Fiscal cliff's hidden subsidies

editor's insight

Nevil Gibson

You would think from the fiscal cliff drama in Washington at New Year that elected representatives would be looking at every means to save American taxpayers money and reduce public debt.

You would be wrong. The Wall Street Journal reveals the budget bill, passed just hours after the January 1 midnight deadline passed, was also full of pork-barrel spending.

Yes, the bill did contain higher capital and income taxes for the “rich” – but it also contained $US40 billion of payoffs to crony capitalists and special pleaders.

These included, as you might guess, huge subsidies to Hollywood film-makers, “green” energy (wind turbines and biodiesel), Michigan speedway owners, tuna canners in American Samoa, rum distillers, railway companies and many more.

It reminds that when politicians are spending public money, a cutback can only mean a loss of votes.

But American largesse is not limited to local voting communities. Among the biggest ticket items are those backing countries such as Egypt and the Palestinian Authority, who are only too keen to demonstrate their contempt for western values.

Pulling the plug
Michael Rubin has done a study on what would happen if the US withdrew its funding from the Muslim Brotherhood-ruled Egypt and its Palestinian allies.

He concludes the results might be a surprise to the western media that kow-tows to the Islamists now riding high throughout the Middle East.

“While some Egyptians were surely attracted to the Brotherhood’s religious position, many ordinary Egyptians cast their votes for them because they said they would eliminate corruption, jumpstart the economy, right wrongs, and put a chicken in every pot.

"For such Egyptians, President Mohamed Morsy must be a disappointment: Security has plummeted, the economy is abysmal, the currency shaky, and the gaps between haves and have-nots growing wider.

“Instead of undertaking real reform, the Brotherhood has subjugated women and minorities, sought rapprochement with Hamas, and threatened the Camp David Accords with Israel.”

Rubin suggests Egyptians might learn that religious rhetoric is no panacea if US funding suddenly dried up and the donees' rulers (and voters) took responsibility for their actions.

Certainly, the billions flowing to the Palestinians could bring some reality to their cause if they were told western patience with endless subsidies absent of serious reform had ended, Rubin concludes.

“Such a lesson has never been more important than now: As not only Hamas but also Fatah turn their backs on the agreements Arafat made to form the Palestinian Authority, they risk demonstrating that they consider agreements ephemeral, not permanent.

“Such a conclusion would ruin any chance at lasting peace, not only between Israel and Palestine, but also between Israel and other Arab states…"

Malice in Mali
Meanwhile, the western media have found another country to bash in their pursuit of appeasing Islamism: France, for its intervention in Mali.

This action has come as a surprise, as France, and particularly its anti-capitalist left wing, has up until now been dedicated to undoing the work of former president Nicolas Sarkozy, who pushed the overthrow of Libyan dictator Muammar Gaddafi.

The French goal of stopping the Islamist expansion throughout Saharan Africa won’t be easy and you don’t need the BBC and Al Jazeera to point out that such operations are risky and dangerous.

But what is the alternative? Mali is another Afghanistan and the strategy of the Islamists will be similar to that of the Taliban: They will retreat and then wage guerilla warfare, hoping the western media will play up all their victories and eventually lead to a withdrawal of foreign forces.

Time’s up for Kim’s kingdom
North Korea is largely caricatured as a country of curiosity, albeit not as warm and cuddly as Cuba.

But, out of character, the UN has finally decided the Kim dynasty’s human rights abuses are no longer tolerable.

In a breakthrough, the UN’s human rights chief Navi Pillay has released a report saying the civilised world cannot accept a chain of gulags that condemns an estimated 200,000 people to brutality, forced labour, torture and malnutrition.

She has called for an international inquiry and says hopes new leader Kim Jong Un will bring about some positive change have not occurred. 

While North Korea has attracted recent attention with the visit by a US group including Google chief Eric Schmidt, the focus on the nuclear programme and periodic rocket launches deflects attention away from the  dire human rights situation.

Ms Pillay’s spokesman, Rupert Colville, says she met with two survivors of North Korea’s prison system before Christmas.

He says they described a system of unspeakable cruelty with inmates subject to rampant violations, including torture, summary executions, rape, slave labor, and forms of collective punishment that may amount to crimes against humanity.

“People do not get enough to eat, there is little or no medical care and no adequate clothing. Colville says entire families are punished for reasons unknown to them.  He says babies are born in prison.  They grow up there and know no other life.”

A copy of the report has been given to North Korea’s UN mission but little is likely to happen. If there was a case for expulsion from international organisations, this would be a good place to start.

Cuba’s passport gamble
Meanwhile, cuddle Cuba could soon be the supplier of the world’s next wave of economic refugees into the West.

The communist states of Eastern Europe were adept at using East Berlin as a staging post for thousands from impoverished Bangladesh, Sri Lanka and elsewhere to enter Western Europe.

Now, Cuba is offering passports for the first time to its 11 million citizens ¬ but at a price. Readers will recall the collapse of the Iron Curtain did not occur by popular resistance; it was the demand by people for freedom of movement.

Deutsche Welle reports it will still be difficult for Cubans to leave legally but the fact it is happening surely dooms the regime once the floodgates open.

Under most circumstances, UN rules should dictate all Cubans will qualify refugees of one sort or another.

But countries such as New Zealand are now too wary to provide an open door to such countries, while tourists who go there report all is well with happy Cubans loving their old American cars and lively music.

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