Will Anwar Ibrahim Finally Make It from Prison to Prime Minister?

Anwar Ibrahim at CatoIn 2005 the Malaysian political leader Anwar Ibrahim visited the Cato Institute. In the photo at right, I’m giving him a copy of my book Libertarianism: A Primer, which he told me he had already read – in prison. What a thing for an author to hear! After becoming leader of the opposition People’s Justice Party, he was again imprisoned on trumped-up charges in 2015. He remains in prison today. But thanks to yesterday’s elections, it now seems that Anwar may soon not only be released from prison but be named prime minister.

It’s a complicated story. Anwar was a youth leader and rising star in UNMO, the party that has ruled Malaysia for six decades since independence. He became finance minister and deputy prime minister under Mahathir Mohamad, who became well known for his defense of “Asian values” against supposedly Western notions of democracy and human rights. But Anwar fell out with Mahathir over the Asian crisis and charges of corruption. In 1998 Anwar was removed from office and then jailed in a trial that was criticized around the world. Amnesty International said that his trial “exposed a pattern of political manipulation of key state institutions including the police, public prosecutor’s office and the judiciary.” He was released in 2004 but banned from participation in politics for five years. After his return to opposition politics, he again angered the ruling party and was sent back to prison. Throughout his travails he was smeared in state-dominated media as homosexual, pro-Israel, and pro-American, the usual sorts of charges that authoritarian governments make against their critics. It should be noted that Anwar is no saint, and he tried to turn some of the same charges back against his persecutors.

Meanwhile, Mahathir retired as the world’s longest-serving elected leader in 2003. He became a sharp critic of his UNMO successors, Abdullah Ahmad Badawi and later Najib Razak. This year, at age 92, he became the opposition candidate for prime minister. From jail Anwar supported him. This week Mahathir led his new party to victory and has just been sworn in as prime minister. He has promised to release Anwar from prison and make him prime minister within two years. Observers are hopeful that Anwar’s leadership would mean reform in Malaysia: an end to kleptocracy and corruption and perhaps an economy that is “inclusive, rules-based and competition-oriented with a large, well-funded social safety net,” much like Singapore. According to the Human Freedom Index, Malaysia could use improvement in all areas.

Last year I complained that President Trump was welcoming Anwar’s jailer, Najib Razak, to the White House. Now of course Anwar is joining forces with his original jailer. What a long strange trip it’s been. But hopefully it’s not over.

Posted on May 10, 2018  Posted to Cato@Liberty

Will Regulations Create Big Marijuana?

I wrote last month that new regulations and taxes in California’s legalized marijuana regime are likely to result in a situation in which

a few people are going to get rich in the California marijuana industry, and fewer small growers are going to earn a modest but comfortable income. Just one of the many ways that regulation contributes to inequality.

Now the East Bay Express in Oakland offers a further look at the problem:

East Bay ExpressAsk the people who grow, manufacture, and sell cannabis about the end of prohibition and you’ll hear two stories. One is that legalization is ushering a multibillion-dollar industry into the light. Opportunities are boundless and green-friendly cities like Oakland are going to benefit enormously. There will be thousands of new jobs, millions in new tax revenue, and a drop in crime and incarceration.

But increasingly you’ll hear another story. The state of California and the city of Oakland blew it. The new state and city cannabis regulations are too complicated, permits are too difficult and time consuming to obtain, taxes are too high, and commercial real estate is scarce and expensive. As a result, many longtime cannabis entrepreneurs are either giving up or they’re burrowing back into the underground economy, out of the taxman’s reach, and unfortunately, further away from the social benefits legal pot was supposed to deliver….

Some longtime farmers, daunted by the regulated market’s heavy expenses, taxes, and low-profit predictions, have shrugged and gone back to the black market where they can continue to grow as they always have: illegally but free of hassle from the state’s new pot bureaucrats armed with pocket protectors and clipboards.

Not all the complaints in the two-part investigation are about taxes and overregulation. Some, especially in part 1, are about “loopholes” in the regulations that allow large corporations to get into the marijuana business and about “dramatic changes to Humboldt County’s cannabis culture, which had an almost pagan worship of a plant that created an alternative lifestyle in the misty hills north of the ‘Redwood Curtain.’”

WSJ on RegulationBut there’s plenty of evidence that regulations are more burdensome on newer and smaller companies than on large, established companies. Indeed, regulatory processes are oftencaptured” by the affected interest groups. The Wall Street Journal confirmed this just yesterday, reporting that “some of the restrictions [in Europe’s GDPR online privacy regulations] are having an unintended consequence: reinforcing the duopoly of Facebook Inc. and Alphabet Inc.’s Google.”

Posted on April 25, 2018  Posted to Cato@Liberty

Does the Senate Foreign Relations Committee Have an Obligation to Rubberstamp Mike Pompeo?

Marc Thiessen, a columnist at the Washington Post, is highly upset that the Senate Foreign Relations Committee may not approve President Trump’s nomination of Mike Pompeo to be Secretary of State:

For the first time in the history of the republic [since the committee started recording votes in 1925], it appears increasingly likely that a majority of the Senate Foreign Relations Committee will vote against the president’s nominee for secretary of state. If this happens, it would be a black mark not on Mike Pompeo’s record, but on the reputation of this once-storied committee.

Thiessen seems to think that the role of the Senate Foreign Relations Committee, and by extension the United States Senate, is to approve a president’s nominees. But of course, the Constitution provides that “The President … shall nominate, and by and with the Advice and Consent of the Senate, shall appoint Ambassadors, other public Ministers and Consuls, Judges of the supreme Court, and all other Officers of the United States.” The Heritage Foundation’s Guide to the Constitution affirms that “the Senate has complete and final discretion in whether to accept or approve a nomination.” The Foreign Relations Committee is today considering whether to consent to this nomination. The Senate as a whole may choose to reject the negative recommendation and consent to the nomination. (See also the novel and movie Advise and Consent, on TCM this Friday.)

It’s not that members of the committee don’t have legitimate grounds on which to withhold consent. Sen. Rand Paul, a key player as he is likely to be the only Republican on the committee to oppose the nomination, says:

Director Pompeo has not learned the lessons of regime change and wants regime change in Iran….

President Trump sought to break with the foreign policy mistakes of the last two administrations. Yet now he picks for Secretary of State and CIA Director people who embody them, defend them, and, I’m afraid, will repeat them. I will not support their nominations.

One need not agree with that criticism to acknowledge that it’s a reasonable concern on which to reject a nominee.

Thiessen is a former speechwriter to Secretary of Defense Donald Rumsfeld and President George W. Bush, which might give him an executive-branch view of Congress’s role. Before that, however, he served for six years as spokesman and senior policy advisor to Senate Foreign Relations Committee Chairman Jesse Helms, whose willingness to use his position to block presidential nominees was well known. He mentions Helms’s support of President Clinton’s nomination of Madeleine Albright for Secretary of State, but omits the nominees Helms blocked or tried to block, such as Massachusetts governor William Weld and former senator Carol Moseley-Braun.

Thiessen concludes his excoriation of the Senate Foreign Relations Committee with a flourish: Assuming he is confirmed by the Senate, Pompeo “would be more than justified in determining that the State Department is best served by working closely with the appropriators and Senate leadership, and bypassing a committee that can’t make policy, can’t legislate and can’t lead.”

His real complaint, however, is not that the committee can’t lead. It is that the Senate Foreign Relations Committee won’t blindly follow.

Posted on April 23, 2018  Posted to Cato@Liberty

David Boaz discusses the Trump administration’s policy agenda on The Bob Zadek Show

Posted on April 22, 2018  Posted to Cato@Liberty

David Boaz discusses James Comey’s book tour on Sinclair Broadcast Group

Posted on April 16, 2018  Posted to Cato@Liberty

Jeff Greenfield on the Hollywood Movie That Urged FDR to Become a Fascist

At Politico Jeff Greenfield writes about “The Hollywood Hit Movie That Urged FDR to Become a Fascist.” The movie was “Gabriel Over the White House” in 1933 and, Greenfield writes, “it was designed as a clear message to President Franklin Delano Roosevelt that he might need to embrace dictatorial powers to solve the crisis of the Great Depression.” Greenfield assures us that FDR did not become a dictator, but he notes that “the impulse toward strongman rule” often stems from a sense of populist grievance, along with the scapegoating of “subversive enemies undermining the nation.” Depending on the time and the strongman, those subversive enemies can be Jews, capitalists, Wall Street, the 1 percent, the homosexuals, or in some countries the Americans.

Gene Healy wrote about “Gabriel” 10 years ago in The Cult of the Presidency and in this column in 2012:

…many of us still believe in authoritarian powers for the president.

In a November 2011 column, the Washington Post’s Dana Milbank offered “A Machiavellian model for Obama” in Jack Kennedy’s “kneecapping” and “mob-style threats” against steel-company executives who’d dared to raise prices.

Despite the obligatory caveat: “President Obama doesn’t need to sic the FBI on his opponents,” Milbank observed that “the price increase was rolled back” only after “subpoenas flew [and] FBI agents marched into steel executives’ offices”: “Sometimes, that’s how it must be. Can Obama understand that?”

Greenfield says “Gabriel” was both a commercial and critical hit, but “faded into obscurity, in large measure because the idea of a “benevolent dictatorship” seemed a lot less attractive after the degradation of Hitler, Mussolini and Stalin.”

But that wasn’t so obvious in 1933. As I wrote in a review of Three New Deals by Wolfgang Schivelbusch, there was a lot of enthusiasm in the United States for central planning and “Fascist means to gain liberal ends.” Two months after Roosevelt’s inauguration, the New York Times reporter Anne O’Hare McCormick wrote that the atmosphere in Washington was “strangely reminiscent of Rome in the first weeks after the march of the Blackshirts, of Moscow at the beginning of the Five-Year Plan.… America today literally asks for orders.”

And Roosevelt was prepared to give those orders. In his inaugural address he proclaimed:

If we are to go forward, we must move as a trained and loyal army willing to sacrifice for the good of a common discipline. We are, I know, ready and willing to submit our lives and property to such discipline, because it makes possible a leadership which aims at a larger good. I assume unhesitatingly the leadership of this great army.… I shall ask the Congress for the one remaining instrument to meet the crisis — broad executive power to wage a war against the emergency, as great as the power that would be given to me if we were in fact invaded by a foreign foe.

Fortunately, American institutions did not collapse. The Supreme Court declared some New Deal measures unconstitutional. Some business leaders resisted it. Intellectuals on both the right and the left, some of whom ended up in the early libertarian movement, railed against Roosevelt. Republican politicians (those were the days!) tended to oppose both the flow of power to Washington and the shift to executive authority. But we’re being reminded again, in Washington as well as Moscow and Beijing and Budapest and Istanbul, that liberal institutions are always threatened by populism and authoritarianism and especially the combination of the two.

“Gabriel Over the White House” will air on TCM on April 27.

 

Posted on March 27, 2018  Posted to Cato@Liberty

Small Marijuana Growers Squeezed Out by Legalization and Regulation

It’s often been noted that regulations can impose larger relative costs on small businesses and can serve to protect incumbent firms from new competitors. Goldman Sachs CEO Lloyd Blankfein noted that new regulations created a “moat” around his firm:

That all industries are being disrupted to some extent by new entrants coming in from technology. We, again, being, you know, technology-oriented ourselves, try to disrupt ourselves and try to figure out what’s the new thing, and come up with new platforms, new forms of distribution, new products. But in some ways, and there are some parts of our business, where it’s very hard for outside entrants to come in, disrupt our business, simply because we’re so regulated. You’ll hear people in our industry talk about the regulation. And they talk about it, you know, with a sigh: Look at the burdens of regulation. But in some cases, the burdensome regulation acts as a bit of a moat around our business.

The Washington Post reports on a new example: the legalized marijuana market in California. Libertarians have long urged the legalization of marijuana and other drugs. Certainly I expect better results from a legal regime where people are not arrested for buying, selling, or using marijuana. But governments can’t just repeal laws and stop arresting people; instead, they prefer to set up a regime of taxes and regulation. And that’s having an effect on the small marijuana growers in the state’s “Emerald Triangle.” As Scott Wilson reports in the Post:

Humboldt County, traditionally shorthand for outlaw culture and the great dope it produces, is facing a harsh reckoning. Every trait that made this strip along California’s wild northwest coast the best place in the world to grow pot is now working against its future as a producer in the state’s $7 billion-a-year marijuana market.

A massive industry never before regulated is being tamed by laws and taxation, characteristically extensive in this state. Nowhere is this process upending a culture and economy more than here in Humboldt, where tens of thousands of people who have been breaking the law for years are being asked to hire accountants, tax lawyers and declare themselves to a government they have famously distrusted. 

Wilson estimates that “Fewer than 1 in 10 of the county’s estimated 12,500 marijuana farmers are likely to make it in the legal trade….Less than 1 percent of the estimated 69,000 growers statewide have received a permit to farm marijuana since the beginning of the year.”
 
As many experts on drug prohibition predicted, prices are dropping in the legalized market. But for Humboldt and neighboring counties, the price drop is happening

at a time when small growers most need the money to begin complying with California’s stiff regulatory demands. At the same time, the state’s licensing of retail shops has been slow, leaving a lot of legal product without a legal place to be sold.

Marijuana from Humboldt that used to sell for $1,200 a pound three years ago is now selling at a 75 percent discount. State officials and many growers predict the vast overproduction will be curtailed by the new rules, likely by consolidating cultivation among large agriculture companies that can afford the regulations.

Humboldt countians feared this sort of effect. Wilson notes the history:

The population grew and changed in the 1970s, when disaffected hippies migrated north, a “back to the land” exodus from the Bay Area that brought a contempt for government ethos here. Marijuana emerged as the county’s next-generation commodity.

There is no reason people chose Humboldt to grow marijuana other than that Humboldt, as a society, allowed it to be grown. The same was true for neighboring Trinity and Mendocino counties. Collectively, the three are known as the “Emerald Triangle,” a globally renowned pot paradise.

And so in 2014 a lot of Emerald Triangle growers opposed Proposition 64, the legalization initiative, because they foresaw that it would lead to bigger companies squeezing out small growers.

It’s definitely a good thing to stop arresting people for marijuana. But once again regulations are going to serve to concentrate an industry and thus concentrate wealth. Chances are, a few people are going to get rich in the California marijuana industry, and fewer small growers are going to earn a modest but comfortable income. Just one of the many ways that regulation contributes to inequality.

 

 

Posted on March 19, 2018  Posted to Cato@Liberty

Leland Yeager on Trump and Trade

Cato adjunct scholar Leland B. Yeager had a long career at the University of Virginia Department of Economics in its golden age and later at Auburn University. He is the author of Foreign Trade and U.S. Policy: The Case for Free International Trade (1976), International Monetary Relations: Theory, History and Policy (1976), and Free Trade: America’s Opportunity (1954). At 93 he is still as insightful and as blunt as ever, and he just published this critique of President Trump’s understanding of trade policy at Liberty magazine under the title “Profound and Destructive.” The whole thing is reprinted below.

___________________

President Trump’s destructiveness requires few words here. Consider how world stock and currency markets have been shaken by the resignation on March 6 of Gary Cohn, regarded until then as Trump’s chief economic adviser. Although not a trained economist, Cohn apparently had some sound instincts derived from years of financial experience. His departure apparently and ominously leaves more influence, or echo, to Peter Navarro — look him up with Google.

This latest example of destructiveness follows the one touched off by Trump’s March 2 tweet bewailing America’s loss of “many billions of dollars on trade with virtually every country it does business with” and heralding trade wars as “good, and easy to win.”

I’ll spend more words on how profound Trump’s ignorance is. He considers a country’s excess of imports over exports a measure of loss. This measure applies even to trade with each foreign country separately. He counts China and Mexico among the worst offenders, deserving punishment. He does not understand the multilateral aspect of beneficial trade.

Nor does he understand how we gain in buying goods cheap from abroad. What difference does it make if steel and aluminum are cheap because of low foreign prices or because they grow cheaply on bushes at home? Money cost is a measure of opportunity cost, which means the loss of other goods when resources go instead to make the particular good in question. Opportunity cost reflects scarcity. Scarcity applies even to prosperous America, where we could enjoy still higher standards of living if food, clothing, shelter, entertainment, and other goods and services came costlessly and miraculously from heaven. Scarcity and how gains from domestic and foreign trade alleviate it are fundamentals of economics. The principle of comparative advantage goes far in explaining how.

Without understanding the academic presentation of the “absorption approach to the balance of payments,” everyone should be able to grasp its central idea, which is sheer arithmetic. If we as a country use more output for consumption and real investment than we produce, then the difference must come from somewhere — from abroad in the form of more imports than exports. A big item in this excess absorption, alias national undersaving, is government deficits. Yet Trump and Congress are complacent about increasing the deficit and debt by taxing less and spending more.

All too many politicians say that they are in favor of free trade if it is “fair trade” played on a “level playing field.” These slogans express Trump’s view of international trade as a game, a zero-sum game in which one player’s gain is another’s loss.

Trump does not understand how the price system coordinates economic activity, making most government planning about jobs and industries unnecessary and harmful.

The profundity of Trump’s ignorance goes beyond economics. It extends to diplomacy in domestic and foreign relations and even to the behavior of a decent human being. Yet his destructive economic ignorance remains prominent.

 
 

Posted on March 11, 2018  Posted to Cato@Liberty

What If Newspapers Reported the Real News about Human Progress?

In his new book Enlightenment Now and in his McLaughlin Lecture at the Cato Institute this week, Steven Pinker made the point that we may fail to appreciate how much progress the world has made because the news is usually about bad and unusual things. For instance, he said, quoting Max Roser, if the media truly reported the important changes in the world, “they could have run the headline NUMBER OF PEOPLE IN EXTREME POVERTY FELL BY 137,000 SINCE YESTERDAY every day for the last twenty-five years.”

This is understandable. As Pinker writes, 

News is about things that happen, not things that don’t happen. We never see a journalist saying to the camera, “I’m reporting live from a country where  a war has not broken out”—or a city that has not been bombed, or a school that has not been shot up. As long as bad things have not vanished from the face of the earth, there will always be enough incidents to fill the news, especially when billions of smartphones turn most of the world’s population into crime reporters and war correspondents.

And among the things that do happen, the positive and negative ones unfold on different time lines. The news, far from being a “first draft of history,” is closer to play-by-play sports commentary. It focuses on discrete events, generally those that took place since the last edition (in earlier times, the day before; now, seconds before). Bad things can happen quickly, but good things aren’t built in a day,  and as they unfold, they  will be out of sync with the news cycle. The peace researcher John Galtung pointed out that if a newspaper came out once every fifty years, it would not report half a century of celebrity gossip and political scandals. It would report momentous global changes such as the increase in life expectancy.

I’ve noted this myself. I think the mainstream media such as NPR, which I listen to morning and evening, fail to adequately examine the most important fact in modern history—what Deirdre McCloskey calls the Great Fact, the enormous and continuing increase in human longevity and living standards since the industrial revolution. If you listen to NPR or read the New York Times, you’ll be well informed about the news in general and about problems such as racism, sexism, and environmental disaster. But you won’t often be reminded that we are the richest, most comfortable, best-fed, longest-lived people in history. Or as Indur Goklany put it in a book title, you won’t hear about The Improving State of the World: Why We’re Living Longer, Healthier, More Comfortable Lives on a Cleaner Planet.

Pinker does point out, “Information about human progress, though absent from major news outlets and intellectual forums, is easy enough to find. The data are not entombed in dry reports but are displayed in gorgeous Web sites, particularly Max Roser’s Our World in Data, Marian Tupy’s HumanProgress, and Hans Rosling’s Gapminder.” But of course those aren’t the major media. Which is why, he says, “And here is a shocker: The world has made spectacular progress in every single measure of human well-being. Here is a second shocker: Almost no one knows about it.”

So what if the media did report the most important news, the Great Fact? I asked Cato intern Thasos Athens to help me envision that:

New York Times mockup

Posted on March 8, 2018  Posted to Cato@Liberty

David Boaz discusses the city of Baltimore paying for students to attend the upcoming March for Our Lives rally on ABC KRCR News Channel 7 at 5 PM

Posted on March 8, 2018  Posted to Cato@Liberty

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