Guest Opinon: Democracy in the Middle East - Is the Obama Administration “Fair and Equal”?

Paula Dierkens is a writer who asked to contribute a piece on the Middle East. The views are her own and do not reflect mine.

There were 18 days in the month of February this year when the world watched Egypt closely to see what would happen – some countries openly supported the people’s demands for the ouster of President Hosni Mubarak and a democratic government in his place, others like the US sat by and gaped silently because they were not sure which way the wind would blow. The Obama administration did issue statements from time to time that seemed to indicate that all they cared about was the Egyptian government’s degree of friendliness with the US. It’s no secret that Mubarak was an ideal choice for the US because he was not a hardcore Islamist even though Egypt is a predominantly Muslim country. And that is the very same reason why the US did not openly support the demand that Mubarak step down until it was apparent that the growing discontent and the hint of violence in the revolution meant that Mubarak leaving was the only way out.

And so Obama’s administration said they wanted a “peaceful and orderly transition” to the new democratic government. But with the army taking over for the interim and with strong signs pointing to the Muslim Brotherhood being significantly involved in any new government that would be formed after a supposedly “free and fair” election process, it’s doubtful if the US would enjoy the same amount of cordiality it did with Egypt during Mubarak’s reign. To the people of Egypt, Mubarak was a tyrant and a despot, but to countries like the US who depended on Egypt for their oil and for the safe passage of their military and trade vessels through the Suez Canal, he was a benign ally amidst the turmoil in the Middle East. 

In the case of Iran however, the US administration has never really enjoyed any kind of friendship with this nation. And even though Obama hoped to improve relations with Iran when he took office by helping them break the impasse over their suspected nuclear program. But with the Iranian government rebuffing his administration, not much of a breakthrough has been achieved. 

And now in the backdrop of the pro-democracy revolutions that are sweeping through the Middle East like a set of dominos, the US has issued a strong statement against the mass arrests and the intimidation of anti-government protestors and their families in Iran, calling on the government to fulfill its human rights obligations and allow the people to demonstrate peacefully for their demands of democracy.

There’s a direct contrast in the way the Obama administration responded to the crises in Egypt and Iran – in the former, there was a strained silence as they straddled the fence waiting to see which way the chips would fall before sliding down that side so they could save face; and in the latter, they know they have nothing to lose and everything to gain by taking a strong stand, and this is what they did. Both Egypt and Iran are fighting for their democratic rights, and the Obama administration showed that more than being in favor of democracy in the Middle East, it preferred to play favorites with the Egyptian government, at least for some time until it became very clear that Mubarak was going down, no matter what.  

By-line:

This guest post is contributed by Paula Dierkins, who writes on the topic of Online PhD Degree . Paula can be reached at her email id: paula.dierkins@gmail.com

The CAPRA Party

Frank Capra is remembered as director of all-American movies where the little guy wins and corrupt politicians and plutocrats lose.  Mr. Smith Goes to Washington, Meet John Doe and It's a Wonderful Life voice libertarian sentiments to which many Americans resonate.  Frank Capra voiced sentiments that explain the Tea Party's groundswell.

Mike Marnell, publisher and editor of Kingston, New York's innovative Lincoln Eagle newspaper has a great new idea: The CAPRA Party.  CAPRA stands for Constitutionalists Against Progressives Reforming America,or, alternatively, Constitutionalists Against Progressives Wrecking America.

Stay tuned.

Anti-Semitic Indoctrination at UC Santa Cruz

Dr. Ken Marcus of the Institute for Jewish and Community Research sent me this link to a Scribd file copy of Tammi Rossman-Benjamin's 29 page letter of complaint date to the  San Francisco Office of Civil Rights concerning systemic anti-Semitism at the University of California, Santa Cruz.  The atmosphere at UCSC sounds terrifying and disturbing, but the facts are not surprising given the reception that I witnessed David Horowitz receive at Brooklyn College.  Given the left-liberal orienation at most universities, anti-Semitism increasingly characterizes them. What is puzzling is that the majority of Jews continue to identify themselves as left liberals.

Ms. Rossman-Benjamin's complaint hit the headlines on Wednesday.  CBS San Francisco reports:

"The U.S. Department of Education is investigating a faculty member’s complaint that a series of pro-Palestinian events at the University of California, Santa Cruz crossed the line into anti-Semitism and created a hostile environment for Jewish students.

"The department’s Office for Civil Rights notified the campus last week that it planned to look into allegations made by Hebrew lecturer Tammi Rossman-Benjamin dating back to 2001."

Defining Globalization: John D. Mueller on the US Dollar's Serving as a Reserve Currency

In analyzing any problem it is important to be specific about cause and effect. Many blame the exodus of US manufacturing jobs on globalization. But the term globalization lacks specificity.  For instance, globalization can mean foreign trade or it can mean US intervention in foreign economies through the International Monetary Fund.  I have previously emphasized that the cause of the exodus of manufacturing is foreign central banks' holding US treasury bonds.  John D. Mueller, in his excellent book about neo-Scholastic economics (in which he argues for the reviving of the economics of St. Thomas Aquinas), Redeeming Economics: Rediscovering the Missing Element, makes the point clearly on page 338.  Mueller is director of the Economics and Ethics Program at the Ethics and Public Policy Center and former speechwriter for Congressman Jack Kemp.   I am reading his book because Dr. Oskar Gruenwald suggested it to me in conjunction with a paper I am writing for his Journal of Interdisciplinary Studies.

Democrats and anti-globalists believe that trade barriers are the solution to the exodus of manufacturing jobs. But that solution does not cure the underlying disease. The disease is misallocation of resources caused by the US Federal Reserve Bank's and the US government's ability to create and fund treasury debt through paper money and foreign central banks.  The cure is monetary stability, which is only possible through a metallic standard.  Until the 1980s there still could be a case that a paper monetary system could be made to work. But the situation now is so far gone that it makes the volatility of earlier paper money periods look mild.  By buying the treasury bonds and using them as reserves foreign banks subsidize the dollar.  This makes foreign goods cheap and causes firms to exit.  To solve the problem the US dollar should not be allowed to be used as a reserve currency. It should be replaced by gold or silver.  Allow me to quote Mr. Mueller (Redeeming Economics, p. 335):

"This is roughly what being an official reserve currency means for the United States. The fact that other nations' monetary authorities hold securities payable in dollars to back their currencies means that our own doesn't need to hold much, if any, foreign money in reserve; it also ensures that the United States makes more investments and purchases of goods and services abroad than are made in the United States--the difference equaling the amount of dollar reserves acquired by foreign central banks.

"...when foreign monetary authorities invest their reserves in US securities, the inflow of official funds substitutes for an equal amount of private investment and trade.  A rise in foreign official dollar reserves therefore not only permits but requires residents of the United States to have a balance-of-payments deficit with foreigners. This excess of "hot money" flows back to the rest of the world as net purchases of foreign goods and/or securities. In effect, the reserve currency privilege allows the United States to have negative net reserves and so run a chronic balance of payments deficit of the same amount. Hot money represents a demand for non-monetary wealth (goods and/or securities) without a matching supply, and so necessarily bids up the price of such wealth wealth..."

The holding of US Treasury bonds permits foreign governments to subsidize the dollar, stimulating their economies in the short term but depleting resources.  US consumption is increased at the expense of foreign workers, who work hard to produce goods that America gets for borrowed money.  It is true that the Chinese have gained considerable manufacturing expertise, but have done so at the expense of low wages. Under an international gold standard system where gold serves as reserves this situation could not occur. Trade imbalances would correct over time.

In contrast, the costs of imposing trade barriers are high.  David Ricardo showed that trade makes all parties wealthier by enabling global specialization, which he called comparative advantage.  To impose trade barriers would reduce the gains from the specialization, making the world much poorer.  Because the US consumer has benefited from the US dollar's serving as a reserve currency, imposing tariffs, which entail the risk of retaliation, would be extremely risky and self destructive.

Put another way, the difference between trade barriers and a gold standard is that under a gold standard markets will reallocate demand for foreign goods as the dollar's purchasing power with respect to foreign currencies is reduced while under trade barriers the people who have created the current monetary system, politicians and their employees, will reallocate demand.  Hence, trade barriers is a means of ensuring that state power is retained in the face of a failing monetary regime.

Rather than economically self-destructive trade barriers, a return to a global gold standard, or a global silver standard, would create the possibility of a stable world trading system and return its share of manufacturing to America.