Cato Daily Dispatch for September 28, 2004
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Bush Administration Warned of Division in IraqMcMyths behind 'McJobs'
Iraq's Foreign Debt Write-Off to Be Discussed by G7
Bush Administration Warned of Division in Iraq
"The same intelligence unit that produced a gloomy report in July about the prospect of growing instability in Iraq warned the Bush administration about the potential costly consequences of an American-led invasion two months before the war began," reports the New York Times.
"The estimate came in two classified reports prepared for President Bush in January 2003 by the National Intelligence Council, an independent group that advises the director of central intelligence. The assessments predicted that an American-led invasion of Iraq would increase support for political Islam and would result in a deeply divided Iraqi society prone to violent internal conflict."
In "Kabuki Theater, Iraq-Style," published in January 2003, Doug Bandow, Cato senior fellow, wrote: "War also creates a far greater risk of proliferation to terrorist groups. The ambassador of a friendly nation privately worries: As his regime implodes, Hussein may disperse a couple of dozen canisters of anthrax to loyal military and intelligence officers, telling them to do as much damage as possible. Or simply hand them over to al-Qaeda agents directly. There are other consequences of war. Attacking Iraq is sure to inflame Islamic hatred of the United States, offering yet another grievance for recruiting terrorists.
"Moreover, conflict could destabilize fragile friendly regimes, such as that of Pakistan's Pervez Musharraf. Imagine a nuclear-armed fundamentalist Islamic government in Islamabad. Further, war will divert attention and resources from the battle against al-Qaeda. Terrorist bombs are going off around the world, while American soldiers are being shot even in Kuwait, America's closest Gulf ally."
McMyths behind 'McJobs'
"Why has America's economy grown 55 percent faster than Germany's over the past 25 years?" asks an editorial in today's Wall Street Journal. "The Germans think they know. Americans suffer cruel inequality. They work three `McJobs' just to survive. They take on more and more debt to maintain their standard of living. Washington hides the true state of unemployment by locking up millions in jail. And forget about getting decent health care."
"So imagine the Sturm und Drang when a German author, Olaf Gersemann, came along earlier this year and exploded all these myths. The title of his book hardly needs translation: Amerikanische Verhaltnisse: Die falsche Angst der Deutschen vor dem Cowboy-Kapitalismus. On each score where Europeans think their system is superior, the Washington correspondent for Germany's largest business weekly shows that the Americans have actually pulled ahead."
The Cato Institute has published Gersemann's book in English with a new title, Cowboy Capitalism: European Myths, American Reality, Gersemann concludes the continental economies of Europe provide no meaningful advantage over the United States. The greater market freedoms in America create a more flexible, adaptable, and prosperous system than the declining welfare states of Europe.
Iraq's Foreign Debt Write-Off to Be Discussed by G7
"Finance chiefs from leading industrialized countries must bridge a transatlantic rift over how much of Iraq's foreign debt to write-off if they are to make progress towards a deal at a meeting this week," reports Reuters.
"Iraqi debt is a top issue on the agenda at Friday's meeting in Washington of finance ministers and central bankers from the Group of Seven (G7) rich nations -- the United States, Japan, Germany, Britain, France, Italy and Canada."
In a Cato Policy Analysis released today, "Iraq's Odious Debts," Patricia Adams, executive director of Probe International, writes: "There is a widespread acknowledgment that the debts created by Saddam Hussein's regime bought weapons, palaces, and instruments of repression. Iraqi legislators should, as a first order of business, establish an arbitral process to determine the legitimacy of the estimated $120 billion in claims against their people. Only after Iraqis have an accurate accounting of these claims against their nation, and determine which are legitimate, should they appeal to creditors for debt relief, if any is required. To do otherwise would allow creditors to evade responsibility for financing Saddam's regime against its people."
Jonathan Block, editor, jblock@cato.org
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