Free Markets, Free People

Daily Archives: November 3, 2011

Cuba allows people to exercise property rights again

You’re probably looking at the title and if you’re familiar with the story wondering why I announced it like that.

The story, if you’re not familiar with it, was reported today by AP in a story entitled “Cuba legalizes sale, purchase of private property”.

After the description of what Cuba will now allow, you run across this within the story:

"This is a very big step forward. With this action the state is granting property rights that didn’t exist before," said Philip J. Peters, a Cuba analyst at the Lexington Institute in Arlington, Virginia.

Have you picked yourself up off the floor yet?   That’s the most ridiculous statement you’re likely to see in some time (which is a bit surprising coming from someone at the Lexington Institute).

Let’s make something perfectly clear – property rights existed prior to and during the communist regime’s takeover.  What the communists did was prevent the exercise of the right through the use of force.  That’s entirely different than what Peters contends.  In fact, the AP title comes closer to the truth than Peters.  The communist regime had simply made the exercise of the right “illegal” and had used force to prevent the people of Cuba from exercising that right.   The right didn’t go away, just the ability to exercise it.

Now, surprise surprise, the communist regime has all but admitted it was a foolish thing to do and has again made the right “legal”.  Or said another way, they will no longer use the force of the state to prevent people from exercising their inherent right to property.

Oh, and as a bonus for the income equality crowd?  If you want income equality, Cuba is your place.  Everyone makes about the same there.  Check it out.


Twitter: @McQandO

Handicapping the 2012 election

Two folks I respect and enjoy reading when it comes to election analysis are Nate Silver and Larry Sabato.  Both have a lot of experience, seem to have their heads on pretty straight and explain their methodology and reasoning fairly well.  Both are also a rare breed in that they don’t seem to let whatever political biases they have interfere with their analysis.

Recommended reading today from both of them.

Silver talks about how he has come to do his analysis of presidential races.  It’s a very interesting read for the political junkie and even for those who are less involved but want some way to do their own analysis of the goings on.  Probably the most controversial aspect of his analysis is what he calls the “the ideological positioning of the Republican candidate” (note: obviously, if it was a Republican in the White House, he would be talking about the ideological positioning of the Democratic candidate).  As he notes, it’s a bit of an intangible, but I think he has a point.  He also has “extreme” ratings for each of the current candidates and explains what that means in the big scheme of things.  

Interesting stuff which I’m sure will make for a good discussion.

Sabato, on the other hand, talks about how it is way too early to draw the curtain down on the GOP nominating process, even though (and I’m as guilty as anyone) many of us want to call it “over”.  Much of that is just wanting to get the process over with in what seems to be an eternal campaign.  But, as he points out, history says “not yet”.  The primaries are the crucible and surprises can and do happen.

Anyway, good stuff for political junkies.  A couple of sources for some fun discussion.  Don’t hesitate to weigh in.


Twitter: @McQandO

Economic Statistics for 3 Nov 11

Today’s economic calendar is fairly full, so let’s get cracking:

Initial jobless claims continue to drop slowly, with this week’s claims tallying 397,000, finally getting us below the awful 400,000 mark. Once again, though, last week’s number was revised upward to 406,000. These upward revisions have become quite commonplace.

Retail sales growth for October is mixed at best, trending at about 3% for same-store sales and about 5% for total sales.

Nonfarm business productivity jumped an annualized 3.1% in the 3rd quarter, much better than expected. Compensation growth, on the other hand, was restrained, rising an annualized 0.6%. Overasll, unit labor costs fell -2.4%.

Bloomberg reports that their consumer confidence index dropped to its lowest level since the 1st quarter of 2009, to -53.2.

Strong sales for non-durable goods and an upward revision to durable goods resulted in a better-than-expected 0.3% jump in September factory orders.

The ISM Non-Manufacturing index continues to point to steady, if slow, growth in the service sector, with the index at 52.9, just one tick below last month’s 53.

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China ignores sanctions to trade with Iran

For years I’ve heard people say that China isn’t an expansionist military threat on the par of, say, the old Soviet Union.  And for the most part, I believe that.  I do believe they’re a regional expansionist military threat and I also believe they’re building their military with unprecedented spending to fulfill that role.  That’s fairly obvious in their dealings with other Asian countries within the China sea area.

But are they an international threat to peace?

In some ways, absolutely.  For instance, their relationship with Iran threatens to make the unstable Middle East even more unstable.  And they’re blatantly disregarding UN sanction and breaking promises to the US about weaponry they are exporting:

China is continuing to provide advanced missiles and other conventional arms to Iran and may be doing so in violation of U.N. sanctions against the Tehran regime, according to a draft report by the congressional U.S.-China Commission.

“China continues to provide Iran with what could be considered advanced conventional weapons,” the report of the U.S.-China Economic and Security Review Commission says.

According to the report, which will be made public Nov. 16, China sold $312 million worth of arms to Iran, second only to Russia, after Congress passed the Iran Freedom Support Act in 2006 that allows the U.S. government to sanction foreign companies that provide advanced arms to Iran.

So, essentially China is calling the US bluff and ignoring the UN.  And it is actively trading with a self- declared enemy of the US (and a country which has killed Americans in both Iraq and Afghanistan). 

Speaking of the US, China has even gone further:

Most of the weapons transfers involved sales of Chinese anti-ship cruise missiles, including C-802 missiles that China promised the United States in 1997 would not be exported to Iran.

China also built an entire missile plant in Iran last year to produce the Nasr-1 anti-ship cruise missile.

While the article goes on to say that technically the sale isn’t a violation of the Iran, North Korea and Syria Nonproliferation Act of 2006 because the payload and range are below the specified minimums, what it doesn’t say is the value of the advanced technology such a sale brings a country like Iran.  Obviously what they learn from the C-802 will be incorporated in their own types of missiles.

The report in which these findings were contained makes a valid conclusion based on them:

The report concludes: “Despite Beijing’s stated claim to be acting as a responsible major power, China continues to place its national interests ahead of regional stability by providing economic and diplomatic support to countries that undermine international security.”

Of course China waves it all away.  I mean, what are we going to do about it?

Chinese Embassy spokesman Wang Baodong denied China violated U.N. sanctions.

“When it comes to the issue of nonproliferation, China has been strictly adhering to the relevant U.N. resolutions and faithfully carries out its international obligations while strictly implementing its relevant domestic policies and regulations in the field.”

He said the commission “should cast off its Cold War mentality, respect the facts and stop making unwarranted allegations against China.”

Of course what sales like the ones China has been making to Iran do indeed undermine international security, or, at least Middle East regional security.  Iran now brags about missiles it has that can hit its avowed enemy, Israel, and most of the world believes they’re pursuing nuclear weapons.  These sorts of sales only aggravate that situation.

Israel has to take them seriously and has:

Israel’s test launch of a ballistic missile at Palmachim Air Force Base on Wednesday, in an apparent show of military strength, has ensured the threat of Iran’s nuclear capabilities remains firmly on the public agenda.

International sources quoted in the Israeli media said the test appeared to have been conducted with a ”surface-to-surface” missile known as the Jericho 3, which has a range of between 3000 and 7000 kilometres and is capable of carrying a nuclear warhead.

Of course Israel has never publically admitted it has nuclear weapons (but most believe they do) and until this launch never publicly admitted it had a missile with this range.  It was indeed a show of force to make it clear to the Iranians that they had best mind their p’s and q’s.  But it certainly indicates in increase in tensions and a decrease in stability in a region already dangerously unstable.

So we have China ignoring or circumventing international sanctions to trade critical weaponry with a rogue nation with military and regional aspirations and essentially telling the rest of the world to bug off.

The question is “why?”

Is it because it perceives weakness in the US?   Europe?  The UN?   All three?  China has weathered the recession in relatively good shape.  It’s economy is still doing well.  It has been the recipient of a wealth transfer through trade that has enabled it to spend much more freely on its military and it seems to be recognizing a growing vacuum in the world power balance as the US is perceived to be withdrawing some from its position of dominance.

Is China just interested in a regional role, or does Iran signal that China hopes to expand into much more of an international power player?  China watchers who’ve been claiming that it is only regional power which interests the country may have to recalibrate their thinking.   It seems, at least to me, that China sees a much broader role for itself (and its self-interest) in the world and may be beginning to make moves internationally to fulfill that role. 

Of course time will tell, but Iran (and some of its activities in Africa and the China sea)  seems to be a good indicator of a larger desired international role for China  than that which was previously assumed for the country.


Twitter: @McQandO