January 30, 2005
Photos From Iraq
January 28, 2005
The Countdown to Elections in Iraq
"Everyone in Iraq just wants one thing; we want to have a stable prosperous state. It doesn't really matter who wins, what matters is building this country in the way that God and his prophet want. It would have been better to have elections in peaceful times. Those terrorist will kill lots of people on election day with their bombs." ---Ayoub Sadoon, 70, Retired
This Sunday will most likely be a bloody day for Iraqis as they head to the polls.
I truly hope that this is not the case, but I think it is sadly inevitable. The religious fundamentalists who are using barbaric violence to thwart this election no doubt have the most to lose and they understand what is at stake. For when people can freely elect their leaders, liberty, for the most part, is secured for all. In such an environment they will be marginalized, and this is what they fear.
This piece by John Podhoretz from earlier in the week makes this point well:
Now, it will certainly be tragic if Sunnis who wish to vote are forcibly prevented from doing so by the terrorists in their midst. But those Sunnis' best chance to secure their freedom to vote at a later date will emerge from a viable result in Sunday's elections.
Why? Because once a legitimately elected Iraqi assembly is seated, the insurgents will have no argument left with which to advance their cause except for the open hatred of liberty.
The latest tape from Iraq's terrorist master, Abu Musab al-Zarqawi, made that point crystal clear. "We have declared a fierce war on this evil principle of democracy and those who follow this wrong ideology," Zarkawi says. "Anyone who tries to help set up this system is part of it."
Note that Zarqawi doesn't say he's fighting imperialism, or foreign invaders on Iraqi soil, or any other (and far more seductive) argument. He is waging war on democracy inside Iraq on the right of Iraqis to choose their own leaders and structure their own governments.
Zarqawi is a very frightening and very evil man, a destructive force with hundreds of gallons of American and Iraqi blood on his hands. Iraqis and Americans alike have reason to be concerned about his declaration of war. But calling democracy "evil" is a self-defeating exercise. By doing so, he is including among the evildoers all Iraqis who go to the polls.
His fight will no longer be with Western devils, but with Iraqi patriots. There is a very real likelihood that under such conditions, his insurgency will collapse from the inside or will merely transition into becoming a brutal gang of parasites who use kidnapping and the threat of terrorism to extort money, pure and simple.
Another point to remember is that that the struggle for democracy is seldom easy. This piece by Jeff Fischer in the Washington Post makes an interesting comparison between the elections in East Timor five years ago and those in Iraq this weekend:
I served as chief electoral officer for the [East Timor independence] referendum, or 'popular consultation,' as it was officially called. Carlos Valenzuela was my deputy. After the election, thousands of people were killed and thousands more displaced by the militia fighters and their Indonesian military masters. To my knowledge, this election was marked by the largest loss of life in history--far larger than Iraq's so far, in numbers and percentage of the total population.
Now Carlos and I are in Baghdad. Carlos is the chief of the international assistance team and the U.N. representative on the Independent Electoral Commission of Iraq. I am serving as one of his advisers. We face a challenge here similar to what we experienced in East Timor -- to demonstrate that an election is the alternative to violence as a means of achieving a democratic goal.
Last week I was informed that a man named Riyadh, who was a professor of English working as an interpreter here, was targeted by the insurgents and killed. Riyadh, like Alvaro, was my friend. In his own way, he symbolized the modest aspirations of ordinary Iraqis who simply want to build a peaceful and free society, and who see the elections as a starting point toward this goal. He was gunned down for his belief. For Iraq, as for East Timor, there are broken houses on democracy's road. I will not forget the sacrifice of people such as Alvaro and Riyadh and the commitment to democracy that their sacrifices represent.
Best of luck to all those serving to keep the peace and to those braving the violence to take part in the election.
January 27, 2005
The Liberation of Auschwitz
Today commemorates the 60th anniversary of the liberation of Auschwitz. Take 10 minutes out of your life and read this inspiring, yet heartbreaking story of an American serviceman and a survivor of the Nazi death camp:
The two young men stood trembling before Army Lt. John Withers, dressed in the rags they'd worn at the recently liberated Dachau concentration camp. Sores pocked their bony arms and legs. Decades later, the lieutenant would remember how their sunken eyes sought mercy.
But in 1945, near the end of World War II, they posed a problem. Lt. Withers was a black leader in an all-black supply convoy. In violation of Army orders, his men were hiding the refugees. Lt. Withers planned to have the strangers removed -- until he saw them.
They stayed with his unit for more than a year, two Jewish survivors of the Holocaust hiding among blacks from segregated America. The soldiers nicknamed them "Peewee" and "Salomon." They grew close to Lt. Withers. By the time he bid them farewell, they'd grown healthy again.
Mr. Withers never forgot them. Over the years, he told and retold their tale to his two sons. When one son set out to find them, he discovered that Salomon had died in 1993. But Peewee, he learned, was alive.
Unlike Mr. Withers, Peewee had buried his past. His children and grandchildren knew almost nothing about his time in Auschwitz, Buchenwald and Dachau. When his grandson asked about the number tattooed on his left forearm -- A19104 -- all he could say was, "Bad people put that down."
He couldn't bring himself to talk about it.
Then John Withers reappeared -- and changed Peewee's life yet again.
January 21, 2005
I'll be out of town until late next week so I though I would put a quick quote up before I leave:
"Those who expect to reap the blessings of freedom must, like men, undergo the fatigue of supporting it."
Thomas Paine, The American Crisis IV
September 12, 1777
Be back next week. In the meantime, if you need some extra reading take a look at Micha Ghertner's latest post on Social Security.
January 19, 2005
The Taxman Cometh
With W-2s appearing in our mailboxes and April 15th fast approaching, I thought this story was quite appropriate:
Survivor winner faces tax charges
US reality TV series Survivor's first winner, Richard Hatch, is in trouble with tax authorities after allegedly failing to declare his $1m prize.
Mr Hatch, 43, has been accused of not paying tax on the $1.01m (£538,000) he got from the show in 2000 plus $321,000 (£171,000) salary from a radio station.
He could face up to five years in jail and a $250,000 (£133,000) fine for each of two charges of tax evasion.
January 17, 2005
Kudlow's Money Politic$, Palmer's The Eclectic Econoclast, and more...
Check them out when you get a chance...
January 16, 2005
Inexpensive Cars are but a Law Away
“That can’t be right” was the first thought that went through my mind.
It was my first day in New Zealand and I was in an internet café across the street from our hostel. While catching up on emails I looked up at the various flyers put up by individuals selling used cars and was blown away by the prices. Yes, they were clearly used but they were also good looking automobiles for NZ$2,000 (US$1,400) and lower. The prices seemed considerably lower than the U.S. but that didn’t make sense given New Zealand’s size and location out in the middle of the Pacific Ocean.
I didn’t think much about it until the next day when I came across a foot note in an article I was reading [Market Reform: Lessons from New Zealand]. It turns out that in the 80’s New Zealand changed its laws to allow for “the commercial importation of second-hand autos,” making it one of the few countries in the where this practice was legal.
The result? People began to import used cars from Japan and with the increase in supply came a sharp decrease in prices. Not only were cars more affordable to people that needed them, it also had the side effect of decreasing the number of motorbike fatalities and injuries by over 75% as automobile ownership grew rapidly among young adults.
Makes you wonder why governments ban used imports in the first place?
January 14, 2005
Sports, Jealousy, and Economics
In his first post over at The Sports Economist, Prof. John Palmer catches me in a bit of a slipup within my last post. He asks: "Why does it matter how wealthy they are?" referencing my quote that "millionaire players and billionaire owners feel the need to take money from everyday people to fund their lines of work."
He makes a good point. For even if Alex Spanos (the owner of the Chargers) didn’t have a dime to his name, it still wouldn’t justify forcing taxpayers to fund his stadium against their will.
But this quote from the post troubles me slightly:
The question of whether taxpayers should support professional sports is a valid one. If it is efficient to support them, if there is a net social gain to supporting them, then it should not matter how well-off the owners and players are, unless we openly acknowledge that we would be happy to sacrifice some economic efficiency just to keep rich franchise owners and highly paid players from becoming richer.
Now, it’s clear that what Dr. Palmer is saying over the entire post is that I should not resort to relying on people’s jealously to make my point, for there are many reasons that stadiums should not be funded with taxpayers’ dollars on efficiency grounds alone. Yet jealousy aside, by pointing out the net worth of the players and owners, it’s clear they would have the collateral to get a loan to fund their stadium if it really was such a good deal.
But even more importantly, I am always bothered by arguments that we should or should not pursue a certain course of action justified solely on economic efficiency. That’s an arbitrary standard in my opinion. When dealing with economic models there are just too many unknown variables to predict the value to society of a given project. You could very well imagine a situation where Economist A says that her calculations predict a stadium would not be economically efficient, while Economist B’s calculations predict it would. Voters could then justify their support or opposition to such a plan by picking their preferred economist, while in truth it may have more to do with the teams winning or losing record.
What is needed instead is a standard of right and wrong that must be applied to all such situations. The standard I use, and that I try to convey to others when debating such a topic, is that individuals should not be coerced into paying for something that they do not support. The fact that a majority of people want a stadium doesn’t justify confiscating the minority’s hard earned cash. Now, that has far reaching implications, but I do think it’s a basic standard that many of us agree upon.
Most of the time we won't find out if a project such as a stadium is economically efficient until years after it is completed. The fans, players, and owners might be right that a new stadium will be a boon to the city of San Diego. What better way to get it build but to have them put their money where their mouths are and fund it themselves?
Update: My friend Dan emails to point out that I grouped players and owners together when there really should be a distinction. Why should players be asked to fund a new stadium he asks? He points out not only the fact that players are contract employees who could be traded to another teams and never get to play in the stadium, but also that if the players did help fund the stadium they should get a paid to do so just like any other investor. In short, even though players do have lots of money, in no way should they be obligated to pay for the stadium simply because they might be working there.
Point taken and I stand corrected.
January 9, 2005
The Importance of a 40-Yard Field Goal
Man, you had to feel bad for Nate Kaeding last night. After the 22-year-old rookie missed a game winning field that would have sent the Chargers into the second round of the playoffs, images of him on the sideline with a depressed look on his face had to make your heart sink. Granted, he gets paid the big bucks to come through in those situations, but I don't think I could handle that kind of pressure.
The second thought that was running through my head though was what did that missed field goal do to the future of the Chargers in San Diego? After a nine year stretch of not making it to the post-season, and a 4-12 record last year, the people of San Diego where ready to send the Chargers packing. The majority of the community was going to have no part in helping to finance a new stadium with tax dollars that the Charges demanded if the city wanted to keep the team in San Diego.
But it is amazing what flipping that record to 12-4 did to public opinion this year. Even though the city is in the middle of a pension fund crisis, public opinion changed and a recent poll showed that a majority of San Diegans now favor keeping the team in the city. A current proposal that had the city donating the land for the stadium (land that could be sold to help fill the depleted city coffers) would have no doubt passed with ease if on the ballot last week.
Whether Nate's field goal attempt that drifted a couple yards to the right will swing public opinion in the other direction remains to be seen. But one things clear, a great playoff run by the Chargers would have all but guaranteed that they would have remained in the city. It also would have all but guaranteed taxpayers of San Diego would have been the losers.
It always shocks me that millionaire players and billionaire owners feel the need to take money from everyday people to fund their line of work. You would think it would be commonsense that if these stadiums were such great deals, they could finance them on their own and wouldn't need taxpayers subsidies. Unfortunately, the excitement of your home team winning is a powerful thing and can override this sentiment.
January 7, 2005
The Cost of Returning the Environment to its "Natural" State
This story from the AP disturbingly shows how some value the environment in its "natural" state more than they value human life.
PATONG BEACH, Thailand - Many believe the tsunami that devastated this tourist hotspot and killed thousands had one positive side: By washing away rampant development, it returned the beaches to nature.
Greg Ferrando glistened with sweat and sea water as he went for a barefoot jog up the immaculate white sand beach, where the tsunami has wiped away almost all signs of humanity.
"This whole area was littered with commercialism," said the 43-year-old from Maui, Hawaii. "There were hundreds of beach chairs out here. I prefer the sand."
See... the world is better now. It's just like King Greg Ferrando wants it (never mind that there were thousands killed).
And then there is this little gem:
"They were just building and building and building. It was too much. You couldn't even walk around," said Moriel Avital, a 24-year-old Israeli who lived on the island for four months.
"It was all gone in one wave — it's telling people not to mess with nature," she said. "Paradise should be paradise and should not become this civilized."
Now if Moriel's house was completely destroyed and her family members killed by a natural disaster, she might have a different outlook on such events. But the majority of those killed by the tsunami in the area she references were just poor Thai villagers... so what does it matter to her. She now gets to enjoy her vision of paradise, which is clearly more important than those lost in the mass grave below.
January 6, 2005
Tragedy in Southeast Asia
A reader asks:
I was wondering whether economicswithaface would review the recent devastation in SE Asia in terms of economic development (or lack thereof). I know that Malaysia will probably get build really quickly, simply because they have tons of money. However, places like Sri Lanka, Indonesia (racked with civil war), and Thailand will not get rebuilt simply because they are not as wealthy.
One of the saddest aspects of this tragedy is that those countries who already had the least, were not only hit the hardest by the tsunami, but also were in many cases the least equipped to deal with such a crisis. Lack of insurance markets, infrastructure, and effective government and private networks to come to the aid of their citizens have made an already horrible situation even worse.
As mentioned above, a wealthier country like Malaysia (who was also the least affected by the tsunami) will have an advantage over it's poor counterparts. To put this in perspective Malaysia has an average annual income of $4,806 per person. This is compared with $3,000 in Thailand, $1,059 in Indonesia, and $899 in Sri Lanka. The aforementioned are also dealing with a host of other problems such as higher degrees of corruption, civil wars and weak judiciaries.
Still, I am optimistic that even these poorer countries will get back on their feet faster than expected. Huge amounts of aid coming from both private and government sources will provide an immediate source of relief, while, as The Economist pointed out in its last issue, the disaster has the potential to smooth internal relations among hostile communities. This alone will help to move these countries forward.
More than anything though my optimism stems for the fact that human being are resilient. This thought was conveyed by Nobel laureate in economics Gary Becker in a recent article on the disaster:
John Stuart Mill, the great 19TH century English economist and philosopher, optimistically, but I believe accurately, remarked on “…the great rapidity with which countries recover from a state of devastation, the disappearance in a short time, of all traces of mischief done by earthquakes, floods, hurricanes, and the ravages of war”. The history of both natural and man-made disasters during the subsequent century and a half generally supports Mill.
So in terms of rebuilding houses, businesses and infrastructure I'm optimistic. But what won't be easy to recover from is the sheer loss of life on a personal level. Parents losing their children and children losing their parents in these numbers is something that is so depressing it's hard to even comprehend.
 It should be noted that per capita income is not the only way to measure a county's wealth. India, which has refused outside aid as it feels it has the resources to deal with the crisis itself, has a per capita income of $493. But it also has a total economy (GDP of $517 billion) that is more than double any of the previously mentioned nations. While the wealth is concentrated, the government has the ability to tap this money for the relief effort. I'd be interested in any feedback others might have on this point.
Update: A friend points out another reason India refused aid: pride. This article in the WSJ, "Proud India Gets Mixed Reviews For Refusing Aid," has the details.
January 3, 2005
Reading, Reading, and More Reading
Here's a list of books and essays (mainly on economics but a few on history as well) that I plan on reading before we depart on our trip around the world starting in July. Most of the works are off George Reisman's bibliography from Capitalism. As I get done with them I'll post short reviews of each...
The Wealth of Nations---Adam Smith
For the New Intellectual---Ayn Rand
The New Left: The Anti-Industrial Revolution --- Ayn Rand
Principles of Economics --- Carl Menger
Principles of Political Economy and Taxation --- David Ricardo
Capital and Interest --- Eugen von Bohm-Bawerk
Shorther Classics of Bohm-Bawerk --- Eugen von Bohm-Bawerk
Capitalism and the Historians --- F.A. Hayek
The Constitution of Liberty --- F.A. Hayek
Economic Sophisms --- Frederic Bastiat
Selected Essays on Political Economy --- Frederic Bastiat
The Russians --- Hedrick Smith
Time Will Run Back --- Henry Hazlitt
The Failure of the "New" Economics --- Henry Hazlitt
The Critics of Keynesian Economics --- Henry Hazlitt
An Essay on Capital --- Israil Kirzner
The General Theory of Employment Interest and Money --- J.M. Keynes
A Short History of the World --- J.M. Roberts
The Consequences of Mr. Keynes --- James Buchanan
James Mill Selected Economic Writings --- James Mill
A Treatise on Political Economy --- Jean-Baptiste Say
Second Treatise on Civil Government --- John Locke
The Communist Manifesto --- Karl Marx
Das Kapital --- Karl Marx
Human Action --- Ludwig von Mises
Socialism --- Ludwig von Mises
The Theory of Money and Credit --- Ludwig von Mises
A monetary History of the United States --- Milton Friedman
Man, Economy, and State --- Murray Rothbard
What Has Government Done to Our Money --- Murray Rothbard
The Politically Incorrect Guide to American History --- Thomas E. Woods Jr.
The State Against Blacks --- Walter Williams
Is Government the Source of Monopoly" --- Yale Brozen
That's 33 in all. If blogging is a little lighter over the next few months that's your reason.