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July 2008

Smacking down "declinism"

Robert J. Lieber, professor of government and international affairs at Georgetown, notes a pattern:

Over the years, America’s staying power has been regularly and chronically underestimated—by condescending French and British statesmen in the nineteenth century, by German, Japanese, and Soviet militarists in the twentieth, and by homegrown prophets of doom today. The critiques come and go. The object of their contempt never does.

The Beacon

The Independent Institute is producing a fine blog, The Beacon. Some of the leading figures in the conservative/libertarian community are posting there. Just to mention a few whose work I'm a little familiar with: David Theroux, Peter Klein, Robert Higgs, and William Shughart.

Here are four recent posts that I think are worth your time:

Robert Higgs, "Notes on the Fannie Mae/Freddic Mac Bailout".

Yes, what is a government for, if not to save us from the impending disaster that its own policies have produced? Thank heavens for the government!

Jonathan Bean, "Affordable Health Insurance is ILLEGAL".

In the late 1980s, I sold health insurance in New England to people who did not have it. Many  were self-employed. A young healthy person could buy top-rated major medical for $30/month. That was low enough to encourage my clients to buy. Then, the “progressives” tacked sugar plum mandates onto health insurance and eventually required all companies to take on any one who applied. The result? Costs soared and most private insurance companies withdrew from the state. That made it necessary for the state to create an indemnity pool to cover those without insurance. Guess what? The cost was sky high.

[This is so right. One of the absolutely least defensible parts of our current health care system is government inhibition of "no frills" policies, policies that would be especially attractive to the young and healthy individuals who comprise a substantial part of the uninsured.]

Continue reading "The Beacon" »

"The Curse of Aid"

Forthcoming in the Journal of Economic Growth, by Djankov, Montalvo, and Reynal-Querol:

Foreign aid provides a windfall of resources to recipient countries and may result in the same rent seeking behavior as documented in the “curse of natural resources” literature. In this paper we discuss this effect and document its magnitude. Using panel data for 108 recipient countries in the period 1960–1999, we find that foreign aid has a negative impact on institutions. In particular, if the foreign aid over GDP that a country receives over a period of 5 years reaches the 75th percentile in the sample, then a 10-point index of democracy is reduced between 0.5 and almost one point, a large effect. For comparison, we also measure the effect of oil rents on political institutions. We find that aid is a bigger curse than oil.

Ungated version.

Something's gotta give

Three pieces on the almost-certainly coming Iranian conflict:

Distinguished Israeli historian, Benny Morris, writes that it's on.

Israel will almost surely attack Iran’s nuclear sites in the next four to seven months. (New York Times, July 18.)

Michael Hirsh, Newsweek (July 9):

But there appears to be increasing daylight between Washington, which is eager to avoid military action, and Jerusalem, which is reluctantly coming to the conclusion that there may be no choice.

And that's because, frankly, nothing else seems to be working.

How Israel will do it.