In this video, David Boaz makes an excellent case for tamping down our overblown perception of Iran.

In the clip, Boaz argues persuasively that far from being suicidal, the track record of Iranian behavior shows pragmatism and calculating temperament when attempting to advance its interests in the region. Thus, rather than assessing Iran based on their leaders’ repulsive and provocative rhetoric, U.S. officials should deduce future Iranian intentions based on how it has reacted when confronted with overwhelming force. While no one can predict the future, regional experts—not hawkish, misinformed policy analysts or neo-conservative ideologues who advocate regime change—insist that the clerical regime has valued self-preservation and in the future can be deterred.

My colleague, Justin Logan, argues here that U.S. policymakers must press for direct diplomacy with the Iranian leadership and have a plan “B” in case that diplomacy fails. Of course, the problem is that those who endorse a tougher approach toward Iran insist that we have tried diplomacy before. That is not true. Washington typically offers halfhearted gestures and then falsely concludes that diplomacy does not work. Americans must reject the alarmist rhetoric and tortured rationales that have thus far proved counterproductive for arriving at a long-term solution toward Iran.

The extent to which government spending either complements or crowds out private investment has long been one of the most heated debates in economics (and politics). Generally economic theorists posit that an increase in government spending drives up interest rates, which increases the cost of private investment, accordingly reducing such investment. Most macroeconomic models are build on this relationship. 

In an interesting new working paper, a trio of economists attack the question from a different angle. They measure the impact of increased earmarks on the local economy receiving those earmarks, and compare the impact to areas not receiving the increased earmarks, which allows them to control for the overall macroeconomic environment. Their finding: even in a setting where government spending is “free” to the recipients (but not free to the rest of us), such spending reduces private investment. 

More specifically, the authors examine what happens to a state when one of its senators becomes a chair of a powerful committee. First, the obvious, upon taking a power chairmanship, the value of earmarks increase almost 50%. This results in roughly a $200 million annual increase to the state. But the authors find this is not simply a transfer from the rest of the country to the state, it also depresses private capital investment and R&D spending in the state. On average, once a state has a senator obtain a powerful chairmanship, state level private investment in capital expenditures decreases $39 million annually and state private R&D decreases $34 million annually. 

For states seeking to get your senator into a powerful chairmanship: be careful of what you wish for. There’s no free lunch, even when someone else is paying.

In a new episode of Stossel, Cato’s David Boaz and Jeffrey Miron join a panel of experts to discuss where libertarians stand on a host of major issues facing the nation today. They tackle libertarian views on war, abortion, the welfare state, gay rights and more.

Watch the videos below for a full re-cap.

The first video covers the so-called culture wars, including gay marriage, abortion and immigration:

More videos after the jump.

In the second video they discuss the role of government in providing aid to the poor:

In the third video, the panelists discuss libertarian views of war. Should the United States leave Afghanistan and Iraq? What should we do about Iran? Watch:

If you’re hungry for more, the segment is a great supplement to David Boaz’s timeless book, Libertarianism: A Primer and Jeffrey Miron’s forthcoming book Libertarianism: From A to Z.

Last week, coincidence brought together a pair of worthy articles attacking the political adage that terrorism is an “existential” threat.

Gene Healy debunked “existential” in his Examiner column. “Conservatives understand that exaggerated fears of environmental threats make government grow and liberty shrink,” he writes. “They’d do well to recognize that the same dynamic applies to homeland security.”

John Mueller and Mark Stewart, meanwhile, have an article on Foreign Affairs’ web site titled: “Hardly Existential: Thinking Rationally About Terrorism.” They show that conventional assessment methods place terrorism so low on the scale of risks that additional spending to further reduce its likelihood or consequences is probably not justified.

But some readers literally can’t absorb what appears in the two paragraphs above. You might be one of them.

Exquisitely rational arguments like these are “cognitively invisible” in the face of fear, as Priscilla Lewis puts it in the forthcoming Cato book Terrorizing Ourselves. I assume the arguments of Healy, Mueller, and Stewart will be dismissed out of hand by people who view terrorism through their personal lens of fear.

Mueller and Stewart touch on this problem briefly:

Because they are so blatantly intentional, deaths resulting from terrorism do, of course, arouse special emotions. And they often have wide political ramifications, as citizens demand that politicians “do something.” Many people therefore consider them more significant and more painful to endure than deaths by other causes. But quite a few dangers, particularly ones concerning pollution and nuclear power plants, also stir considerable political and emotional feelings, and these have been taken into account by regulators when devising their assessments of risk acceptability.

We know enough to be confident of our security. The questions remaining include: How do we convince others to join the ranks of the indomitable Americans? How do we undercut the political advantage taken of terror fears? And how do we rein in the massive government growth produced by terror politics?

This month, two vice-presidents of the Czech National Bank (CNB) have made very serious allegations against the International Monetary Fund. Below is the summary of their claims so far:

1. Speaking to the Austrian daily newspaper Der Standard on April 2, Mojmir Hampl, the vice-president of the CNB, said that the IMF under Dominique Strauss-Kahn “wanted to expand its role in Eastern Europe and obtain new financial resources.” Hampl claimed that the IMF exaggerated problems with the financial systems in Eastern Europe. “We have always emphasized that the instability of the financial system [in 2008] was a Western European problem. That proved correct… According to a recent EU report, only nine out of 27 EU member states did not have to introduce any financial stabilization measures [during the crisis]. All nine were new [mostly Eastern European] member states.”
2. Hampl’s claim was echoed by his colleague, CNB vice-president Miroslav Singer, in today’s edition of the Czech daily Hospodarske Noviny. According to Singer, “I cannot say nice things about the IMF’s role in the 2008 crisis.” The Financial Times, Singer continued, carried a lot of nonsensical stories about the state of the Czech financial sector prior to the crisis. Instead of dispelling those stories, the IMF produced a study about the Czech Republic based on incorrect data and then leaked it to the Financial Times. “It is difficult to be certain… that the IMF wanted to harm the Czechs, Slovaks or Poles on purpose… More likely it was a combination of panic, lack of expertise and a desire to see problems everywhere.”

If true, these claims raise troubling questions about the incentives behind the largest increase of resources in the Fund’s history.

There may be no area of public policy more dominated by platitudes and pie-in-the-sky pronouncements than education. Case in point: the oft-repeated declaration that we must put aside our differences about what kids should be taught — whole language or phonics, old math or new math, creationism or evolution — so that we can just get down to teaching.

USA Today is currently offering an editorial providing just such trenchant advice. Using the social studies brouhaha in Texas as their jumping off point, the editorialists lament standards that are skewed to either the left or right in states around the country:

[T]his sort of agenda-driven revisionism isn’t narrow and isn’t confined to Texas. Nearly half the states have a centralized curriculum system, often dominated by a politically elected or appointed board.

Kansas has been tied in knots for a decade over teaching evolution. At the other end of the politically correct spectrum, California regulates the portrayal of genders, minority groups, the elderly and the disabled. According to the Los Angeles Times, publishers have even been discouraged from labeling the residents of poor countries as, well, poor. Negative stereotyping, you know.

Members of the Texas board and their backers say they’re just trying to restore balance to an academic system they view as skewed to the left. But that misses the point. Standards should be set by professionals in their fields. They should not be a vehicle for scoring points in the culture wars.…

[W]hy should students in Texas, or anywhere, have their education warped by political and ideological gamesmanship?

Sayeth USA Today, ideologues and politicians, with their nettlesome opinions, should just butt out of curriculum setting and let the “professionals” set the standards.

There are numerous major problems with this.

First, what if the professionals are not a monolithic group and there’s disagreement among them? Who among them should dictate the curriculum? The vaunted “consensus?” But what if the consensus is wrong? It has happened, you know.

Then there’s this: What if the “professionals” are every bit as political and ideological as everyone else? Hard to believe, but there is actually a mammoth left-wing bias among academics in many fields, and those are often the “professionals” we’re supposed to let unilaterally decide what our kids will learn.

Wait. No one said it had to be a unilateral decision. Except if it isn’t, you are right back to gamesmanship square-one. Why? Because if non-professionals get a say, all of those diverse Americans with their infuriatingly varied opinions, values, and educational desires will be right back to having input into what the system of schools they all must support will teach! And many of those people — shockingly! — will go right back to fighting to get the schools to teach what they want their kids to learn, not what the liberal, or conservative, or atheist, or whatever down the street wants their own children taught.

Frankly, this is not hard to figure out, and once one thinks it through it becomes obvious that just saying that things should be different, without changing the one-size-must-fit-all system, will never work. Indeed, short of eliminating all diversity in the nation, or forcing all schools under the boot of a dictator, only one system of education can end the fighting: universal school choice, which lets every family choose what they want their kids taught as long as there’s an educator willing to teach it. Nothing is forced, so no one must fight.

Ultimately, this is what it comes down to: Either give us liberty, or give us “gamesmanship”!

One of the topics Chris Edwards will be discussing with Glenn Beck this evening (5:00 EST, Fox) is the “Not-So-Great Depression” of 1920–21.

Cato Senior Fellow Jim Powell notes that President Warren G. Harding inherited from his predecessor Woodrow Wilson “a post–World War I depression that was almost as severe, from peak to trough, as the Great Contraction from 1929 to 1933 that FDR would later inherit.”

However, instead of calling for bigger government to right the economy, as President Obama did upon inheriting George Bush’s mess, Harding pushed for spending and tax cuts.

The result?

With Harding’s tax and spending cuts and relatively non-interventionist economic policy, GNP rebounded to $74.1 billion in 1922. The number of unemployed fell to 2.8 million— a reported 6.7 percent of the labor force— in 1922. So, just a year and a half after Harding became president, the Roaring Twenties were underway. The unemployment rate continued to decline, reaching an extraordinary low of 1.8 percent in 1926. Since then, the unemployment rate has been lower only once in wartime (1944), and never in peacetime.

The following chart shows federal spending from 1920 to 1940: