Archived Posts August 2011 » Page 4 of 6 | Acton PowerBlog

It’s terribly sad, but you just can’t make this stuff up:

Thousands of sacks of food aid meant for Somalia’s famine victims have been stolen and are being sold at markets in the same neighborhoods where skeletal children in filthy refugee camps can’t find enough to eat, an Associated Press investigation has found.

As much as half of the food aid going into Somalia is stolen and sold in markets. Militants that control of large parts of the country and those who run refugee camps interdict the aid and sell it to free agents. Last week we warned about rampant corruption and theft in the country, but passages like this from the AP story are still heartbreaking

The aid is not even safe once it has been distributed to families huddled in the makeshift camps popping up around the capital. Families at the large, government-run Badbado camp said they were often forced to hand back aid after journalists had taken photos of them with it.

The camp bosses, employed by the most corrupt government in the entire world, take back the food and sell it outside the camp. The flow of aid has become torrential as Western governments take note of the famine and announce generous new aid packages. That has created what one Somali official called a “bonanza” for local charlatans. (The man spoke on condition of anonymity because, believe it or not, “monitoring food assistance in Somalia is a particularly dangerous process.”)

One man interviewed for the story seems to have read yesterday’s PowerBlog posting on the famine.

“While helping starving people, you are also feeding the power groups that make a business out of the disaster,” said Joakim Gundel, who heads Katuni Consult, a Nairobi-based company often asked to evaluate international aid efforts in Somalia. “You’re saving people’s lives today so they can die tomorrow.”

What Somalia needs is a PovertyCure. Instead of hosting hundreds of thousands of its people in refugee camps, which reinforces their powerlessness and encourages the country’s agricultural impotence, the country must open itself up to entrepreneurial development. And the West must focus its resources not on the indirect funding of militants, terrorists, and shysters, but on helping Somalia to build up its civil society and protect the economic freedom of its citizens.

In today’s Detroit News, Acton communications intern Elise Amyx offers a piece on farm subsidies. She looks at how Michigan Sen. Debbie Stabenow described this government support as “risk management protection” for farmers.

Stabenow, chairwoman of the Committee on Agriculture, Nutrition and Forestry, conceded to the soybean farmers that “it’s wonderful that farming is prosperous now.” But she pointed to droughts in the South and the floods in the Midwest as proof that “you still face the same risk that farmers have always to deal with.” Some agribusinesses get paid seven digits to not farm areas of their farm in the name of “risk management,” but what sort of business person doesn’t take risks?

There is no doubt that farming is a difficult, volatile business filled with risk and uncertainty, but so are many other industries that do not receive any government handouts. Too many farmers view the government as a savior, who will reduce risk, create certainty and save the day if something bad happens. This is a dangerously dependent position to be in, and it is morally problematic when it comes at the expense of everyone else.

The glaring injustices built into farm subsidy policies explain why so many on both the political right and left routinely describe them as immoral.

Read Elise Amyx’s “Farming subsidies often do more harm than good” in the Detroit News.

In “Stop Coddling the Super-Rich” investor Warren Buffett, one of the world’s wealthiest men, makes a case for upping the tax rate on the “mega-rich” in America. In a response published on National Review Online, Acton Research Director Samuel Gregg observes that “this is a broken record that Mr. Buffett has taken to re-playing over the past five years.” He points out that the U.S. tax system is already heavily progressive (no pun intended) and that the label “mega-rich” may not be as obvious as Buffett would like us to believe:

It’s safe to say that a substantial number of these people operate small-to-medium-size businesses that don’t play the corporate welfare game a la General Electric, that are already subject to some of the world’s highest corporate tax rates (most of which is paid by the owners of companies), that reinvest much of their income in expanding their activities and taking on new risk, and, above all, that employ people. They are the engine of growth and employment in America today — not the United States government. Why on earth would we disincentivize them from creating value and jobs by raising their taxes?

Read Samuel Gregg’s “Taxing Warren Buffett” on NRO.

Coverage of the drought in the Horn of Africa has fixated on the amount of aid going into the region and humanitarians’ estimates of how much more will be needed. According to the U.N. Coordination of Human Affairs office, the $1 billion already committed to assistance is less than half of what will be needed—but who knows whether the final figure will be anywhere near the stated $2.3 billion.

Hundreds of thousands of Somalis are flooding out of their country into neighboring Kenya and Ethiopia because massive refugee camps and daily high-energy rations are better than the situation at home. This migration is no different than that of the Israelites in Exodus or Ruth: surely 3500 years and half-a-dozen moon landings later we ought to have a better way of doing things?

Well we do, but the U.N. and the rest of the humanitarian establishment have lost the patrimony of Moses, and so have been wandering around the desert, dispersing aid to no effect, for a good deal more than 40 years. There is, thank goodness, a growing realization that U.N.’s materialistic solution is not working, as Ian Ernest, the chairman of the Council of Anglican Provinces of Africa, said last week:

We would not only want to work on the immediate needs, but we are thinking, because this is becoming a chronic problem, we have got to see the root causes and fight it.

World leaders cannot help developing Africa, of course, unless they understand developing Africa, and that is hopeless if they do not understand human nature. There can be no to help for the world’s poor that does not come from a correct understanding of the human person. Modern humanitarian efforts undermine the dignity of the human person by treating the people of developing nations as mouths to be fed rather than the entrepreneurs who will pull their countries out of poverty.

Eva Muraya, a Kenyan businesswoman and one of the voices of Acton’s PovertyCure project, put it this way:

We begin to say no to poverty and begin to redeem the dignity of the citizens by virtue of creating business opportunity.

My biggest asset, I will say without a doubt, is the people who have worked with me, have worked alongside me.

As long as the U.N.’s mission in the Horn of Africa is unchanged, progress made by Somalia and other countries will be despite mainstream humanitarian efforts, not because of them.

British Prime Minister David Cameron and Labour Party leader Ed Miliband both weighed in on a moral decline that was exposed during the recent riots in Britain. An AP article titled “Cameron: Riot hit-UK must reverse ‘moral collapse’” covers their contrasting diagnosis and solutions:

Britain must confront a culture of laziness, irresponsibility and selfishness that fueled four days of riots which left five people dead, thousands facing criminal charges and hundreds of millions in damages, Prime Minister David Cameron acknowledged Monday . . .

“We have been too unwilling for too long to talk about what is right and what is wrong,” Cameron said. “We have too often avoided saying what needs to be said, about everything from marriage to welfare to common courtesy.”

Responding to Cameron, who is head of the Conservative Party, Labour’s Miliband offered these words:

In a rival speech, main opposition Labour Party leader Ed Miliband criticized Cameron’s response as overly simplistic, and demanded that lawmakers focus on delivering better opportunities for disaffected young people. “The usual politicians’ instinct – announce a raft of new legislation, appoint a new adviser, wheel out your old prejudices and shallow answers – will not meet the public’s demand …”

“Are issues like education and skills, youth services, youth unemployment important for diverting people away from gangs, criminality, the wrong path? Yes, they matter,” Miliband said.

More from the article:

Cameron insists that racial tensions, poverty and the government’s austerity program – much of which is yet to bite – were not the primary motivations for the riots across London and other major cities.

Instead, Cameron pointed to gang-related crime, and a widespread failure from Britain’s leaders to address deep rooted social issues, including the country’s generous welfare system.

“Children without fathers. Schools without discipline. Reward without effort. Crime without punishment. Rights without responsibilities. Communities without control. Some of the worst aspects of human nature tolerated, indulged – sometimes even incentivized – by a state and its agencies that in parts have become literally demoralized,” Cameron said . . .

Both he and Miliband agreed that, following recklessness by bankers, the lawmakers’ expense check scandal, and media phone hacking saga, all sectors of society had a share of the blame.

“Moral decline and bad behavior is not limited to a few of the poorest parts of our society. In the highest offices, the plushest boardrooms, the most influential jobs, we need to think about the example we are setting,” Cameron said.

At Acton University in June, Metropolitan Jonah said if the West suffers from poverty, it is the poverty of loneliness. “What is secular inside of us is the root of consumerism,” he declared. He also noted, “The fruit of secularism is despair.”

The secularization of culture in the UK and beyond is why rioters fill their emptiness or disenchantment with material goods and gadgets, sadly, their most prized possessions. Ultimately, a meaningless loot to fill a life of disappointment and pain. Much has been made in pointing out the entitlement and welfare culture as the culprit of chaos and unrest. It is indeed responsible too, but carving it up, won’t solve the underlying affliction of our culture.

The recent English riots, soaked as they are in unrestrained Marxism, bring to mind one of the 20th century’s great anti-Marxists, the British novelist Evelyn Waugh. Waugh was a staunch—even curmudgeonly—defender of social order, and a derisive critic of Marxism, calling it in The Tablet “the opiate of the people.”

Waugh would no doubt have been a booster of the Acton Institute (his best man was Lord Acton’s grand nephew), and a passage in his 1945 classic Brideshead Revisited artfully sums up the Institute’s founding justification. It is a conversation between Charles Ryder and Lady Marchmain in which her ladyship reveals a history of a conscience troubled by great wealth.

It used to worry me, and I thought it wrong to have so many beautiful things when others had nothing. Now I realize that it is possible for the rich to sin by coveting the privileges of the poor. The poor have always been the favourites of God and His saints, but I believe that it is one of the special achievements of Grace to sanctify the whole of life, riches included. Wealth in paganRomewas necessarily something cruel; it’s not anymore.

Lady Marchmain is not the most sympathetically drawn character, and at first it seems strange what she says about coveting the advantage of the poor. But of course what she was coveting was not the earthly simplicity of Lazarus’s existence, but a perceived spiritual primacy.

What she neglected to do was to put her trust in Providence, which sees to the distribution of wealth according to an Eternal Law she cannot read. What she came to see is that she is merely a stewardess of “so many beautiful things.” The cruel Roman world was that of Nero’s nihilistic tyranny, but the Domus Aurea has become the ornately restored chapel at Brideshead.

The conversation continues with Charles (the first-person narrator),

I said something about a camel and the eye of a needle and she rose happily to the point.

“But of course,” she said, “it’s very unexpected for a camel to go through the eye of a needle, but the gospel is simply a catalogue of unexpected things. It’s not to be expected that an ox and an ass should worship at the crib. Animals are always doing the oddest things in the lives of the saints. It’s all party of the poetry, theAlice-in-Wonderland side, of religion.”

(Against charges that Waugh was a snob need only be set this comparison of himself to the ox and the ass in Bethlehem.)

The socialist rejects this Alice-in-Wonderland aspect of life, and tries to impose his own order on it. That was the folly of the Soviet Union, and it is the folly of the modern comprehensive state.

Last week the Federal Circuit Court handed down what seemed to many a funny decision: that human genes are patentable. Myriad Genetics owns patents for two tumor suppressor genes, BRCA1 and BRCA2 (mutations of these genes are correlated with increased incidence of breast cancer, making them of great interest to doctors and scientists). Myriad was sued by doctors and researchers who claim that genes fall into the category of “products of nature,” which makes them unpatentable, but the court disagreed.

Myriad’s patents allow it to charge licensing fees to doctors who wish to screen their patients for BRCA1/2 mutations, and also to researchers developing drugs that would target BRCA1/2 abnormalities in breast cancers. Myriad claims that its patents allow it to recover the costs of identifying the two genes, and so are just like the patents for Velcro, ShamWow, or the Segway. Aside from the legal dispute—i.e., the majority’s facially risible argument that “the molecules as claimed do not exist in nature,” since bits of the BRCA1 gene aren’t floating around in ponds—there are two problems with the patenting of genes: a moral one and a practical one.

In his Acton monograph The Social Mortgage of Intellectual Property, David H. Carey addresses intellectual property rights vis-à-vis the distribution of medicine. He focuses on the AIDS epidemic and infectious diseases in the Third World, and presents the Vatican’s 2001 argument that the principle of solidarity supersedes patent rights where the lives of the poor are at stake, even though the long-term consequences of a suspension of intellectual property might be severe.

Admittedly, personalized cancer treatment in the United States alters the moral calculation, but the American public has made its consideration, and by the establishment of the National Cancer Institute (part of the National Institutes of Health), has decided to fund early stage cancer research publicly. Certainly in order recoup the billions of dollars of testing required to bring a cancer drug to market, companies need the assurance of patent protection, but the sequencing of a gene comes years before any drug begins testing (Myriad filed for its patents in 1994).

As Francis S. Collins, head of the NIH, explained in a recent book,

The information contained in our shared [genome] is so fundamental, and requires so much further research to understand its utility, that patenting it at the earliest stage is like putting up a whole lot of unnecessary toll booths on the road to discovery.

Whether the Supreme Court reverses the Federal Circuit’s decision, or Congress passes a law making clear the proper extent of patent protections, this intellectual property mess must be untangled.

Blog author: lglinzak
posted by on Thursday, August 11, 2011

Rumors are flying about a possible hearing involving Standard & Poor’s. It is believed the Senate Banking Committee is gathering information on the credit rating agency. Disgruntled over the loss of the government’s AAA rating, the rumored investigation is believed to be sparked by Treasury Department officials claiming that S&P’s judgment was affected by an error that overstated national debt projections by $2 trillion. And in the House, a few Republicans are wondering about talks S&P executives had with Treasury officials.

What is also being discussed as justification for a possible investigation is S&P’s, along with other rating agencies, failure to accurately rate mortgage securities which contributed to the housing bubble. The logic behind such an argument reflects a flawed train of thought, for surely if S&P  failed to rate mortgage securities they didn’t correctly rate the U.S. government.

It appears, based upon actions, that the government hasn’t learned anything from the recent downgrade. Instead of taking responsibility, elected officials are looking for a scapegoat and have decided to place the blame on S&P.

As Samuel Gregg explains in, “Down on the Downgrade?” S&P’s failure to accurately rate mortgage securities shouldn’t dismiss the obvious, which is the United State’s  inability to meet its fiscal obligations resulting in its credit downgrade:

There are many reasons to be cynical about ratings agencies. These are, after all, the same outfits that assured us collateralized-debt-obligation markets were doing fine just before they started imploding in 2007–2008. Their slowness in warning about the fading creditworthiness of corrupt entities such as Enron and government-sponsored enterprises such as Fannie Mae and Freddie Mac is a matter of record.

That said, Standard & Poor’s decision to downgrade America’s creditworthiness shouldn’t surprise us. It simply states in a pseudo-official kind of way what everyone — citizens, investors, politicians, and maybe even Paul Krugman — already knows: The failure of Washington’s neo-Keynesian policies combined with the long-term projections for entitlement-spending have lowered confidence in the U.S.’s ability to meet its fiscal obligations.

The surprise that many in the government are showing by the U.S. credit downgrade is appalling. S&P published reports clearly articulating the fiscal policy that was needed in order for the government to preserve its AAA rating which included $4 trillion in savings (the budget includes only abut half of that in cuts). Furthermore, in a report released on August 5th, S&P doesn’t just blame the lack of savings but describes  how entitlement spending is a problem:

We lowered our long-term rating on the U.S. because we believe that the prolonged controversy over raising the statutory debt ceiling and the related fiscal policy debate indicate that further near-term progress containing the growth in public spending, especially on entitlements, or on reaching an agreement on raising revenues is less likely than we previously assumed and will remain a contentious and fitful process. We also believe that the fiscal consolidation plan that Congress and the Administration agreed to this week falls short of the amount that we believe is necessary to stabilize the general government debt burden by the middle of the decade.

In addition, the plan envisions only minor policy changes on Medicare and little change in other entitlements, the containment of which we and most other independent observers regard as key to long-term fiscal sustainability.

There are clear policy options the government needs to pursue if it wishes to return to fiscal health, and it should be of no surprise that such policies involve fiscal stewardship.

Instead of being humbled by the government’s loss of its triple AAA credit rating and learning from their mistakes, the politicians in Washington have chosen to sit on the sidelines. The lack of leadership in such a crucial time is astounding. Politicians are continuing down the path which brought them to this state: blaming others instead of accepting responsibility. It is time for some humility in Washington. Politicians need to admit to their mistakes and become leaders set on bringing America back on course.

Blog author: jballor
posted by on Thursday, August 11, 2011

Uwe Siemon-Netto, a journalist and Lutheran theologian, reflects on the upcoming half-century anniversary of the construction of the Berlin Wall, “And the wall fell down flat.” He relates the story of the Christian peace movement and its role in tearing down the spiritual walls that helped to hold up the Berlin Wall.

He talks about the social and spiritual consequences of the flight of so many from East Germany to West Germany: “By the time East German leader Walter Ulbricht ordered the Western sectors of Berlin sealed off, up to 2,500 left his country every day. Its economy was about to collapse. Entire branches of industry no longer functioned because their skilled workforce had run away.”

But there were much more than economic effects, as he notes:

Ironically, the flight of highly qualified craftsmen, of scientists, engineers, professionals and farmers, was not just a catastrophic loss to the Communists but also had a religious dimension. These refugees belonged primarily to the social strata that had been the Christian Church’s mainstay. Ulbricht’s regime was intent on establishing a “dictatorship of the proletariat”, relegating the former upper and middle classes to an inferior status, and driving them out. This was the main cause for the decline of church membership from some 95 percent of the population in 1945 to one quarter at the time of East Germany’s collapse in 1989.

But even so that one-quarter of the population was behind the Christian peace movement that helped to “tear down this Wall,” in the words of Ronald Reagan.

Siemon-Netto describes the contours of the movement, including its “most momentous demonstration,” which “occurred on 9 October 1989.” But following that massive public expression of faith, the religious dimensions of these eastern areas of Germany have continued to diminish. Political and economic freedom in itself has not sparked religious revival.

He concludes,

It is now 50 years since I saw the Wall go up and 22 since it came down. The Christian movement in eastern Germany seems to have collapsed. When Germany was reunited on 3 October 1990, most Protestant churches did not even ring their bells in gratitude, in contrast to Catholic churches, which did. Once again, eastern Germans are turning their backs on the Christian faith in droves. Next to the Czech Republic, the former GDR is the most secularized region in Europe, and Berlin is the most godless city.

Let us hope and pray that the spiritual walls too might come tumbling down and that godlessness is not the lasting legacy of the Berlin Wall.

Update: More on the “the spiritual dimension” of the Berlin Wall story today from Siemon-Netto.

World Youth Day being held in Madrid August 16-21 will be an important opportunity for Pope Benedict XVI to speak regarding Europe’s Christian roots. George Weigel summarized some remarks from the Holy Father to religious and cultural leaders in Zagreb, Croatia. The pope spoke on many important topics including freedom, free society, human rights, and democracy. It is important to note that though obvious to many Americans, these points are still “wildly counter-cultural” in Europe. Like Weigel, I hope someone takes notice to help bring needed religious, political, business and cultural change to Europe.