Free Markets, Free People

Daily Archives: October 4, 2012


Look West, Young Ukraine

“Freedom is the right to question and change the established way of doing things. It is the continuous revolution of the marketplace. It is the understanding that allows to recognize shortcomings and seek solutions.”

Ronald Reagan — Address to students at Moscow State University, May 31, 1988

Remember the Orange Revolution? Believe it or not, it’s still pretty darned important.

We’re knee-deep in a presidential election. The European Union is witnessing a slow-motion meltdown. Syria is quickly becoming a bloody nightmare, while North Africa seethes under the vicissitudes of the Arab Spring. Iran marches closer to nuclear arms, and perhaps war with Israel. And Sino-Japanese relations threaten to simmer out of control. So why care about the Ukraine?

The simple answer is because Ukrainians have had a taste of freedom, and liked it, and we should encourage that journey towards liberalization to continue. We have an interest in such development – via free and fair elections, open markets and greater legal protections in its reformed court system – because this is how individuals become personally invested in the growth of the nation, and thus how liberty spreads. As President Reagan emphasized in 1981, “only when individuals are given a personal stake in deciding economic policies and benefiting from their success — only then can societies remain economically alive, dynamic, progressive, and free.” The more societies like that in the world, and especially in the Eurasian region, the better. And this is exactly where Ukraine is poised to go.

Unfortunately, we may be taking steps to discourage further liberalization in the form of a Senate resolution essentially demanding that Ukraine act exactly like a western democracy immediately or face consequences. The reality is that the former soviet republic of nearly 50 million souls is at a crossroads. Will they continue to move towards alignment with the West, or turn back towards familiar haunts in Moscow?

To be sure, the current government has expressed great interest in being integrated into the European Union, going so far as to ink an Association Agreement in March:

The Association Agreement creates a framework for cooperation and stipulates establishing closer economic, cultural, and social ties between the signees. Moreover, Brussels officials expect the document to promote the rule of law, democracy, and human rights in Ukraine.

This first step to entering the EU (which still needs to be ratified) requires a concrete demonstration from Ukraine that it is moving towards “an independent judicial system, free and fair elections and constitutional reform.”

These are exactly the sorts of reforms that serve to expand liberty. Indeed, as Ukraine has liberalized over the past two decades since independence, it has since fits and starts of great economic growth and expanded prosperity. For example, between 2001 and 2008, the economy expanded at an average rate of 7.5%, and despite a severe downturn in 2009, it has continued to grow with exports increasing by 30% in 2010 alone. Indeed, Ukraine is ranked by CNBC.com as the second best country for long-term growth in the world, right behind the Philippines. Ukraine has also begun to institute judicial reforms that promise to train better judges, hold them accountable, and strengthen the fairness of the system that has long been burdened with rampant corruption and cronyism. And for the first time ever, outside election observers will be allowed to monitor the parliamentary elections this month.

Yet, these necessary and welcome reforms lie on a fragile bed.

Ukraine has been moving toward a market economy since it declared independence in 1991. The way has been extremely difficult and bumpy. Twenty years after the beginning of market reforms, Ukraine is still struggling to build a strong, transparent, and sustainable economic system that can provide the Ukrainian people with economic prosperity and social security.

Moving towards greater integration with the West, via the EU, will strengthen that bed. Demanding that Ukraine act as a long-established western democracy right now, today, only serves to further weaken it :

Economics 101 defines the problem of scarcity as unlimited wants with limited resources, and, to paraphrase George Shultz, the laws of economics apply as much in foreign policy as they do at home. While it may be rhetorically satisfying and politically convenient for Americans to assert an equal commitment to every priority in Ukraine, ranging from democratic development to removal of weapons-grade uranium, the reality is that some priorities are achievable, at an acceptable cost and within a realistic timeframe, while others are not.

If we cannot advance all of our values and all of our interests all of the time, then we are left with the necessity of ranking our national priorities. While it is clearly important that Ukraine put an end to politically motivated prosecutions, it bears asking whether resources and attention from Washington that have been focused exclusively on this issue are crowding out other compelling U.S. national interests.

The Orange Revolution was not a battle or a war. It was, and is, a movement. Our national interests will always be aligned with fostering greater liberty, which is what the Orange Revolution movement is all about. Instead of throwing up roadblocks in the Senate, we should be helping build road signs that lead towards further peace, prosperity and freedom.


Economic Statistics for 4 Oct 12

The following US economic statistics were announced today:

Chain store sales are reporting mainly positive results this morning, but the rate of sales growth seems to be slowing. Still, the positive reports are helping sales of chain retailers’ stock this morning.

The Challenger Job-Cut Report indicates layoffs remain near recovery lows, at 33,816 for September.

Initial claims for unemployment rose 8,000 to 367,000 last week. The 4-week average rose 1,000 to 375,000. Continuing claims continue to fall, down 13,000 to 3.285 million.

Consumers continue to become more optimistic, as the Bloomberg Consumer Comfort Index rose 3.3 points to -39.6.

Factory orders were down a very sharp –5.2% in August, mainly on a drop in aircraft orders. Ex-aircraft, orders actually rose 0.7%.

~
Dale Franks
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Debate: If it had been a prize fight, they’d have called it in the 9th round (update)

Or, as Michael Moore said, “that’s what you get for having John Kerry as a debate coach”.

It appears the debate went pretty much in Mitt Romney’s favor last night, and, as you would see if you watched MSNBC’s Morning Joe, they’ve suddenly “discovered” MItt Romney. I know it must be a shock that their made up Romney didn’t show up last night.

Interesting.

More interesting? There appears to have been a clear winner last night:

According to a CNN/ORC International survey conducted right after the debate, 67% of debate watchers questioned said that the Republican nominee won the faceoff, with one in four saying that President Barack Obama was victorious.

“No presidential candidate has topped 60% in that question since it was first asked in 1984,” says CNN Polling Director Keating Holland.

And:

While nearly half of debate watchers said the showdown didn’t make them more likely to vote for either candidate, 35% said the debate made them more likely to vote for Romney while only 18% said the faceoff made them more likely to vote to re-elect the president.

More than six in ten said that president did worse than expected, with one in five saying that Obama performed better than expected. Compare that to the 82% who said that Romney performed better than expected. Only one in ten felt that the former Massachusetts governor performed worse than expected.

Now the poll only reflects debate watchers and not all Americans, but then the debates are aimed at, well, debate watchers, aren’t they?

One of the things I take away from the numbers is the 82% that say Romney performed better than expected actually got to see and judge Mitt Romney for themselves last night and not through the filter of the media.

We talked about that sort of thing on the podcast.  How America watched the debate between Ronald Reagan and Jimmy Carter, when Reagan was lagging in the polls, and apparently decided that night that Reagan was acceptable as President.

Did that happen last night for those that tuned in?

Did Romney get a check-mark beside “acceptable” for the job?

Probably so.  As for Obama’s performance?  Well, here are a few words from his supporters:

  • Commentator and blogger Andrew Sullivan might have captured the collective reaction best with this tweet, “Look, you know how much I love the guy, and how much of a high-info viewer I am, but this was a disaster for Obama.”
  • On MSNBC, talk show host Chris Matthews asked incredulously, “Where was Obama tonight?” He suggested that the president take some cues from the liberal voices on the cable channel. “There’s a hot debate going on in this country. Do you know where it’s being held? Here on this network is where we’re having the debate. We have our knives out. We go after the people and the facts. What was he doing tonight? He went in there disarmed.” Obama failed to put any points on the board by not bringing up Romney’s controversial “47 percent” remark or his work at Bain Capital, Matthews complained, while Romney “did it just right,” keeping a direct gaze on Obama as he spoke, ignoring moderator Jim Lehrer’s mild-mannered attempts to cut him off and treating he president like “prey.” Matthews said, “What was Romney doing? He was winning.”
  • Comedian Bill Maher, who takes regular hard jabs at conservatives on his television show and who gave $1 million to a super PAC supporting Obama’s reelection, tweeted, “I can’t believe I’m saying this, but Obama looks like he DOES need a teleprompter” — a reference to Obama’s critics who say he relies too heavily on teleprompters.

Not pretty.  Not pretty at all.

Now we’ll go through the obligatory fact checks that no one will pay attention too.  But the impression has been made.  The only question is, was it enough to tip the election to the Romney side.

And here’s another point to ponder.  If Americans were waiting on the first debate to determine whether Mitt Romney was acceptable, will they bother tuning in to any of the other debates.  Or said another way, was this first debate performance enough to convince them that he can do the job and would probably be better than the incumbent.

If I had to guess, I’d say yes.

And if last night made the undecided comfortable with a Romney presidency,  that should worry Democrats.

Update: From CNN of all places:

It was the biggest question coming into this first showdown: Could Romney seem presidential standing next to the Obama?

The answer appears to be yes.

Wow.

Also from CNN:

“I don’t think anyone’s ever spoken to him like that over the last four years. I think he found that not only surprising but offensive. It looked like he was angry at times,” added CNN Senior Political Analyst David Gergen, who has advised both Democratic and Republican presidents.

Heh … what, no Nobel Peace Prize for just showing up?!

~McQ
Twitter: @McQandO
Facebook: QandO

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