Posts tagged with: corruption

Earlier this month, India experienced the worst blackout in global history. Over 600 million people—more than double the number of people in the U.S. and nearly one in 10 people in the world—were left without power.

The crisis highlights the fact that corrupt governance and lawless institutions can keep even an entrepreneurial people in the dark:

Along with a lack of investment in infrastructure, the crisis also had roots in many of India’s familiar failings: the populist tone of much of its politics, rampant corruption and poor management in its government and public sector, weak law enforcement, and a maze of regulations that restrict many industries.

Officials said they did not know what caused the blackout Tuesday, although a similar failure Monday was blamed on individual states drawing too much power from the grid, in defiance of regulations.

“It is open lawbreaking that goes on all the time in India,” said a Power Ministry official, who spoke on the condition of anonymity because of the sensitive nature of the subject. “This time, it went beyond limits.”

Read more . . .

In my commentary this week, I used Louisiana as one of the backdrops to shine the light on government greed. I first became fascinated with the political scene in the Pelican State when I moved down to the Mississippi Gulf Coast.

I stayed up late one night in 1996 watching C-Span2 while Woody Jenkins, the Republican nominee for U.S. Senate, appeared to have his election stolen. I was hooked from that point on.

Former Louisiana governor Earl Long once remarked, “When I die I want to be buried in Louisiana so I can stay active in politics.” Former Congressman Billy Tauzin said of his state: “One half of Louisiana is under water and the other half is under indictment.” Former governor Edwin Edwards, who is mentioned in the commentary, has a fascinating book profiling his antics and political corruption in The Last Hayride.

Louisiana has undergone a remarkable transformation and it is covered superbly by Jim Geraghty at National Review in “The Storm Calmer.” The transformation provides wisdom for the nation today. My commentary is printed below.

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Government Greed Needs an ‘Occupation’ Too

When it comes to political crookedness and graft, Louisiana is infamous. The New York Times just profiled Edwin Edwards, whose reputation earned him the nickname “Fast Eddie.” The former governor of the Pelican State recently released after a 10-year prison sentence for racketeering naturally wants back in the political ring. A resident displayed the love many still have for the former lawmaker, telling the Times, “We all knew he was going to steal, but he told us he was going to do it.”

Edwards serves as one of the most flagrant examples of government greed, enriching countless cronies along with himself. But he is not alone. The Occupy Wall Street movement focuses on “corporate greed,” but the public sector variety, though it draws less media attention, is equally reprehensible.

Eminent domain abuse, bloated public pensions, deficit spending—which simply generate calls for future tax increases—and a tax code that discourages saving and investing, are just a few examples of government greed. The 19th century British preacher and evangelist Charles Spurgeon once remarked, “You say, ‘If I had a little more, I should be very satisfied.’ You make a mistake. If you are not content with what you have, you would not be satisfied if it were doubled.”

His audience was the individual. But Spurgeon’s warning applies to a government demanding more wealth that should remain private and more of the public trust. Government excess and the way in which it mercilessly suctions revenue away from Main Street are alarming indeed. According to The World Bank’s annual Doing Business report, the United States no longer ranks as a top 10 country for starting a business; Rwanda is higher on the list. Half a century ago, business rapidly mobilized to help launch the greatest army of liberation in world history; now the nation’s private sector faces an uncertain future.

Today the Occupy Wall Street movement and its echo chamber in the media denounce corporate America. But a smaller headline in Bloomberg News about Washington edging out San Jose, Calif., as the wealthiest U.S. metropolitan area raised eyebrows, too. The total compensation package for a federal employee in the beltway now exceeds $126,000. There are many hard working and patriotic federal employees, but as the federal government payroll increasingly coincides with a diminishing private sector, government employees are rapidly moving closer to the 1 percent.

More disturbing perhaps is a quote from the president of the D.C. Chamber of Commerce who declared, “Wall Street has moved to K Street.” The mammoth increase in federal laws and regulation has generated an upsurge in the number of lobbyists and lawyers to manage the federal government’s far-reaching bureaucratic tentacles.

Greed of all sorts should be denounced. Unique to neither business nor government, its perennial presence illuminates the unchanged heart of humankind. For that reason the Founders understood that the power of government must be limited and virtue magnified. During the benediction at the Acton Institute’s Annual Dinner last week, Rev. Ren Broekhuizen offered this rightly famous quote from Abraham Kuyper: “There is not a square inch in the whole domain of our human existence over which Christ, who is Sovereign over all, does not cry: ‘Mine!’” He implored the assembled to mount their own righteous “occupation” of Wall Street, the government, business, and all of society.

Just last week, the 84-year-old former governor Edwin Edwards joked with well wishers and basked in the limelight at a parade during the International Rice Festival in Crowley, La. That same day Gov. Bobby Jindal coasted to reelection against a crowded field with nearly 66 percent of the vote. Jindal’s approval in part stems from sweeping reforms to antiquated laws that bred government greed and corruption. After Katrina and the BP oil spill, it was all the more apparent to Louisianans that the old way of doing things was toxic. Greed and corruption intensify suffering in a time of crisis.

As America faces its current economic crisis, Louisiana’s experience is instructive. Solutions can be found not in centralized power and burdensome regulation, which facilitate and reward government greed, but in framing sensible laws and reinvigorating a culture of virtue in business and government alike.

Three days ago I arrived in Nairobi, Kenya, for Acton’s conference at Strathmore University. Driving about the city the last few days, I have been amazed by the number of small-medium businesses located in the kiosks along streets. These simple, tin/wood structures are bustling with enterprising and entrepreneurial souls working hard to better their lives and those of others.

In a Nairobi bread kiosk

In discussions with students and staff at Strathmore, I have heard many stories outlining the significant problems with law, property, and inter-tribal (low non-kin) trust. You wonder:

• How can a country thrive when officials do not equally distribute justice? Where bribes and connections determine legal decisions?
• How can an entrepreneur access the necessary start-up capital for his business when he is considered a squatter in the home he built because he cannot access a title to the land?
• How can local or foreign investors expand their businesses when they are not members of a certain tribe and so are not well trusted?

These are the struggles, not only of Kenya, but of the developing world. These are the problems that need to be addressed in order to have a strong market economy that has the power to reduce poverty world-wide. These are some of the many questions asked and discussed at today’s conference titled Economic and Cultural Transformation: Breaking the Shackles of Poverty.

More than 170 people attended this conference, co-sponsored by Strathmore’s Governance Centre. We heard the speakers discuss both the theory and the practice of moving out of poverty through enterprise. By building up the institutions of rule of law, private property, and a culture of trust, the creative power of individuals is able to be unleashed and drive innovation and business. A new mindset is needed – not to rely on big government or foreign aid, but upon the many entrepreneurs who create wealth and help countries rise out of poverty.

Also see the article “Involve People in the Poverty Fight” by Antoinette Kankindi and Tom Odhiambo of the Strathmore Centre which appeared in yesterday’s Nairobi Star.

Update (3/25): The Standard reports on the conference. Read “Top economists urge African States to support enterprises.”

The AP reports that of the roughly $379 million spent by the US government on relief efforts in Haiti, less than 1% has been in the form of direct government to government aid.

This has raised complaints from the Haitian president, Rene Preval, who says his government isn’t getting its fair share. According to the report, Preval spoke at a news conference and complained, “There’s a perception of corruption, but I would like to tell the Haitian people that the Haitian government has not seen one penny of all the money that has been raised — millions are being made on the right, millions on the left, it’s all going to the NGOs (nongovernmental organizations).”

But is that really so bad? If it is the citizens of Haiti who need direct assistance, why should more of the money be routed through the Haitian governmental bureaucracy?

Undoubtedly the government is struggling to provide any modicum of law and order in the chaos of the last two weeks. And whatever money the Haitian government receives should go firstly toward providing that kind of stability within which aid workers, food suppliers, and virtuoso entrepreneurs don’t have to be so concerned with theft and violence.

And in any case, the amount spent by the US government thus far is a small percentage of the nearly $2 billion in aid that has been sent in to the disaster zone. Indeed, according to the Chronicle of Philanthropy, private aid from America is running at about $470 million, topping the government’s contributions by nearly $100 million. Preval’s claims to a greater share of that aid money seem to not have much merit.

It isn’t the Haitian government that is the object of charitable aid; it’s the Haitian people, and that’s where the vast bulk of the money ought to be (and seemingly is) going. That’s also why calls for forgiveness of the Haitian government’s debts are so misguided, at least in the short term as the dead are still being pulled from the rubble.

Jean-Bertrand Aristide, the ex-president of Haiti who has lived lavishly in exile as a guest of the South African government for the past six years, recently announced he was ready to go back and help Haiti rebuild from its catastrophic earthquake. Allowing the former despot Aristide — a long time proponent of liberation theology — back into the country would be the worst thing we could do to Haiti right now. The American government must resist any move by Aristide to return.

In 2004, I wrote a piece for the Wall Street Journal in which I reminded readers of Aristide’s violent past:

In sermons later published in his book “In the Parish of the Poor,” [Aristide] called for forming “battalions” to perform “acts of deliverance” and for overthrowing the regime by “any means necessary” and pined for a Haitian version of the Sandinista Revolution. He did not hide his sincere devotion to Christian communism, which preferred its humanitarianism soaked in blood.

Ultimately, this former priest’s flawed understanding of the human person and economic realities added great suffering and injustice to a Haitian people who have endured so much: (more…)

Amity Shlaes, a senior fellow in economic history at the Council on Foreign Relations, has an excellent primer on public choice in the August 3 edition of Forbes, “The New PC.” Shlaes is also the author of the 2007 book, The Forgotten Man: A New History of the Great Depression.

Shlaes, who will be featured in the upcoming issue of Religion & Liberty, writes, “Government reformers view themselves as morally superior, but that is an illusion. They are just like private-sector operators, who do things that are in their own interest, not society’s. Those things include taking advantage of an economic crisis to aggregate power for themselves and their offices.” She goes on to point out five specific instances of recent government action that fits the public choice paradigm.

I have no doubt that many enter politics with good intentions. Some even follow through on those intentions and work for their constituencies. But a precious few remain uncontaminated and uncorrupted by the temptations that political power offers.

This reality is a strong argument in favor of term limits. Even though the individual constiuencies might lose out by replacing older, more senior representatives, who have garnered the most powerful appointments and consolidated the most influence, it has the happy consequence of putting caps on political clout. Every so often the slate is rubbed clean and alliances, power partnerships, and appointments need to be rebuilt.

Anything that puts an absolute ceiling on an individual politician’s power seems like a step in the right direction. Of course, an unintended consequence is that with the sundown of their political career always in view, an individual politician will be just that much more focused on greasing the skids to a comfy private sector job after the term limits come into effect.

When the Berlin Wall fell in November 1989, that event visibly marked the collapse of a Communist ideology that had oppressed, tortured and killed millions for decades. But now, 20 years later, Communist authorities are once again taking aim at an old target — the Christian Church. Samuel Gregg looks at the alarming persecution of Roman Catholics in Vietnam in his commentary, “Corruption, Communism, and Catholicism in Vietnam.”

Gregg articulates the horrifying reasons for the continued persecution that Catholics in Vietnam are subject to:

Some of the reasons for this treatment of Vietnam’s Catholic Church are historical. Vietnam’s rulers are acutely aware that Catholics were among the most committed anti-Communist Vietnamese during the Vietnam War. Many Vietnamese also identified Catholicism with French colonial rule.

This background, however, is of marginal significance in explaining the violent crackdown presently being experienced by Catholics throughout Vietnam. Put simply, it’s about government corruption.

Catholic clergy and lay Catholics are not the only target, but the property of the Catholic Church is also emerging as another target for the government:

In late 2008, for example, Vinh Long provincial officials announced their intention to “appropriate” the land of a convent of nuns which also functioned as an orphanage in order to build a hotel. More recently, land in Hanoi that the government itself acknowledges has been owned by a Catholic monastery since 1928 was simply given over by the state for residential construction.

In an era where religious tolerance is becoming more widely accepted it is disheartening to see corrupt governments still persecuting the faithful.

A reader makes a request:

My purpose for writing is simply to request the Acton Institute make a public statement on its website to repudiate Mr. Sanford’s actions, in large measure because he was prominently featured in Volume 18, Number 3 of Religion & Liberty journal. Of course your organization is not expected to guarantee moral behavior of its featured contributors simply because none of us knows what is really in the hearts and minds of our neighbor. Governor Sanford previously demonstrated he was a man of character and integrity, but even the most upright man is in danger of falling. My request is for the Institute to denounce Mr. Sanford’s actions in the same public manner it praised his approach to politics last summer, in order to assure its viewers that it is not complicit with his actions.

If not exactly a denunciation, here’s an explanation for why we interviewed Gov. Mark Sanford. We opened the pages of R&L to the governor because of his record as a fiscal conservative and his willingness to talk about the way faith guided his public life. Here’s a sample of the interview:

R&L The religious views of candidates and their support among various faith traditions played a big role in the 2008 presidential race. Is this a good thing?

Sanford It is. But I don’t know if it was more window dressing than not. Obama had Rick Warren speak at the inauguration, and then got some guy of another persuasion to give the benediction. I don’t think you want it as an accoutrement. I think that you want it to show up in policy. In other words, conversation is certainly an important starting point. It can’t be the ending point.

Somewhere, that “deeds, not words” philosophy fell by the wayside. Yes, Gov. Sanford fell and fell hard. But he was lying to many people about his public life and private conduct. And we got taken in, too.

Now, we watch the sad spectacle of a politician clinging to power after he has obliterated any moral claim to continuing in office. He is refusing to go, and absurdly compares himself to Biblical figures. (more…)

Yet another moral meltdown based on greed. This time the human vice reared its ugly head in Westminster. For the first time since 1650, a Speaker of the House of Commons has resigned under angry public protest of his controversial use of public funds.

Yesterday, the Labour party’s second most senior leader, Michael Martin of Glasgow, officially quit as House Speaker amid accusations that he abused his publically financed personal expense account, a perk enjoyed by Members of Parliament.

The British population is outraged: not only because of the exorbitant nature of Martin’s financial reimbursements (reimbursements for cat food, installation of chandeliers, manure, porn material, and repairs to his country estate moat) during the painful economic recession, but because morally rekindled Britons are fed up and ready to part ways with the country’s current leadership.

Adding fuel to the fire, government officials released deeper probes into the art of public deceit. Repayment claims were filed by other M.P.s for interest charged on fictional mortgages on second homes, at time when many banks are foreclosing on the homes of ordinary citizens.

According to a study on global corruption released by Dr. Richard Ebeling of the American Institute for Economic Research, the United Kingdom has fared well amongst its European peers, given the positive correlation found between the freer markets of the British Isles and lesser incentives to perform illicit acts to gain undue advantages in either the public and private sectors. Therefore, United Kingdom has traditionally looked good when compared to the corruption impairing the progress of freedom and prosperity among the many “transition nations” of Eastern Europe.

However, even British traditions of good behaviour will not last forever. Pope Benedict has warned the world time and again of the corrosive nature of greed, which “distorts the purpose of material goods and destroys the world,” as he said last April 22 during his weekly general audience in Rome.

In the wake of the scandals of Westminster, Prime Minister Gordon Brown has rallied the British population to change. “Westminster cannot operate like some gentleman’s club,” where its members “make up the rules,” he said. Yet his oratory seems too little, too late. Under 10 years of center-left Labour leadership, the United Kingdom has slowly welcomed back bigger government – along with it invasive tax schemes, cushy welfare doles, and the slippery slope of greed and corruption among public servants.

Britain’s lawmakers are fortunate only to lose their prestigious government posts and reputations and face incarceration. Their prospects would have been far worse under the days under monarchical rule when greedy and corrupt political officials were quickly guillotined for accepting bribes and illegal financial contributions.

In today’s Detroit News, Acton Research Director Samuel Gregg talks about the sort of “moral, legal and political environment” that must exist if entrepreneurs are to flourish. He applies these precepts to the very serious economic problems in Michigan, where Acton is located:

… in the midst of this enthusiasm about entrepreneurship, we risk forgetting that entrepreneurship’s capacity to create wealth is heavily determined by the environments in which we live. In many business schools, it’s possible to study entrepreneurship without any reference being made to the role played by factors such as rule of law, property rights and low taxes in stimulating wealth-creating entrepreneurship.

Entrepreneurs gravitate to places where conditions for starting a business are optimal and the infrastructure — financial, legal, and technical — supports new businesses. Here, Michigan has a double-barreled problem: the out-migration of Michigan job seekers — much of it compelled by the steep decline of the auto sector in recent years — and the college graduate “brain drain” from state universities. How many of these people saying goodbye to Michigan are taking their entrepreneurial dreams, and maybe the next Big Thing in the economy, with them?

Read “Entrepreneurs Require More Room to Survive.” An extended version of this essay is slated to run in tomorrow’s Acton News & Commentary. Sign up online for this free email newsletter here.