Greed vs. Giving... Trickle down charity is a recipe for real long term success

Rush Limbaugh caused a bit of a stir recently when he asked the question: “What do you think has fed more mouths, greed or charity?” The question seemed particularly untoward given that Christmas was right around the corner. Who besides Gordon Gekko might ask such a ludicrous question? Rush, obviously… and it turns out that it’s not such a ludicrous question after all.

Of course when he says greed, what he is really referring to – and he says as much – is self interest. Basically what he is arguing is that while giving charity to someone may make the donor feel good and sometimes has a positive effect on the recipient, the real way to improve the lot of people is to act in your own self interest – within the rule of law of course – and the benefits will flow to others, either directly or via giving. You might call this trickle down charity.

Not long ago I wrote a piece about Steve Jobs stating that despite giving Jack to charity, he did more to improve the lives of people around the world over the last 35 years than possibly anyone other than Bill Gates. Of course Gates has given away tens of billions of dollars, but in reality he has benefited the world far more by founding and growing Microsoft than anything he has done or likely will ever do with the Bill and Melinda Gates foundation.

To understand the level of failure that charity & giving can accomplish one need only look at Africa. In her brilliant book: Dead Aid: Why Aid Is Not Working and How There Is a Better Way for Africa", Dambisa Moyo writes: “Over the past 60 years at least $1 trillion of development-related aid has been transferred from rich countries to Africa. Yet real per-capita income today is lower than it was in the 1970s, and more than 50% of the population -- over 350 million people -- live on less than a dollar a day, a figure that has nearly doubled in two decades.” Moyo argues that not only does aid actually destroy much of the potential economic development of African nations and enables corrupt leaders to maintain their power, at the same time it encourages would-be dictators to attempt to overthrow existing regimes, which in turn creates more war and poverty.

Food is one of the most brutal forms of aid. Many countries receive aid in the form of American agricultural products. The result of these gifts is that, as local farmers cannot compete with free food, their farms fail, and any chance of self sustainability vanishes. It’s the whole notion of “Give a man a fish, feed him for a day… Teach a man to fish, feed him for a lifetime.” In the case of Africa the world’s aid (and food is only part of that problem) is destroying the capacity of the recipients to become self sustaining, resulting in a vicious circle of aid, corruption and poverty.

Here in the United States the record of success via “giving” is largely the same. After six decades and trillions of dollars of government “aid” in the form of welfare and government education, the poverty problem is not only not getting any better, but it’s actually getting worse! We have record levels of people with no discernable skills, little ability to support themselves and most seeking support at the public trough. A smashing success of compassion!

None of this should be taken to suggest that giving is a bad thing. It’s not. Particularly when it’s done to ameliorate incidental or disaster induced problems, big or small. Giving however should not be seen as a long term solution to improving the condition of man. The problem is that giving typically comes with few, or poorly enforced, requirements on the part recipient, particularly when those “gifts” come from the government or international organizations like the UN or the IMF. Compare the different outcomes between 1960 and today of the Asian tigers and sub-Saharan Africa. In 1960 South Korea’s GDP per capita was twice that of sub-Saharan Africa’s, but in 2005 it was almost 24 times as much. The story is similar for countries such as Indonesia, Malaysia, Cambodia and Vietnam, who went from half the per capital GDP of sub-Saharan Africa in 1960 to five times it today. While all of these tigers received aid at some point, in Africa the aid became an end in and of itself while in Asia it was used as a step to economic growth and development.

Andrew Carnegie provides a perfect example of how both greed and giving can work together. In the late 19th century he was the richest man in the world, and in 1889 he wrote a piece called “Wealth” where he argued that the adult life of an industrialist should comprise two parts. The first part was the accumulation of wealth. The second part was the distribution of that accumulated wealth to benevolent causes. Philanthropy, Carnegie argued, was key to making the life worthwhile.

And Carnegie was no piker when it came to giving. By the time he died, he had given away 90% of his wealth (equivalent to $4.5 billion today) with the remainder to be distributed by others.

In Rush’s parlance, Carnegie fed many people via both greed and charity. By creating the heart of what became the most valuable company in the world, Carnegie provided food and shelter to tens of thousands of workers around the world and hundreds of thousands of family members. Whether you call it greed or self interest is immaterial. It supported hundreds of thousands of people and it gave Carnegie the resources to give to charity. Carnegie’s giving did not simply feed a man for a day. On the contrary. He wanted to prepare recipients to feed themselves for a lifetime. The majority of Carnegie’s giving came in the form of financing universities and libraries around the world where men could improve their lot in life through education. His was a gift, but he required something from the recipient in order to take advantage of it. Be it studying or reading, the recipient of Carnegie’s largesse was involved in the improvement of his own condition.

At the end of the day, as usual, Rush was right. The good Carnegie was able to do was driven by his pursuit of his own self interest. Same deal with Gates, Rockefeller, Ford and even Mark Zuckerberg. The result was that they improved the lives of their workers, their customers and the recipients of their gifts… but it all started with a profit motive. And it’s true on a national scale as well. America became the breadbasket and economic engine of the world through the pursuit of profit. That profit motive and the success it created allowed the United States to become by far the most generous nation in the world. But the same thing holds true here, people around the world have benefited far more from Cyrus McCormick’s invention of the mechanical reaper, the American innovation in the early auto, energy and transportation industries and Silicon Valley’s silicon and cyber advances than they have from any charity that was ever given by anyone anywhere.

While charity has its place in the world, free markets and capitalism are the keys to true improvement in the condition of man. They provide the opportunity for investment and innovation to ameliorate most problems on the planet. Not all, but many. If one’s goal is to help a neighbor, a friend or someone across the planet survive a disaster or get through a difficult moment in their lives, charitable giving is the perfect solution. If however one’s goal is to lift a family or a community or a country out of poverty, do what you can to help them participate in capitalism and a free market economy. That’s where long term, sustainable economic advances come from. Now that’s a gift that will pay dividends for everyone involved.

Iraq will be Barack Obama’s Vietnam

Iraq will become Barack Obama’s Vietnam. Not in the boogieman sense that the left has been using the Vietnam War for the last 40 years where every American use of force is the “next Vietnam” but rather in its aftermath.

The Vietnam War ostensibly ended in ended in early 1973 with the signing of the Paris Peace Accords. The agreement was based upon an agreement by all sides to stop hostile activities and for American troops to depart. The Americans would continue to supply the South Vietnamese military. In addition, the SVN leadership was explicitly assured that were the North Vietnamese to resume hostilities the United States would begin bombing Hanoi and other targets in the North.

Unfortunately for the South Vietnamese, the promises of arms and support were mirages. In 1974 Congress cut military aid to Vietnam from $2.3 billion to $1 billion and then in 1975 to $300 million. Thanks to the Democrat’s Case-Church Amendment, when the North had resupplied and resumed hostilities, the promised US bombing never came. In April 1975 Saigon fell and the South surrendered.

Then came the nightmare. Upwards of a million South Vietnamese found themselves in prisons, “re-education camps” or other tropical outposts where they were treated to starvation, torture and murder. Hundreds of thousands more braved the oceans in order to escape, a quarter of them never reaching shore. The effects of this nightmare reached into Cambodia and Laos as well.

And now there is Iraq.

The war in Iraq was obviously far different from the one in Vietnam. Unfortunately however, the aftermath may be similarly unpleasant.

While Iran will not invade Iraq anytime soon, the country could still become a vassal of the ayatollahs. If Iraq escapes that fate it may well collapse into a civil war that eventually draws not only the involvement of the Iranians, but of the Saudis, the Turks and other neighbors as well. Oh, and, yes, perhaps eventually the Americans again.

However one feels about the war in Iraq in the first place, the manner of the exit ensures one thing, that the American blood and treasure spent toppling Saddam Hussein and seeking to establish a viable democracy in the Middle East will likely be for naught.

Not that Saddam Hussein will be coming back anytime soon, he won’t… but the country he once ruled will likely become a basket case or a failed state.

The writing on the wall has been there for years. Candidate Obama had been a critic of the Surge and President Obama’s only priority in Iraq seemed to be leaving.

Iran was paying close attention. Although they had been heavily arming insurgents and Shia militants during the dark days of 2005-2007, by 2009 their efforts had largely been defeated with the establishment of a fledgling but credible Iraqi government infrastructure.

However, the national elections of 2010 opened the door to Iran once again. Barack Obama was inexplicably a proponent of a laissez faire policy in reference to the dysfunction in the formation of the Iraqi government following the 2010 elections. To anyone looking (and there were many) it was clear that the United States was disengaged and focused on wrapping up the operation.

Such chaos invites the efforts of a strong horse. Iran was willing to play. With an ambiguous constitution and a Chief Justice carrying Prime Minister Maliki’s water, the Iranians became the power brokers behind the new government, forcing Mr. Maliki into a coalition that included the Sadrists, erstwhile insurgents led by cleric Muqtada al-Sadr. This was only possible because of the vacuum left by the Obama administration. Had the Iraqis been confident that the United States would be standing with them until they could stand on their own, there would have been no vacuum for the Iranians to fill.

As things stand today, Iraq sits on a precipice of disaster. Within the last three months terrorist attacks have increased, sectarian infighting has escalated and two of the country’s eighteen provinces have sought semi-autonomous status, seeking to enjoy the autonomy the Kurds enjoy. Other provinces will surely follow. For a country with a weak central government and deep divisions amongst its population, such a centrifugal force is not exactly helpful. This will be particularly problematic as the national government seeks to collect and distribute oil revenues, bolster the power grid and perform other traditional tasks. Apart from the growing separatism at the local level, the federal government is a patchwork of alliances, most of which are held together by Iranian influence. That influence comes in various forms, from their covert (but hardly secret) support of terror groups Khataib Hizballah and Asaib Ahl al-Haqq, who are not only responsible for killing US troops but for targeted assassination across the country, to their overt economic, diplomatic and religious ties. As if to put a cherry bomb on the top of this powder keg, the day after the last American troops left the country, the Shiite-led government issued a warrant for Vice President Tariq al-Hashemi, the country's highest ranking Sunni official, on terrorism charges.

Of course it did not have to be this way. American Military planners had long sought to leave a force of between 20,000 to 30,000 troops to provide continued security, run counterinsurgency operations and to focus on training of the Iraqi military. Most analysts believed that number was the minimum number necessary to maintain many of the hard fought gains won over the last four years.

While 20,000 troops may sound rather small in terms of maintaining gains achieved in a country of 30 million people, the message they would have sent to the Iraqis, and equally importantly, to the Iranians, would have been crystal clear: The United States will not allow a democratically fragile Iraq to become an battleground of the Middle East or an Iranian puppet.

That however was never Barack Obama’s message. His campaign would later reveal his message: “Ending the War in Iraq: A Promise Kept”

For some perspective, one might observe that leaving sizable troop levels in a theater for a period of time after a conflict in order to maintain hard fought gains is nothing new. A quarter century after the end of WWII there were 260,000 American troops in Germany and today, sixty years after the Korean War there are 30,000 US troops in South Korea. Obviously the Korean peninsula and Western Europe are different than Mesopotamia, but the notion remains that leaving troops to midwife a long term positive outcome is far from foreign. At least to most people not named Barack Obama.

Instead, the message the Iraqis and their neighbors received from the United States was one of detachment driven by a President with little interest in anything other than ending “Bush’s War”. Whereas Bush talked with Prime Minister Maliki on a weekly basis, President Obama spoke with him rarely and not at all between February 13 and October 21 of this year, critical days in the period leading up to the end of the American presence in Iraq.

After months of doing nothing the administration finally proposed in August of this year to leave 3,000-5,000 troops, far below what most believed was necessary to secure the peace. Those numbers, far too small to fulfill its mission did prove helpful to the administration however: it provided a fig leaf behind which it could hide its retreat. This fig leaf came in the form of a lack of immunity for American troops on Iraqi soil. While Mr. Maliki and other members of the government may have been willing to go to the mattresses to secure such immunity for a substantial force that demonstrated a serious American commitment to Iraq, they were not willing to do so for a token force that would provide little support or security. Even that fig leaf was too small to provide true cover because the administration could have easily put any forces in Iraq on the diplomatic rolls, which would have provided such immunity.

At the end of the day, Iraq will be Barack Obama’s Vietnam in the sense that not only will most of the hard fought gains be lost, but there will be thousands who will pay the price for his choice, starting with the innocents who will be caught in the sectarian crossfire. They will not be the only ones however. So too will a price be paid by neighbors who fear an emboldened Iran as well as freedom advocates across the region who might have sought replicate Iraq’s success and build secular, democratic governments. And then there is the world’s confidence in the United States as a long term ally in the fight for regional stability and a bulwark against Iranian intervention.

Of course all of this comes on the heels of another futile round of sanctions seeking to keep the Iranians from developing or delivering a nuclear weapon. Barack Obama has certainly conveyed a message of strength and stability to the region. “Ending the War in Iraq: A Promise Kept” Indeed.

Tea Party vs. the GOP establishment - Begging for a brokered convention...

For much of the last three years, I, like so many others who were so despondent after the election of 2008, assumed that the election of 2012 was finally going to provide the American people with a real choice of philosophies.

On the one side you have President Obama and the progressive / fascist utopia. (Fascist in the economic sense – where private property remains, but government dictates its usage – rather than the Nazi anti-Semitic / nationalist sense.) This utopia is where government plays the role of caretaker of the nation, where government tells citizens what they can and can’t do with their property, what they must buy and where they must invest, where unions have the power to coerce both government officials and private corporations that pay their members salaries.

On the other side the Tea Party was going to make sure that for the first time in 30 years a conservative nominee would be the standard-bearer of the Republican Party. The platform would include radically smaller government, less intrusive government, and lower taxes coupled with a less complicated tax code – maybe even the Fair Tax – and a strict adherence to the 10th Amendment. Life was indeed going to be good again and prosperity would soon come roaring back.

Given the failure of everything progressive, from welfare to education to the USSR to practically the entire European continent, Americans would finally be given the choice between continuing down that well trod path to failure and a going down that forgotten path of economic liberty that was the foundation of American prosperity since the revolution.

Somehow, somewhere along the road leading to that fateful, Solomanic fork in the road, something went wrong. Not on the left. No, President Obama has indeed been as progressive as most of us feared, and in some cases far worse. Actually, the problem is on the right. Where many of us were hoping that the standard-bearer of the GOP would be a clean, if not perfect, conservative, increasingly it looks as if the nominee is going to be someone other than that.

In the one corner we have Mitt Romney who to this day refuses to renounce Romneycare, the Massachusetts disaster that spawned Obamacare. He also was an early supporter of cap and trade, was gullible on global warming, opposes a flat tax or the Fair Tax and shares an unhealthy affinity with Barack Obama for class warfare.

In the other corner we have Newt Gingrich, the guy who sat on a couch with Nancy Pelosi and told us to pressure our leaders to combat climate change. Although he finally admitted that was one of the stupidest things he ever did, there are other candidates for that title. He trashed Paul Ryan’s less than radical tax plan as “conservative social engineering”, supported the individual mandate in healthcare and now wants to harness local boards to determine which illegal immigrants should be allowed to pursue a “Path to legality”. I have to wonder how effective that might be in sanctuary cities around the country like San Francisco, Austin and Denver. As if all of that were not enough, after taking almost $2 million from Fannie & Freddie and praising their work and the GSE model itself, he now wants us to believe that the only thing he did for the money was tell them their businesses were going to fail. Really?

There are of course others in the race and they too are imperfect, but at least with Perry and Bachman you know they are true conservatives mostly dedicated to a smaller government. Unfortunately for the two of them, their campaigns barely register a pulse when it comes to the polls.

At the end of the day one has to ask, what happened to the Tea Party revolution? How is it possible that the two men leading the race for the 2012 GOP nomination are big government, crony capitalist chameleons who are far less inclined to upend the Washington applecart than work with the people driving it? Why are not the leading GOP candidates shouting from the rafters that they will radically slash government spending and regulation, that they will champion a flat tax and that they will impose a strict adherence to the Constitution, particularly the 10th Amendment?

Despite the best efforts of the media and the Democrats to paint the Tea Partiers as racist rubes and the Occupy Wall Streeters as noble sophisticates put upon by the evil capitalist system, the American people recognize the truth. The fact that the PR field is so heavily tilted towards OWS, yet citizens still have a more favorable view of the Tea Party, tells you everything the GOP needs to know about the coming election. If they would simply run a candidate who proudly articulates basic conservative principles, the next election would result in the country being freed from the tightening progressive noose around its neck. Without such a candidate, with just another standard-bearer Americans can’t distinguish from the big government GOP they’ve come to know, Barack Obama may indeed triumph.

With Gingrich and Romney sitting in the pole positions, I find myself pulling for a brokered convention that results in an opening for someone other than Frick and Frack to take the nomination. Someone like Sarah Palin, or even the forgetful but conservative Rick Perry. Sure that’s an unlikely scenario, but at this point the traditional route has brought us two paper tiger conservatives leading the pack. The Tea Partiers and the country deserve an opportunity to make a clear choice between progressivism and conservatism. Let’s hope that somehow the GOP can figure out how to give that to them. Otherwise it may be another four years of hoping for change.