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By Gordon Frisch

May 14, 2001



Nuggets of News

"It is a newspaper’s duty to print the news and raise hell."

The Chicago Times, 1861


More Energy Folly

Last week we detailed how California’s state government created its energy crisis with price caps, which financially precluded energy companies from building more new power plants. Add the Federal Energy Regulatory Commission (FERC) as culpable in the crisis. FERC’s iron grip on the US interstate oil and gas pipeline system greatly discouraged companies from building more pipelines to handle growing demand. Economist Paul MacAvoy, Yale School of Management, says FERC created artificial scarcity by impeding pipeline construction that resulted in $billions of extra costs to consumers each year. Traditionally, government has always found a way to blame oil companies for price gouging. Perhaps with knowledgeable oilmen running government, solutions instead of scapegoats will be found.

Big Brother Now Cracking Down on Soccer Moms

The U.S. Supreme Court has gone a legal bridge too far. It upheld the arrest, handcuffing, and hauling off to jail (while 2 young children were left in the car) of a Texas soccer mom for failing to have auto seatbelts buckled as required by law. The soccer mom sued the city, charging that the arrest for a fine-only offense was a violation of her Fourth Amendment rights, which explicitly prohibit "unreasonable searches and seizures." Unbelievably, the US Supreme Court upheld this jackbooted arrest as reasonable and appropriate.

UN Human Rights Commission

The U.S. is miffed that it was removed from the 53-member UN Human Rights Commission by lack of votes. Some glory in the fact the world’s superpower was put in its place and that a dose of humility was long overdue. But despite its sometimes-bullying tactics, the US also ranks as perhaps the world’s greatest champion of human rights, and to have it absent from this commission hurts, not helps, those who most need representation. It’s not encouraging to find that new members of the commission include Algeria, Congo, Libya, Pakistan, Saudi Arabia, Sudan, Syria and Vietnam, while the U.S. was forced out.

Medical Privacy Sham

Last fall a Gallup poll showed that 92% of Americans opposed "official" snooping in private medical records. In his customary "government-by-poll" fashion, President Clinton then instituted supposedly tough new regulations regarding medical privacy, which President Bush has rubber-stamped. Sue A. Blevins, Institute for Health Freedom, Washington, D.C. says the new regulations "actually weaken individuals’ ability to restrict access to their medical records." Under the guise of privacy, the new rules undercut doctor-patient confidentiality and authorize new intrusions, especially by government.

Doctors and health plans strongly urge (coerce?) patients to sign consent forms immediately prior to treatment (when in distress and you urgently need it), which permit broad use and disclosure of personal data. Without this consent, doctors can’t sell your file to a marketing firm, however your health maintenance provider can do so anyway. Regardless, the new rules permit doctors and health plans to release medical records to government agencies for virtually any reason, without patient consent. And government agencies are notoriously un-protective of medical data they collect.

Online Privacy

Online e-businesses usually require you to submit your e-mail address. Once you do, you’ve often lost your privacy. Despite claims to the contrary, e-tailers frequently shop your e-mail address to other e-marketers, who deluge you with spam (junk e-mail). To stop spamming a message will often say, "To unsubscribe, click here." It’s the big-lie equivalent of "The check is in the mail," as it rarely stops spamming. Caveat e-consumer.

German Pensions Going Private

Everyone talks about the global "pensions time bomb," but (until now) few have done anything about it. In summary, most nations have pay-as-you-go pension systems, which are destined for failure in years ahead as demographics show fewer workers will be unable to support more retirees. Germany is pushing legislation to privatize part of its pension system so citizens share in responsibility for their future retirement. Germany is to be commended for taking this necessary action, which President Bush (in the face of strong partisan opposition) is also attempting with the U.S. Social Security system.

Japan: Another False Dawn in the Land of the Rising Sun?

In his maiden policy speech to parliament this week, Japan’s new Prime Minister Koizumi promised "reform with nothing sacred." Is it just another in an endless litany of similar promises by former prime ministers, or is it the real thing this time? The gods on Mt. Fuji and everyone else know reform is desperately needed, as a decade of deficit spending has made Japan the most heavily indebted country in the world (its budget deficit is nearly 10% of GDP and long-term debt exceeds income by 15 times).

A key indicator will be bankruptcies. The Japanese government has kept its 1989 real estate bubble inflated by refusing to write off non-performing bank loans. Ironically, an increase in bankruptcies would be seen as positive for the Japanese economy and markets as it would mean the government is finally coming to grips with the past and writing off bad loans. But to achieve genuine reform, PM Koizumi will have to battle like a samurai to defeat Japan’s entrenched government-by-committee bureaucracy.

Sub-Saharan Africa in Stark Economic Perspective

Writing in the May 28 issue of Forbes magazine, Professor Steve H. Hanke of The Johns Hopkins University provides some sobering economic statistics on sub-Saharan Africa:

h In late 2000, the IMF and World Bank approved a $34 billion debt relief package for the world’s 22 poorest countries—18 are in Africa.

h Average per capita income (excluding South Africa) is $315/year. Inflation-adjusted, that’s lower than it was in 1960.

h Median GDP per country is $2 billion—roughly the output of a town of 60,000 people in a rich country.

h Africa’s population is more than twice the size of the US, and it has untold natural resources, but the continent’s total income is barely more than Belgium’s.

h "Africa’s share of world trade has fallen to less than 2%." Foreign aid amounts to 9% of GDP.

h Just to halt the downward spiral into deeper poverty would require a 5% annual growth rate. This is virtually unachievable as all over sub-Saharan Africa AIDS and other illnesses are striking down workers in their prime productive years. [Editor’s Note: I attended a lecture yesterday by Professor William Foltz, Yale University, an expert on African affairs, who has lived and worked in many African countries. Dr. Foltz said 3 people are now being trained for many skilled jobs in sub-Saharan Africa as statistics show that 2 of the 3 will die from AIDS. Imagine the tremendous impact on any corporation’s bottom line if it had to train 3 people for every job.]

h Civil wars, resulting from conflict over resources such as diamonds, directly impact 20% of Africans, resulting in millions of deaths and refugees.

h Due to capital flight [much attributable to corruption and outright looting], 40% of Africa’s wealth is parked in bank accounts outside the continent making it unavailable for vitally needed investment.

h Professor Hanke believes one of the root causes of Africa’s problems is a lack of property rights. "If African’s can’t be assured of owning lands or goods, they can’t have functioning economies." He laments the fact that "in Africa, people can’t even be assured of owning their own bodies. Child slavery is common, particularly in West Africa, where youngsters are routinely shipped off to the Middle East to work as unpaid laborers. Many more are sold into bondage at home." The International Labor Organization estimates 80 million African children between the ages of 5-14 work as slaves.

Tax Cut Facts (Doug Bandow, senior fellow, Cato Institute, in The Washington Times)

"The top 1% of taxpayers pay about one-third of all income taxes. The top 5% pay more than half. The top 10% pay nearly two-thirds. The top 25% pay more than $4 of every $5. Occasionally, the purveyors of envy acknowledge this inconvenient fact. Yes admits the Washington Post’s columnist E.J. Dionne Jr., ‘The wealthy pay the most taxes’ but ‘they have also made the greatest gains in the past decade.’ Eh? Let’s run through this one more time. Tax cuts should go to the people who pay taxes. The fact that some higher-income people made great gains in the 1990s means they are paying even more in taxes. So, they should receive more back, unless one believes Uncle Sam is the great benefactor who generously allowed them to earn more. And, all that money really belongs to the government, so increased earnings are the equivalent of a tax cut."

US Senator Bob Kerrey (D-NE)—Congressional Medal of Honor Recipient

The fogs of war distort and obscure many truths and often lead to unforeseen actions that haunt its reluctant participants forever. Atrocities and horrors are in the nature of war and it is easy for those who have not been in the turmoil of conflict to stand as critics on the other side of history. That doesn’t excuse wrongdoing, but it sometimes explains it. This appears to be at the heart of Senator Kerrey’s painful revelations as his ghosts of Vietnam reappear. As Robert E. Lee said: "It is well that war is so terrible, else we should grow too fond of it."

Celebrity Bandits

It’s always a bit puzzling how some criminals become near folk heroes despite their crimes. O.J. Simpson and Robin Hood come to mind, and the latest is Ron Biggs, who pulled off Britain’s Great Train Robbery in 1963, and then fled to Brazil where he escaped extradition. Old and broken, Biggs has now returned to Britain, where he’s welcomed as a hero by many. How do these "celebrity bandits" come to be idolized? It’s because they somehow managed to "beat the system," which almost everyone would like to do, and they’re admired for that, not their crimes.

"Whenever I take up a newspaper and read it,

I fancy I see ghosts creeping between the lines."

—Henrik Ibsen, 1881


Commentary and Interpretation of Global Issues by Gordon Frisch

Editor: Issues of the Day

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