975. It is probably one of the few things that Dictator Augusto Pinochet ever did. Incredible economic growth followed with real earnings more than doubling by 1995; infant mortality rate fell from 6 percent to just over 1 percent and the average life expectancy rose from 64 to 73 years. Chileans today compare easily to Europe in their standard of living. Even the dictatorships have been superseded by more or less democratic regimes. In Chile even the socialist regimes have maintained the free market economic rules and adapted the free market and capitalism by adopting its methods of production. In Chile the private-public cooperation in education has been prevalent through the voucher system recommended by Milton Freedman of the University of Chicago which in turn decreases public spending (another method of reducing public spending in education while increasing its quality is the use of Charter schools like they do in Chicago, Illinois, USA). Mexico, Brazil, Uruguay, Colombia, Peru, Costa Rica, and the Dominican Republic have reconciled with liberal democracy, free market economy and international trade. All of them have an entrepreneurial class. In Chile they privatized business, stabilized money via an independent central bank, deregulated markets, and opened borders.

Chile is the Latin American country that has grown the fastest, raised the standard of living and where poverty has shrunk the most. Free trade is particularly effective, allowing its citizens to consume low-priced goods from the global market and motivating business to export products with value-added to the whole world. Just like the Asian tigers did, such as wine, fish, and fruit. The concern in Chile has been to redistribute without increasing public expenditures and suffocating the free market. A method similar to school vouchers, in principle fair and egalitarian, has been applied in the area of housing and has proven effective. The state guarantees the least advantaged access to mortgages and the ability to acquire housing in the private sector. The state does not build the houses that it assigns publicly and government spending is kept within reasonable limits. Similarly Chile has been most effective in its retirement system in a system comparable to that of school vouchers.

School vouchers is not a matter of total privatization of education, housing or retirement, since the state guarantees access to everyone and offers public assistance to the poorest person, but the private sector manages the services in education, health, housing and retirement. It is not unencumbered free market but it is not socialism. It is efficient. It is cohesive. It does not hamper the functioning, effectiveness and dynamism of the free market. It may not be perfect but neither the system in the Asian countries or in the United States of America is perfect.

In Nicaragua, by contrast, its head of state is nothing more than a caudillo ready to distribute wealth: minerals, land, and government jobs at the expense of the market economy and of development. Nicaragua is the land of Marxist revolution and class struggle. Democracy in Nicaragua is a fiction. Every political leader exerts his or her utmost to redistribute more than the other, never to produce more. If global commodity prices rise it produces the illusion of prosperity, like in Argentina when soybeans do. When prices fall they turn for handouts from the Western countries or from the Communist, Socialist or Arab countries and economic recession and military dictatorship always return. Chavez-style populists contest the global order, but they propose no real alternative. The disappearance of the Soviet Union as well as subsequent experience clearly shows that the only path to wealth and prosperity is through the free market coupled with democracy and integration in the international community.

The Western World, particularly the United States of America and European Union pays lip service to free trade with the developing countries. Protectionism particularly in the areas of textiles and agriculture forces the developing countries to sell only raw materials, which then are processed and sold back to the developing countries as finished products. They achieve this result by means of tariffs, quotas, subsidies and antidumping regulations. It is a deliberate attempt to undermine the very type of industry in which the developing countries have comparative advantage making them unable to compete, while burdening the U.S. taxpayers and consumers. The irony is that the United States of America and the European Union spend the same amount of money in international development assistance than the benefits that the world economy, including the U.S.A and E.U would gain, about $70 billion a year from just a 40% tariff reduction where some 75% of that would be gained by the developing countries (Thomas W. Hertel and Will Martin, “Would Developing Countries Gain from Inclusion of Manufacturers in the WTO Negotiations?” presented at the World Trade Organization/World Bank Conference on “Developing Countries in a Millennium Round,” September 20-21, 1999 in Geneva at the WTOs Center William Rappard, p.12, http://www.itd.org/wb/hertel.doc), and we do not include the costs of tariffs, quotas, subsidies and antidumping incurred by the U.S.A and the E.U by this policy of protectionism. The U.S.A and E.U. policy is irrational and shameful. It protects a small circle of lobbyists and farmers. The cynicism is even more evident by the realization that the U.S.A. and the E.U. as a whole gain nothing by it either.

The Asian tigers developed in spite of the tariffs and protectionism of the other countries. Nicaragua can do it also. For Nicaragua the possibility of breaking free of dependence on raw materials lies in free trade and not in counter-protectionism. The free trade walls of protectionism backfire and make Nicaragua weaker. The tariff walls become a barrier from competition that makes them less efficient and innovative. Remember that if a country has a comparative advantage, that comparative advantage becomes more attractive to other countries if there are no barriers to participation. The facts prove the above statement: the developing countries that have switched fastest from exporting raw materials to exporting value added products are those that had the most open economies themselves, especially the Asian countries. Free trade countries have move much faster than protectionist countries towards industrial production. Sachs and Warner, “Economic Reform and the Process of Global Integration,” pp. 52-55.

Nowadays with the speed of transportation and information with the internet, a factory almost anywhere in the world, can send and receive products and services to and from any destination on earth in less than two weeks and be reached instantly by email, fax or telephone. The bases of operations of business have expanded to all the countries of the world, including the developing countries. The very core of manufacturing can be relocated to Nicaragua for example if they have comparative advantages in that area of production or manufacturing, especially if the governments of the developing countries make it easy for these foreign companies to relocate or to receive tax and other benefits. Not only foreigners but smart local entrepreneurs can make a fortune if they only realize the amazing opportunities that are now available in their underdeveloped countries. For example, in India many foreign companies outsource their administrative routines to take advantage of the cheaper labor. In Nicaragua, there is a huge labor intensive comparative advantage that protectionism cannot shield from. The unemployed in Nicaragua get employment and receive higher wages while at the same time the foreign company gets the same services cheaper. Why couldn’t the educational system of Nicaragua help develop the masses to take advantage of this trend?

Today the developing countries export more value added products thanks to improved communications and free trade reforms accounting to about three quarters of all exports. Mexico is a perfect example. Through free trade Mexicans are exporting fewer raw materials and more manufactured goods, while the United States of America is moving more towards programming and consulting services. Through comparative advantages the global economy is becoming more efficient. Vested interest in the developed countries naturally oppose this globalism, however free trade and its benefits is a force that cannot be stopped for long. Its benefits are too visible.

The best policy is unilateral free trade. The best policy is for Nicaragua is to dismantle its own tariffs and quotas even if other countries retain or even increase theirs. Tariffs and quotas and other restrictions harm in the balance the imposing country. The British economist Joan Robinson said it best when she stated “there is nothing very clever about tipping boulders into your own harbors just because your neighbors have rocky and inaccessible coastlines that make it hard for your own ships to dock.” Just because the U.S.A. prevents its citizens from choosing from a wider range of goods and cheaper products eliminated by their own quotas, tariffs and subsidies stolen from their own defenseless taxpayers, is no reason for Nicaragua to do the same. Voluntary free trade is advantageous to both trading partners, though not always equally to both, otherwise there would be no trade at all.

There is a clear connection between free trade and growth on the one hand and poverty reduction on the other. This is almost immediately clear when one compares neighboring countries similarly situated when one country has free trade and the other has protectionism. We see the difference between Costa Rica and Nicaragua or Honduras and between Chile and its neighbors in Latin America.

One of the most drastic examples of free trade liberalization in modern history was carried out by the Baltic nation of Estonia. After its independence from the Soviet Union in 1992 and in the midst of immense misery the Estonian government decided to abolish all tariffs at once. The economy was restructured on a competitive basis. So whereas in 1990 Estonia did only 1 percent of its international trade with Western Europe, today it accounts for 67 percent of it. The country is attracting large direct investments. Its life expectancy has grown and infant mortality has decreased, much faster than those former communist states that have reformed slowly. Estonia is now one of the EU countries most promising countries. The amazing thing is that in order to become a member of the EU Estonia had to agree to EU style protectionism. They are required now to reintroduce 10,794 different tariffs levels, which has begun to affect its economic progress and has raised food prices appreciably. In addition Estonia is now required by E.Us’ protectionism to reintroduce various quotas, subsidies and antidumping measures. Anders Aslund, “Darfor ar Estland lyckats,” Svenska Dagbladet, August 2, 2000, Razeen Sally, “Free Trade in Practice: Estonia in the 1990s,” Central Europe review 27 (2000), http://www.ce-review.org/00/27/sally27.html.

The Bangladeshi garment industry is a prime example of foreign enterprise providing knowledge and new ideas through comparative advantage that revolutionized the economy. A native entrepreneur Noorul Quader established cooperation with the South Korean company Daewoo which sold sewing machines to Quader and trained his workers and assisted him with with marketing and advice on new methods of production, in return for 8 percent of earnings. Quader started in 1980 with one hundred thirty skilled workers and two engineers from South Korea and garment exports were accepted by the government for free trade even though the economy was protectionist.

Sales doubled every year and by 1987 they sold 2.3 million sweaters worth $5.3 millions. 114 of the original workers started their own businesses and very soon the country had 700 enterprises. Today there are over 2,000 enterprises and garment manufacturing is the biggest industry in the country accounting for 60 percent of the country's exports. The factories employ over 1.2 million employees, about 90 percent of them are women, who moved from the poverty stricken rural areas, and another five million are employed in the industry as a whole, providing new and higher wages, new opportunities of choice, more competition even for other traditional occupations, which now have to exert themselves to attract workers. Clive Crook, "Third World Economic Development," in The Fortune Encyclopedia of Economics, edited by David Henderson (New York: Warner Books, 1993).

I had a similar experience in Nicaragua where I had the opportunity to work as Assistant General Manager of Aceitera Gracsa, a small-cap corporation in the refining and exportation of vegetable oil from 1969 through 1972. In 1970 I obtained a one million dollar loan from the Central American Common Market Bank headquartered in Tegucigalpa, Honduras to develop the peanut oil industry and obtain the necessary equipment, personnel and seed to start the business. We retained the help of a North American specialist from the state of Georgia, USA, the land of Jimmy Carter, the peanut president, and employed an engineer from the Dominican Republic who had at that time the most successful peanut enterprise in Latin America, to assist and provide knowledge in the development of this industry.

We planted several thousand acres in Chinandega and in the area of Cosiguina, Nicaragua. At that time the main shareholders were Philip Lehner of Boston Massachusetts, Mauricio Borgonovo of El Salvador, the Callejas family and Alfonso Robelo of Nicaragua. Unfortunately, Gracsa lost interest and used the losses as an accounting gimmick to lower profits and reduce taxes, so the project was abandoned in 1971. To my great surprise, I visited Nicaragua on or about 1993 and visited Gracsa who was then owned by another group of entrepreneurs and I was amazed to find the the peanut industry was flourishing in Chinandega and in Cosiguina.

Apparently small entrepreneurs in the area collected some of the peanut seed abandoned by Gracsa, made their own plantations in small lots and were selling truck loads of peanuts to Gracsa. I wonder now if this enterprise in Nicaragua has been promoted by the government and to what extent. Sixteen years ago it created employment and wealth to the small entrepreneurs in the area and certainly is the type of production that can be sold for refinement into oil and for exportation, or sold or exported by the small entrepreneur as a quality added product, such as "Nicaragua Peanuts The Best Tasting In The Whole Discriminating World", and with the "Made in Nicaragua" label; this is both a domestic and a business suitable for exportation to Central American, South American countries without tariffs, or NAFTA if tariffs permit it, or even the rest of the international market. This is one type of export that Nicaragua has a comparative advantage that the government should be promoting and help develop. I remember that the land in Nicaragua was so fertile, that the engineer from the Dominican Republic could not believe his own eyes. This is an example of what the people of Nicaragua can do even without the help of organized business or the help of the government. And I wonder what it would be now if only the government would encourage it.

Nicaragua, Nicaraguita cuando vas a aprender? (When are you going to learn?)

A Menace to the Western Hemisphere By: Jaime Daremblum
RealClearWorld | Wednesday, September 23, 2009


It is no exaggeration to say that Venezuela's burgeoning alliance with Iran represents the greatest threat to hemispheric stability since the Cold War. Both governments have supported international terrorist groups operating in South America (including Hezbollah). Both have embraced other terror-sponsoring regimes (such as Syria). Both have initiated an arms buildup. Both have pursued close military cooperation with Russia. Both share a visceral anti-Americanism and are committed to undermining U.S. interests throughout the Western Hemisphere. And, perhaps most ominous, as announced earlier this month by both governments, Venezuela and Iran are now collaborating on the development of nuclear technology.

Their relationship has grown steadily over the past several years, thanks to the aggressive outreach of Venezuelan leader Hugo Chávez. Yet for whatever reason, U.S. opinion leaders - politicians, journalists, and others - have tended to ignore or downplay it. In a recent speech to the Brookings Institution, longtime New York District Attorney Robert Morgenthau sought to change that. Morgenthau outlined the full extent of the Venezuela-Iran partnership, which has included everything from financial and economic collaboration to energy and military coordination.

In early 2008, for example, Iran established a new bank in Caracas, Banco Internacional de Desarrollo (BID), which was later sanctioned by the U.S. Treasury Department for having financial links to the Iranian military. On its website, BID explains that its mission includes "boosting the economic relations between Venezuela and Iran by facilitating joint projects and ventures in these countries." But Morgenthau noted that "a foothold into the Venezuelan banking system is a perfect ‘sanctions-busting method." In that sense, Venezuela's financial cooperation with Iran is helping the mullahs advance their nuclear program.

Earlier this year, the two countries launched the Tehran-based Iran-Venezuela Joint Bank, which reportedly started with a capital base of $200 million and hopes of increasing that figure to $1.2 billion. On September 6, during a visit to Tehran, Chávez declared that Venezuela and Iran would pump another $100 million into the bank. He also announced that Venezuela would begin selling the Islamic Republic some 20,000 barrels of petroleum a day, projecting that the deal would be worth $800 million. This arrangement will further undercut international efforts to pressure the Iranian regime through sanctions.

Meanwhile, Iran continues to operate suspicious factories in rural, sparsely populated areas of Venezuela. As Morgenthau observed, it has been estimated that Venezuela could have 50,000 tons of uranium reserves. According to the Associated Press, a recent Israeli foreign ministry report suggested that Venezuela and Bolivia (which is led by Chávez crony Evo Morales) are now providing Iran with uranium. There is good reason to be worried that Iran is using its murky manufacturing presence in relatively inaccessible parts of Venezuela to advance its nuclear-weapons aims. The mere prospect that the Iranians could be conducting illicit nuclear activities in Latin America is highly alarming.

The latest State Department survey of global terrorism says that Iran and Venezuela are still running "weekly flights connecting Tehran and Damascus with Caracas. Passengers on these flights were reportedly subject to only cursory immigration and customs controls at Simon Bolivar International Airport in Caracas." There is persuasive evidence that Hezbollah, the notorious Iranian-backed terror group, has established a presence in Venezuela. In 2008, the U.S. Treasury Department accused the Chávez government of "employing and providing safe harbor to Hezbollah facilitators and fundraisers." Besides carrying out murderous attacks throughout the Middle East, Hezbollah has also been implicated in the 1994 bombing of a Jewish community center in Buenos Aires.

At this point, there should no longer be any doubt that the Chávez regime is willing to aid terrorist organizations. Evidence of its support for the drug-trafficking FARC terrorists in Colombia keeps piling up. A recent U.S. Government Accountability Office report confirmed that the amount of cocaine transiting through Venezuela has increased "significantly," thanks partly to Venezuelan support for the FARC. This past July, Colombian military forces raided a FARC camp and discovered anti-tank rocket launchers that were originally made in Sweden and then sold to Venezuela. In another interesting development, a prominent newspaper in the European principality of Andorra, a famous tax haven known for its banking secrecy, reported this month that, at the behest of the U.S. Treasury Department, the Andorran government has frozen bank accounts belonging to people who are "close" to Chávez due to concerns over "the financing of terrorism."

Iran, of course, remains the top state sponsor of terrorism. I find it remarkable that Venezuela's growing alliance with the Islamic Republic has not garnered more attention in the U.S. media, or among U.S. officials in Washington. Think about it: The government of an oil-rich, strategically significant country in the heart of Latin America has embraced the world's leading terror sponsor as it works to build nuclear weapons, and members of that same government have directly aided terrorist organizations.

The Venezuela-Iran relationship is now the chief threat to stability in the Western Hemisphere. We ignore that relationship at our peril.

In Defense of Capitalism By: Vasko Kohlmayer
FrontPageMagazine.com | Friday, September 18, 2009


"Capitalism is an evil, and you cannot regulate evil... you have to eliminate it and replace it with something that is good for all people," concludes Michael Moore in his latest documentary Capitalism: A Love Story.

Moore's fulmination is neither surprising nor atypical in this era when capitalism finds itself under all-out assault. Having become something of a derogatory term, capitalism gets faulted for almost every societal problem and ill. Blamed for exploitation, poverty, fraud, alienation, crime, racism and nearly everything else, capitalism is increasingly cast as the great villain of our time.

The bad rap could not be more undeserved. Rather than mankind's scourge, capitalism has been its greatest benefactor. It is, in fact, the only socio-economic system that can provide ordinary people with dignified and prosperous lives. It was only with the advent of capitalism that the common man was able to escape the penury and filth of his existence to which he had been previously consigned. Until then, the lives of most people were short, hard and miserable. Today, as if by miracle, we can enjoy greater comforts and ease of life than the kings of the past. It is to capitalism that we owe this good fortune.

Capitalism is responsible for nearly everything that makes human existence easy and comfortable. The automobile, the supermarket, the personal computer, the washing machine, the hammer-drill, the iPhone, the airplane, the TV set, the chewing gum, electricity and countless other good things have all been birthed and mass produced by capitalism.

Because of its immense wealth generating power, people who live in capitalist societies enjoy rising standards of living and material affluence. Conversely, those who live in non-capitalist societies invariably experience the opposite. To see this, it is enough to compare the experience of, let's say, the United States, Switzerland and Australia, on one hand, with that of the Soviet Union, Cuba, North Korea and Saudi Arabia on the other. The rule always holds: Capitalist societies are invariably prosperous. Non-capitalist ones are always poor.

But wealth and prosperity are not the only benefits capitalism confers. Capitalism fosters freedoms of all kinds and affords unprecedented opportunities for personal fulfillment and growth. It rewards efficiency, resourcefulness, originality and inventiveness. Those whose oddness would consign them to marginalization in less free societies often excel under capitalism. Capitalism rewards good ideas regardless of who their authors are. Thomas Edison was a hearing-impaired eccentric while Bill Gates is a well-known nerd. It is inconceivable that these men could develop their gifts in the way they did under any other system. Mankind has benefited greatly from the fact that they were born under capitalism rather than under a communist or Islamic regime. Andrew Bernstein was right when he said that capitalism is, among other things, “the system of liberated human brain power.” Capitalism uniquely encourages individuals to realize their talents and pursue their dreams no matter how far-fetched they may seem.

Perhaps the most remarkable characteristic of capitalism is its ability to transform the pursuit of self-interest into the general good. In the process of pursuing profit, people satisfy the needs and wants of their fellow men. This is because success under capitalism is tied to one's the ability to provide something – a product or a service – that benefits other people. In a very real sense capitalism is the most effective and successful welfare program ever implemented. In the process of becoming the richest man on earth, Bill Gates provided a product which tens of millions have found immensely useful. This is the story of nearly every successful capitalist. John D. Rockefeller provided the masses with cheap oil, Henry Ford with affordable cars, and Steve Jobs with ingenious gadgets.

Anyone who genuinely cares about the well-being of mankind – anyone who claims love and compassion as his personal traits – cannot but become a passionate advocate for capitalism. The question to ask is: Under which system are people best off? Capitalism wins hands down. The difference between capitalism and even the best alternative is that of light and darkness. Michael Moore and all those who oppose and revile capitalism cannot have the best interest of their fellow men at heart. If they did, they would dedicate their efforts to its defense. By trying to destroy it, they are inviting hardship and misery on their society.

Free-market capitalism can only exist if people possess the liberty to engage in the free exchange of goods, services and labor. Freedom, therefore, is the most essential prerequisite of capitalism; the absence of coercion is the soil on which it thrives. “Capitalism is what people do when you leave them alone,” observed Kenneth Minogue. Given its inherent tendency to tax, control and regulate, government is by nature the greatest threat to capitalism. It is impossible for big government and capitalism to coexist. The bigger a country's government, the less freedom and capitalism that country will end up with.

America became the wealthiest, the freest and the most prosperous country in history, because it was the most capitalistic country in history. By enshrining the ideas of individual freedom and limited government in America's founding document, the Founding Fathers created an ideal environment for capitalism to flourish. The Constitution made capitalism the socio-economic foundation of the United States of America.

What is commonly called the American Dream is in reality the capitalist's dream. It is the idea of turning one's abilities and labor into material plenty and financial success. The American Dream embodies that universal human desire of becoming rich. But unlike in other places, in America everybody is free to give it a try. And most people do try, with varying degrees of success. The striving for wealth is the national pursuit in America. Calvin Coolidge, the country's 30th president, zeroed in on this truth when he said:

“The chief business of the American people is business. They are profoundly concerned with producing, buying, selling, investing and prospering in the world.”

It was precisely this striving for personal prosperity by countless Americans that produced the richest and the most advanced society that has ever existed.

Contrary to what is generally believed, America does not have free market capitalism today. Battered by the increasingly oppressive and domineering government, America's capitalism has been badly vitiated. The government's assault on capitalism is sustained and relentless, carried out by more than a dozen cabinet level departments, numerous agencies and countess regulatory boards whose main purpose is to interfere with and restrict the activities of the market. Tens of thousands of pages of rules, laws and regulations control nearly every aspect of American commerce. Today it is virtually impossible for private parties to enter into a transaction without the government dictating the terms. The government's daily battle against the forces of free enterprise is carried out by a well-funded army of bureaucrats numbering in the hundreds of thousands.

Those who still work see half of their income taken away by taxes of various kinds. Nearly half of America's total economic activity is now driven by government spending. To call this a free market is absurd. The notion that America has unbridled capitalism is one of the great misconceptions of our time. What America has is a heavily regulated system in which the government rides roughshod over the private sector.

All this government interference inevitably causes severe economic dislocation and numerous social ills. Corporatism, welfare dependence, malinvestments, wide-scale illegitimacy, currency debasement, inner cities slums, the business cycle – all these are a result of government policies. But most people fail to grasp this, because politicians have become very adept at pinning the blame on capitalism for the ills they themselves cause. We have seen a glaring example of this recently when the very government officials who brought on the financial crisis railed against the free market for its unconscionable “excesses.” Their solution is to take over and nationalize whole industries and thus incinerate a bleeding stump of the free market which is all that is left from what once was great American enterprise.

That destructive effort got under way in earnest in the 1930s, carried out by statists seeking to remake America in a collectivist image. They knew that to achieve their goal they would first have to tear apart the country's socio-economic base. America can survive the destruction of lesser institutions, but it cannot survive the destruction of its capitalist foundation. A man dies when his heart stops beating. America will die when the remaining vestiges of its capitalism are eradicated at last.

America's enemies – both domestic and foreign – realize that capitalism is America's jugular. This is why the final objective of almost every leftist cause is to clamp down on the free market. Consider, for example, such seemingly disparate movements as animal rights, civil rights, workers rights and environmentalism. If you take a careful look at their modus operandi you will realize that the terminal point of all their activism is legislation that would place some aspect of the free market under governmental control. What ultimately drives all leftist movements is their anti-capitalism. Their seeming variety is largely superficial, for they are all expressions of the same mindset. The different aims for which they ostensibly strive are merely guises under which they work their anti-capitalist subversion. Predictably, the cumulative effect of their activism has been the devastation of the marketplace.

The left's anti-capitalist goals are shared by America's foreign enemies. It is no accident that the 9/11 hijackers chose the World Trade Center towers as their target. In their effort to bring America down, they revealingly attacked structures that were widely perceived as capitalist symbols.

America's survival ultimately depends on the preservation of its capitalist system. Although the great political, ideological and cultural clashes of our time are seemingly fought over different issues and on different fronts, all the fault-lines ultimately converge in the great struggle over capitalism. The progress made by its enemies is nothing short of remarkable given that facts, evidence and history are overwhelmingly stacked against them. But after decades of brainwashing, reviling, indoctrination and propaganda they have been able to convince many that capitalism is evil and government good. This is the equivalent of convincing someone that white is black and black is white.

There is only one way in which this process can be reversed – through education. People must be exposed to facts and information about the beneficial nature of capitalism and the deleterious effects of government intervention. Although changing the prevailing mindset is never easy, we have at our fingertips an immense amount of material to make the case. The fact that most people have never been properly exposed to it shows what a monumental fraud our education establishment is. It is our task to ensure that people get this information, so that they can see through the lies they have been taught and told. Only when enough people see the truth will we be able to restore this country's capitalist foundation. America's survival depends on i

Socialism found a seminal and powerful voice on English soil through a group of young deadbeats and intellectuals who called themselves “Fabians.” The Fabian Society included famous personalities such as founder George Bernard Shaw, H. G. Well, Virginia Woolf, Sydney and Beatrice Webb, and even Bertrand Russell for a time. These figures served as the main voices of socialism in both England and the United States.

The Fabians took their name from Quintus Fabius Maximus, a Roman general famous for his tactics of delay and guerilla-style attacks designed to wear the enemy down over time. The Fabian socialists agreed to work for a socialist future covertly, gradually, without direct confrontation or call for revolution. As such, they used the turtle as a symbol of their movement: slow and steady, “Make haste, slowly!”[1]

With the exception of officially shunning noisy or violent revolution, The Fabians adopted the basic doctrines of Marxism including the inevitability of socialism in the future. This involved the rejection of the basic Christian doctrine of private property and ownership, as well as the overturning of the social order in most other areas: finance, education, politics, family, sex, etc. The Fabians, however, endeavored to advance this agenda without appearing to oppose the traditional system; they hoped to advance Marxism without being detected as Marxists.

The amount of deceit involved in this endeavor defies all comprehension. Two of the founding members, Sidney and Beatrice Webb, provide a great example of wolves spinning lies in sheep’s wool. During their 1932 visit to Soviet Russia, Stalin had waged war against Ukrainian farmers who refused to collectivize. The dictator closed railways, roads, and blocked all shipments of food, stock, fuel, and seed. In a short time, anywhere from two to ten million people starved to death. The Webbs crossed Ukraine through the worst of this slaughter, but denied seeing anything. Worse yet, in 1935 the couple published Soviet Socialism—A New Civilization?, in which they denied that any famine had occurred period.[2] The question mark disappeared from the title in later editions. They approved of the Bolshevik Revolution, and vaunted Soviet Russia as a model. Later it turned out that Soviet army officials had written much of the text themselves, and that “The entire text of the Webbs’ book had been prepared in the Soviet foreign office.”[3] Propaganda about their “humane” prison camps and denials of atrocities filled the whole work.

Their willingness to spin lies in defense of socialism extended into every sphere of their activity. As they attempted to control the world toward their own hearts’ desires, they purposefully adopted another symbol: a wolf in sheep’s clothing. The emblem appears in a now-famous stained-glass window picturing the worldview of the socialists. Designed by G. B. Shaw in 1910, it ended up at the Beatrice Webb House, was stolen, resurfaced, and finally resides at the London School of Economics for which it seems to have been originally intended as a gift. Nevertheless, the content of the stained-glass spectacle concerns us more here, for it displays the dark mission and methods of socialism.

Despite the fact that most of the Fabians (like Marx and the later Bolsheviks) promoted atheism or at least agnosticism, they had no problem employing religious language or even overtly tagging the name “Christian” on their devices. They disguised their wolf’s-head atheistic system under the white-as-snow wool of Christian faith in such an “impudent contrivance,” as Martin calls it, as the “Christian Book Club.”[4] For a grand opening in this disguise they offered Christians the Webb’s Soviet Socialism—A New Civilization. Martin comments:

The inference seemed to be that, since Christians were not overly bright, they could easily be led down the garden path to Socialism by a false appeal to ideals of brotherhood and social justice.… To churchgoers among the voting population, Sidney Webb had reasoned shrewdly, Socialist goals must be presented cautiously—in terms that did not appear to conflict with their religious beliefs.… For the most part its spokesmen prudently avoided outraging the beliefs of religious minded persons, while soliciting their support for Socialist candidates and persons.[5]

The faux-religiosity of the socialist program extended well beyond the mere presentation of the message. The whole system intended to replace Christianity from Marx onward, only while Marx favored open confrontation and conquest, the Fabians promoted subversion and gradualism. Either way, socialism was a new messianism, a humanistic, God-replacing messianism. Martin again:

In the Fabian Socialist movement, as in Soviet Marxism, there was always a strong element of political messianism, diametrically opposed to the religious messianism of One who proclaimed: “My Kingdom is not of this world.” Both Socialist and Communist literature stressed the supposedly communal character of early Christianity, undetectable to anyone familiar with the Epistles of St. Paul. Revolutionary Marxism, open or disguised, was presented as being the “Christianity of today.” Voluntary charity and renunciation of one’s own goods were confused with the forcible confiscation of other people’s property, as illustrated in the famous phrase of John Maynard Keynes, “the euthanasia of the rentier,” that is, the mercy-killing or painless extinction of those who live on income from invested capital.[6]

Nowhere does the messianic worldview of the socialists find a better visual expression than in the aforementioned window. Designed by one of the human objects of their devotion himself, all the major themes shine through: the caption at the top reads “REMOULD IT NEARER TO THE HEARTS DESIRE,” and while founding member Edward Pease mans the bellows, fanning the flames of a smith’s furnace, fellow founders G. B. Shaw and Sidney Webb place the globe—heated like iron to an orange glow—upon an anvil and hammer away toward that heart’s desire. Between the hammering atheists and above the globe stands a crest displaying a wolf in sheep’s clothing with the initials “F. S.”—for “Fabian Socialists.” Below this grizzly vision of socialist world-domination and “remoulding,” ten more of the original members kneel with hands folded in prayer towards a stack of their holy scriptures: the plays and works of G. B. Shaw, the writings of the Webbs, and the Fabian Society Tracts and Essays. The group of disciples even has a “Judas,” H. G. Wells, who later left the group in disillusionment. He kneels on the left end while thumbing his nose at the rest of the group and their devotion.

Nevertheless, the overall picture is clear, and comports with the thesis of this booklet: the God of Holy Scripture and Socialism stand in total contrast to one another, they are totally irreconcilable, and must necessarily wage war until one lay vanquished. The window into the socialist soul reveals an attempt at a complete replacement of Christianity. Instead of God’s will they follow their own “heart’s desire.” In place of dominion under God, we have man-directed dominion and refashioning of the world in man’s image. Instead of the heart-refining fire of the Holy Spirit, we have man generating the flames of passion and ambition. Instead of Christ’s disciples we get twelve apostles of socialism (excluding Wells), “praying” and “hammering”—a parody of St. Benedict’s rule ora et labora, “pray and work.” Above all we see the central object of their obeisance: the words of Shaw, Webb, and their Society. That is, above all they have replaced God’s word with man’s.

To intensify the insult, they openly declare that they will engage in trickery and deception—as wolves in sheep’s clothing—to carry out their ends. They will attempt deceive Christians, feeding them their atheistic agenda in the name of Christianity, all the while denying the Christian faith as ardently as Marx, Lenin, or Stalin themselves. In continuance of such mockery disguised as agreement, the Socialist-dominated government at the time interred the ashes of the two atheists, Beatrice and Sidney Webb, within the grounds of Westminster Abbey.[7] This should not surprise us, as they had buried Charles Darwin there over a generation earlier, thanks to the urgings of fellow agnostics Francis Galton and Thomas Huxley.

But while Darwin denied God and appealed to natural selection for evolutionary change, the Fabian atheists created a belief system in which man (they themselves at the head, of course) direct the evolutionary change, including the evolution of mankind (meaning, “other men”). This is a new providence—the providence of man. This worldview justifies the forced redistribution of wealth, erosion of personal freedom, and other measures of violence that have accompanied socialism throughout its history. There is no safeguard from this tyranny except for the doctrines of private property and personal accountability taught by God in holy Scripture.

God and socialism stand in complete contradiction and eternal conflict. We must choose one, and cannot choose neither. Without God, mankind is doomed to the judgment of mankind, including his political contrivances leading to theft. Christians must recognize this antithesis and choose the good. Then, we must stand and defend the private property and individual freedom that come with that good. Thankfully, Christians have the Holy Spirit, and we have the Word of God, and we have the mandates and the will of God behind us in history, in order to combat the idolatrous man-contrived socialism that confronts us today.

Endnotes:

[1] Rose L. Martin, Fabian Freeway: The High Road to Socialism in the U.S.A., 1884–1966 (Chicago: Heritage Foundation, 1966), 1–7.
[2] Wendy McElroy, “A Webb of Lies,” The Free Market, 18/2 (Feb. 2000): (accessed September 15, 2009); (Rose L. Martin, Fabian Freeway, 29.
[3] Rose L. Martin, Fabian Freeway, 29–30.
[4] Rose L. Martin, Fabian Freeway, 54.
[5] Rose L. Martin, Fabian Freeway, 55, 57.
[6] Rose L. Martin, Fabian Freeway, 55.
[7] Rose L. Martin, Fabian Freeway, 30.

You have no intention of being my keeper, so why do you intrude when you preach and state: "...I do not see..." and when you state : "if you think I am happy", and when you say "you have no right".

I am happy because socialism cannot succeed unless you are allowed to become my brother's keeper. You say the truth cannot hurt. I am happy because long ago I rejected the deceitfulness and dishonesty of the Fabian doctrines of Marxism as represented by Sidney and Beatrice Webb seeking to destroy private property and ownership, and overturn the capitalist system in the areas of finance, education, politics, family, and sex, through duplicity and guile.

I am happy because I reject the deception of the 1960s radical Saul Alinsky as detailed in his Little Red Book " Rules for Radicals" and exposed it to other free men. And please spare me the sidetracking paradoxical “absolute” drivel.

I am a free man capitalist and I trade and exchange with other free men and try not to mislead them. A wolf in sheep’s clothing falsely claims he is not trying to be my brother’s keeper claiming “I am not trying to convince you that socialism is not the panacea to every mankind problem”, advancing Marxist doctrine, while claiming inconsistently that ”capitalism removes compassion, brotherhood, sympathy and empathy, love, and kindness, as well as minimizing spirituality and even substitutes it with materialism and opportunism”, without any proof or debate whatsoever. Appealing as any good Fabian to a false appeal to the Christian ideals of brotherhood and social justice leading us to the garden parth of Socialism, like any good Fabian.

Spare me the superflous banal and overused stereotypes. Do you want to debate Capitalism vs Socialism? Do it with facts. Spare me the cliché.

Sixty Five years of age and counting and it is the first time in my life that I have been together with a group of people that share my beliefs. I am talking about the Tea Party people whom I met at New Lenox, Illinois and whom I witnessed in Washington DC last September 12, 2009.

I am an individualist. All my life, 65 years of it, I have been independent and supported myself through my own efforts. I abhor the idea of living on the dole. I don’t want and I don’t ask for hand outs from the government. I reject the idea of being dependent on others. I am a free and independent man and I don’t want anyone to be my keeper and I admire other free men so I am not my brother’s keeper either.

So it was very much against my character to go to a Tea Party or to any type of political party for that matter. No one told me to go. I don’t follow any leaders. I am not a racist. I do not belong to any circle of Republicans, Democrats, Independents, or any Washington elite. I just felt I had to go, I prepared my own sign that read: “I EMIGRATED FROM A SOCIALIST COUNTRY TO WHAT…….AMERIKA?” and I went.

I didn’t know what I would find since I did not come to listen to any one speaker or to rally around any leader. To my everlasting surprise I found myself among thousands of individuals like myself of all backgrounds and experiences, each one with their own personally made sign, all reflecting an overwhelming and common idea: the idea of liberty.

I realized that I was and I am a part of something that I have never quite seen: A true grass roots movement without leaders. I remember thinking ‘this is what the founding fathers must have felt”, “this is what a movement of individualist looks like”.

So, keep pretending that we don’t exist. You do that at your own peril. We will never go away. Never!

THE IDEAS OF A NICARAGUAN DEBATER
Edited by a Nicaraguan debater

FROM THE ECONOMIST DEBATES AND OTHER SOURCES

To view all current and past Economist debates, click here: http://www.economist.com/debate/archive

TABLE OF CONTENT

I. COPYRIGHTS AND WRONGS
II. SCREWING THE RICH
III. THE RIGHT OF PRIVACY AND DNA DATABASING
IV. THE FREE MARKET VS. DEFICIT SPENDING AND BIG GOVERNMENT
V. THE ENVY AGAINST AMERICA
VI. THERE IS NO MASS INTELLIGENCE ONLY CONCRETE INDIVIDUAL HUMAN BEINGS
VII. THE FREE MARKET AND GOVERNMENT INTERVENTION
VIII. HEALTHY FREE MARKET COMPETITION INCREASES WEALTH TO ALL WHILE SOCIALISM DECREASES IT.
IX. THE SPIRIT OF FREEDOM IS UNRELENTING. NEVER IMPOSE THE PAIN OF CHANGE UPON OTHERS UNLESS YOU ARE WILLING TO ACCEPT IT UPON YOURSELF.
X. THE UNITED STATES OF AMERICA IS BANKRUPT BECAUSE OF GOVERNMENT INTERVENTION IN THE MARKET.
XI. INFORMATION OVERLOAD
XII. TERRORISM: PRIVACY AND SECURITY

I. COPYRIGHTS AND WRONGS

This Economist house believes that existing copyright laws do more harm than good.

Economist Debates: Copyright and wrongs
May 8, 2009 17:06pm

Dear Sir,
Whether or not Copyright law is meant to benefit "Society" as Mr. Kenneth Cukier, the moderator asserts, or promote a just and stimulating culture as Prof. Fisher declares, I don't know as I have yet to see "Society" or "Culture" inform me that it is beneficial or detrimental. I have heard, however, from individuals, some claiming a detriment and others a benefit.

I agree with Prof. Fisher about the hoped for functions of Copyright law, although I fail to see it as a "no-brainer" as Milton Friedman reportedly agreed with the subjective opinion of 17 other economists (including five Nobel prizewinners) that it is highly unlikely that the Economic benefit from copyright extension under [this Statute] outweigh the additional costs.

On the other hand, Prof. Justin Hughes agrees in essence as to the functions of Copyright law, i.e., that it is: "a good idea", but disagrees as to the costs, that is disagrees with Milton Friedman and the other 17 economists that the benefits of the "current" copyright law outweighs its costs (or the marginal costs outweighs the marginal benefits at the time).

Prof. Hughes emphasizes the "creative class" as the main beneficiary of copyrights laws and the enormous explosion of non-commercial expression that is not hindered and coexists with the copyright system. He argues that Copyright law favors expressive diversity such as films for the African-American and gay communities. In the end Prof. Hughes maintains that Copyright laws are wonderful for the mixed economy of expression which included the patronage model, the open source model, and the profit/incentive model of copyright.

Neither side presents arguments or evidence based on data from which conclusions can be drawn that can be either verified or refuted by others and notwithstanding Milton Friedman’s comment of a "no-brainer", at best both sides present untested hypothesis and naked speculations. Thus the results merely measure general opinion that does not even reach the level of the Tholomeic beliefs. I am unable to reach any conclusion because of the lack of substantial data, proof or evidence and I decline to vote for either side.

Economist Debates: Copyright and wrongs
May 9, 2009 08:08am

Dear Sir,
The statement by Ms. Dale Cendali, featured guest, is the only one that relies on cited studies and data from which conclusions can be drawn that can be scientifically verified or refuted by anyone who cares.

However, in the absence of studies or data specifically examining, researching, exploring and addressing the house proposition that "existing copyright laws do more harm than good" I believe Ms. Cendali argument misses the point and is irrelevant to the issue.

The proposition is not that "existing copyright laws do good" as clearly demonstrated by Ms. Cendali and the quoted studies, rather the proposition, paraphrased for the purpose of clarifying the point, is that: "Existing copyright laws, can be improved, and do more good than they are actually doing. Some would probably maintain, that eliminating copyright laws would produce better results; a larger group would say that fine-tuning the copyright laws would produce much better results, and that the current laws, relatively speaking, are more harmful than beneficial. Thus, almost everyone will agree with Ms. Cendali that the copyright laws are beneficial to some degree or another.

I am inclined to believe that benefits exist in spite of the existing copyright laws and that the benefits could be much better. However, that is only my opinion and is not supported by any studies or any data or any research that I know of or that has been presented by any one in PRO or CON in this debate. That is the reason I find myself unable to vote either way.

Economist Debates: Copyright and wrongs
May 11, 2009 07:12am

Dear Sir,
Are the insights of other Clinical experts in agreement with the data observed by Ms. Jennifer M. Urban, featured guest speaker?

Her suggested explanation and data can be statistically collected and analyzed and can be tested in line with the scientific method and verified or refuted independently by others.

Instead of Oxford style rhetorical and banal speculation, the statistical collection, analysis and presentation of actual data would verify or refute the house proposition. I would be compelled to vote in line with the degree of confidence and the statistical likelihood of the results.

Economist Debates: Copyright and wrongs
May 13, 2009 15:26pm

Dear Sir,
You state that: "By submitting Message to a Forum you are granting The Economist a perpetual, irrevocable, royalty free non-exclusive license to reproduce, modify, translate, make available, distribute and sub-license the Message in whole or in part and in any form," unfortunately since I am blind I cannot read the "terms and conditions”.

HA, HA!!! I have given to the Economist the same thing that I have given everyone in this Forum and everyone in the world. These ideas are Public now, and every one can use them, and there is nothing you can do to prevent the real me because I am using a faked identity of a faked name of a fictitious entity through a faked web domain through a root kit controlled computer in a foreign location in international waters. Plus all the information that I gave you about ME when I subscribed is false. That person is dead. HA, HA. And if you don't believe me, SUE ME!! First you must locate me. My name is [x/>?z] and I am in the planet Mars! HA, HA!!!

II. SCREWING THE RICH

This Economist house believes that the rich should pay higher taxes.

Economist Debates: Resenting the rich
April 8, 2009 06:30am

Dear Sir,
Since I have three cars I am rich in comparison to those that only have 1 car. So now the government will take one of my cars and distribute it to promote equality. No more economic disparity. Bravo! I am sure those that get my property without paying for it and without my permission will be very happy indeed!

I am glad we all have the right to bear arms because they will take my property over my dead body. It is my property and if I decide to give it away it will be my decision. I do not need parasites to tell me what I can do with it. I am planning to move away from this suckers' paradise and leave the leaches in the swamp. I don't know where to go yet. Suggestions anyone?

Economist Debates: Resenting the rich
April 8, 2009 08:50am

Dear Sir,
So, the rich are going to hell because of their selfishness, or so says commentator Ike ssz. The truth is, for example, that I have probably given more money “voluntarily and selfishly” to the needy than most people have ever given their own mothers on their birthdays.

It is better to be in hell than to live with “the unselfish leaches” that hypocritically profit from the work and sweat of honest producers while giving nothing in return except “Christian” whining of anguish and penis envy. The same medicine used to get rid of leaches is also used to get rid of oppressive totalitarian and oppressive governments that claim unwarranted sovereignty over the individual.

III. THE RIGHT OF PRIVACY AND DNA DATABASING

This house believes that people's DNA sequences are their business, and nobody else's.

Economist Debates: The ethics of DNA databasing
March 27, 2009 01:36am

Dear Sir,
Mr. J. Craig Venter appears to argue against the Proposition: "This house believes that people's DNA sequences are their business, and nobody else's." or against anonymity as follows: "...while we actually don't need people to step forward and identify themselves as donors and subjects in this research, there is no real need for them to remain anonymous, because there is too little to fear..." and immediately admits the need to pass a law because the danger of DNA discrimination: "The United States...Genetic Information Nondiscrimination Act (GINA),and concludes with the non-sequitor that because he and others consented to disclose their own participation as donors that everybody else should also disclose because according to Mr. Venter the collective good and benefit far outweighs the individual right to privacy.

On the other hand the arguments presented by Professor Caplan seem to me irrefutable. In fact the Common Law has already and some time ago dealt with the question of balancing the private and public interests in many areas, including DNA applications, fingerprinting, blood typing, AIDs and other infectious deceases, not jus because the hypothetical fear of someone but because of actual cases and controversies resulting from abuses of the right of privacy by governments, researchers and individuals.

I am all for voluntary informed consent if someone has the sacrificial spirit or the humanitarian purpose, like mother Theresa and other dedicated individuals like Mr. Venter, who want to disclose their identity regardless of the risks and fears because their overriding concern for the afterlife (in the case of mother Theresa) or the genome project (in the case of Mr. Venter). However, I for one, do not want anyone to make that choice for me, even if it is for my own benefit as long as I am able and have the capacity to decide for myself. Particularly I do not want biased researchers or any government to make that decision for me.

I am looking forward to a more spirited rebuttal and eventual closing statement in order to be persuaded to change my vote. I have to admit thought that I had no time to read any of the comments and that I am open to change my opinion and vote.

Economist Debates: The ethics of DNA databasing
March 27, 2009 15:51pm

Dear Sir,
Shibley's comment highlighting the Marper's case in England and the decision of the the Grand Chamber of the European Court of Human Rights (ECtHR) is a perfect example or the reasoning based on concrete facts dealing with the balancing of the private and public interest within the scope of DNA use and misuse that applies not only to criminals but to the general public who is erroneously accused and the criminal charges dismissed. It is clear that the individual right of privacy is paramount and that the collective or public right which after all is derived from the private right has to take second place in similar situations. Thank you for the rebuttal arguments. I am still very much in favor of the proposition in spite of the fact that as a criminal attorney I am a firm believer in the value of properly used DNA evidence.

IV. THE FREE MARKET VS DEFICIT SPENDING AND BIG GOVERNMENT

This house believes that we are all Keynesians now.
Economist Debates: Keynesian principles

March 17, 2009 04:04am

The proposal of Prof. Luigi Zingales and Alberto Alesina, “Let’s Stimulate Private Risk Taking”, The Wall Street Journal, January 21st, 2009 and Eric A. Posner and Luigi Zingales, “The Housing Crisis and Bankruptcy Reform: The Prepackaged Chapter 13 Approach”, Chicago Booth School of Business Research Paper No 09-11, available at SSRN: http://ssrn.com/abstract=1349364 incorporates a limited type of government intervention that does not compromise directly long-term incentive, does not incur direct costs to taxpayers, and does not directly and immediately handicap competition, growth, savings, and investment, while ameliorating the short term cyclical unemployment caused by Keynesian policies in the first place. This proposal however may at best restore the old status quo and restore the banking system to the same sick conditions that existed prior to the crisis without providing long term and healthy stability to the financial, industrial and the long term job markets and the global economy insofar as it fails to recognize the inherent instability of the fractional banking system, the unhealthy government banking cartel, the intrinsic weakness of monopolistic government fiat money creation and the cyclical boom and bust effect of government intervention in its reactionary attempts to stabilize the financial, monetary and productive system with more of the same “remedies” that caused the failures in the first place.

To understand Prof. Zingales proposal all that is needed is some understanding of the force innate in human beings that compels them to better themselves as the primary cause of individual progress and secondarily to the progress of organized society and the negative impact of government intervention. Even a socialist should be able to understand this proposal. It is sad however that President Obama will disagree most eloquently without even reading much less debating the proposal as it should be clear by now that he is not cheering for individual entrepreneurs, but he is blindingly, by training and culture, in favor of big government, welfare, collectivism and old country socialism.

On the other hand the proposal of Prof Brad DeLong is an unvarnished Keynesian massive government intervention, taxing and spending project, as advocated by the current welfare socialist stimulus package of President Obama and a socialist Congress grossly attempting to support, among other things health, education and retirement, housing prices, and force feeding a hidden energy-tax increase in the guise of a cap-and-trade system and a 13% excise tax on offshore oil and gas production in the Gulf of Mexico threatening the domestic oil and gas industry while promoting a war-on-wealth rhetoric. I agree with Prof. Zingales that Prof. DeLong proposal is not well-grounded in compelling theory and not supported by well-established empirical evidence, citing Ramey, Valerie and Matthew D. Shapiro, “Costly Capital Reallocation and the Effects of Government Spending,” Carnegie-Rochester Conference Series on Public Policy, 48 (June 1998): 145-194. All the above citations are mentioned in Prof. Luigi Zingales’ Opposition’s rebuttal remarks but are worth repeating and read by anyone seriously concerned with the present economic crisis.

Although I much prefer the proposal advocated by the Austrian School of Economics and the Von Mises Institute, eliminating Central Banks, fractional banking, fiat money monopoly by the Feds and its whorish cartel with privileged large banking institutions while promoting competition, transferring the risk of loss from the taxpayers to the investors both in the financial and other institutions, the orderly reorganization of the financial system in place of investors bailouts, and the elimination of big government intervention except to promote competition, during time of war or when the market is missing, the less intensive and less far reaching approach of Prof. Luigi Zingales is preferable and less injurious than any Keynesian proposal. It is substantially in line with the ideas of Prof. Ludwig von Mises, as expressed in his seminal work “Human Action”.

Prof. Brad DeLong proposal is just another ideological political Keynesian non-empirical argument, jamming huge reforms all at once down the taxpayers throats, requiring gargantuan economic dislocations and government extreme interference, while the current 2008 account deficit stands at $614 billions, the budget deficit at $455 billions and military expenditures at $731 billions, and encouraging in addition to gargantuan economic consequences, gargantuan non-economic ones such as the opportunistic spread of Russian bases in islands near Venezuelan shores, 50 miles from our coasts, in collusion with Venezuelan President Chavez, in their expectation of the “appeasing” weakness of the current administration and global energy dislocations that will eventually lead to World War III much as the Great Depression led to World War II.

V. THE ENVY AGAINST AMERICA

This house believes that Brand America will regain its shine.

Economist Debates: Brand America
February 17, 2009 22:52pm

Dear Sir, America has lost its shine only in the minds of the likes of Chavez of Venezuela, Ortega of Nicaragua, and Putin of Russia and the leftist-socialist-Marxists of the world. With all its defects I would not change America for any other country. I moved from socialist Nicaragua to America and like the Cuban, the Hmong and Haitians refugees and many millions more I do not intent to return. Prof. Kishore Mahbubani merely reflects the envious hypocritical attitude of those people who do not know the meaning of freedom and who have not experience real government repression. As for the economy and the free market I recommend the book "Meltdown" by Thomas E. Woods Jr. It says it all.

VI. THERE IS NO MASS INTELLIGENCE ONLY CONCRETE INDIVIDUAL HUMAN BEINGS

This house believes that in its appetite for culture, the world is wising up more than it is dumbing down.

Economist Debates: Mass intelligence
January 6, 2009 17:02pm

Dear Madam, I believe there is both an absolute increase in wising up and dumbing down although relatively speaking general critical thinking has decreased vis-a-vis pure appetite or emotional gut appeal of the masses.

The result of the election for President of the United States is an obvious example of the uncritical tendency of the democratic masses and the conduct of the mass media, at least in the United States.

Perhaps the increased availability of higher level education will improve the wising up process although the impact of higher education professors who are generally dumbed down ideologues unable to apply critical thinking are a negative force against the wising up of the people. Nonetheless, even during the dark ages there were always brilliant minds preserving human culture and wisdom, surging anew in a reactionary cyclical manner. So I am optimistic that this relative dumbing down of the masses is just a temporary phenomenon.

Economist Debates: Mass intelligence
January 6, 2009 22:02pm

Dear Madam, I believe there is both an absolute increase in wising up and dumbing down although relatively speaking general critical thinking has decreased vis-a-vis pure appetite or emotional gut appeal of the masses.

The result of the election for President of the United States is an obvious example of the uncritical tendency of the democratic masses and the conduct of the mass media, at least in the United States.

Perhaps the increased availability of higher level education will improve the wising up process although the impact of higher education professors who are generally dumbed down ideologues unable to apply critical thinking are a negative force against the wising up of the people. Nonetheless, even during the dark ages there were always brilliant minds preserving human culture and wisdom, surging anew in a reactionary cyclical manner. So I am optimistic that this relative dumbing down of the masses is just a temporary phenomenon.

Economist Debates: Mass intelligence
January 12, 2009 00:58am

Dear Madam,
This debate suffers from the "fallacy of composition" which attributes to so called "Mass Intelligence" the properties of individual human beings and concludes fallaciously that "Mass Intelligence" has the property of "wising up" or dumbing down." It also suffers from the “fallacy of Misplaced Concretion” since it reifies the concept of “Mass Intelligence” which exists only in discourse when applied to human beings, or is ambiguously misapplied as if human beings exhibited “Mass or Collective Intelligence” similar to the usage applied to bees or ants. “Human Mass Intelligence” is just a convenient universal mental category that has neither objective reality nor the properties of concrete individual human beings.

One cannot correctly attribute individual human properties, such as human intelligence, to a convenient verbal, mental, universal entity such as "Human Mass Intelligence" which has no real existence and no flesh and bone existence, nor apply it unambiguously either in the concrete fallacious sense mentioned above or in its fallacious extension from non-rational species to the verbal concept of “Human Mass Intelligence”

For that reason, as I stated in a previous comment the “mass”, or to be correct, the aggregate of humanity has both increased in wisdom in an absolute sense but also increased in dumbing down in a relative sense.

I am confident that this is only a temporary situation as the billions of newborn individuals are only exposed to general superficial education such as they find in Wikipaedia, for example, but do not have the benefit of a guided superior education and the time to grow beyond such superficial learning.

A computational example may help to clarify my point: if the human population increases by 4 billion I would argue that 3 billion individuals have "dumbed down" relative to 1 billion individuals that have "wised up". But all 4 billion individuals have wised up vis-a-vis their ancestors who did not even had the superficial learning widely spread nowadays by the internet and other media.

The long term solution is obviously more critical "higher education" to individual human beings, with the objective of increasing non-ideological individual critical skills and improving the absolute and relative wisdom of the billions of individuals composing the human race.

For the reasons stated above and qualifying the proposition to mean "Aggregate Intelligence" and long term impact I change my vote to CON

Economist Debates: Mass intelligence
January 12, 2009 11:39am

Dear Madam,
In my last comment I stated that I changed my vote to CON. Actually I meant to say that I changed my vote to PRO. I believe that the relative "dumbing down" is only a short term, temporary situation that wlll change in the same manner that the Japanese changed and the radical Muslins will change in a couple of centuries.

In the long term, give or take a couple thousand years, I believe humanity in the aggregate will "wise up" as it has been doing little by little through the centuries. The internet, ipods, ereaders, etc, are merely tools that can be used in the same manner as books. Thus I carry currently in my ipod 3 books and read ebooks and listen to audio books all the time.

My choice of books ranges from "Human Action" on Economics, or Reason and Responsibility concerning basic problems in Philosophy, or Scalia's dissent regarding legal matters or symbolic logic and other mathematical treatises, or IT and computer programming to Science Fiction such as Analog Magazine, chess problems and joke books.

I enjoy traveling and visiting museums such as The Hermitage or the Louvre and enjoy ballet and symphonic works and classical music, and Harry Potter and Star Wars, and 24, House and NCIS on TV. And football, soccer, baseball, basketball and karate, (I have a black belt in Taekwondo). I also enjoy gourmet food and the intimate delights and the occasional fights of married life.

This is my individual choice and I am sure I am not unique but that there are millions, perhaps billions of individuals who do the same with many variations.

I am aware however that there are, relatively speaking, many more individuals that enjoy creating "spam", or causing havoc with electronic viruses, and as a criminal and constitutional attorney experienced the worst and the best of humanity, from intentional homicide, i.e.: a son killing his mother, and a mother killing her baby, to serial killers, to rape, incest, drug addiction, prostitution, and defrauders. On the other hand I have enjoyed the delight of arguments in the Supreme Court of the United States, regarding constitutional issues, equal protection of the laws, education, intelligent design, and reverse discrimination.

I believe I have, as have many others become wiser and changed from being a bigoted, chauvinistic, egotistical, unbending individual to what I am now an agnostic, experienced and ignorant doubter, looking at the world in amazement and awe.

I know there are many people like me out there. I wish I knew them. I also know there is many more that for whatever reason don't care or couldn't care less about their fellow human beings. Generally, however I have a long term positive outlook about the future and that is why I changed my vote to PRO.

VII. THE FREE MARKET AND GOVERNMENT INTERVENTION

This house believes that it would be a mistake to regulate the financial system heavily after the crisis.

October 22, 2008 15:37pm

In my opinion, the financial crisis cannot be corrected by more, less, or the right type of regulation. There is a built-in systemic problem in the fractional banking system and the function of the Central banks that increases risk in the first place that when coupled with the systematic corruption of bureaucrats and politicians creates the current crisis. And this crisis will not disappear by merely injecting more money as has been done in the past. It will merely delay the inevitable: the actual bankruptcy of the fiat Federal government, expanding into the actual poverty and bankruptcy of real individuals. (I made the same suggestion in a prior debate concerning economic regulation)

As far as I can tell none of the participants challenge the current economic and political system. All that they consider is either more, less, or the right regulation in the rarefied air of academic and professorial discussion. What a waste!

None of the participants challenge the validity of the fractional banking system, the actions of an executive branch that rules through "executive orders" disregarding constitutional constraints; the powerlessness of state governments who are mere puppets of the central government; the abuses and basic unfairness of rampant corporate welfare, exemplified by the current bailout; the amazing unfunded liabilities and extraordinary run-away national debt; the actions of Fannie and Freddie as quasi-government socialist type organizations contributing thousand of dollars to the coffers of politicians that support and supported their policies and the many politicians who benefit and benefited with huge earmarks tacked to legislation.

None of the participants challenge the continuous boom-and-bust cycle caused by the Feds monetary policy; and the bribes, pork barrel legislation, and subsidies of every kind imaginable at the expense of the taxpayers, while simultaneously piously legislating morality in market operations declaring the socialist type "affirmative obligation" to meet the credit needs of victims of discrimination, leading directly to the activist and coercive actions of institutions like ACORN.

All that this debate is concerned with is either more, or less regulation, or the right regulation, thereby missing completely the point.

No. The solution is not pouring more money into the broken system, nor more, less or right regulations.

As a minimum, the fractionalized banking system should be dismantled. The Federal Reserve should be dismantled. The Government should stop printing money beyond what is necessary to replace the money that is lost and what is necessary to maintain the healthy and natural growth in the economy, and a serious effort should be made to return to using the market's money supported by real capital goods reflective of real wealth and not just fiat paper.

In addition the use of private money should be allowed rather than just the dollar, business transactions could then occur between individuals in whatever private money the parties agreed. As it is the government has a monopoly on fiat paper money (which should be a symbol of real value in the economy but in actuality is not) and it is devaluing it at a very alarming rate. Taxes should be reduced across the board, to create employment and production, and capital gains should be liberalized, to create incentive for investment.

The Federal Reserve should be disbanded because it is a cartelizing entity that limits entry into and regulates competition within the lucrative fractional-reserve banking industry and stands ready to bail it out, thus guaranteeing its profits and socializing its losses (i.e. taxpayers always pay). But it is more than that because not only bankers, but also incumbent politicians and their favored constituencies and special interest groups benefit from the Fed's power to create money at will. This power is routinely used in the service of vote-seeking politicians to surreptitiously tax money holders to promote the interests of groups that gain from artificially cheap interest rates and direct government subsidies (Example ACORN), Those beneficiaries include, besides banks and beneficiaries of government subsidies, among others, Wall Street financial institutions, manufacturing firms that process capital goods, the military-industrial complex, the construction and auto industries, labor unions, civil right institutions and many others.

The fractional banking system should be dismantled because the minimal reserves of capital required do not protect depositors and it amounts to pure speculation and gambling with other people’s money.

The alternative is I predict, that by 2012 at the latest the USA will see an inflation the likes of which have never been seen not even during the Carter administration, accompanied at the same time by the mother of all recessions, if not by an outright depression.

More self-reliant and less welfare should be welcomed. Government should stop intervening in the functioning of the market and limit itself to protecting individuals and groups in need against catastrophic disaster and against human predators while facilitating opportunities for all that want to take advantage of it.

I would propose, in addition to the minimum steps mentioned above, a debate and discussion as follows:

Premise:

The cause for the current crisis is the inflationary bank credit expansion by the government through the intervention of government and its central bank. The recession or depression is inevitable.

Proposed solution:

It is not "more credit expansion" the cause of the problem in the first place.

1. The government must cease inflating as soon as possible. The opposite of what they are doing even now even without a bailout.

2. The government must not prop-up unsound business situations

3. The government must not bail out or lend money to business firms in trouble.

4. The government must never prop up wage rates or prices of producer's goods

5. The government must let the depression-readjustment which is inevitable take its course. It must not try to inflate again, in order to get out of the depression. It will merely prolong the agony which then will become lingering and chronic, causing an even more prolonged adjustment and indefinite and prolonged mass unemployment in the capital goods industries.

6. The government must do nothing to encourage consumption for this will drive money away from the capital goods industries. It must promote savings.

7. The government must not increase its own expenditures, but must cut the budget.

8. The government should do absolutely nothing; it must maintain hands off attitude because anything it does will delay the adjustment process of the market.

9. The government must limit itself TO CONFINE ITS OWN INFLATION AND TO CUT ITS OWN BUDGET, keeping hands off the market.

10. The government can eliminate its own inflation by cutting earmarks, pork barrel and wasteful expenditures, eliminating non-essential programs, fighting corruption, eliminating inefficient agencies, and trimming defense expenditures in areas non-essential to the national defense, and possibly many other areas that I have not thought yet.

As you can see none of these recommendations are politically acceptable and none will be implemented. One candidate is a coward for not standing up to his principles of a free market and the other is a not so subtle socialist who intends to increase government expenditures, increase taxes, increase government interference in the economy and restrain the capital goods industry.

On a personal level I suggest that you save for the storm, protect your employment as much as possible, and do not spend money in frivolities.

I voted pro because at least that implies less regulation and interference by the government. However I do not agree with the reasons provided by either side.

In my opinion, the financial crisis cannot be corrected by more, less, or the right type of regulation. There is a built-in systemic problem in the fractional banking system and the function of the Central banks that increases risk in the first place that when coupled with the systematic corruption of bureaucrats and politicians creates the current crisis. And this crisis will not disappear by merely injecting more money as has been done in the past. It will merely delay the inevitable: the actual bankruptcy of the fiat Federal government, expanding into the actual poverty and bankruptcy of real individuals. (I made the same suggestion in a prior debate concerning economic regulation)

As far as I can tell none of the participants challenge the current economic and political system. All that they consider is either more, less, or the right regulation in the rarefied air of academic and professorial discussion. What a waste!

None of the participants challenge the validity of the fractional banking system, the actions of an executive branch that rules through "executive orders" disregarding constitutional constraints; the powerlessness of state governments who are mere puppets of the central government; the abuses and basic unfairness of rampant corporate welfare, exemplified by the current bailout; the amazing unfunded liabilities and extraordinary run-away national debt; the actions of Fannie and Freddie as quasi-government socialist type organizations contributing thousand of dollars to the coffers of politicians that support and supported their policies and the many politicians who benefit and benefited with huge earmarks tacked to legislation.

None of the participants challenge the continuous boom-and-bust cycle caused by the Feds monetary policy; and the bribes, pork barrel legislation, and subsidies of every kind imaginable at the expense of the taxpayers, while simultaneously piously legislating morality in market operations declaring the socialist type "affirmative obligation" to meet the credit needs of victims of discrimination, leading directly to the activist and coercive actions of institutions like ACORN.

All that this debate is concerned with is either more, or less regulation, or the right regulation, thereby missing completely the point.

No. The solution is not pouring more money into the broken system, nor more, less or right regulations.

As a minimum, the fractionalized banking system should be dismantled. The Federal Reserve should be dismantled. The Government should stop printing money beyond what is necessary to replace the money that is lost and what is necessary to maintain the healthy and natural growth in the economy, and a serious effort should be made to return to using the market's money supported by real capital goods reflective of real wealth and not just fiat paper.

In addition the use of private money should be allowed rather than just the dollar, business transactions could then occur between individuals in whatever private money the parties agreed. As it is the government has a monopoly on fiat paper money (which should be a symbol of real value in the economy but in actuality is not) and it is devaluing it at a very alarming rate. Taxes should be reduced across the board, to create employment and production, and capital gains should be liberalized, to create incentive for investment.

The Federal Reserve should be disbanded because it is a cartelizing entity that limits entry into and regulates competition within the lucrative fractional-reserve banking industry and stands ready to bail it out, thus guaranteeing its profits and socializing its losses (i.e. taxpayers always pay). But it is more than that because not only bankers, but also incumbent politicians and their favored constituencies and special interest groups benefit from the Fed's power to create money at will. This power is routinely used in the service of vote-seeking politicians to surreptitiously tax money holders to promote the interests of groups that gain from artificially cheap interest rates and direct government subsidies (Example ACORN), Those beneficiaries include, besides banks and beneficiaries of government subsidies, among others, Wall Street financial institutions, manufacturing firms that process capital goods, the military-industrial complex, the construction and auto industries, labor unions, civil right institutions and many others.

The fractional banking system should be dismantled because the minimal reserves of capital required do not protect depositors and it amounts to pure speculation and gambling with other people’s money.

The alternative is I predict that by 2012 at the latest the USA will see an inflation the likes of which have never been seen not even during the Carter administration, accompanied at the same time by the mother of all recessions, if not by an outright depression.

More self-reliant and less welfare should be welcomed. Government should stop intervening in the functioning of the market and limit itself to protecting individuals and groups in need against catastrophic disaster and against human predators while facilitating opportunities for all that want to take advantage of it.

I would propose, in addition to the minimum steps mentioned above, a debate and discussion as follows:

Premise:

The cause for the current crisis is the inflationary bank credit expansion by the government through the intervention of government and its central bank. The recession or depression is inevitable.

Proposed solution:

It is not "more credit expansion" the cause of the problem in the first place.

1. The government must cease inflating as soon as possible. The opposite of what they are doing even now even without a bailout.

2. The government must not prop-up unsound business situations

3. The government must not bail out or lend money to business firms in trouble.

4. The government must never prop up wage rates or prices of producer's goods

5. The government must let the depression-readjustment which is inevitable take its course. It must not try to inflate again, in order to get out of the depression. It will merely prolong the agony which then will become lingering and chronic, causing an even more prolonged adjustment and indefinite and prolonged mass unemployment in the capital goods industries.

6. The government must do nothing to encourage consumption for this will drive money away from the capital goods industries. It must promote savings.

7. The government must not increase its own expenditures, but must cut the budget.

8. The government should do absolutely nothing; it must maintain hands off attitude because anything it does will delay the adjustment process of the market.

9. The government must limit itself TO CONFINE ITS OWN INFLATION AND TO CUT ITS OWN BUDGET, keeping hands off the market.

10. The government can eliminate its own inflation by cutting earmarks, pork barrel and wasteful expenditures, eliminating non-essential programs, fighting corruption, eliminating inefficient agencies, and trimming defense expenditures in areas non-essential to the national defense, and possibly many other areas that I have not thought yet.

As you can see none of these recommendations are politically acceptable and none will be implemented. One candidate is a coward for not standing up to his principles of a free market and the other is a not so subtle socialist who intends to increase government expenditures, increase taxes, increase government interference in the economy and restrain the capital goods industry.

On a personal level I suggest that you save for the storm, protect your employment as much as possible, and do not spend money in frivolities.

I voted pro because at least that implies less regulation and interference by the government. However I do not agree with the reasons provided by either side.

VIII. HEALTHY FREE MARKET COMPETITION INCREASES WEALTH TO ALL WHILE SOCIALISM DECREASES IT.

This house believes that the competitiveness of workers in today’s rich countries is in permanent decline.

July 18, 2008 08:42am

The benefits of comparative advantage and of competition have not changed merely because the competition is now global. The world is rapidly becoming inextricable intertwined. There is increasing demand and migration of skilled workers and an increasing occupational mobility and competency of individuals that works from the developed to the underdeveloped and from the underdeveloped to the developed countries. Lifelong learning is not a monopoly of the workers of some country and is not a scarce and localized resource; neither the incumbent Western middle class nor the developing non-Western middle class is stupid, unable to change to take advantage of the benefits of competition. Even the location of physical resources is less important in a global mobile transportation economy. It is beyond me how healthy free market competition will make some workers less wealthy or restrict them to merely stand still. Socialism certainly will do so. If everybody is richer because of competition what difference does it make that the rich countries are no longer overwhelmingly rich? To maintain that global competition makes some workers less well off is a preposterous disguised rationalization for socialism attempting to undermine confidence in the capitalist system and not well informed to boot as to how the world economy works. Capitalist economics has access to a comprehensive economic theory about how the world economy works—one grounded in more than two centuries of spectacular practical results and a wider philosophical world view that provides the moral and philosophical foundation for capitalism. The lessons of the failure of socialism and the triumph of capitalism apparently need to be re-learned again, this time on the global scale.

IX. THE SPIRIT OF FREEDOM IS UNRELENTING. NEVER IMPOSE THE PAIN OF CHANGE UPON OTHERS UNLESS YOU ARE WILLING TO ACCEPT IT UPON YOURSELF.

This house believes that it was a mistake to award the Olympics to Beijing.

May 27, 2008 22:26pm

"Olympism seeks to create a way of life based on the joy found in effort, the educational value of good example and respect for universal fundamental ethical principles." Olympic Charter, Fundamental principles, paragraph 2

***The continuing evidence of persecution and human rights abuses in China cannot be reconciled with the Olympic Spirit set out in Article 1 of the Olympic Charter.

According to the Olympic Charter, established by Pierre de Coubertin, the goal of the Olympic Movement is to contribute to building a peaceful and better world by educating youth through sport practiced without discrimination of any kind.

***The continuing evidence of discrimination against Tibet and other groups cannot be reconciled with the goals of the Olympic Movement.

One of the educational policies of the Olympic Committee (IOC) enshrined in the Olympic Charter (Fundamental Principles) is to promote Olympic education supporting institutions which promote the values of Olympism.

***There is no evidence that the autocratic Chinese government is an institution promoting the values of Olympism, which requires fairness.

The IOC devotes a great deal of attention to protecting athletes, and has undertaken the following actions:

• Creation of the IOC Athletes' Commission in 1981. This Commission delegates representatives to all the other IOC commissions; it is involved in the process to select the Olympic host city; and meets with the IOC Executive Board at least once a year to submit its recommendations.

• Studies performed by the IOC Medical Commission during the Olympic Games into traumatology and injury prevention. Research by the Medical Commission and the IFs on preventing injury and optimising performance through the analysis of movements.

• Creation in 1983 of the Court of Arbitration for Sport (CAS), which became fully independent in 1993. This is an international court which handles the legal problems encountered by athletes. Its procedure is universally applicable, and is simple, quick, flexible and inexpensive.

• Creation of the World Anti-Doping Agency (WADA) in 1999 to combat the scourge of doping in sport and protect the health of the athletes. WADA is an independent body, but the IOC paid US$25 million towards setting it up, and covers 50% of its annual budget.

• Creation of the World Olympians Association (WOA) in 1995 to promote relations between Olympic athletes all over the world and spread the Olympic values.

• Respect for the environment by requiring cities bidding to host the Olympic Games to specify the environmental protection measures they intend to take.

***The evidence is that the International Olympic Committee has failed to protect the athletes from the environmental pollution in Beijing. The IOC is legally liable for the injuries to the lungs of the athletes caused by pollution during the competition because of their reckless disregard.

Sport is a tool for development and plays an important role for a more prosperous and more peaceful society through its educational values and worldwide network, helping bridge cultural and ethnic divides, creating jobs and businesses, promoting tolerance and non-discrimination, and reinforcing social integration. Sport is a universal language that plays the role of catalyst in today’s society as a means of improving quality of life and well-being. (Jacques Rogge, IOC President)

***This is one of the most valuable purposes that the Olympics in China should be able to perform. However when weighed against all the negatives detailed above and the violations to the Fundaments Principles contained in the Fundamental Charter particularly the injury to the athletes and the evidence of Human Rights abuses, discrimination and lack of fairness I must agree with the proposition that it was a mistake to award the Olympics to Beijing.

I vote PRO at this time.

May 28, 2008 17:19pm

I am not Chinese, or a westerner from a developed country. I am from a little underdeveloped but beautiful country known as Nicaragua, the second poorest country in the western hemisphere, so the fallacious arguments made by some commentators polarizing the debate as a contest between China and the West do not apply to me. And I say fallacious because the syllogism goes something like this: The West is genocidal; it has abused human rights like the United States allegedly does in Guantanamo, Iraq, etc. THEREFORE China does not have such problems and we should ignore the facts.

Here are some relevant facts:
Check the post appearing at the Biooutput blog:
http://biooutput.blogspot.com/2007/01/china-pollution-threatens-2008-oly...

illustrating the unhealthful impact of pollution on the 2008 Summer Olympics in China. Thus, at a recent marathon in Hong Kong 40,000 runners participated in China’s largest footrace. The pollution readings were 149 where any reading over 100 is considered unhealthy.

By the end of the race, Tsang Karn-yin, a 53 year old marathoner died a third of the way through the event. 20 runners were hospitalized, and runners complained about asthma attacks and hacking fits after finishing the race.

Beijing, according to the official website of the BEIJING 2008 Olympic Games - Games of the XXIX Olympiad:

http://en.beijing2008.cn/11/24/article212012411.shtml

suffered from air quality level IV, or poor air pollution with the pollution reading of between 201 and 300, and level V, or hazardous air pollution with the pollution reading of over 301, for 13 days by April 10. Floating dust coming from north China's Inner Mongolia Autonomous Region haunted Beijing. The content of particulate matter in the air stood at 500 microgram per cubic meter in every hour. The authorities cleared up the streets with water and suspended earthwork on construction sites in a bid to reduce the influence of floating dust on the life and health of local residents.

China has passed the U.S. as the world's largest emitter of carbon dioxide," the main contributor to global warming, said Mike McElwrath, chief executive of Houston-based Far East Energy and a former assistant U.S. energy secretary.

According to the World Bank, 20 of the 30 most polluted cities in the world are in China and the Worldwatch Institute's State of the World reported in 2006 that acidification has spread to 30% of China's cropland; another study, by the Atlanta-based Georgia Institute of Technology, reports that the range of ozone exposure in agricultural regions in the Yangtze River Delta is enough to reduce yields by 10%. Smokestack factories spew toxins and particulates into the air everywhere while rivers teem with sewage. One third of China experienced acid rain in the year 2007. The dirtiest of the fossil fuels, coal provides 70% to 80% of the electric power. In 2006 China constructed new coal-fired bringing online about as much coal-power capacity each week as the United States and India together did over the entire year," according to the Worldwatch Institute, a nonprofit research group specializing in environmental issues. Put another way, China added the equivalent of two large coal-fired plants a week. The country’s Ministry of Science and Technology estimated that 50,000 newborn babies a year die from the effects of air pollution in China.

China's problems stem from a weak legal system, corruption, poverty, two decades of double-digit industrial growth, government policies that put job growth ahead of the environment, and Communist propaganda that over-promotes man's ability to conquer nature, and the supremacy of the state over the individual.

If you don’t believe me check the following:

How is China coping with the pollution problem? Read the article “Beijing's Massive Pre-Olympic People Relocation, Home Demolition a Human Rights Issue” at:

http://www.nowpublic.com/world/beijings-massive-pre-olympic-people-reloc...

a plan to remove from the city some estimated 2 million orphaned or homeless children living in Beijing, designed to make sure Westerners see the best of Beijing.

Human rights groups are asking: "Where are they going and how are they getting there?"

China remains silent. The removal and relocation of people from Beijing for the Olympics is shrouded in secrecy.

Then there is the government removing homes and creating homeless -- with little warning and little compensation.

The Washington Post reported in a long story by Jill Drew on Saturday April 26, 2008, that communist leaders in Beijing are buying up at below market value all the villagers’ houses near the Olympic venues. As soon as the people vacate; their former homes are bulldozed into oblivion. Residents make way for such architectural glories as the National Stadium, known as the bird’s nest, and the apartment and office towers springing up nearby, Whole neighborhoods have been wiped out including the destruction of about 800 of the city’s 1,200 hutongs, lanes full of traditional, courtyard-style houses.

Beijing is being remade for you and me and other TV viewers and Olympic tourists. But there is a price; a toll that can only be measured in human suffering. Because China is a communist holdout, the people have no rights and no voice. The government is free to abuse its own population. That’s always a prescription for abuses: and today in Beijing a blind man can see that the displaced, poor and “without voice” are powerless to resist their communist government….

May 30, 2008 14:57pm

Here is some of what the web has been saying about China’s pollution and the Olympics among other things:

BBC Sports
Beijing’s air quality has been flagged up as a potential problem for athletes in endurance events lke the marathon…Ehiopian great Halle Gebrselassle, the world record-holder for the marathon, will not run the distance in Beijing as he is worried about his asthma. And Justine Henin, the defending Olympic tennis champion, is another asthmatic unwilling to risk her health in Beijing.

BBC News
Research suggests the country’s greenhouse gas emissions have been underestimated, and probably passed those of the US in 2006-2007. (A researcher said)

Digg.com post in response to the BBC report
When you’re building 2 new coal fired power plants per week, pollution will catch up to you in a hurry. I would love to see Olympians wearing dust masks in protest.

China Business Services blog (on Beijing’s decision not to release pollution stats)
It is simply easier to hide bad news… Last week in Beijing I could not see beyond 4 blocks due to the smog.

CNN
China executed at least 470 people last year - more than any other country in the world. Exact figures for how many people were put to death in China are difficult to come by because the country considers the death penalty a “state secret”.

USA TODAY http://www.usatoday.com/news/world/2006-06-14-death-van_x.htm
China makes ultimate punishment mobile. China metes out capital punishment from specially equipped "death vans" that shuttle from town to town. Makers of the death vans say the vehicles and injections are a civilized alternative to the firing squad, ending the life of the condemned more quickly, clinically and safely. The switch from gunshots to injections is a sign that China "promotes human rights now," says Kang Zhongwen, who designed the Jinguan Automobile death van. In executions by firing squad the kneeling prisoner is shot in the back of the head. The guards "ask the prisoner to open his mouth, so the bullet can pass out of the mouth and leave the face intact."

For years, foreign human rights groups have accused China of arbitrary executions and cruelty in its use of capital punishment. The exact number of convicts put to death is a state secret. Amnesty International estimates there were at least 1,770 executions in China in 2005 — vs. 60 in the United States, but the group says on its website that the toll could be as high as 8,000 prisoners.

Injections leave the whole body intact and require participation of doctors. Organs can "be extracted in a speedier and more effective way than if the prisoner is shot," says Mark Allison, East Asia researcher at Amnesty International in Hong Kong. "We have gathered strong evidence suggesting the involvement of (Chinese) police, courts and hospitals in the organ trade."

New York Times
To earn the right to play host to this summer’s Olympics, Beijing promised to improve its human rights record. As its behavior in Tibet ... demonstrates, China does not take that commitment seriously.

Arstechnica
President Hu Jintao last year called for purification of the Internet, saying that it was poisoning the minds of China’s youth. What he really meant to say is that the government is upset that it cannot completely control the flow of information.

Amnesty International's annual report, released Wednesday May 28, 2007
growing numbers of human rights activists were imprisoned or harassed in China in 2007, with ethnic and religious minorities -- including Tibetans, Falun Gong practitioners and Christians -- repressed or persecuted.

Death penalty statistics in China are difficult to assess, Amnesty said, but based on public reports, the group estimated that at least 470 people were executed in 2007.

Amnesty also noted the repression of free speech in China and said censorship of the Internet and other media intensified last year. "The Chinese authorities maintained efforts to tightly control the flow of information," the report said. "They decided what topics and news stories could be published, and media outlets were sometimes required to respond within minutes to government directives. The authorities continued to block Web sites and to filter Internet content based on specified words and topics."

Around 30 journalists and at least 50 others are known to be in prison for posting their views online, Amnesty said.

Read the full report in pdf format at:
http://report2008.amnesty.org/press-area/en/air08-en-low-res.pdf

June 6, 2008 14:26pm

Mr. Hu Jintao, the Paramount Leader of the People's Republic of China, holding the titles of General Secretary of the Communist Party of China since 2002, President of the People's Republic of China since 2003, and Chairman of the Central Military Commission since 2004 is a man in the middle of a battle and the rivalry of his presumed supporters afraid of being ousted. His apparent liberal stance, philosophy and government by consensus is a façade, a caution made necessary by the internal politics surrounding him and the unbalanced situation of the economy and the Chinese society. Unless China becomes a free country economically, politically and individually it will breakdown in a similar manner that the government and the society of the old Soviet Union eventually broke down, but worse because economic freedom and individual repression are totally inimical. Make no mistake that, if and when, his political position should ever become secured Mr. Hu will turn into the new Mao, the new Kim Jong Il. Beneath the exhortations of harmony, peaceful rise, serving the people and benevolent leadership, the old Maoist is hidden, with no sense whatsoever of how to implement free market changes to address China’s formidable problems. There is nothing that Mr. Hu fears more, because of the rivalry of his trusted communist comrades than implementing unsettling political reforms, like letting the people exercise their natural power in a fashion similar to Western type republican democracy.

Covering his rule with the mantle of traditional Confucianism Mr. Hu wants to return China to the ‘better’ ideas of communism passing himself in the style of a Confucian gentlemen --- one who governs by virtuous example and radiates benevolence throughout society. The last thing that he desires for the Chinese people are political and media control. It would be like asking the Pope to grant infallibility to Church parishioners. That is why Mr. Hu has been very cautious with regards to the Internet, choosing to censor politically sensitive material to a degree more strict than the Jiang era. In February 2007, he embarked on further domestic media controls that restricted primetime TV series to "morally correct" content—objected to lowbrow programming including some reality shows—on all Chinese TV stations, and listed "20 forbidden areas" of coverage on news reporting.

Mr. Hu’s style is that of the upright scholar-official instructing the ignorant but good-hearted ‘commoners’ how to be virtuous from the top down, cultivating the cult of personality, and as a good Chinese communist leader making his own contribution to Confucianism mixed Marxist theory. He released in 2006 the ‘Eight Honours and Eight Shames, widely regarded as his ideological solution to the new generation of competitive Chinese concerned with earning money and power, a publication that is visible almost everywhere: in classroom posters, banners on the street, and electronic display boards for the preparation of the 2008 Olympics in Beijing and Expo 2010 in Shanghai, reminding one of the ubiquitous Mao’s little red book.

Mr. Hu has been a communist since early childhood; he is not going to change merely because President Bush attends the Olympics and has a private meeting to press the case on Tibet, or Africa. In fact it is the other way around: Mr. Hu is going to teach Mr. Bush what Mr. Bush should be doing in the good old United States of America. Mr. Hu will change, if at all, if he becomes convinced that he will be ousted and that his future is at an end which would surely happen if the Olympics turn out to be a failure. For that reason, the proposal of Dr. Yang Jianli, featured guest commentator, that the world community unite around a specific set of conditions, which if not met, would result in reduced levels of participation in the Olympics determined by the individual governments is a realistic, tough, non-utopian, and feasible proposal.

The visit of Mr. Bush will only serve to raise the standing of Mr. Hu in the eyes of his own people giving the appearance that the human right violations of the Chinese government are officially sanctioned by the United States of America; will produce no lasting improvement; and will delay the natural course of events that is the inevitable outcome of the suppression of individual rights. It may take 50 years or more like in Cuba or a thousand years but it will inevitably happen. Individuals may be killed and repressed and put in chains but the spirit of freedom is unrelenting.

May 30, 2008 19:39pm

It is too late to stop the Olympics in China but the Olympics themselves will serve to remind the world not of China's emerging greatness but of its continuing denial of freedom to its citizens, its repression of minorities and its amoral alliances with rogue states. If we truly valued human rights ideals then as a community we should had boycotted these games. It is too late now, but you might as well use this opportunity to go to China and be persuaded and witness unwillingly perhaps the shame of an enslaved people. Make sure you ask the officials with admiration where are the poor in Beijing? The answer will surely be that there are no poor people in Beijing.

That is because Beijing has cleared entire neighborhoods to make room for Olympic sites and to beautify the city. In 2006 the Beijing municipal authority announced that certain groups of local people would be banished from the area where the games will be held. They include beggars, vagrants and those with mental illnesses. Furthermore, many citizens will be forced to either vacate their homes or remain in their houses for the duration of the Olympics. At least 300,000 residents have been moved to make way for the games, and those who complain face persecution, prison or even death. Those people that complaint cannot win because under socialism land is not individually owned and private property is not officially approved.

Be careful though. You may be arrested too if you speak against the system. Remember you are a guest of the People’s Republic of China and as such you have no rights, remember not even the Chinese people have rights. Beware. In fact not even the competing athletes may speak out. China is asking all athletes of all nations to sign a contract that bans them from making political statements against China, or they will not be allowed to travel raising the specter of the order given to the England football team to give a Nazi salute in Berlin in 1938.

Consider this:

Ye Guozhu owned two restaurants in Beijing, both of which were demolished in 2001, as was his home two years later. This was done in order to create space for Olympic facilities to be built. Mr Ye sought permission to demonstrate against such forcible evictions and the lack of compensation for them. He was arrested and sentenced to four years in prison, and his family has had no contact with him since. No appeal can be made on his behalf as there is no way to contact him to sign the papers necessary for this process. It is reported that the courts have been ordered not to hear cases seeking compensation for any such abuses.

Last Monday, land-rights activist Yang Chunlin was sentenced to five years in prison for starting a petition with the slogan, "We want human rights, not the Olympics."

Last week, another dissident, Hu Jia, was put on trial on charges of subversion; he was arrested after testifying to the European Parliament via the Internet and publishing a letter urging the world to focus on human rights concerns in connection with the Olympics.

Defenders who attempt to track abuses against other activists are particularly vulnerable. Since mid-July 2006, Hu Jia has been held under house arrest and repeatedly taken by the police for interrogation.

Chen Guangcheng, a blind legal activist who exposed abuses connected to family planning was sentenced in August to more than four years in prison on charges of obstructing traffic. In apparent response to considerable international attention, the appellate court in November ordered a retrial, though Chen remains in jail.

After many months of house arrest, police harassment, and threats, Gao Zhisheng, a prominent human rights lawyer, was arrested in October 2006 on state security charges of “inciting subversion.” At this writing, Beijing police continued to deny Gao’s lawyer permission to visit him.

Legal activist Yang Maodong (also known as Guo Feixiong), who was assisting Guangdong villagers resist land seizures, was formally arrested in September 2006 on charges of “illegal business activities.”

In June 2006, a local court sentenced Huang Weizhong, elected by villagers in Fujian to protest land acquisition procedures, to three years in prison.

Suspected “separatists,” many of whom come from monasteries and nunneries, are routinely imprisoned. In January 2006, Gendun, a Tibetan monk, received a four-year prison sentence for opinions expressed in his lectures on Tibetan history and culture. In June 2006, five Tibetans, including two nuns, were detained for publishing and distributing independence leaflets. In July, Namkha Gyaltsen, a monk, received an eight-year sentence for his independence activities. In August, armed police detained Khenpo Jinpa, an abbot. In September, Lobsang Palden, another monk, was charged with “initiating separatist activities.”

On September 30, Chinese People’s Armed Police shot at a group of approximately 40 Tibetan refugees attempting to cross the border into Nepal, killing a 17-year-old nun, Kelsang Namtso, and possibly others. The rest of the group fled, though witnesses reported seeing Chinese soldiers marching approximately 10 children back to a nearby camp. The official press agency Xinhua claimed that the soldiers were “forced to defend themselves,” but film footage showed soldiers calmly taking aim and shooting from afar at a column of people making their way through heavy snow.

In January 2006, on orders from party officials, China Youth Daily temporarily closed Freezing Point (Bingdian), its weekly supplement, ostensibly for running an article asserting that Chinese textbooks rewrote history.

In August, the UN Committee on the Elimination of Discrimination against Women (CEDAW) faulted China for not having incorporated a legal definition for gender discrimination and for failing to act on the Committee’s previous recommendations.

China does not recognize freedom of religion outside of the state-controlled system in which all congregations, mosques, temples, churches, and monasteries must register.

Registration entails government vetting and ongoing monitoring of religious personnel, seminary applicants, and publications; scrutiny of financial records and membership rolls; and veto power over group activities. Failure to register renders a religious organization illegal and subject to closure, fines, and criminal sanctions. Despite the restrictions, the number of religious practitioners continues to grow.

Policies have been reflected in round-ups of Protestants¬—possibly as many as 1,958 in a one-year period ending in June 2006—for attending training sessions and Bible study meetings in unregistered venues. Most are released quickly, some after paying fines. Some leaders are held on trumped up charges, such as “illegal business practices.”

The Catholic underground church community and the official Chinese Catholic church continue to disagree over the ordination of bishops.In May, over the objections of the Vatican, the official church installed four new bishops.

The government also curtails religious freedom by designating some groups as cults, such as the Falungong. Leaders and those caught publishing and distributing Falungong literature face severe repression.

In 2006, China intensified its efforts to use the “war on terrorism” to justify its policies to eradicate the “three evil forces”—terrorism, separatism, and religious extremism—allegedly prevalent among Uighurs, a Turkic-speaking Muslim population in China’s Xinjiang Uighur Autonomous Region.

Under current policies local imams are required to vet the text of weekly Friday sermons with religious bureaus. “Strike Hard” campaigns subject Uighurs who express “separatist” tendencies to quick, secret, and summary trials, sometimes accompanied by mass sentencing rallies. Imposition of the death penalty is common.

In 2006, China continued to pressure neighboring countries to arrest and deport politically active Uighurs. In June 2006, Uzbekistan extradited to China Huseyin Celil, a Uighur and a Canadian citizen. At this writing, Celil was being held in Xinjiang with no access to Canadian consular services. In May 2006, Kazakhstan acceded to China’s demand that it extradite two Uighurs. In October, China sentenced Ismail Semed to death for “separatism” following his deportation from Pakistan. China also pressed hard, though unsuccessfully, to get Albania to repatriate five Uighurs who, until 2006, had been held by the US at Guantanamo Bay.

Chinese officials have labeled Rebiya Kadeer—a Nobel Prize nominee—a terrorist, and in retaliation for her championing of Uighur rights following her exile to the US in March 2005, have beaten and arrested members of her family in Xinjiang. In October 2006 two of her sons, Kahar Abdureyim, 42, and Alim Abdureyim, 31, were put on trial on tax charges.

In mid-September, Beijing municipal authorities shut down over 50 unregistered schools for children of migrant workers, leaving tens of thousands of children without access to education. This followed a discussion by the authorities about ways to expel one-million migrant laborers from Beijing.

In August, the UN Committee on the Elimination of Discrimination against Women (CEDAW) faulted China for not having incorporated a legal definition for gender discrimination and for failing to act on the Committee’s previous recommendations.

According to Human Rights Watch http://hrw.org/englishwr2k7/docs/2007/01/11/china14867.htm

The “Great Firewall of China” restricts not only access to the internet, with its 123 million users in China, but also to newspapers, magazines, books, television and radio broadcasts, and film. During 2006, the Chinese government and Communist party officials moved aggressively to plug the wall’s holes and to punish transgressors. Premier Wen Jiabao justified the renewed crackdown, stating that “internet censorship is necessary to safeguard national, social and collective interests.”

Journalists, bloggers, webmasters, writers, and editors, who send news out of China or who merely debate politically sensitive ideas among themselves, face punishments ranging from sudden unemployment to long prison terms. Censors use sophisticated filters, blocking, and internet police to limit incoming information.

During the first half of 2006, Chinese officials shut down more than 700 online forums and ordered eight search engines to filter “subversive and sensitive content” based on 10,000 key words. In July, a website called Century China and its eight online forums, popular among Chinese intellectuals, was shut down for illegally providing news. In September, two chief editors of Wang Yi (NetEase), a top internet portal, were fired for allowing an unauthorized opinion poll. Blogs from prominent commentators and activists continued to be regularly shut down.

Subversion charges in 2006 led to 10, 12, four and two-year sentences respectively for internet writers Ren Ziyuan, Li Jianqiang, Guo Qizhen, and Li Yuanlong.

By their own admission, global corporations such as Google, Microsoft, Yahoo!, and Skype continue to assist in the Chinese government’s system of arbitrary and opaque political censorship in an effort to ingratiate their companies with Chinese regulators. Yahoo! released the identity of private users to Chinese authorities, contributing to four critics’ lengthy prison sentences. Microsoft and Google censor searches for what they think the government considers sensitive terms.

In September 2006, new measures mandated that foreign news agencies not sell stories directly to Chinese outlets but submit them first to Xinhua, the official Chinese news agency, for clearance and subsequent distribution.

Foreign journalists are harassed, detained and subject to occasional violence. In August, the Foreign Correspondent Club of China (FCCC) reported “widespread detentions” and some instances of physical assaults of foreign reporters. Chinese nationals working for foreign newspapers are especially vulnerable. In September, Zhao Yan, a researcher for the New York Times, was sentenced to three years on fraud charges following a trial marred by due process violations. As of this week, authorities won't allow live broadcasts from Tiananmen Square, site of the deadly crackdown on pro-democracy students two decades ago.

The Chinese government continues to use a vast police and state security apparatus to enforce multiple layers of controls on critics, protesters, and civil society activists. The system includes administrative and professional pressures, restrictions on domestic and foreign movements, covert or overt tapping and surveillance of phone and internet communications, visits and summons by the police, close surveillance by plainclothes agents, unofficial house-arrests, incommunicado confinement in distant police-run guest houses, and custody in police stations, charged with vaguely defined crimes such as “disrupting social order,” “leaking state secrets,” or “inciting subversion.”

It is unfortunate that the granting of the 2008 games to Beijing has encouraged the Chinese authorities to continue their abhorrent treatment of their own citizens, safe in the knowledge that the international community is tacitly allowing such actions to occur, a showcase for violent repression, censorship and political persecution by a regime that has failed to rise above the level of police state.

Though presenting himself as worldly and reformist, President Hu Jintao and his leadership group seem unable to grasp how the policies they have pursued in recent months undermine the honor of staging the Olympics and destroy China's international prestige.

The Olympics will be a showcase for violent repression, censorship and political persecution by a regime that has failed to rise above the level of police state.

Mr. Hu's government has tightened its grip: shutting down publications, imprisoning dissidents and harassing lawyers in the name of pre-Olympic harmony. Media controls have been tightened, not only in Tibet -- where the foreign press has been denied access to the carnage -- but in Beijing itself.

The amazing fact is that China is a member of the Human Rights Council of the United Nations, "committed" to protect basic rights and freedoms, including such things as ceasing repression of activists, removing internet and press censorship, granting independence to lawyers, ending re-education-through-labour, complying with international conventions on human rights, and recognizing independent workers unions.

In its candidacy statement China asserted that “the Chinese government respects the universality of human rights and supports the UN in playing an important role in the protection and promotion of human rights.”

China makes a mockery of this however; Chinese diplomatic efforts have focused on doing away with independent UN investigations, on the grounds that “the internal affairs” of a state should not be subject to investigation. China continues to work closely with the “like minded” group of countries, which includes Iran and Zimbabwe, to roll back important human rights protections.

To those Chinese nationals who have been given permission by the government to access this debate page, shame on you. This last comment may violate debate rules about addressing only the moderator and not the commentators. If so, I hope I am not arrested or worse censored!

June 4, 2008 22:00pm

The following are this commentator’s reflections on the closing comments and other guest speaker’s comments:

Dr. Yang Jianli, featured guest commentator believes that the awarding of the 2008 Olympics to China is consistent with the necessary goal of integrating China into the global community among other reasons because the issue of whether it was a mistake to award the Olympics to China is today moot.

I fully agree with his proposal that the world community should unite around a specific set of conditions, which if not met, would result in reduced levels of participation determined by the individual governments if accepted by the Chinese Government would compel this commentator to change from PRO to CON, if and only if, the Chinese Government agrees to act on those recommendations immediately.

The four conditions that Dr Jianli proposes are:

1. The Chinese Government must grant full and unrestricted access of the press during the Olympic Games.

2. The Chinese Government must remove the firewall that blocks the flow of information across the Internet.

3. The Chinese Government must declare the right of return to all Chinese dissidents who are now blacklisted from returning to China because of their participation in the Tiananmen Square demonstrations.

4. The Chinese Government must free all political prisoners, specifically those still in prison since, and as a result of, the 1989 demonstrations at Tiananmen Square.

These four conditions are specific, reasonable, achievable, and consistent with international standards and the spirit of the Olympics. China’s execution of these conditions would be a demonstrable movement towards improving its human rights situation.

Dr. Yang Jianli ads that it is important to realize that the world community presently holds the upper hand with respect to China’s integration with the world community. China both desires and requires international recognition and acceptance to continue its rapid economic expansion. Without this economic growth, the Chinese government will lose legitimacy and standing with its own citizens. The Chinese government’s relentless drive for economic growth demands that China continue to engage, and continue to do business with the world, even in the face of constant pressure on the human rights issue. We must not lose this small window of opportunity to engage and promote change.

These commentator ads that Economic Freedom is not an end of itself but a means to the ultimate end of Individual Freedom; Without Individual Freedor example the situation in North Korea where there is neitm Economic Freedom cannot long survive. Witness foher Individual nor Economic Freedom. The window of opportunity to engage and promote change in China must be accompanied by the four preconditions outlined above or else it will merely lengthen the period of oppression in China and strengthen the standing of the Chinese government.

Mr. Daniel Franklin, the moderator of this debate on the Olympics and China remains neutral in his closing statement as is appropriate to a moderator of a debate within the context of an aloof business interested primarily in sales, avoiding antagonizing commercial interests in China and attracting potential customers.

The other speakers, all agree on the following:

Mr. Gordon G. Chang, the proposition exponent, states that China has, almost from the time of the award to Beijing in 2001, imposed a crackdown on human rights and uses the sporting extravaganza to justify its increasingly repressive rule, although he believes, mistakenly, as Mr. Charles W. Freedman, III believes, that the welfare of the Chinese people technically is not a concern of officials who award Olympic events. For that reason Mr. Chang emphasizes the environmental problems that make Beijing unfit to hold the games, as well as the negative impact the Olympics have on the country.

Contrary to this joint belief of the opposing parties this commentator asserts that the concern of the IOC for the environment reflects a broader holistic concern for the welfare of the human condition and values, and not only the physical animalistic aspect. Otherwise the IOC would be equivalent to an animal activist group opposing cock fighting in order to protect and promote the physical welfare of cocks. This holistic welfare for the human condition and values is implicit in the Olympic Spirit set out in Article 1 of the Olympic Charter, requiring improvement in the quality of life and well-being of human beings, not just animals.

Mr. Charles W. Freedman, III, the opposition exponent, is fully aware of the human rights violations in China and the environmental risks in Beijing, but considers them mere caricature and overblown; while he is aware that this is in stark contrast to the blind nationalism represented by some on the con side of the debate (Chinese people in China are not allowed to participate in this debate because the government blocks information across the internet), he inconsistently maintains that somehow, in spite of this lack of freedom of the press, speech, internet and thought there is an emergence of a ‘genuine’ (emphasis by commentator) debate within China about China’s future. (commentator laugh). And that this debate taking place within government, academia and among the general public, is increasingly open and transparent, and it hints at liberal, corrective social and political changes in China yet to come. That a country (free?) (commentator’s insertion) that recognizes its imperfections and seeks to improve them is a country of which one truly can be proud (commentator laugh).

Mr. Freedman, III goes on: The Olympic Games in Beijing will be a spectacular, lavish affair where visitors from other countries will see much that inspire them, much that gives them pause and even some things that alarm them. He shows a sincere, admirable, clearly illusory personal hope (a hope that dissidents and other suffering individuals in China don’t have) that President Hu Jintao and his leadership group will in their supreme wisdom be placated, and recognize their imperfections and grant full and unrestricted access of the press during the Olympic Games, remove the firewall that blocks the flow of information across the Internet, declare the right of return to all Chinese dissidents who are now blacklisted from returning to China because of their participation in the Tiananmen Square demonstrations, free all political prisoners, specifically those still in prison since, and as a result of, the 1989 demonstrations at Tiananmen Square, and compensate the approximately two million people that have been displaced or otherwise repressed to make room for the Olympic facilities (see featured guest Dr. Yang Jianli May 29th, 2008 full comment summarized above).

Professor Alfred Senn, featured guest commentator, argues that The International Olympic Committee (IOC) did not “make a mistake in awarding the Games to Beijing” because, as best as I can read from his comment, the IOC had to show them a little favour, and the torch relay, replete with People’s Guard, constituted advertising, setting specific times and places for live television coverage. “Oh, my heart, what more could you desire!” Demonstrators calling attention to Darfur and Tibet obviously had to welcome the opportunity to appear in front of cameras. They could not have bought that kind of television exposure.

Furthermore, he says the Games do have a distinctive mystique, but at this point they are in fact reality television. Money is the name of the game—television money, corporate money—and also ratings. The demonstrations against the torch relay have probably intensified interest in the Games. …The television ratings will surely be high. The IOC will be pleased;
NBC will be pleased. And I may add Professor Senn is pleased!

Mr. Dauod Hari, featured guest commentator, is the only guest speaker sensitive enough to send his condolences to the people of China who suffered so terribly from the recent earthquake and who directly mentions the thousand of people that are dying right now in Darfur. He is the only one that recognizes that it is very easy but very wrong to respond to a great wrong by bringing suffering to people who are relatively innocent. And why it is wrong to hurt people in a marketplace or in an airplane or a city office building in order to put pressure on a government.

This commentator adds that it is very easy but very wrong for the international community and the IOC to tacitly allow and encourage a commercialized Olympic athletic event to bring suffering to million of innocent Chinese people residents of Beijing who have been displaced and made homeless in order to beautify the city and make room for the Olympic Games. Some of these residents have been incarcerated and put to death.

Mr. Dauod Hari has his priorities right. He shows true sensitivity to individual human suffering. Do unto others as you are willing to do unto yourself. Never impose the pain of change upon others unless you are willing to accept it upon yourself.

I strongly recommend Mr. Hari’s comment of June 3rd 2008 and his suggestions as to what can we do. Since we are so willing to let other suffer this commentator suggest as Mr. Hari suggests that we try taking some of that pain upon ourselves. Such self-sacrifice might simply be the modest cost in time of a telephone call or a stamp on a letter to a few elected leaders, with simple messages voicing concern about the situation in Darfur (and China) (commentators words) and the hope these leaders will work to stop the killing and the removal of people from their native lands. If millions of people will only suffer this little trouble themselves, far more can be accomplished than making athletes suffer instead.

If people think that this is not enough, then they might decide to take “time out for Darfur” (and China) (commentators words) in their purchases of goods made in China and let the Chinese embassy in their country know what they are doing and that they are doing so to encourage China to find a way to peace in Darfur instead of selling weapons to the genocidal regime there. Yes, this might very unfortunately make people in Chinese factories suffer somewhat, but it will make us, as consumers who enjoy inexpensive Chinese goods, suffer the most, as it should be.

X. THE UNITED STATES OF AMERICA IS BANKRUPT BECAUSE OF GOVERNMENT INTERVENTION IN THE MARKET.

This house believes that by intervening to regulate business and financial risks, governments have made things worse.

March 17, 2008 21:34pm

Mr. Franklin advice is to 'focus on the matter of risk management rather than on broader aspects or regulation'. The concrete example given by Mr. Berlau relating to Countrywide Financial Corporation wherein the Sarbanies-Oxley Act of 2002 controlled risk management for this corporation to the point that it supplanted 'business judgment' requiring reliance on two main credit rating agencies protected by government regulation and literally forcing banks and pension funds to accept subprime loans is a perfect example of how government intervention to regulate business and financial risks made things worse.

The examples given by Mr. Moore address the broader aspects of regulation, are largely academic and do not concretely address the proposition at hand. His broad general assertion that it is the State that allows the market to thrive has been discredited by the results experienced, for example, by the old Soviet Union, Cuba and even the socialist economy of Great Britain. His is a short term analysis that seeks to support its position by the distortions caused by government intervention in the market in the first place, disregarding the long terms effects.

I am reminded of centralized planning in the Soviet Union which was highly successful in the area of Space technology but a total failure in allocating toilet paper for hotels and restaurants, as I discovered when I visited the Soviet Union over 10 years ago and the most prestigious hotel was lacking toilet paper because the central committee, in their wisdom, had produced harps instead. Unfortunately I could not use harps in place of toilet paper. My vote is PRO; however I am open to persuasion. You will need to persuade me that the wisdom of centralized planners and their honesty is superior to self-interest, however egotistical that self-interest may be.

March 17, 2008 23:45pm

PostColonialTech arguments fail, respectfully, to understand and address the issue. Mr. Moore asserts that the State ”allows” (emphasis not in the original) the market to thrive (See opening statement). Mr. Berlau essentially takes the opposite position that individuals and the market “suffer” the State to intervene (in line with my understanding that our government is a government of the people, by the people and for the people, rather than the government “allowing” us rights). Thus, Mr. Berlau states in his opening statement that “the real folly is the notion that politicians can somehow dictate risk management for individual firms”. Further, PostColonialTech focuses on the broader political dictatorial aspects of regulation by the State rather than on the question before us (See Mr. Franklin opening statement): “whether government intervention to manage business and financial risk has made things better or worse” (as exemplified by the economic intervention via central planning by the former Soviet Union, the present Cuba, the previous Sandinista Nicaragua, the current nationalistic Chavez-Venezuela, and the improperly applied and enforced Sarbanes-Oxley act of 2002 (SOX) in the United States, for example).

I am still open to persuasion, but I discount PostColonialTech ad hominen Nazi argument since it totally fails to persuade and convince that the “honesty” and “wisdom” of centralized planners is superior and preferable to individual self-interest in the economic arena and in particular in the area of business management and financial risk, and further fails to convince that government intervention to manage business and financial risks has made things better as asserted by Mr. Moore and contradicted by the ongoing failure of the Federal Reserve to effectively stop the decline in the value of the dollar, the incipient recession and the monstrous forthcoming inflation.

March 18, 2008 18:55pm

Please PostColonialTech- Mr. Moore asserts that the State "allows" (emphasis not in the original) the market to thrive (See opening statement). I cannot but laugh at PostColonialTech diatribe since the above "fascist" statement, as you call it, is in the English language, clearly legible, and has no relevance to whether corporations, (which to the best of my knowledge are made up of entrepreneurs and stockholders), owe something to society The largely academic examples given by Mr. Moore and by PostColonialTech are irrelevant to the proposition at hand, rather such examples are attempts to support the "fascists" proposition that the state "allows" the market to thrive Marxist style.

I simply cannot subscribe to such extreme view of society. I submit that the issue of this debate is not the abstract proposition of neither whether naked corporations owe a duty to society nor whether the state "allows" the market to thrive, but on whether government intervention to manage business and financial risk has made things better or worse?

It is true that the state has presumably regulated business conduct for the general good, but as Mr. Franklin stated in his opening statement: "At issue is not whether the state has any role at all in setting regulations for business. Clearly it does." "A basic rule of law is essential for business to thrive" (please note that Mr. Franklin does not support the extreme fascist position that the state "allows" the market to thrive), "the focus is on the matter of risk management rather on broader aspects or regulation". "Have the regulators got the balance right, or gone too far?"

The concrete example given by Mr. Berlau, again, relates "concretely" to government intervention to regulate business and financial risks. That concrete, material and relevant example evidences clearly that government intervention made things worse in light of new developing risks in the market, to wit: the mortgage subprime woes, propitiated by the regulators who straight jacketed "business judgment" creating the current credit crunch. That does not mean that I subscribe wholly to the opposite extreme proposition espoused by Mr. Berlau: "that a market-based system of regulation, really works better". (For example compare the well known Board of Directors and CEO Enron abuses). Does Mr. Berlau mean that a market-based system of regulation is the "sole" remedy? I am still open to persuasion. But I cannot be persuaded by irrelevant and irrational diatribes that ignore the plain meaning of the English language, or the plain meaning of the word "allow". On the whole, however, given the lessons of global history vis-a-vis government intervention in the market arena, and in the USA given the current credit crunch resulting from government and regulatory agencies errors dealing with the mortgage woes, coupled with government and regulatory agencies failure in controlling government spending, maintaining the exchange value of the dollar, fomenting inflation, and prolonging recession, I remain skeptical. I still vote PRO.

March 19, 2008 19:25pm

Hi Art Teacher, I looked up the word "allow" in the Compact Oxford English Dictionary. It defines allow as a verb 1. Let someone have or do something. 2. Decide that something is legal or acceptable.

March 19, 2008 20:22pm

pdavideonutk are you saying that the Steagall Act prevented mortgage originators from passing their mortgage to underwriters who would then bear the risk of default? And after the repeal of the Steagall Act, they could do so? What compels underwriters with or without the Steagall Act to accept subprime loans? Does the Sarbanes-Oxley Act of 2002 together with other SEC regulations outlined by Mr. Berlau in his opening statement have anything to do with that? So what kind of further government regulation would you propose to better the situation? Would allowing underwriters to use their business judgment in evaluating credit risk help? Just curious.


March 19, 2008 21:57pm

PostColonialTech, in answer to your question I consider the government, any government, a "necessary evil". Just like our founding fathers did. I consider that the imperfections and the evil of the free market are vastly surpassed by the imperfections and the evil of our politicians and other governmental leaders and bureaucrats. And the wisdom and the benefits of a free market vastly surpass the wisdom and the benefits that any government can claim to have accomplished both historically and in the present. I distrust any one, like Mr. Moore, who claims that more "control" is needed from any government in general. Since the government is a "necessary evil" I do not claim that the government does "not" have any role in the setting of regulations for business, as you have repeatedly asserted. I stated before and I state again now, at issue is not whether the state has any role at all in setting regulations for business. Clearly it does. A "basic rule of law" is essential for business to thrive. Now, having answered your question about my motives. Perhaps you will be kind enough to explain yours?

March 20, 2008 05:26am

Mr. Daniel Franklin, the moderator, states in his opening statement: "To judge by their opening statements, John Berlau and Paul Moore are poles apart". The position of Mr. Berlau is that: "a market-based system of regulation, really works better." "a market in risk management would be a far better and more flexible solution"; the position of Mr. Moore is that arguing: "from the opposite end of the ideological spectrum" "It is the state, that allows the market to thrive"

Now PostColonialTech gives up. He argues that "government" and "society" mean the same thing when the word "allow" is applied. However, the proposition is "not", as PostColonialTech apparently believes, the ridiculous proposition that: "By "intervening" to regulate business and financial risks, "society" has made things worse”. Very practical and realistic Debator2009 goes directly to the topic of this debate, that "By intervening to regulate business and financial risks, governments have made things worse". He points out that "government" includes the politically selected heads or the bureaucrats or both together; including governments of developing countries, and points out further that exaggeration of "regulation" can turn into "controlling" (by yrguard: permitting someone to have or do something, or deciding that something is legal or acceptable).

In summary, Mr. Berlau asserts that "a market-based system of regulation, really works better". Mr. Moore on the other hand asserts that: "For those not blinded by 'free market' dogmas it [is] obvious that the Americans have always had state planning"...A structure that allows those in "control" (emphasis not on original) to oversee the entire workings of any given penal institution" "that more of the very thing (read "control") that appears to make you ill will have to be taken if freedom of economic movement is to be ensured."

And in this manner Mr. Moore claims to demonstrate logically, factually and concretely (read "ideologically") the truth of his position concerning the proposition here debated, that: "By intervening to regulate business and financial risks, governments have made things "better"?

I look forward to the rebuttal. Particularly, I look forward to Mr. Moore concrete and factual rebuttal of how government intervention to regulate business and financial risks, has made things better in the USA given the current credit crunch, the government and regulatory agencies intervention, the Sarbanes-Oxley Act of 2002, and other SEC and government controls, and the ongoing failure of government and regulatory agencies to control government overspending, maintain the international value of the dollar, prevent inflation, and avoid recession.

March 20, 2008 05:26am

Why Did Mortgage Lenders Keep Granting Subprime Loans, and Why Did Financial Institutions Keep Buying Them? The Federal Reserve is largely responsible for the current deflation in home prices and the current credit crisis. In an effort to stave on a Japan-style deflation, Greenspan took short term rates all the way down to 1%. By keeping interest rates artificially low in the period of 2001 to 2004, the Fed spurred over investment in real estate and housing. In effect the Federal Reserve gave the large commercial banks too much easy money. In turn large commercial banks gave the mortgage banks too much easy money, and mortgage banks gave mortgage brokers too much easy money, all the way down to the consumer, motivating lenders to make loans that they shouldn’t have made and motivating borrowers to buy more home than they could afford.

In addition to easy money what motivated Mortgage lenders, to make subprime loans? The reason is that they could grant the loans, re-package them, and sell them to other investors. They could grant the loans and get their money up front with little-to-no-risk to themselves and sell them to other financial institutions as part of financial engineering called securitization, passing the rights to the mortgage payments and related credit/default risk to third party investors via mortgage-backed securities (MBS) and collateralized debt obligations (CDO).

Wall Street took these bad loans, along with some good ones, and turned them into publicly traded securities and corporate, individual, institutional investors and other financial institutions holding MBS or CDO assumed the risks. When the value of the underlying mortgage asset began collapsing with the failure of the housing market as interest rates increased affecting ARM loans and easy money dried up, these corporate, individual and institutional investors together with many Stock markets around the world suffered significant losses.

So why did financial institutions keep buying these debt instruments if the risk of default was systematic and large and many institutional investors are obliged to hold only AAA-rated securities in their bond portfolios? The reason is that these financial institutions relied on insurance to transfer the risk of their debt instruments, and the insurance companies together with Standard & Poor's and Moody's Investors Service, the largest rating agencies, did a very poor job of risk assessment. The risks of default for each mortgage were not independent of the risks of default for similar mortgages and so the overall risk of the CDOs, for example, was much higher than the insurers had estimated it to be. As a result, with the downturn in the housing market, the insurers are on the brink of insolvency. And once an insurer is downgraded, then the insured loan packages full of default risk will also be downgraded, furthermore, since many institutional investors are obliged to hold only AAA-rated securities in their bond portfolios, they would be required to dump all their CDOs on the market, causing some serious havoc.

So, why did insurers and rating agencies not see this coming? Is it because the rating agencies have a conflict of interest in dealing with the bond insurers? Or is it because they are incompetent? The fact is, as Mr. Berlau argues, that the SEC highly regulates these rating agencies and has blocked competition since the 1970 by not accrediting competing firms in the business for risk management. Thus, "this has lead to an unnatural reliance on the rating agencies to evaluate debt instruments." These rating agencies, government sanctioned monopolies that they are, do not have to worry about competition. There is no free market for risk management. Now, given the above facts, won’t you give in that Government Intervention has made things worse? PS. I have borrowed liberally from a very helpful article at ElecEcon http://www.eclectecon.com/posts/1204749507.shtml discussing some of the above ideas.

March 20, 2008 17:13pm

The same explanation in economical terms of "Why Did Mortgage Lenders Keep Granting Subprime Loans, and Why Did Financial Institutions Keep Buying Them?" is the following: (Summarized and adapted from "Inflation is a Policy that Cannot Last", Thorsten Polleit, March 14, 2008 http://www.mises.org/story/2901)The credit market crisis is a case of the inherent destructive tendency of government-run money monopoly: the consequence of an excessive expansion of credit and money, which encourages uneconomic investment and leads to unsustainable debt burdens.

The inflation-provoked series of errors in the financial sphere trigger an economic disaster. Commercial banks hold the state-granted monopoly of increasing the money supply through extending loans to, or by buying assets from nonbanks (insurance companies, pension funds, etc). Commercial banks are required to hold so called base money, over which the central bank wields monopoly power. If the central bank increases the supply of base money, by buying assets from commercial banks, [note that central banks can also increase the money supply by extending loans to nonbanks], commercial banks can increase their credit and money supply by a multiplier, a multiple of every dollar of base money borrowed from the central bank. This multiplier exists because commercial banks are required to hold only a fraction of their liabilities vis-à-vis nonbanks in the form of base money (fractional-reserve banking).

The commercial bank liabilities are much greater than their actual cash assets in the form of cash due from Federal Reserve banks, cash due from depositary institutions, cash items in the process of collection and vault cash. In addition government regulations require commercial banks to keep a certain ratio (a so called capital ratio, about 8% at the present time) between risky assets (loans and bonds) and equity capital, this implies a multiplier since the capital requirement ratio means that for every Dollar of equity capital, commercial banks can create US$12.5 of credit, at present rates.

The bottom line is that commercial banks can lend more money than what they actually have. Now what happens when, after years of a credit-and money-fueled boom, borrowers start defaulting? The book value of banks' holdings of loans and bonds needs to be written off. Banks equity capital declines proportionally, the capital ratio drops to a level lower than what banks are required to maintain. To stay in business commercial banks must either sell risky assets or issue new equity, however, selling risky assets in time of crisis may suppress asset valuations increasing capital losses further and raising new equity capital might be rather costly in times of financial market crisis. In fact this might trigger a downward spiral; falling asset prices, more capital losses, rising investor concern about the solidity of the banking sector, higher funding costs- potentially ending in bank failures on a grand scale.

Let us say that the bank is able to sell bonds to nonbanks (insurance companies, pension funds, etc.) and avoid bank failure, the bank, although surviving will not be able to expand credit and money supply any further, because of its limited equity capital. More importantly, a contraction of the means of payment coupled with the stagnation of the credit supply exerts downward pressure on money prices, production and employment. Public opinion demands lower official interest rates via increase in credit and money supply and the boom bust cycle begins again.

The government can use another strategy, increase inflation by making central banks buy commercial banks’ risky assets (subprime loans anyone?). This strategy amounts to creating inflation by means of monetizing banks' risky assets. In this manner the government avoids the highly unpopular alternative of financing capital injections and or purchases of banks' risky assets via tax financing, using current taxpayer money or, in the case which the government issues bonds, future taxpayer money.

Once the inflation-fueled boom during which malinvestment occurs is about to turn into a bust and correct itself through free market mechanisms, government steps in again through government-sponsored central banks and lowers the interest rates "again", as is happening now, in an effort to reverse the economic downswing into another boom. This is because expanding credit and money supply by lowering interest rates is seen by the intervening FED as the solution for, rather than the very cause of the crises.

All of this is unfortunate because a policy of increasing inflation cannot prevent the economy from collapsing under its debt burden. Ludwig von Mises was aware that an inflation policy could not go on forever, but must break down sooner or later: But then finally the masses wake up. They become suddenly aware of the fact that inflation is a deliberate policy and will go on endlessly. A breakdown occurs. The crack-up boom appears. Everybody is anxious to swap his money against "real" goods (Gold?), no matter whether he needs them or not, no matter how much money he has to pay for them. Within a very short time, within a few weeks or even days, the things which were used as money are no longer used as media of exchange. They become scrap paper. Nobody wants to give away anything against them. Mises, L. v. (1996), Human Action, 4th edition, Fox & Wilkes, San Francisco, pp. 428.

Ludwig von Mises describes the cycle of boom and busts as follows: The wavelike movement affecting the economic system, the recurrence of periods of boom which are followed by periods of depression, is the unavoidable outcome of the attempt, repeated again and again, to lower the gross market rate of interest by means of credit expansion. There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as the result of a voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved. Mises, L. v. (1996), Human Action, 4th edition, Fox & Wilkes, San Francisco, pp. 572.This line of thinking is not heeded by our government which continues to intervene to regulate business and financial risks, making things worse. More government intervention anyone?

March 20, 2008 20:01pm

PostColonialTech, what a coincidence! I am a humanist too. Now what is your political philosophy? Can you say without too much equivocation whether you believe that government represents your society or represents an externally imposed force? That is a vital question, as some others have raised. If you believe that your government is an imposition (i.e. it is not necessary) you surely will not trust it with "any" powers. If you believe that your government is representative of your society (i.e. it is virtuous and necessary) you will-on the other hand- expect that it will usually act in the best interest of at least a majority or even "most" (Where have I heard those words before?).

As you have noticed, (probably), I advocate a third skeptical option that you feel is "smug and ridiculous" , chucks!, I assert that government is a "necessary evil" and agree with Thomas Paine, [the author of the powerful, widely read pamphlet, "Common Sense" (1776), advocating independence for the American colonies from Great Britain, and "The American Crisis" (1776-1783), a series of pamphlets supporting the American Revolution, and "The Rights of Man" (1791) defending the early French Revolution], that "Society is produced by our wants, and government by our wickedness", that "Society is a blessing, but government is evil".

I defend Paine's proposition that government is no further necessary than to supply the few cases to which society and civilization are not conveniently competent. The enemy is us, credulous humanitarians, that have allowed the government to become more powerful than any in the history of man! Be that as it may, it makes no difference to me what your motives may be. Good luck with the virtuous and necessary government. Meanwhile, I have not yet read the rebuttals and I usually rest during the weekend, so until next week, Adiós.

March 24, 2008 20:58pm

The Proposition of this debate is that: By intervening to regulate business and financial risks, governments have made things worse. I have finally read the Proposition's rebuttal, the Opposition's rebuttal, the moderator's rebuttal, and the featured guest's rebuttal. I also read this weeks Economist, March 19, 2008, two articles: Wall Street Crisis and What Went Wrong. I commend the Economist. The two articles are very well written and balanced although I do not agree 100% with the conclusion, particularly I do not agree with the short term solution that "cheaper money, by lending money to more banks for longer against worse collateral stems panic and buys time". This assertion confuses the cause of the crises with the solution as I argued before in my previous two comments: Why Did Mortgage Lenders Keep Granting Subprime Loans, and Why Did Financial Institutions Keep Buying Them? And the same comment expressed in economic language, with additional details. Mr. Berlau, properly limits his rebuttal to the scope of the debate and concludes that government intervention to regulate business and financial risks made matters worse and concludes that with less state interference, the market’s gatekeepers can better guard against both excessive risk-taking and excessive risk aversion that stifles beneficial innovation.

On the other hand, Mr. Moore says that the idea of protecting consumers is not wrong; the problem, he says, is the way in which the architects (i.e. governments) introduced such systems of risk management that was intrinsically flawed. The government regulation failed, he says, because it allowed free markets. He does not elaborate how the SEC and other government regulations intended to regulate free markets failed to regulate free markets? All he asserts is that the regulations were not "proper sustained regulation(s)".

This concession should logically end this debate, however, in light of Mr. Franklin's request that we may like to turn to this week's Economists articles referred above as a pertinent perspective on the proposition before us and to consider it as an extra, unexpected guest participant in this debate, I would like to take a look as to how the SEC and other government regulations failed to regulate free markets to permit its healthy operation. (I reviewed the same issues in my previous two comments mentioned above but here I would like to review the Economists articles in particular).The securitization crisis and the Gordian knot entanglement exemplified by the Bear Stearns failure is so dangerous that it may imply the collapse of the financial system. This is not something new as we have seen in the past decade plagued by the Asian crisis, the Long-Term Capital Management debacle, and the dotcom crash.

I disagree with the immediate steps taken to shore up the financial system such as reducing interest rates again, increasing the money supply, creating more easy cheaper money to lend directly to cash-strapped investment banks and brokers and to accept a broader array of good and worse collateral. These actions send the wrong message to the financial institutions and confuse the cause of the crises with the solution as I argued before in my previous two comments. My concern here is the allegation of the critics that the crisis is the inevitable consequence of the laissez-faire philosophy in financial services and how can it be fixed?

I touched on these topics in my prior comments. This is what the Economist has to say: (Paraphrasing): The criticism that this crisis is the product of laissez-faire of finance misses an important point. The worst excesses in the securitization mess are encrusted precisely where regulation (not laissez-faire) sought to protect banks and investors from the dangers of untrammeled credit growth. The problem in hindsight is disastrously lax regulations; banks did not then have to lay aside capital in case something went wrong; The trick of packaging securities as AAA-and finding a friendly rating agency to give you the nod (again disastrous lax regulation and I may add mistaken, unsound and misguided policies of the SEC in allowing monopolizing of rating agencies), clever people, abetted (conflict of interest) by the rating agencies, set out to pass off poor credit as AAA, because they stood to make a lot of money, and they did. The Economists is worried in the short term with recession that will lead to such big losses that banks are forced into insolvency.

The fact is that we are already in a recession. The real problem is not recession but inflation, or a persistent increase in the purchasing power of money, caused by an increase in available currency and credit beyond the proportion of available goods and services. And that is being exacerbated by the short term policies creating easy money and increasing liquidity. The banks' course was made possible by cheap money, says the Economists, (Wow! Isn't that the short term solution again!), facilitated in turn by low consumer-price inflation. Central banks (government) has in effect conspired (incompetence or conflict of interest) with the banks' urge to earn fees and use leverage. The very mechanisms that create abundant credit will also destroy it. In a falling market those mechanisms (not the absence of mechanisms) will do so.

The problem is not Laissez-faire. No broker, no financial institution, no insurance company, wants to loose money. They all want to make money. But at the bottom when government regulation (SEC) allows rating agencies via lax and incompetent restrictive regulations to pass off poor credit as AAA, who is responsible, the markets or the regulators? Who prevents the market from operating as it should, and shouldn't the rating agencies be liable for gross and reckless negligence if not fraud?

Besides self-interest in making profit, financial institutions have self-interest in not loosing money. This is the key to the long term solution to the financial crisis. Good old-fashioned financial prudence is required. A keen understanding of the borrowers credit worthiness, employment, the value of collateral, and the market. The buck should not pass or be transferred and accountability should be demanded. Financial senior executives should suffer consequences if they fail to evaluate credit properly. Over-speculation by brokers without regard to proper prudential risk management should be penalized. Government should facilitate all of the above by enforcing existing regulations, requiring lenders to back up their loans with sufficient equity, and avoiding conflict of interest created by government's own incompetence and monopolistic myopic practices as in the case of the rating agencies.

The solution is not to prevent the free market operation by socializing it and over controlling it, but to balance it so that economic selfishness is tempered by the risk of failure and losses, and free individuals and other entities harvest the benefits of their innovations, making sure that the risk takers truly take risks and suffer the consequences of their greed and imprudence rather than transferring it without accountability. There is no question that by intervening to regulate business and financial risks, governments have made things worse. That is settled. The further question, and perhaps the more interesting and important one is: What is government going to do about it? I personally think the government is already on its way to making it worse.

March 24, 2008 22:42pm

In my previous comment the proper definition of inflation is: a decline in the purchasing power of money and not an increase in the purchasing power of money (It is also defined as an increase in consumer prices, hence my mistake). Sorry

March 25, 2008 00:25am

John, I disagree with you that derivatives are "totally unregulated securitized derivatives “The CFTC (The Commodity Futures Trading Commission) has exclusive statutory jurisdiction over all exchange-traded derivatives under the CEA (The Commodity Exchange Act) regulates all national futures and commodity exchanges, as well as all futures and options on futures. The CFTC’s functional regulations include minimum capital requirements, reporting and transparency requirements, anti-fraud and anti-manipulation regulations, and minimum standards for clearinghouse organizations. The SEC (The Security and Exchange Commission) regulates all securities traded on national securities exchanges, including currency options, stock options, and options on stock indexes. The SEC’s regulation of these products and exchanges include transparency and price reporting requirements, anti-manipulation regulations, position limits, audit trail requirements, and margin requirements. In addition there is "institutional" regulation, that is, regulation of the different kinds of enterprises involved in financial markets and intermediation. First, regulators of various derivatives users often specify "permissible activities" in which institutions may engage. Second, once activities have been judged permissible, institutions engaged in those activities are subjected to supervisory oversight. And third, regulators attempt to judge the overall integrity of each institution by assessing its capital adequacy and by enforcing prudential regulations to ensure compliance with those capital requirements. I agree with the rest and the trust of your comment.

March 25, 2008 03:34am

Icarus12, I agree with you that regulatory agencies should not bear all the blame. That is why the solution I propose clearly urges regulatory measures in support of good old-fashioned financial prudence and penalties for over-speculation by brokers without regard to proper prudential risk management. They certainly bear part of the blame in the current crisis, including the rating agencies. Your criticism however, is well taken; perhaps the proposition should have been stated in a different manner. The word "worse" does indeed imply that things would have been better without government regulations, and that an untrammeled laissez-faire, free market is a better and more desirable result. Although I don't have a high regard for government in general I do not advocate that position, as should be clear from my prior comments. My comment should be taken within the context of the arguments presented by the proponent, opponent, moderator, guest participant, and the Economist articles suggested by Mr. Franklin, not as a matter of degree between being worse or better, but as the failure of government regulation. I have read the proposition, perhaps mistakenly, to indicate that government regulation has failed without regard to whether they would be better in an absolute sense in relation to some normative value. Both the proponent Mr. Berlau and the opponent Mr. Moore do not deny that there is government intervention. Both actually come to the same conclusion that government intervention failed, albeit for different reasons. Mr. Berlau claims that "less" state interference to regulate business is desirable in that the market's gatekeepers can better guard against both excessive risk-taking and excessive risk aversion that stifles beneficial innovation. Mr. Moore claims that the government intervention to regulate business failed because it allowed free markets to operate, indicating that the regulations were not "proper sustained regulation(s)". The word free market however is not mentioned as a normative standard in the proposition in which to judge government failure, although it is implied.

It is clear that Mr. Berlau does not concede, and neither does the Economist, or myself that the market was acting as an untrammeled free market, free of any government regulation. The conflict as almost everybody has envisioned it is not between regulation and no regulation, but between effective regulation, (or less regulation) and ineffective regulation that actually distorts the implied free market. A truly free competitive market would have prevented, if not eliminated, the abuses of the rating agencies, not because they are not able to abuse and be dishonest, but because competitive self-interest, more than likely, would have made it in their best interest to act honestly, or else they loose their license. After all competition lowers prices and makes businessmen honest even against their wills; unregulated monopolies, on the other hand, usually have the opposite effect.

So, the logic of the conclusion that I reach is not that regulatory agencies have screwed up and markets are not to blame. I do not conclude that government intervention has made things worse in relation to a non-existent hypothetical untrammeled free market, nor it is based on a change and a normative judgment comparing laissez-faire as against government regulation. Whatever intervention exist, exists failing to regulate because of incompetency or dishonesty as argued by Mr. Berlau, or failing to regulate and allowing untrammeled free market government intervention (as argued by Mr. Moore) (I do not agree with the latter position). Either way government intervention has been a failure. Whether it would have been worse vis-à-vis pure laissez-faire and to what degree I cannot say. All I am certain is that government intervention has always existed in one manner or another, and that it has failed as evidenced by the current crisis. Would things be been better if there had been no regulation whatsoever? I don’t know. Thanks for correcting me. I think your corrections vastly clarify the issues. Naturally, I agree with your second proposition that regulatory agencies are clearly far from the solution. The abuses and dishonesty of the private sector took advantage of ineffective and incompetent, if not dishonest, government regulation.

March 25, 2008 18:50pm

Temp622 I believe you are right. This is implied in the fact that the conflict is not between regulation and no regulation but rather between one type of regulation and another. Either way government intervention has failed vis-a-viz the purpose of the regulation, to wit: enforcing existing regulations, requiring lenders to back up their loans, avoiding conflicts of interest and in the larger arena, increasing the monetary base, debasing the dollar, controlling recession and limiting debt and inflation. These are the purposes of regulation which government has failed to implement and have made worse. In another sense however, Icarus12 is right since the proposition seems to relate to government intervention vis-as-viz free markets without expressly referring to it and the debaters have approached the debate as a debate between free market vs. government intervention. Thanks.

March 27, 2008 07:31am

Mr. Moore in his closing statement defends from the charge that his statements have been too theoretical, too broad, too academic or too general by suggesting that the fundamental ground on which political and economic struggles are fought is on the legitimacy of concepts and ideologies and in support thereof construct his final argument around the work of the American literary critic and Marxist political theorist Fredric Jameson in his book Postmodernism: The Cultural Logic of Late Capitalism.

The moderator Mr. Daniel Franklin summarizes Mr. Moore closing argument as follows: Society needs protecting from the risky vagaries of the market. The optimal balance between risk and reward, he concludes, is a regulatory structure which "underlines the human capacity to organize itself through collaboration not naked competition."Thus the straightforward and simple idea that competition reduces prices and makes businessmen honest even against their will (Adam Smith) is reduced by Mr. Moore to the Marxist assertion that the optimal risk-reward balance is to encourage a regulatory structure which undermines chance and underlines the human capacity to organize itself through collaboration and not naked competition, (Soviet Union style I suppose, although if so, I cannot then explain the economic policies of the government of China introducing such a thing as, god forbid, competition and reducing reliance, god forbid, on socialist collaboration?).

The concept that government ought to regulate business in order to facilitate free market competition is anathema to the deterministic and dialectical interpretation of Mr. Moore, since according to him there is no freedom of choice; the choices are all determined for us in advance, and as maintained by Fredric Jameson the market is already regulated even before any governmental intervention exist.

The topic of the proposition that: By Intervening to Regulate Business and Financial Risks, Governments have made things worse somehow has been lost during this mélange. Finally, Mr. Moore explains conveniently his decision not to discuss the specifics of the recent events of the liquidity crisis because they are irrelevant for two reasons: First, it gives credence to the notion that intrinsic flaws in the free market ideology can be explained away by focusing on the behavior of rogue companies. Second, the very structures through which they deliver their profits ensure that their behavior is high risk and hence their behavior is not only not reprehensible but inevitable. Their behavior is inevitable (dialectically and historically determined) since not only do they not speak the structures but rather the structures, in Althusser’s final Instance, must speak them.

However, it is not clear to me why Mr. Moore does not even discuss the structural problems at all, beyond the unsupported assertion that there are intrinsic flaws in the free-market ideology? Thus, for example, the particular examples related to the events of last week that he ignores, all point out to a very real and systematic problem in the structure and the nature of government intervention in the economy of the United States.

A vital problem has been ignored by everyone in this debate; the problem of the complete and absolute power and lack of accountability of the Federal Reserve System. The Federal Reserve is not under the control of Congress and is accountable to no one; it has no budget; it is subject to no audit; and no Congressional committee knows of, or can supervise, its operations. The Federal Reserve, in total control of the nation’s monetary system, is accountable to no one. The Federal Reserve in collusion and conspiring with the banking system defends its absolute power and lack of accountability on one ground alone: that any change would weaken the Federal Reserve’s alleged inflexible commitment to wage a permanent fight against inflation. But isn’t the Federal Reserve the one that is promoting inflation by creating easy money and lowering interest rates? At least elected government is accountable to the public and to its representatives in the legislature; but if the Federal Reserve is independent of the legislature, then that branch of government is an absolute self-perpetuating oligarchy, never subject to the public’s ability to supervise. It is intrinsically a structural dictatorship vastly more dangerous than any alleged intrinsic flaw or imperfection or evil of a free competitive market. It may even destroy this nation.

Mr. Moore, what do you think about the intrinsic imperfection of that structure? Do you think society needs protection from the risky vagaries of this oligarchy? Does the Federal Reserve underlie the human capacity to organize itself through collaboration? Don’t you agree that some naked competition and accountability is necessary? Which is worse, the Federal Reserve’s absolute independence, or the competition of the free market? And if the Federal Reserve is ultimately responsible for the current crisis, together with the banking system, should they not pay for their incompetence, or be jailed for their reckless or fraudulent disregard of the public interest? Why are those people that can destruct this nation not accountable?

March 27, 2008 19:54pm

Praise to Mr. Thomas A. Firey for an exceptionally well written, well researched, balanced, factual, non-ideological, and scholarly comment directly related to the debated proposition.

Concerning regulation he points out that even the most liberal markets require basis regulation. I believe that Mr. Berlau would partly disagree with Mr. Firey however on the issue of what regulations beyond the basic rule of law should be adopted. Mr. Berlau considers that whatever existing regulation exists, there should be less, not more. He suggests deregulating private risk management, as we have risk taking, for ordinary investors as well as hedge-fund fat cats.

Clearly to Mr. Berlau, the current level of regulation of risk management is over the basic level of regulation. Concerning what is meant by "worse" I suggest that the multiplier effect of the 1 million subprime loans now in default in the economy is not yet over and that such effect will surpass the benefit of the 5 million subprime loans currently in good standing. Its effect in the large community will hurt not only the subprime borrowers but all other consumers and the international community as well.

For one thing those subprime loans in good standing are now not rated AAA. The banking crisis has merely been extended in time. The subsequent bust will be worse specially when foreign investors get wise and start dumping the dollar and inflation hits full force and the run on the banks begin again. Your review of banking is concise. I wish you had reviewed the larger picture regarding the easy money creation and the cozy relationship between the central bank and banking institutions that promote inflation as a regulatory policy.

I agree with your analysis about Additional Regulation. Regulation is often defended by the regulated industries and with good reason; it usually limits competition and end up hurting the consumer it is supposed to protect. Underlying your analysis, like most of the participants and commentators, is a belief of the effectiveness of a free competitive market and the danger of over regulation. I do not believe that the results of the vote imply that, at this time, 48% voting CON favor Marxist type collaboration rather than healthy competition. I believe that that group believes in government intervention and feel that it has not made matters worse; the other 52 percent feel the other way that government intervention has made matters worse.

As for myself, after reviewing all the arguments and all the evidence, I still do not feel persuaded to change my position and would still vote PRO, my distrust for government intervention in general remains very high. Government intervention has actually made things worse, particularly in its relation and its purpose of stabilizing the economy.

March 31, 2008 16:24pm

It pains me to say this but the United States is already bankrupt and spending every day more than it earns or can afford. The Federal Reserve, the "lender of last resort", is technically bankrupt, although the figures in the Balance Sheet of the Central Bank try to disguise this fact. The Central Bank's Balance Sheet cannot hide the fact that the Government Bonds and Treasury Bills worth $400 billion, about half of the most recently reported total holdings of government securities of $828 billions on the left asset side of the balance sheet, were supplied to the banking system during the recent liquidity crisis in exchange for the said banks low-grade and non-performing assets that when properly prized at their actual depressed market value, make the assets of the Central Bank less than the Central Bank's outstanding US currency and other liabilities on the right side of the ledger.

This means of course that the US dollars is getting even faster to the point where it is not worth the cost of the paper it is printed, like the German and British monetary unit sometime back. I said "technically" because the Federal Reserve can simply print more money if necessary and that is what it will probably end up doing once the banks take back their low-grade and non-performing assets within 28 days and return the Government Bonds and Treasury Bills as they must, and the banks become insolvent once more unless the Federal Reserve again bails out the banking system again and again, every month thereafter on pain of suffering massive deflation, long-term unemployment and economic paralysis. This ad hoc solution, if it is a solution at all, to the lack of bank capital is not a long term solution, does not guarantee against the recurrence of the financial crisis, the booms and busts, assures the real insolvency of the Federal Reserve, guarantees the destruction of the exchange value of the dollar, and is contrary to the principles of economic freedom since it takes either present or future money from the citizens and distributes it to undeserving financial institutions without the consent of the shareholders or other investors.

At the heart of the problem is the answer to the following question: Why do bank runs happen? The immediate reason is because banks do not have the deposits entrusted to them when the depositors claim back the money that belongs to them. The banks don't have the depositors' money not only because they used it up in loans to others, but because banks lend more money than they actually have in depositors' money or their own minimal token capital investment. This is leverage in a large scale. The derivative market does not even come close. The Central Bank does the same thing since it does not have enough assets to redeem its liabilities except with fiat paper (printed money) that becomes worthless through over printing very quickly, like excessively printed monopoly paper, loosing its purchasing power, both for the domestic and foreign users.

Why do banks lend more money than they have? Answer: the "fractional reserve system" approved by the Federal Reserve. There is not a single bank in the United States that can pay back their depositors if the depositors decide to withdraw their deposit in large amounts. Banks gamble and make lots of money with other people's savings or deposits with the approval and consent of the Central Bank.

The Central Bank and the financial institutions are a cartel, absolutely necessary for the banks to make lots of money. The public interest is secondary, although it is mentioned a lot when there is a serious danger of deflation. If the problem is lack of capitalization by banks then it is clear that reducing interest rates is counterproductive since it reduces motivation for saving, makes it more difficult for banks to obtain capital and moves capital from the US to countries with higher interest rates.

Similarly, the solution is not printing fiat money that would merely reduce its purchasing power and dilutes its effectiveness. For all products (other than money) increasing its supply is beneficial since it lowers its price and raises the standard of living. Increasing the supply of oil or wheat reduces its price and raises the standard of living. On the other hand increasing the supply of money is always harmful because the more money there is the less good and services you can get per unit of dollar, or yen, etc., and therefore it only decreases the standard of living (given that wages and prices remain unchanged). Money itself is not a product that can be eaten nor used up in production. Money can only be used as an accepted medium of exchange or an instrument of calculation.

Unfortunately the Federal Reserve is constantly changing the money supply either through "open market operations" for example by writing a check on itself for 1 billion dollars, transferring the check to a U.S. Bond dealer with instructions to purchase 1 billion dollars of US Government Bonds, the bond dealer naturally deposits the check on his bank say Chase Manhattan increasing Chase Manhattan demand deposits by 1 billion dollars, Chase Manhattan deposits the check with its account with the Federal Reserve New York bank increasing its reserve which automatically increases the money supply by 1 billion dollars. Chase Manhattan now can lend 1 billion dollars more to other customers and the multiplier effect now takes effect as the demand deposits in other banks by subsequent customers allows further demand deposits and further reserves and further demands deposits so that the 1 billion dollar purchase by the Federal Reserve may become after a couple of weeks a 10 billion increase in the money supply. All of the above without printing an additional single piece of paper! If the fed sells any assets, usually US Government Bonds it decreases the money supply in the same manner with similar effects. Another powerful control instrument that the Federal Reserve has for changing the money supply is the changing of the legal reserve minimum. If the Fed lowers the minimum reserve say from 8 to 4 it will double the money supply very quickly and vice-versa.

A third way the Federal Reserve controls the money supply is by lowering the Fed’s discount rate or the interest it charges to the banks on its loans. This is effective when the banks borrow directly from the Feds rather than from each other in the overnight "federal funds" market. Most recently the Feds reduced the Fed's discount rate from 3 percent to 2.25 percent. There is only one permanent solution to this problem: require banks to have capital equal to their outstanding loans and investments. The multiplier effect of the fractional reserve system causes the boom and busts. In effect, banks are insolvent all the time under a fractional reserve system. How can this solution be implemented? I do not know.

As I explained above just raising the legal reserve minimum from the current 8% for example to say 16% would quickly cut the money supply in half and would certainly send the economy into a credit crisis the likes of which no one has ever seen before causing an immediate catastrophe, deflation, unemployment and a total collapse. Can you imagine what it would be like to suddenly require 100% reserve. Impossible! It seems we are stuck. There seems to be no way of avoiding the final collapse of a boom brought about by credit expansion.

The alternative is only whether the crisis should come sooner as the result of a voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved. Mises, L. v. (1996), Human Action, 4th edition, Fox & Wilkes, San Francisco, pp. 572.

If the dollar becomes scrap paper is there another medium of exchange that could take its place? What other "real" goods could serve as medium of exchange, if the dollar becomes junk? Can we return to the gold standard without causing a huge deflation? What is the reason that Alan Greenspan told a group of Arabs that the Gulf oil states should cut their currencies loose from the dollar?

The Daily Article from the Mises Institute has a very fine article titled: "Our Financial House of Cards and How to Start Replacing It with Solid Gold". I have quoted substantially from that article.

April 1, 2008 10:08am

JPChance wrote: "The so-called "gold standard" is as much of a swindle as usury and fractional-reserve banking. Why should anyone be compelled to use a scarce and rather useless commodity such as fools' gold as a fiat currency?" "Since energy is the prime ingredient of an industrial economy, it makes sense - rather than more nonsense - for benign governments to issue "solar dollars" or renewable energy credits (RECs), and to replace the negative-value "dollars" and "pounds" of debt issued by private central banks as soon as possible."

I suggest that any medium of exchange including "solar dollars" would work as long as it is established by an spontaneous automatic common consensus, among the people in the economy. Money has to be developed in the market, not imposed and compelled from without. In Africa iron hoes were money, salt in West Africa, sugar in the Caribbean, beaver skins in Canada, codfish in colonial New England, tobacco in colonial Maryland and Virginia. In German prisoner-of-war camps of British soldiers during World War II used CARE packages, Cigarettes were money in those camps not by imposition by German or British officers or from sudden agreement: it developed "organically" from barter trading in spontaneously developed markets within the camps. How would you compel, impose and implement "solar dollars" if it does not exist, and it has not developed "organically" and spontaneously in the market, without creating immediate deflation and total collapse. Now compare: Gold already exists; it is going up in prices; it is over $1,000 dollars an ounce and still rising; its supply is stable and fungible; it is already being used as a substitute for dollars in some economic transactions around the world by means of ingenious mechanisms created by the market; it was "organically" and spontaneously developed in the past by the economy but suppressed by government fiat; and finally all central banks around the world possess huge stocks of gold including our central bank which carries its gold stock of $260 million ounces at $42 dollars an ounce or a mere $11 billion.

All it would take is for gold to reach a much higher price per ounce and gold would become de facto and "organically" the medium of exchange both in the USA and in the world without any imposition by the Fed or any government. Of course the Fed could do the same by simply revaluing its gold stock to say $6,730 dollars and ounce, issuing certificates of deposit to the banking system in proportion and in addition to current reserves and demand deposits and additional bank capital, making the reserves and the capital essentially permanent and with one strike of the pen creating permanent reserves of about 50% of the outstanding United States money supply in the world which at present count is about $3.5 trillion. With one strike of the pen the Feds could eliminate deflation and inflation simultaneously. Note that $260 million ounces of gold at $6,730 dollars an ounce equal about $1.75 trillion or about half of the $3.5 trillion outstanding money supply. The price of gold could be increased or the gold stock increased by government purchases in such a way that eventually the permanent reserves would be 100% of the outstanding money supply. I agree that it would be great if the economy accomplished the same effect with "solar dollars"? But it makes no difference what we call it as long as it is accepted by the market and the people recognize its value as a medium of exchange.

XI. INFORMATION OVERLOAD

This house believes that if the promise of technology is to simplify our lives, it is failing.

February 26, 2008 20:05pm

Mr. Szafranski, asserts that technological development and its social, environmental, political, economic, legal, psychological negative effects on individuals, society or the planet outweigh its benefits and has failed to simplify our life.

On the other hand, Mr. Maeda asserts that the bad rap given to technology today is only temporary and that technology has the capacity to remove even greater complexity that existed beforehand and that its benefits outweigh its negatives simplifying many aspects of our existence, giving us options to live our life how we want and when we want it and free.

Given that the drive to innovate is not unique to human beings but other primates and certain dolphins have developed simple technological tools and learned to pass their knowledge to other generations it seems that the application of scientific knowledge to the practical aims of human life is an inherent evolutionary tendency that either reinforces or undermines particular values and is part and parcel to the survival of the species, and is inevitable, even more so now that the rate of growth of knowledge and technological innovation is expanding geometrically.

Of course human beings are more complex that other primates and dolphins. We are also conscious fanatics (i.e. fundamentalist Muslins) or conscious humanists. We can use technology for either good or evil.

Technology is not evil per se even if it is improperly used in many occasions to foster social/class alienation, environmental degradation, and spiritual dissipation. Improperly used it will dehumanize and alienate people; destroy traditional cultures, societies, and family structure; pollute languages; isolate people, alter the meaning of what it is to be human, and damage the Earth's entire biosphere so gravely as to cause human extinction.

On the other hand, properly used and applied it increases available sources of food, help humans in travelling and global communication, allow the rise of the leisure class, develop moral advanced economies, makes us aware of new ethical questions, and generally improve the human condition. How we use it is our CHOICE.

I choose technology. I believe we have, by and large, the power and the wisdom to use it wisely. I believe we are entering a time of design-led development. That we can use technology to defeat conscious fanaticism and that we are entering a time of simplification. Thus, I vote CON.

March 6, 2008 12:20pm

As Mr. Franklin says in his closing statement: "the wandering has been interesting". As commentator AndyExpat says: "what we have to decide is whether the promise is being kept or not" instead of the presumed truth of the "if" part of the proposition. I also strongly agree with commentator Art Teacher: "This is another non-issue put forth by the Economist" Mr. Szafranski emphasizes the "focus on today" unfulfilled promises. The proposition however, is not limited to today for it says: "... it is failing", which is an ongoing process not yet ended and clearly connected to the future. For the same reason I disagree with Mr. Ferris closing statement over-stressing the grammatical "present tense" and forgetting the physical reality and flux of the "now" which is inextricably connected to the future.

If the proposition is limited to the grammatical "today" we end up debating "How many angels can dance on the point of a needle?" highly entertaining but totally useless. I much prefer Mr. Maeda;s closing statement: "the important question is what we will do next, because "now" vanishes the moment we look away from the browser window. We inevitably live in the future and our concern is always about what comes next: will technology make our lives better or worse..." "...progress is unavoidable. We do not live for the past or even the present. We live for the future, for ourselves, our children, grandchildren, our friends and society. Thus, Mr. Szafranski is right if the debate is about the metaphysical, theological proposition: "How many angels can dance on the point of a needle? Mr. Maeda is right if the debate is about our ongoing reality. I voted CON and I still vote CON. Thanks

March 6, 2008 19:59pm

world citizen wrote: March 06, 2008 12:23 Information technology has simplified our lives...You may be right that Information technology has simplified "your" (and mine, emphasis mine) life and that of an elite group of people that employ information technology. The proposition however is: "If the promise of technology is to simplify "our" (emphasis mine) lives, it is failing."Although I disagree with Mr. Szafranski Pro stance (and I tend therefore to agree with your conclusion for other reasons) I believe your comment is fully answered in The Proposition's Rebuttal statement "Think beyond the elites" that technology has not simplified the "majority" (emphasis mine) of humans' lives. I disagree with Mr. Szafranski proposition because his focus on "today" is blindsided in his disregard of the future (Is technology "failing"? (emphasis mine), and not just has it failed?).

In fact Mr. Szafranski disregards his own proposition when he re-states repeatedly in his opening, rebuttal and closing statements: "we truly believe the evidence overwhelmingly supports the position that technology has "failed" (emphasis mine) to simplify our lives." "...technology has not "simplified" (past tense-emphasis mine) our lives." "...we humans don't really care that technology has "failed" (emphasis mine) to simplify our lives, and on and on and on, instead of addressing his attention whether "it is failing" as the proposition propounds and to the dynamics of technological change over time (Mr. Franklin closing argument), or the fact that technology has the "capacity" (emphasis mine) to remove even greater complexity that existed beforehand and that its benefits outweigh its negatives simplifying many aspects of our existence, giving us options to live our life how we want and when we want it and free (to boot) (See Mr. Maeda's opening statement).

Unfortunately, although your examples give some limited support to the position that technology has not failed I believe, respectfully, that it does not fully address the issue presented by the debated proposition.

March 6, 2008 21:47pm

idealab wrote:March 06, 2008 15:13"So where is the promise of Ubiquitous Computing?....from my blog post today" Hi, idealab, interesting blog regarding ubiquitous computing. Can you please elucidate and expound on its connection to this debate regarding the proposition debated, i.e.: If the promise of technology is to simplify our lives, it is failing. Are you saying that because ubiquitous computing has not yet materialized that technology is failing? Just curious!

March 7, 2008 00:39am

What is the right proposition to debate? What does the original proposition actually means: “If the promise of technology is to simplify our lives, it is failing? “Does this proposition means:1. If the promise of technology is to simplify our lives, it has failed today? 2. If the promise of technology is to simplify our lives, it is in the process of failing? 3. Is the promise of technology to simplify our lives, failing? Should the question be 4. Is the promise of technology to allow us to do something else more efficiently, failing? (In my opinion this proposition is different). 5. Is technology’s purpose to simplify our lives, or is it to enable us to do something else more efficiently (whether it simplifies our lives or not) and it is failing? (What are the social impact and the consequences of new technology?) (In my opinion this are different questions). 6. If the purpose of technology in the 21st century, as an extension of human capacity and its servant, is to enable humans to do something else more efficiently, or simplify our lives, or both, it is failing?

I believe this last question encompasses the meaning of the original proposition and properly defines technology as a human tool that is not biased in favor of simplicity or complexity. (This is a first draft so I do not claim it is absolutely perfect). I submit that Mr. Szafranski, the proponent of the original proposition is in fact answering proposition 1. He accepts without question the conditional statement and limits his answer to the past or to the “grammatical today”, disregarding the future. On the other hand Mr. Maeda does not accept or limit himself to the conditional that the promise of technology is solely to simplify our lives since he admits that technology also creates complexity. He is in fact answering proposition 6 above. What do you think?

March 7, 2008 05:41am

Carolyn Pittis wrote:March 06, 2008 22:08"An example of where too much technological complexity outstrips our quality of life is the power failure in the U.S. northeast of a few summers ago. Here the complexity of the power grid failure stripped us of very simple quality of life elements like running water, light, gas for our cars, cash for food”.

I do not understand your statement. Isn't the quality of life that we appreciate, such as running water, light, gas for our cars, cash for food, the result of technology itself? Do you feel the same, that too much complex technology outstrips our quality of life, when the complexity of the technology behind the water plant, or the complexity of the technology behind the electric company, or the complexity of the technology behind the gas pump, or the complexity of the technology behind the ATM machine causes a breakdown or a failure, depriving us of such quality of life elements.

If so, perhaps, we should we go back to a state of nature, like the tribes in the Amazon jungle, and get water from the river, light from a burning tree, human muscle for transportation, and barter for trade as the basic sources of our "quality of life", and even those state of nature activities require technological advances for to carry water from the river requires the construction of some type of container or piping system, light from a burning tree requires the use of appropriately dried wood and protected areas, maintenance of human muscle requires the technology of hunting, herding, agriculture and food preparation and cooking for appropriate muscle development, and trading requires the social technology of communication with strangers willing to trade, record keeping and the ability to compute equivalent exchange values.

Having actually observed the benefits of such state of nature technologies in the Amazon tribes and in some other areas in Central America, I can assert confidently that I do not feel stripped in my power to adapt nor do I envy them. I most certainly prefer the complexities of our complex society even if I do not come close to approaching the speed of the technology. Most respectfully, I do not understand your statement. Can you clarify it? Thank you.

March 7, 2008 17:18pm

Mr. Daniel Franklin writes: “The key to Mr. Szafranski's comeback lay in his insistence that all in the debate hall interpret the proposition exactly as it was worded. This was not to be a debate about the value or merit of technology. This was to be a debate about complexity.” And I would like to ask: When you worded the proposition was it about whether technology “has failed” or about whether “It is failing”? Further, I disagree in part with Ryan Wanger's absolutist observation that technology has made complex decisions more simple and simple decisions more complex. I suggest that technology has also made complex decisions more complex and simple decisions simpler. It is not a clear cut black or white proposition as implied. For example in the area of Quantum Mechanics and string theory, technology through mathematics and probability has made complex decisions more complex, and in the area of applied chemistry Quantum Mechanics has made classical chemistry even simpler in its commercial results and applications.

March 7, 2008 19:20pm

I would like to ask Mr. Daniel Franklin: How do you determine if technology has 'failed', or 'it is failing" without taking into account the value or merit of the technology? Is not simplicity (or complexity) a relative, variable and changing value that depends on past, present and future life content, the big picture, holistic thinking, system thinking and system dynamics? Can the future be ignored under your original proposition? Or are we just limiting the debate to the dry and empty 'complexity' issue without relevance to 'our complex lives'? Is technology failing us and if so, is it failing only in the past or 'today' or is it in the dynamic process of failing into the future? And if it is 'failing' us without relevance to our present and future complex lives, then who cares? Does not the debate then becomes a useless exercise in futility?

XII. TERRORISM: PRIVACY AND SECURITY

This house believes security in the modern age cannot be established without some erosion of individual privacy.

February 14, 2008 22:35pm

Both Mr. Livingston and Mr. Barr appear to be partly right and partly wrong. They both talk about the government as THEY and about us as if we were different from the government. Let me try to clarify my point with an example. During a recent trip to the rain forest of Nicaragua with my wife and my oldest son we camped in some caves in an area where dangerous animals roamed. My son and I took turns by the entrance of the cave while the others slept.

The gatekeeper was authorized by the others two to intrude into their privacy and wake them up if any animals approached, further if a snake or if fire ants should get in the cave he was authorized not only to wake us up but to also search our cloth, our bags and in the case of the fire ants he was authorized to apply a special spray to our skin to kill the ants.

On the other hand, last summer, we went camping to Castle Rock Lake near Friendship Wisconsin in the good USA. The only protection we had was our dog. No one guarded the camp and neither my son nor I were authorized to intrude into the privacy of the others to wake us up or to spray our bodies, or search our belongings since we did not consider it necessary.

This simple example I believe contains a lesson. First whoever garded the entrance to our camp was selected by us he was one of us. At no time did we argue that he should not wake the others or that he should not spray against the ants because it would be an invasion of our privacy while we were in the rain forest. In this case our safety took priority over our privacy. On the other hand during our camping at Castle Rock Lake in Wisconsin, we certainly did not expect our son to spray us against any ants nor to come barging into our tent to search our packs. In Castle Rock Lake there are no dangerous animals, snakes nor killer ants.

Thus, Pragmatism informed us. Our privacy took priority over our Security at Castle Rock Lake. Our inherent constitutionally protected privacy rights took second place in the rain forest. The same constitutionally protected privacy right was paramount in the civilized environment of Castle Rock Lake in Wisconsin.

Question, is terrorism a threat like the animals, the snakes and the fire ants of the rain forest? And should we authorize the gate keeper (the government) to protect us to the point of encroaching on our privacy? Or are we safe enough that all we need is our trusted dog (the government) like at Castle Rock Lake in Wisconsin and complaint about the unnecessary intrusion on our privacy?

As you can see I am very pragmatic in the rain forest and very civilized and ideologue in the relative safety of Castle Rock Lake. Of course since the government is US we are in control. So gentlemen I do not believe either party won this debate. Both illustrious speakers are barking off the wrong tree.

What we should do is look at the actual facts. If Terrorism is like the rain forest analogy then Mr. Livingston maybe right. If the situation is like at Castle Rock Lake then Mr. Barr may be right. So gentlemen enough of abstract philosophical arguments! I CANNOT VOTE NEITHER PRO NOR CON BECAUSE THIS DEBATE IS PURELY ACADEMIC. I need to know the facts before I make my decision.

February 15, 2008 15:03pm

Mr. Livingston and Mr. Barr argued about "HOW MANY ANGELS CAN DANCE ON THE POINT OF A NEEDLE"

The proposition, bereft of any factual background was debated in a contextual and factual vacuum. No competent facts, figures, evidence or context was available by the promoters or the speakers in support of their side. What a waste! And what is worse. The proposition was approved by the presumably factual Economist online magazine. Any argument under such circumstances is bound to favor the philosophically soft position rather than the pragmatically grounded one that of necessity requires facts to arrive at conclusions.

Certainly this academic entertainment would not have satisfied the likes of Milton Friedman or any of the dedicated professionals at the University of Chicago where consequences are derived from facts alone.

The fault however is not so much the fault of the speakers, but the failure of Economists online, and the structure and limited nature of the debate itself that under the oxford rules of debate appears to limit itself to pointless medieval theologian arguments such as How many angels can dance on the point of a needle.

The debaters were excellent however. From an entertainment perspective I rank them 10 each and declare a tie. I give them a 1 for practical results. Thank you.

February 18, 2008 00:39am

PostColonialTech wrote: - this is why "facts" as you call them need to left out of a debate like this - they will only be twisted to suit whatever the debater already believes.

yrguard wrote: And "HOW MANY ANGELS CAN DANCE ON THE POINT OF A NEEDLE"?

3,000 murdered on 9-11, that is a fact. The stoning of women on Saudi Arabia is a fact. The Madrasas in Pakistan are facts. The beheadings in Iraq are facts. The statements of the head of government of Iran against Israel and the United States are facts. The attacks against innocent people in Great Britain, Indonesia, Spain, Japan, and on and on and on, are facts.
But let us not get bogged down by those little prickly details, "so called facts" are irrelevant and easily distorted. Let us not try to unravel them. Why? Facts are unimportant. Let us worry about the wonderful debate! And that is a fact!

PS. Would you like to know what the Koran says? That is a fact. Would you like to know how many fundamentalist Muslin there are? 250,000,000 approximately at last count. That is a fact. Would you like to know how is Al Qaeda organized? Would you like to know how many attacks have been thwarted in the US alone? How about Al Qaeda funding? About cells in the US? Is liberty suppressed in Iran? Those are twisted fact, right? Who cares? The debate must go on!!!

February 20, 2008 13:44pm

SALMAN N wrote: But we can add: Quntanamo, sekret prisons, nuclear bombardment of Japon by USA, genocide of Israil against palestinians, women and children, tortures in the prisons of CIA.

Yrguard replied: You forgot Pearl Harbor, The killing of Christians in Sudan, Fidel Castro, etc, etc, etc. I don't understand how I forgot them. You are right. Now it is clear to me that we need not worry about our security. The USA is not in danger. I am sooo! persuaded by your reasoning. Sorry about my mistake!

February 22, 2008 19:28pm

Mediocry wrote:

"How about the fact that the ACLU can't see its day in court to resolve whether wire-tapping my phone without warrant was legal or not (see latest on Supreme Court refusal to hear this case)? I voted Pro, but I don't like the tone of this post-results debate... This is usually when we shake hands and agree to disagree and live to fight another issue on another day!"

Here is my reply on the subject of warrantless surveillance (forgive the extent but I need to set up what warrantless surveillance we are discussing):

The Foreign Intelligence Surveillance Act of 1978 (FISA) authorizes warrantless intercepts where the government "has a reasonable basis to conclude that one party to the communication is a member of al Qaeda, affiliated with al Qaeda, or a member of an organization affiliated with al Qaeda, or working in support of al Qaeda." and that one party to the conversation is "outside of the United States".

Warrantless searches have been authorized in the past (as upheld by the Courts at the Circuit Court level) when the target is a foreign agent residing abroad, a foreign agent residing in the US and a US citizen abroad.

The law (FISA), the FISA court (FISC) and other lower courts have upheld such warrantless searches, but until recently the legality of targeting US persons "acting as agents of a foreign power" and residing in this country has not been decided by the US Supreme Court. Take note that when both the target and the threat are domestic a warrant needs to be obtained, subject to recognized exceptions, and is not an issue for FISA purposes.

On February 18, 2008, however, the Supreme Court of the United States denied an appeal from the American Civil Liberties Union letting stand the decision of the lower court, de facto allowing warrantless surveillance of U.S. citizens or legal residents, either acting as agents or reasonably suspected to be acting as agents for such foreign powers, by the National Security Agency (NSA) to monitor, without warrants, phone calls, e-mails, text messaging, and any communication involving any party believed by the NSA to be outside the US, even if the other end of the communication lies within the U.S, where the government "has a reasonable basis to conclude that such party to the communication is a member of al Qaeda, affiliated with al Qaeda, or a member of an organization affiliated with al Qaeda, or working in support of al Qaeda." and that one party to the conversation is "outside of the United States)".

As of this moment that is the law of the land as approved by the legislature, the executive and the courts. The American Civil Liberties Union will have to find better legal basis, or perhaps some way to demonstrate that the NSA is a necessary evil that is worse than our declared global enemies, before the Supreme Court will consider the issue and be persuaded to overrule the lower court.

I FOR ONE CONSIDER THE ABOVE AUTHORIZATION FOR WARRANTLESS SEARCHES AS NECESSARY TO OUR SECURITY AND THE CONSEQUENTIAL INCIDENTAL INTRUSION OF OUR PRIVACY, AS REASONABLE, IF AND ONLY IF THE FACTS WARRANT SUCH AN INTRUSION AND ITS NECESSITY.

If the facts warrant it, pragmatically, I am not willing to risk the lives of my children and grandchildren, regardless of whether the U.S. is to blame or not for the current terrorist attacks (as many of the commentators seem to believe). From my point of view guilt or fault makes no difference as to whether I should protect or not my family, my friends and my society. And I do not concede for one single moment that the intentional murder of innocent people by anyone can be justified in any manner whatsoever.

Unfortunately, as I have pointed out before, some of you maintain that facts are irrelevant in the debate between security and privacy (see PostColonialTech commentary below), others rely on blame as their main argument (see SALMAN N. commentary) and still others will change their opinion because the Supreme Court let stand the decision of the lower court without any comment, as if the decision of the lower court was not known to him or her before he voted in this debate and the lower court was in some undefined way wrong (see Mediocry commentary).

My decision on the proposition herein debated that: "Security in the modern age cannot be established without some erosion of individual privacy" is based on facts that I have researched on my own, but which are not presented in this debate. I maintain, that fact and context are absolutely necessary and that no decision can be made on the absence of real facts.

Let me illustrate why with an example and an analogy:
During a recent trip to the rain forest of Nicaragua with my wife and my oldest son we camped in some caves in an area where it was known that dangerous hungry black pumas hunted. My son and I took turns by the entrance of the cave while the others slept. The gatekeeper was authorized by the others two to intrude into their privacy and wake them up if any dangerous animals approached, further if a snake or if fire ants should get in the cave the gatekeeper was authorized not only to wake us up but to also search our cloth, our bags and in the case of the fire ants he was authorized to apply a special spray to our skin to kill the ants.

A different situation occurred last summer. We went camping to Castle Rock Lake near Friendship Wisconsin in the good USA. The only protection we had was our dog. No one guarded the camp and neither my son nor I were authorized to intrude into the privacy of the others to wake them up or to spray their bodies, or search their belongings since we did not consider it necessary.

This simple example I believe contains a lesson. First whoever guarded the entrance to our camp was selected by us, he was one of us. At no time did we argue that he should not wake the others or that he should not spray against the ants because it would be an invasion of our privacy while we were in the rain forest. In this case our safety took priority over our privacy. On the other hand during our camping at Castle Rock Lake in Wisconsin, we certainly did not expect our son to spray us against any ants nor to come barging into our tent to search our packs. In Castle Rock Lake there are no dangerous black pumas, snakes nor killer ants. (There is lot of deer).

Thus, pragmatism informed us. Our Privacy took priority over our Security at Castle Rock Lake. Our inherent constitutionally protected Privacy took second place to our Security and safety in the rain forest. The same constitutionally protected privacy right was paramount in the relatively civilized environment of Castle Rock Lake in Wisconsin and secondary in the dangerous environment of the rain forest in Nicaragua.

Is terrorism a threat like the hungry pumas, the snakes and the fire ants of the rain forest? And should we authorize the gate keeper (the government) to protect us to the point of encroaching on our privacy? Or are we safe enough that all we need is our trusted dog (the government) like at Castle Rock Lake in Wisconsin and complain about the unnecessary intrusion on our privacy?

As you can see I am very pragmatic in the rain forest and very civilized and ideologue in the relative safety of Castle Rock Lake. Furthermore, since the government is one of US, chosen by us, we are always in control of it. If we don't like it we are free to change it. We don't like the invasion of our privacy but we tolerate it, however there is no question in my mind that there has to be a trade off between security and privacy depending on the facts and the circumstances. I do not see how it can be any other way (some other commentators argue that you can have your cake and eat it, if so I would like to know how)

I maintain that this debate does not provide enough facts to allow a meaningful result or to permit anyone to change their position vis-a-vis security versus privacy. Perhaps that is why the Supreme Court let stand the lower court position. After all, in the absence of facts, would you be willing to strike down the safeguards and allow terrorists to strike us. Is the Supreme Court better qualified than the NSA to provide our national security? Or is the Court better suited to protect the individual against unreasonable and unnecessary encroachments by the authorized representative of the government?

My opinion is based on my own independent factual research and on my love for my children, grandchildren, friends and the welfare of other people in that order. You must do your own research and reach your own conclusion. Thank You.

February 24, 2008 06:44am

Mediocry, thank you for attempting to correct the facts, (rather than ignoring them).

My comments referred to FISA as currently amended and interpreted by the court, not as written in 1978.

On January 10, 2007 a Judge of the Foreign Intelligence Surveillance Court enabled the government to conduct electronic surveillance “ very specifically, surveillance into or out of the United States where there is probable cause to believe that one of the communicants is a member or agent of al Qaeda or an associated terrorist organization “ subject to the approval of the FISA Court.

Prior to January 10, 2007 the NSA conducted warrantless surveillance of persons within the United States incident to the collection of foreign intelligence by the U.S. National Security Agency (NSA) as part of the war on terror, referred as the terrorist surveillance program. The NSA was authorized by executive order to monitor, without warrants, phone calls, e-mails, text messaging and other communication involving any party believed by the NSA to be outside the U.S., even if the other end of the communication lies within the U.S. The Administration maintained that the authorized intercepts were not domestic but rather "foreign intelligence" integral to the conduct of war and that the warrant requirements of FISA were implicitly superseded by the subsequent passage of the Authorization for Use of Military Force (AUMF).

Also on August 3, 2007, the Senate passed a Republican-sponsored version of FISA S. 1927 The House followed by passing the bill, 227-183 on August 4, 2007. This law, the Protect America Act of 2007, altered the scope of the original 1978 FISA in many ways, including:

1) Notification to the FISA Court of warrantless surveillance within 72 hours of any authorization. The bill also required that "a sealed copy of the certification" be sent which would "remain sealed unless the certification is needed to determine the legality of the acquisition."

2) Monitoring of data related to Americans communicating with foreigners who are the targets of a U.S. terrorism investigation. This data could be monitored only if intelligence officials have a reasonable expectation of learning information relevant to that probe.

The Protect America Act of 2007, expired, by its own terms on February 18, 2008 leaving the original January 10, 2007 order of the Foreign Intelligence Surveillance Court in full force and effect.

Currently S. 2248 “Foreign Intelligence Surveillance Act of 1978 Amendments Act of 2007” and H.R. 3773 “Restore Act of 2007” is pending to take the place of the Protect America Act of 2007.

Whether necessary or not, the legality or illegality of the telecommunication case, has not been determined by the courts. (This case is different from the ACLU case). On November 16, 2007, three judges - M. Margaret McKeown, Michael Daly Hawkins, and Harry Pregerson - issued a 27-page ruling that the charity, the Al-Haramain Islamic Foundation, could not introduce a key piece of evidence in its case because it fell under the government's claim of state secret.

On the other hand, the ACLU v. NSA case was dismissed on July 6, 2007 by the 6TH Circuit Court of Appeals. The court did not rule on the spying program's legality. Instead, declared that the American Civil Liberties Union and the others who brought the case - including academics, lawyers and journalists - did not have the legal standing to sue. On February 19, 2008, the Supreme Court, without comment, turned down an appeal from the American Civil Liberties Union, letting stand the earlier decision dismissing the case. As far as the law is concerned, the FISA order of January 10, 2008 authorizing limited wireless surveillance of foreign agents in U.S. soil whether U.S. citizens or not, where the other party is outside the United States is still in effect.

The reason for the Supreme Court dismissal is not because they failed in their duty, nor is it because they did not have sufficient facts as I pragmatically suggested in my commentary but because not even the Supreme Court can entertain a case where there is no legal standing. Legal standing is required by the “case or controversy” requirement of the judicial power of Article Three of the United States Constitution § 2, cl.1. As stated there, “The Judicial Power shall extend to all Cases . . .[and] to Controversies . . .” The requirement that a plaintiff have standing to sue is a limit on the role of the judiciary and the law of Article III standing is built on the idea of separation of powers. Allen v. Wright, 468 U.S. 737, 752 (1984).

I would love to hear what the Supreme Court would have to say concerning the legality of the warrantless surveillance issue and the striking of a delicate balance between our security and our privacy. This will require full explanation of all the underlying FACTS vis-à-vis the war on terror.

It must however, be brought by a party who has suffered or imminently will suffer a concrete, actual, imminent, distinct and palpable injury, with a causal connection between the injury and the conduct complained of, and it must be likely, as opposed to merely speculative, that a favorable court decision will redress the injury.

Neither the Court, nor Congress can change these constitutional requirements, otherwise the Supreme Court would become a super-judiciary, a super-legislature and a super executive a la Ayatola Khommeini, Supreme Leaders and paramount political figures of the new Islamic Republic of the United States of America.

February 25, 2008 08:22am

Mediocry....You reply implies that "somehow" in my analysis Art. III of the United States Constitution “somehow” handicaps the Supreme Court?? My guess is that you have “somehow” discovered an error in the constitution! Remarkable!

Forgive my presumption in maintaining, as the Supreme Court itself maintains, that what you call handicap is the essence of the separation of power. Without Art III of the Constitution there would be no United States of America only the new “Islamic Republic of the United States of America”. Sorry, that “somehow” my analysis failed to convince you. It is some solace, however, that “somehow” it convinced the nine Supreme Court justices themselves. Good company wouldn’t you say?

Meanwhile, I cannot help but to “somehow” give up. The power of the "somehow" argument has "somehow" overwhelmed me. It is “somehow” too powerful!

And, How Many Angels Can Dance On The Point Of A Needle?

Socialized Health Care, Global Warming, the Green Revolution are dangerous pretenses designed by insiders like those converging at the closed door summit meeting at a secured Copenhagen location on December 7, 2009 euphemistically named the “Conference of Parties” or “COP-15”, that under the guise of “climate talks” convenes political leaders, members of the Saudi Royal Family, high ranking Israeli officials with ties to the Mossad, members of the KGB, and well known World Socialists, to make decisions about the global economy, and to silence the pressing problems of global unemployment, debt collapse and terrorism (not necessarily in that order) while condescendingly determining which cars we'll be able to drive, how many hours can we run hot water in our homes, how much we pay in electricity bills each month, who will be our doctor and to whom we'll end up writing out the checks.

In the USA Socialized Health Care is a secondary, although serious, red herring designed to distract attention from the very real and immediate problem of rampant unemployment and terrorism and the failure of Obama's socialized stimulus and the anti-American and unconstitutional policies of the Obama's administration.

Even Warren Buffet, a financial genius and leftist democrat, is voting with his money selling more domestic stock than buying and investing in foreign currencies rather than dollars.

-The red herring back-fired for Obama-. Witness the Tea Party revolt in the country and in DC that has unified hundreds of thousands in spontaneous demonstrations. The problem remains however, for the economy and the Republic are in the road to total catastrophe.

The green jobs the Socialist Obama administration has promised simply aren't materializing. The cash-to-clunkers program, which created a boom for foreign auto makers, didn’t result in any meaningful job creation.

The real estate market is as dead as a door nail and the banking system is as inefficient as it can be with 91 banks having failed to date in 2009 alone. Businesses are slashing working hours to record lows to keep costs down.

Layoffs continue, consumer spending is vanishing and companies are shrinking or going bankrupt. Wal-Mart, one of the most profitable and dynamic companies in the world, has begun to incur loses as sales are shrinking and unemployment continues to increase....

AND WHAT IS THE REASON? I assert it is Obama's failed Socialist Keynesian stimulus based on the theory that you fight an economic downturn by pumping money into the economy to "encourage demand" and "create jobs".

The only effective way to create employment is to INCREASE INCENTIVES FOR INVESTMENT AND ENTREPRENEURSHIP instead of borrowing close to a trillion dollars out of the private economy to increase government spending in socialized and power grabbing political entitlements promoted by anti-American Czars that suppress the free market, restrict personal freedom and violate the United States Constitution...

Obama's actions have created the longest recession since World War II—21 months and counting—with no clear end in sight.

There are only two possible explanations, either Obama is stupid or he is trying to destroy us. What do you think?

Cheney: Nuclear, Bio Attacks Likely If Obama Ends Bush Policies

Former Vice President Dick Cheney is blasting the fledgling administration of Barack Obama, arguing that its policies dealing with terrorism and international foes are naive and dangerous, making it all the more likely that terrorists will succeed in their next attempt at killing Americans, according to a report in Politico.

Simply by closing Guantanamo Bay’s detention camp for terrorists, Cheney said, Obama inadvertently will aid enemies eager to make another attack on the United States. Another major attack on this country, perhaps even using biological or nuclear materials, is very likely in the next few years, Cheney said.

I think there’s a high probability of such an attempt, Cheney said. Whether or not they can pull it off depends whether or not we keep in place policies that have allowed us to defeat all further attempts, since 9/11, to launch mass-casualty attacks against the United States.

Cheney opined that the inevitable attack will be a 9/11-type event where the terrorists are armed with something much more dangerous than an airline ticket and a box cutter, a nuclear weapon or a biological agent of some kind, that is set off in an American city.

In a wide-ranging interview with Politico, Cheney emphasized the usefulness of the interrogations at Gitmo while lambasting the policies emerging from the new administration.

When we get people who are more concerned about reading the rights to an al-Qaida terrorist than they are with protecting the United States against people who are absolutely committed to do anything they can to kill Americans, then I worry, Cheney said.

Concentrating on the merits of Gitmo, Cheney described it as a first-class operation, noting that one of the painful lessons learned was the penchant for those detainees who were released to return to their terrorist roots.

He noted that 61 of the inmates who were released from Guantanamo during the Bush administration had gone back into the business of being terrorists. He also characterized the remaining 200 or so remaining detainees as hard core cases that were even more likely to be repeat offenders.

Releasing the prisoners or ramping up their due process would be unwise, Cheney charged.

The United States needs to be not so much loved as it needs to be respected. Sometimes, that requires us to take actions that generate controversy. I am not at all sure that that’s what the Obama administration believes, he said.

Cheney defended the hard-line tactics of the Bush administration as responsible for the safety of the country after 9/11.

If it hadn’t been for what we did with respect to the terrorist surveillance program, or enhanced interrogation techniques for high-value detainees, the Patriot Act, and so forth then we would have been attacked again, he said. Those policies we put in place, in my opinion, were absolutely crucial to getting us through the last seven-plus years without a major-casualty attack on the U.S.

Protecting the country’s security is a tough, mean, dirty, nasty business, he said. These are evil people. And we are not going to win this fight by turning the other cheek.
© 2009 Newsmax. All rights reserved.

The Obama Presidency: Here Comes Socialism

Wednesday, January 21, 2009 5:11 PM

By: Dick Morris and Eileen McGann

The years 2009-2010 will rank with 1913-14, 1933-36, 1964-65, and 1981-82 as periods that permanently changed our government, politics, and lives. Just as the stars were aligned for Wilson, Roosevelt, Johnson, and Reagan, they are aligned for Obama.

Simply put, we enter his administration as free-enterprise, market-dominated, laissez-faire America. We soon will become like Germany, France, the United Kingdom, and Sweden: a socialist democracy in which the government dominates the economy, determines private-sector priorities, and offers a vastly expanded range of services to many more people at much higher taxes.

Obama will accomplish his agenda of �reform� under the rubric of �recovery.� Using the electoral mandate bestowed on a Democratic Congress by restless voters and the economic power given his administration by terrified Americans, he will change our country fundamentally in the name of lifting the depression. His stimulus packages won�t do much to shorten the downturn, although they will make it less painful, but they will do a great deal to change our nation.

In implementing his agenda, Obama will emulate the example of Franklin D. Roosevelt. (Not the liberal mythology of the New Deal but the actuality of what it accomplished.) When FDR took office, he was enormously successful in averting a total collapse of the banking system and the economy. But his New Deal measures succeeded only in lowering the unemployment rate from 23 percent in 1933, when he took office, to 13 percent in the summer of 1937. It never went lower.

And his policies of over-regulation generated such business uncertainty that they triggered a second-term recession. Unemployment in 1938 rose to 17 percent and, in 1940, on the verge of the war-driven recovery, stood at 15 percent. (These data and the real story of and Roosevelt�s and Herbert Hoover�s missteps, uncolored by ideology, are available in �The Forgotten Man� by Amity Shlaes.)

But in the name of a largely unsuccessful effort to end the Depression, Roosevelt passed crucial and permanent reforms that have dominated our lives ever since, including Social Security, the creation of the Securities and Exchange Commission, unionization under the Wagner Act, the federal minimum wage, and a host of other fundamental changes.

Obama�s record will be similar, although less wise and more destructive. He will begin by passing every program for which liberals have lusted for decades, from alternative-energy sources to school renovations, infrastructure repairs and technology enhancements. These are all good programs, but they normally would be stretched out for years.

However, freed of any constraint on the deficit � indeed, empowered by a mandate to raise it as high as possible � Obama will do them all rather quickly.

But his spending is not what will transform our political system; rather, his tax and welfare policies will do the damage. In the name of short-term stimulus, he will give every American family (who makes less than $200,000) a welfare check of $1,000 euphemistically called a refundable tax credit. And he will cut taxes so sharply for the middle class and the poor that the number of Americans who pay no federal income tax will rise from one-third of all households to more than half.

In the process, he will create a permanent electoral majority that does not pay taxes, but counts on ever-expanding welfare checks from the government. The dependency on the dole, formerly limited in pre-Clinton days to 14 million women and children on Aid to Families with Dependent Children, will now grow to a clear majority of the American population.

Will he raise taxes? Why should he? With a congressional mandate to run the deficit up as high as need be, there is no reason to raise taxes now and risk aggravating the depression.

Instead, Obama will follow the opposite of the Reagan strategy. Reagan cut taxes and increased the deficit so that liberals could not increase spending. Obama will raise spending and increase the deficit so that conservatives cannot cut taxes. And, when the economy is restored, he will raise taxes with impunity, since the only people who will have to pay them would be rich Republicans.

In the name of stabilizing the banking system, Obama will nationalize it. Using Troubled Asset Relief Program funds to write generous checks to needy financial institutions, his administration will demand preferred stock in exchange. Preferred stock gets dividends before common stockholders do. With the massive debt these companies will owe to the government, they will be able to afford dividends only for preferred stockholders: the government, not private investors. So who will buy common stock?

And the government will demand that its bills be paid before any profits that might materialize are reinvested in the financial institution, so how will the value of the stocks ever grow? Devoid of private investors, these institutions will fall ever more under government control.

Obama will begin the process by limiting executive compensation. Then he will urge restructuring and lowering of home mortgages in danger of default (as the feds have done with Citibank).

Then will come guidance on the loans to make and government instructions on the types of enterprises to favor. God grant that some Blagojevich type is not in charge of the program, using his power to line his pockets. The United States will find itself with an economic system comparable to that of Japan, where the all-powerful bureaucracy at the Ministry of International Trade and Industry manages the economy, often making mistakes like giving mainframe computers priority over the development of laptops.

But the healthcare system will experience the most dramatic and traumatic of changes. The debate between erecting a Medicare-like governmental single payer or channeling coverage through private insurance misses the essential point. Without a lot more doctors, nurses, clinics, equipment, and hospital beds, health resources will be strained to the breaking point. The people and the equipment that now serve 250 million Americans and largely neglect all but the emergency needs of the other 50 million now will have to serve everyone.

As government imposes ever-more-Draconian price controls and income limits on doctors, the supply of practitioners and equipment will decline as the demand escalates. Price increases will be out of the question, so the government will impose healthcare rationing, denying the older and sicker among us the care they need and even barring them from paying for it themselves. (Rationing based on income and price will be seen as immoral.)

And Obama will move to change permanently the partisan balance in America. He will move quickly to legalize all those who have been in America for five years, albeit illegally, and to smooth their paths to citizenship and voting. He will weaken border controls in an attempt to hike the Latino vote as high as he can to make red states like Texas into blue states like California.

By the time Obama is finished, Latinos and blacks will cast a combined 30 percent of the vote. If they go by top-heavy margins for the Democrats, as they did in 2008, it will assure Democratic domination (until they move up the economic ladder and become good Republicans).

And he will enact the check-off card system for determining labor union representation, repealing the secret ballot in union elections. The result will be to raise the proportion of the labor force in unions up to the high teens from the present level of about 12 percent.

Finally, he will use the expansive powers of the Federal Communications Commission to impose �local� control and ownership of radio stations and to impose the �fairness doctrine� on talk radio. The effect will be to drive talk radio to the Internet, fundamentally change its economics, and retard its growth for years hence.

But none of these changes will cure the depression. It will end when the private sector works through the high debt levels that triggered the collapse in the first place. And, then, the large stimulus package deficits will likely lead to rapid inflation, probably necessitating a second recession to cure it.

So Obama�s name will be mud by 2012, probably by 2010. And the Republican Party will make big gains and regain much of its lost power.

But it will be too late to reverse the socialism of much of the economy, the demographic change in the electorate, the rationing of healthcare by the government, the surge of unionization, and the crippling of talk radio.

Join Dick Morris on a Special Cruise! Newsmax will be hosting its 10th Anniversary Cruise in June of 2009 and you are invited! Join Newsmax writers Dick Morris, Ronald Kessler, Christopher Ruddy, Dr. Russell Blaylock, Dr. David Brownstein, and many others on an incredible cruise of the Mediterranean. For full info � Click Here Now.

© 2009 Dick Morris & Eileen McGann

I believe that in the aggregate humanity is "dumbing down" in relative numbers,but that this is only a short term, temporary situation that will change in the same manner that the Japanese changed and the radical Muslims will change in a couple of centuries.

In the long term, give or take a couple thousand years, I believe humanity in the aggregate will "wise up" as it has been doing little by little through the centuries.

The internet, ipods, ereaders, etc, are merely tools that can be used in the same manner as books. Thus I carry currently in my ipod 3 books and read ebooks and listen to audio books all the time

My choice of books ranges from "Human Action" on Economics, or Reason and Responsibility concerning basic problems in Philosophy, or Scalia's dissent regarding legal matters or symbolic logic and other mathematical treatises, or IT and computer programming to Science Fiction such as Analog Magazine, chess problems and joke books.

I enjoy traveling and visiting museums such as The Hermitage or the Louvre and enjoy ballet and symphonic works and classical music, and Harry Potter and Star Wars, and 24, House and NCIS on TV. And football, soccer, baseball, basketball and karate. I also enjoy gourmet food and the intimate delights and the occasional fights of married life.

This is my individual choice and I am sure I am not unique but that there are millions, perhaps billions of individuals who do the same with many variations.

I am aware however that there are, relatively speaking, many more individuals that enjoy creating "spam", or causing havoc with electronic viruses, and as a criminal and constitutional attorney experienced the worst and the best of humanity, from intentional homicide, ie. a son killing his mother, and a mother killing her baby, to serial killers, to rape, incest, drug addiction, prostitution, defrauders and gang wars. On the other hand I have enjoyed the delight of arguments in the Supreme Court of the United States, regarding constitutional issues, equal protection of the laws, education, intelligent design, and reverse discrimination.

I believe I have, as have many others become wiser and changed from being a bigoted, chauvinistic, egotistical, unbending individual to what I am now an agnostic, experienced and ignorant doubter, looking at the world in amazement and awe.

I know there are many people like me out there. I wish I knew them. I also know there are many more that for whatever reason don't care or couldn't care less about their fellow human beings. Generally, however I have a long term positive outlook about the future and that in spite of all the horrors that I have seen the great aggregate of individuals that is the world is little by little but surely "wising up"

Activists with their lists of acceptable and unacceptable corporate behavior remind me of the Soviet Union central planners setting up arbitrary quotas in blind unproductive ways causing the eventual demoralization and destruction of the communist system; the same demoralization that is happening to the environmentalist in the area of energy and food.

The environmentalist movement puts the threat to whales, animals, birds, trees, or land over the threat to human beings, for example the recent cases concerning the conflict between the speculative threat to whales vs. individual and U.S. national security.

Except for the leaders, attorneys, the corrupt hangers, the criminal, the insane and other power mongers the moral idealism of the environmentalist activists is decaying in the face of human hunger and suffering. If you are hungry do you really care if you get a paper or a plastic bag at the market? In some countries they carry corn in their hands. And what difference does it make anyhow? Either choice causes injury. Papers affect trees; plastic produces more Co2 affecting trees, humans and the weather; and who grants environmentalist planners the right to choose for us?

No doubt there is a link between outside pressure and meaningful corporate action on sustainability. The relationship between outside pressure groups and corporations on sustainability issues spans a spectrum from antagonism to collaboration, from voluntary to mandatory. The dynamic interplay between stakeholders and corporations on sustainability boils down to a balance of power.

However, the above balance of power completely disregards the most powerful element of outside pressure, the best means of rational, economic, ecologic, calculation: the free-market price system.

Milton Friedman argued that the business of business is business and that that companies keen on philanthropy should maximize shareholder returns and let those individual shareholders decide which philanthropies are the worthiest.

How is anyone, except the individual and the individual private corporation supposed to figure out what is the best and most efficient use of Earth's scarce resources? Certainly it is not the politically motivated environmentalist central planner that decides this issue.

Dumping garbage in your neighbor’s lawn is illegal and you will protect your private property and go to court if necessary to redress the damage. Pollution is another form of garbage, and charging pollution fees to private business, higher as the pollution is greater, is like taxing neighbors to induce them not to pollute or taxing robbers as a way to induce them not to burglarize your home.

There is no acceptable level of pollution unless the invasion of property is accepted or agreed by all parties or the parties agree to fix the costs and the degree of pollution. In the absence of such agreement the court system should enjoin and assess damages. This is a free market outcome enforced through the judicial system in the same way that you settle your grievance with a neighbor that dumps garbage in your private property or you protect your private rights against a robber or a trespasser.

Economist Walter Block and Robert W. McGee have suggested that if in place of treating pollution as a nuisance it was treated the same way as robbers and trespassers are treated in violation of the law, we would enjoy a non-pollution-intensive technology preventing the emission of errant soot particles and encouraging the growth of an environmental forensic industry allowing the identification liable private industries, determining their exact source, just as DNA evidence permits the identification of robbers, rapists, trespassers and murderers.

Economist George Reisman puts this way: “The free market (and civil society) (parenthesis added) acts like a vast computer coordinating the trillions of decisions made by all participating individuals (and individual corporations) (parenthesis added) as to what resources are desired and in what quantities.” Prices and costs are the signals which integrate and harmonize the plans and decisions of each individual and private industry with the plans and decisions of everyone else and reflect the sum total of demand versus supply for every resource and alternative resources.

Buying glass or paper milk containers, or buying local vs. buying organic become irrelevant issues in the face of the need for economic growth in the midst of energy and food scarcity and mass poverty if the invasion of property is accepted or agreed by the suffering parties or the parties agree to fix the costs and the degree of pollution given the individual priorities of the people.

Tyrannical global warming regulations and fuel rationing that disregard the rights and the needs of individuals and that brings suffering and puts a stop to economic growth will not be tolerated even if high gas prices lower the sales of SUVs causing great happiness to some environmentalist.

Environmentalist despotism and subjectivist multiculturalism causing the rise of gasoline will fall before the need of increased oil drilling and the need of billions of people to prosper, as exemplified by the poor farmer people in China. Only when their livelihood has been secured will they begin considering the niceties of paper vs. plastic container, or local vs. organic food. The reality of gas prices today makes irrelevant the promise of alternative fuels tomorrow if the survival imperative makes it absurd to die while waiting.

For the above reasons planned and coerced environmentalist primitive and utopian life style is for the birds and the eccentric and other noble savages; it is not for me, or my children and grandchildren. The environmentalist planned contradictory, coercive and extreme philosophy in favor of poverty and in disregard of the rights and needs of free individuals is unsustainable.

It is too late to stop the Olympics in China but the Olympics themselves will serve to remind the world not of China's emerging greatness but of its continuing denial of freedom to its citizens, its repression of minorities and its amoral alliances with rogue states. If we truly valued human rights ideals then as a community we should had boycotted these games. It is too late now, but you might as well use this opportunity to go to China and be persuaded and witness unwillingly perhaps the shame of an enslaved people. Make sure you ask the officials with admiration where are the poor in Beijing? The answer will surely be that there are no poor people in Beijing.

That is because Beijing has cleared entire neighborhoods to make room for Olympic sites and to beautify the city. In 2006 the Beijing municipal authority announced that certain groups of local people would be banished from the area where the games will be held. They include beggars, vagrants and those with mental illnesses. Furthermore, many citizens will be forced to either vacate their homes or remain in their houses for the duration of the Olympics. At least 300,000 residents have been moved to make way for the games, and those who complain face persecution, prison or even death. Those people that complaint cannot win because under socialism land is not individually owned and private property is not officially approved.

Be careful though. You may be arrested too if you speak against the system. Remember you are a guest of the People’s Republic of China and as such you have no rights, remember not even the Chinese people have rights. Beware. In fact not even the competing athletes may speak out. China is asking all athletes of all nations to sign a contract that bans them from making political statements against China, or they will not be allowed to travel raising the specter of the order given to the England football team to give a Nazi salute in Berlin in 1938.

Consider this:

Ye Guozhu owned two restaurants in Beijing, both of which were demolished in 2001, as was his home two years later. This was done in order to create space for Olympic facilities to be built. Mr Ye sought permission to demonstrate against such forcible evictions and the lack of compensation for them. He was arrested and sentenced to four years in prison, and his family has had no contact with him since. No appeal can be made on his behalf as there is no way to contact him to sign the papers necessary for this process. It is reported that the courts have been ordered not to hear cases seeking compensation for any such abuses.

Last Monday, land-rights activist Yang Chunlin was sentenced to five years in prison for starting a petition with the slogan, "We want human rights, not the Olympics."

Last week, another dissident, Hu Jia, was put on trial on charges of subversion; he was arrested after testifying to the European Parliament via the Internet and publishing a letter urging the world to focus on human rights concerns in connection with the Olympics.

Defenders who attempt to track abuses against other activists are particularly vulnerable. Since mid-July 2006, Hu Jia has been held under house arrest and repeatedly taken by the police for interrogation.

Chen Guangcheng, a blind legal activist who exposed abuses connected to family planning was sentenced in August to more than four years in prison on charges of obstructing traffic. In apparent response to considerable international attention, the appellate court in November ordered a retrial, though Chen remains in jail.

After many months of house arrest, police harassment, and threats, Gao Zhisheng, a prominent human rights lawyer, was arrested in October 2006 on state security charges of “inciting subversion.” At this writing, Beijing police continued to deny Gao’s lawyer permission to visit him.

Legal activist Yang Maodong (also known as Guo Feixiong), who was assisting Guangdong villagers resist land seizures, was formally arrested in September 2006 on charges of “illegal business activities.”

In June 2006, a local court sentenced Huang Weizhong, elected by villagers in Fujian to protest land acquisition procedures, to three years in prison.

Suspected “separatists,” many of whom come from monasteries and nunneries, are routinely imprisoned. In January 2006, Gendun, a Tibetan monk, received a four-year prison sentence for opinions expressed in his lectures on Tibetan history and culture. In June 2006, five Tibetans, including two nuns, were detained for publishing and distributing independence leaflets. In July, Namkha Gyaltsen, a monk, received an eight-year sentence for his independence activities. In August, armed police detained Khenpo Jinpa, an abbot. In September, Lobsang Palden, another monk, was charged with “initiating separatist activities.”

On September 30, Chinese People’s Armed Police shot at a group of approximately 40 Tibetan refugees attempting to cross the border into Nepal, killing a 17-year-old nun, Kelsang Namtso, and possibly others. The rest of the group fled, though witnesses reported seeing Chinese soldiers marching approximately 10 children back to a nearby camp. The official press agency Xinhua claimed that the soldiers were “forced to defend themselves,” but film footage showed soldiers calmly taking aim and shooting from afar at a column of people making their way through heavy snow.

In January 2006, on orders from party officials, China Youth Daily temporarily closed Freezing Point (Bingdian), its weekly supplement, ostensibly for running an article asserting that Chinese textbooks rewrote history.

In August, the UN Committee on the Elimination of Discrimination against Women (CEDAW) faulted China for not having incorporated a legal definition for gender discrimination and for failing to act on the Committee’s previous recommendations.

China does not recognize freedom of religion outside of the state-controlled system in which all congregations, mosques, temples, churches, and monasteries must register.

Registration entails government vetting and ongoing monitoring of religious personnel, seminary applicants, and publications; scrutiny of financial records and membership rolls; and veto power over group activities. Failure to register renders a religious organization illegal and subject to closure, fines, and criminal sanctions. Despite the restrictions, the number of religious practitioners continues to grow.

Policies have been reflected in round-ups of Protestants—possibly as many as 1,958 in a one-year period ending in June 2006—for attending training sessions and Bible study meetings in unregistered venues. Most are released quickly, some after paying fines. Some leaders are held on trumped up charges, such as “illegal business practices.”

The Catholic underground church community and the official Chinese Catholic church continue to disagree over the ordination of bishops. In May, over the objections of the Vatican, the official church installed four new bishops.

The government also curtails religious freedom by designating some groups as cults, such as the Falungong. Leaders and those caught publishing and distributing Falungong literature face severe repression.

In 2006, China intensified its efforts to use the “war on terrorism” to justify its policies to eradicate the “three evil forces”—terrorism, separatism, and religious extremism—allegedly prevalent among Uighurs, a Turkic-speaking Muslim population in China’s Xinjiang Uighur Autonomous Region.

Under current policies local imams are required to vet the text of weekly Friday sermons with religious bureaus. “Strike Hard” campaigns subject Uighurs who express “separatist” tendencies to quick, secret, and summary trials, sometimes accompanied by mass sentencing rallies. Imposition of the death penalty is common.

In 2006, China continued to pressure neighboring countries to arrest and deport politically active Uighurs. In June 2006, Uzbekistan extradited to China Huseyin Celil, a Uighur and a Canadian citizen. At this writing, Celil was being held in Xinjiang with no access to Canadian consular services. In May 2006, Kazakhstan acceded to China’s demand that it extradite two Uighurs. In October, China sentenced Ismail Semed to death for “separatism” following his deportation from Pakistan. China also pressed hard, though unsuccessfully, to get Albania to repatriate five Uighurs who, until 2006, had been held by the US at Guantanamo Bay.

Chinese officials have labeled Rebiya Kadeer—a Nobel Prize nominee—a terrorist, and in retaliation for her championing of Uighur rights following her exile to the US in March 2005, have beaten and arrested members of her family in Xinjiang. In October 2006 two of her sons, Kahar Abdureyim, 42, and Alim Abdureyim, 31, were put on trial on tax charges.

In mid-September, Beijing municipal authorities shut down over 50 unregistered schools for children of migrant workers, leaving tens of thousands of children without access to education. This followed a discussion by the authorities about ways to expel one-million migrant laborers from Beijing.

According to Human Rights Watch http://hrw.org/englishwr2k7/docs/2007/01/11/china14867.htm

The “Great Firewall of China” restricts not only access to the internet, with its 123 million users in China, but also to newspapers, magazines, books, television and radio broadcasts, and film. During 2006, the Chinese government and Communist party officials moved aggressively to plug the wall’s holes and to punish transgressors. Premier Wen Jiabao justified the renewed crackdown, stating that “internet censorship is necessary to safeguard national, social and collective interests.”

Journalists, bloggers, webmasters, writers, and editors, who send news out of China or who merely debate politically sensitive ideas among themselves, face punishments ranging from sudden unemployment to long prison terms. Censors use sophisticated filters, blocking, and internet police to limit incoming information.

During the first half of 2006, Chinese officials shut down more than 700 online forums and ordered eight search engines to filter “subversive and sensitive content” based on 10,000 key words. In July, a website called Century China and its eight online forums, popular among Chinese intellectuals, was shut down for illegally providing news. In September, two chief editors of Wang Yi (NetEase), a top internet portal, were fired for allowing an unauthorized opinion poll. Blogs from prominent commentators and activists continued to be regularly shut down.

Subversion charges in 2006 led to 10, 12, four and two-year sentences respectively for internet writers Ren Ziyuan, Li Jianqiang, Guo Qizhen, and Li Yuanlong.

By their own admission, global corporations such as Google, Microsoft, Yahoo!, and Skype continue to assist in the Chinese government’s system of arbitrary and opaque political censorship in an effort to ingratiate their companies with Chinese regulators. Yahoo! released the identity of private users to Chinese authorities, contributing to four critics’ lengthy prison sentences. Microsoft and Google censor searches for what they think the government considers sensitive terms.

In September 2006, new measures mandated that foreign news agencies not sell stories directly to Chinese outlets but submit them first to Xinhua, the official Chinese news agency, for clearance and subsequent distribution.

Foreign journalists are harassed, detained and subject to occasional violence. In August, the Foreign Correspondent Club of China (FCCC) reported “widespread detentions” and some instances of physical assaults of foreign reporters. Chinese nationals working for foreign newspapers are especially vulnerable. In September, Zhao Yan, a researcher for the New York Times, was sentenced to three years on fraud charges following a trial marred by due process violations. As of this week, authorities won't allow live broadcasts from Tiananmen Square, site of the deadly crackdown on pro-democracy students two decades ago.

The Chinese government continues to use a vast police and state security apparatus to enforce multiple layers of controls on critics, protesters, and civil society activists. The system includes administrative and professional pressures, restrictions on domestic and foreign movements, covert or overt tapping and surveillance of phone and internet communications, visits and summons by the police, close surveillance by plainclothes agents, unofficial house-arrests, incommunicado confinement in distant police-run guest houses, and custody in police stations, charged with vaguely defined crimes such as “disrupting social order,” “leaking state secrets,” or “inciting subversion.”

It is unfortunate that the granting of the 2008 games to Beijing has encouraged the Chinese authorities to continue their abhorrent treatment of their own citizens, safe in the knowledge that the international community is tacitly allowing such actions to occur, a showcase for violent repression, censorship and political persecution by a regime that has failed to rise above the level of police state.

Though presenting himself as worldly and reformist, President Hu Jintao and his leadership group seem unable to grasp how the policies they have pursued in recent months undermine the honor of staging the Olympics and destroy China's international prestige.

Mr. Hu's government has tightened its grip: shutting down publications, imprisoning dissidents and harassing lawyers in the name of pre-Olympic harmony. Media controls have been tightened, not only in Tibet -- where the foreign press has been denied access to the carnage -- but in Beijing itself.

The amazing fact is that China is a member of the Human Rights Council of the United Nations, "committed" to protect basic rights and freedoms, including such things as ceasing repression of activists, removing internet and press censorship, granting independence to lawyers, ending re-education-through-labour, complying with international conventions on human rights, and recognizing independent workers unions.

In its candidacy statement China asserted that “the Chinese government respects the universality of human rights and supports the UN in playing an important role in the protection and promotion of human rights.”

China makes a mockery of this however; Chinese diplomatic efforts have focused on doing away with independent UN investigations, on the grounds that “the internal affairs” of a state should not be subject to investigation. China continues to work closely with the “like minded” group of countries, which includes Iran and Zimbabwe, to roll back important human rights protections.

To those Chinese nationals who have been given permission by the government to access this debate page, shame on you. This last comment may violate debate rules about addressing only the moderator and not the commentators. If so, I hope I am not arrested or worse censored!

Mr. Hu Jintao, the Paramount Leader of the People's Republic of China, holding the titles of General Secretary of the Communist Party of China since 2002, President of the People's Republic of China since 2003, and Chairman of the Central Military Commission since 2004 is a man in the middle of a battle and the rivalry of his presumed supporters afraid of being ousted. His apparent liberal stance, philosophy and government by consensus is a façade, a caution made necessary by the internal politics surrounding him and the unbalanced situation of the economy and the Chinese society. Unless China becomes a free country economically, politically and individually it will breakdown in a similar manner that the government and the society of the old Soviet Union eventually broke down, but worse because economic freedom and individual repression are totally inimical. Make no mistake that, if and when, his political position should ever become secured Mr. Hu will turn into the new Mao, the new Kim Jong Il. Beneath the exhortations of harmony, peaceful rise, serving the people and benevolent leadership, the old Maoist is hidden, with no sense whatsoever of how to implement free market changes to address China’s formidable problems. There is nothing that Mr. Hu fears more, because of the rivalry of his trusted communist comrades than implementing unsettling political reforms, like letting the people exercise their natural power in a fashion similar to Western type republican democracy.

Covering his rule with the mantle of traditional Confucianism Mr. Hu wants to return China to the ‘better’ ideas of communism passing himself in the style of a Confucian gentlemen --- one who governs by virtuous example and radiates benevolence throughout society. The last thing that he desires for the Chinese people are political and media control. It would be like asking the Pope to grant infallibility to Church parishioners. That is why Mr. Hu has been very cautious with regards to the Internet, choosing to censor politically sensitive material to a degree more strict than the Jiang era. In February 2007, he embarked on further domestic media controls that restricted primetime TV series to "morally correct" content—objected to lowbrow programming including some reality shows—on all Chinese TV stations, and listed "20 forbidden areas" of coverage on news reporting.

Mr. Hu’s style is that of the upright scholar-official instructing the ignorant but good-hearted ‘commoners’ how to be virtuous from the top down, cultivating the cult of personality, and as a good Chinese communist leader making his own contribution to Confucianism mixed Marxist theory. He released in 2006 the ‘Eight Honours and Eight Shames, widely regarded as his ideological solution to the new generation of competitive Chinese concerned with earning money and power, a publication that is visible almost everywhere: in classroom posters, banners on the street, and electronic display boards for the preparation of the 2008 Olympics in Beijing and Expo 2010 in Shanghai, reminding one of the ubiquitous Mao’s little red book.

Mr. Hu has been a communist since early childhood; he is not going to change merely because President Bush attends the Olympics and has a private meeting to press the case on Tibet, or Africa. In fact it is the other way around: Mr. Hu is going to teach Mr. Bush what Mr. Bush should be doing in the good old United States of America. Mr. Hu will change, if at all, if he becomes convinced that he will be ousted and that his future is at an end which would surely happen if the Olympics turn out to be a failure. For that reason, the proposal of Dr. Yang Jianli, featured guest commentator, that the world community unite around a specific set of conditions, which if not met, would result in reduced levels of participation in the Olympics determined by the individual governments is a realistic, tough, non-utopian, and feasible proposal.

The visit of Mr. Bush will only serve to raise the standing of Mr. Hu in the eyes of his own people giving the appearance that the human right violations of the Chinese government are officially sanctioned by the United States of America; will produce no lasting improvement; and will delay the natural course of events that is the inevitable outcome of the suppression of individual rights. It may take 50 years or more like in Cuba or a thousand years but it will inevitably happen. Individuals may be killed and repressed and put in chains but the spirit of freedom is unrelenting.