Posts tagged with: politics

ForbesAlejandro Chafuen, president and chief executive officer of Atlas Economic Research Foundation and board member of the Acton Institute, recently wrote a piece for about crony capitalism.

Chafuen used to spend his summers in Argentina, so he begins his article with a story about a friend from Argentina. Enrique Piana, known to his friends as “Quique,” was heir to “Argentina’s oldest and most respected trophy and medals companies.”

During part of the ’90s, the government of President Carlos Menem, and then-Minister Domingo Cavallo, had a policy for the importation of gold and exports of gold fabrications that amounted to a major subsidy for exporters. Attracted by the incentives, Quique, who had become CEO of his company, became a key player in a scheme whereby exporting overvalued gold-plated products netted them 30 million in subsidies for fake transactions. As it seems that none of the medals were sold at artificial value to true customers, the only victims here ended up being the Argentine tax-payers.

The scheme involved a “business” in the United States. As there is still substantial respect for rule of law in the United States, Quique was indicted, captured, and—after some months in a U.S. jail—extradited to Argentina. In his book, he lists the government officials who he claims knew about the scheme and who received bribes for his fraudulent activities. I will not mention them here. None of them were sentenced to jail. (more…)

In the Wall Street Journal, Acton Research Director Samuel Gregg turns to French political thinker Alexis de Tocqueville to show how democratic systems can be used to strike a Faustian bargain. “Citizens use their votes to prop up the political class, in return for which the state uses its power to try and provide the citizens with perpetual economic security,” Gregg explains. This, of course, speaks to the current catastrophe that is the European welfare state. French workers, for example, “clearly expect the government to protect them from the economic consequences of their curious work habits,” he adds.

Some 180 years ago, Tocqueville predicted in his magnum opus “Democracy in America” that something similar would be one of democracy’s long-term challenges. Though Tocqueville never used the expression “welfare state,” he worried about the potentially corrosive effects of democratically elected governments that tried to use their powers to guarantee economic security for as many people as possible.

Democracy, Tocqueville argued, was capable of breeding its own form of despotism, albeit of the “soft” variety. He spoke of “an immense protective power” that took all responsibility for everyone’s happiness—just so long as this power remained “sole agent and judge of it.” This power, Tocqueville projected, would “resemble parental authority” but would try to keep people “in perpetual childhood” by relieving people “from all the trouble of thinking and all the cares of living.”

But here’s the catch. Many people today forget that Tocqueville wasn’t writing for an American audience. His book was for French readers and therefore, by extension, much of Europe’s 19th-century political elite. What would some of those elites today—such as a career-politician and confirmed statist like Arnaud Montebourg—make of his compatriot’s warnings?

Read “What Tocqueville Knew” in the Wall Street Journal.

And pick up a copy of Gregg’s new book, Becoming Europe: Economic Decline, Culture, and How America Can Avoid a European Future.

Blog author: jballor
Friday, March 15, 2013

Sam Gregg writes of Argentina, whence the new Pope Francis hails, “Over and over again, Argentina has been brought to its knees by the populist politics of Peronism, which dominates Argentina’s Right and Left. ‘Kirchnerism,’ as peddled by Argentina’s present and immediate past president, is simply the latest version of that.” For a bit of the current economic context in Argentina, here’s the latest on Kirchnerian political economy as related by John Teevan:

Cristinakirchnermensaje2010That’s the Argentine Way: In order to prevent the outflow of dollars from President Cristiana Kirchner’s silly-but-harmful economy, she created a new trade policy that permits only as much importing of foreign goods as can be paid for by equally matched by exports. So how is Newsan, an Argentine maker of Sanyo and JVC electronic equipment, going to create the exports necessary to buy the parts it needs to import? Easy, they added a seafood business that now exports shrimp and is paid in dollars. Similarly, Argentine BMW exports rice. Better to partner with Argentina’s wineries which produced $865m in wine exports. The words to describe this urgent economic inefficiency are not ‘free market’ nor even ‘social economic planning’ but ‘a Byzantine labyrinth.’ Why is it necessary? Because Ms. Kirchner also has currency rules or controls that ration how much foreign currency people can hold. Why? Because her policies have made the Argentine currency worth less threatening her dollar reserves. All this is to help ‘manage trade’ as she says so that Argentine jobs can be protected from ‘cheap imports’. President Cristiana is contorting herself to put many fingers in her leaky dike. She’s running out of fingers and looks ridiculous.

The above is from John’s monthly email, “Economic Prospect.” Send John a message if you’d like to be added to his list.

After nearly 13 hours of speaking in an attempt to stall the confirmation of CIA Director nominee John Brennan, Sen. Rand Paul ended his filibuster. The filibuster is a grandiose method of legislative stalling, requiring the speaker to hold the floor, talking the entire time and not sitting down. In essence, one tries to talk a bill to death. The most famous fictitious depiction of the filibuster is probably is Frank Capra’s Mr. Smith Goes To Washington.

Jimmy Stewart in "Mr. Smith Goes to Washington"

Jimmy Stewart in “Mr. Smith Goes to Washington”

Paul Rand, as are many other Republicans, is concerned with the use of drones overseas, and believe that President Obama has not been forth-coming in his answers regarding the CIA program.

For most of the time, Paul squarely placed blame on the president for what he perceived a dangerous precedent in federal law. The Kentucky senator was quick to make comparisons between President Obama and candidate Obama.

“I think it’s also safe to say that Barack Obama of 2007 would be right down here with me arguing against this drone strike program if he were in the Senate,” he said. “It amazes and disappoints me how much he has actually changed from what he once stood for.”

Obama said there’s something “contagious” about the office of presidency and cited the famous quote by John Dalberg-Acton.

“It’s not just power corrupts, but that ‘absolute power corrupts absolutely’,” Paul said. “I think people can become intoxicated with power. I don’t know if that’s the explanation for President Obama’s about-face. He was one, when he was in this body believed, in some restraint.”

Just before 1 a.m. Thursday, Rand ended his filibuster:

Repeatedly, Mr. Paul explained that his true goal was simply to get a response from the administration saying it would not use drone strikes to take out American citizens on United States soil.

In a lengthy interview in the Daily Caller, Acton Research Director Samuel Gregg picks up many of the themes in his terrific new book, Becoming Europe: Economic Decline, Culture, and How America Can Avoid a European Future. Here’s an excerpt:

Daily Caller: In what ways do you think the U.S. has become like Europe?

Samuel Gregg: If you think about the criteria I just identified, it’s obvious that parts of America — states like California, Illinois, and New York — have more-or-less become European. Likewise, the fact that most federal government expenditures are overwhelmingly on welfare programs replicates the situation prevailing throughout Western Europe. Then there is the unwillingness on the part of many Americans to accept that we cannot go on this way. It is one thing to have problems. But it’s quite another to refuse to acknowledge them.

Daily Caller: What’s so bad about becoming like Europe? It’s not that bad of a place. It’s not like becoming like North Korea, right?

Samuel Gregg: I lived and studied in Europe for several years. So I can report that there is much to like! But even leaving aside many European nations’ apparent willingness to settle for long-term economic stagnation, I would argue that it’s becoming harder and harder to be a free person in Europe. By that, I don’t mean a re-emergence of the type of socialist regimes that controlled half of Europe for 50 years. Rather I have in mind two things. (more…)

George Washington knew a thing or two about leadership during a crisis. Arguably one of the greatest military leaders in modern history, he was chosen as president of a new nation, one with a idealistic notion of liberty. He was also acutely aware that a cohesive nation was a calm one, and that governing required order and unity:

The unity of government which constitutes you one people is also now dear to you. It is justly so, for it is a main pillar in the edifice of your real independence, the support of your tranquility at home, your peace abroad; of your safety; of your prosperity; of that very liberty which you so highly prize. But as it is easy to foresee that, from different causes and from different quarters, much pains will be taken, many artifices employed to weaken in your minds the conviction of this truth; as this is the point in your political fortress against which the batteries of internal and external enemies will be most constantly and actively (though often covertly and insidiously) directed, it is of infinite moment that you should properly estimate the immense value of your national union to your collective and individual happiness; that you should cherish a cordial, habitual, and immovable attachment to it; accustoming yourselves to think and speak of it as of the palladium of your political safety and prosperity; watching for its preservation with jealous anxiety; discountenancing whatever may suggest even a suspicion that it can in any event be abandoned; and indignantly frowning upon the first dawning of every attempt to alienate any portion of our country from the rest, or to enfeeble the sacred ties which now link together the various parts.


There is always much to discuss after a State of the Union address, and Tuesday’s speech is no different. Sam Gregg, Director of Research at the Acton Institute, shared his thoughts:

“The overall theme of the address is that government is there to do stuff for you,” he said.  “He starts out making remarks about America being a country that values free enterprise and rewards individual initiative…and yet he offers proposals for government intervention after intervention after intervention,… and there’s not much there at all about freeing up the labor market or trying to do things like reducing America’s absurdly high level of corporate tax.”

Specifically, Gregg wanted to view the speech through a Catholic lens, using the Church’s teaching on subsidiarity:

Obama, he said, “basically seems to think the government, and specifically the federal government, should be intervening all over the place in the economy. He talks about the administration partnering with a certain number of communities throughout the U.S. You have to say, ‘Well, why does he think the federal government needs to be involved in these situations?’”

Obama said, for example, that his administration will “begin to partner with 20 of the hardest-hit [economically] towns in America to get these communities back on their feet.”

“Subsidiarity would suggest that surely one should be looking at other communities both in terms of local and state government,” said Gregg, “but also the actual communities themselves, if we’re serious about dealing with some of these problems.”

Read “A Catholic’s Take on Obama’s State of the Union Address” at

Sam Gregg is author of “Becoming Europe: Economic Decline, Culture and How American Can Avoid a European Future”.