The Hopelessness of Negotiating with Iran

WASHINGTON, October 21, 2009 – Iran and the United States have been holding direct talks this week over Tehran’s nuclear program. What will these diplomatic negotiations accomplish?

“In the three decades since its Islamic revolution, Iran has dedicated itself to spreading its moral ideal–Islamic totalitarianism–by force of arms,” writes Elan Journo, fellow with the Ayn Rand Center and editor of the new book “Winning the Unwinnable War: America’s Self-Crippled Response to Islamic Totalitarianism.” “Tehran spends millions every year, not to pursue prosperity for its tyrannized citizens, but to finance terrorism and to build a nuclear arsenal to wield against enemies of Allah.

“Would diplomatic negotiations encourage Iran to mitigate its ideology? No, they would only intensify its hostility. Negotiations buy Iran time. Above all, diplomacy grants Iran moral legitimacy as a civilized regime: its hostile goals–‘death to America’–and its murder of our citizens are made to seem reasonable differences of opinion. Such appeasement confirms the perverse notion that Allah’s warriors, materially weaker but morally self-righteous, can succeed in bringing down the mighty infidel West.

“To protect American lives, we must learn the life-or-death importance of passing objective moral judgment. We must recognize the character of Iran and act accordingly.”

How Do We Deal with Iran?

How Do We Deal with Iran?

WASHINGTON, September 28, 2009–Iran announced on Sunday that it has test fired several short-range missiles, just days after proclaiming that it has been building a second uranium enrichment plant. In response to this show of force, Defense Secretary Robert M. Gates implied that the United States has no military solution to the problem, and added “I think there’s still time for diplomacy.”

The U.N. is Fundamentally Flawed

The U.N. is Fundamentally Flawed

WASHINGTON, September 24, 2009–Libyan leader Moammar Gadhafi’s recent 90-minute tirade, and the anti-semitic ranting of Iranian president Mahmoud Ahmadinejad, both at the United Nations general assembly, are yet two more reminders of what’s fundamentally wrong with the United Nations.

“The fundamental feature of the U.N. is its policy of opening membership non-judgmentally to all nations–whether free or oppressive, peaceful or belligerent,” says Elan Journo, a fellow with the Ayn Rand Center.

“The U.N.’s policy of neutrality accomplishes precisely the opposite of its putative effect; it actually protects and bolsters vicious regimes.

“That the U.N. benefits evil regimes is a necessary consequence of its avowed ideal of neutrality. The willful refusal to discriminate between good and evil, between freedom and slavery, can benefit only the vicious. It is only an evil regime that fears moral scrutiny, that needs to conceal its crimes, and that struggles for a veneer of moral legitimacy. The U.N.’s policy of moral neutrality is precisely what evil desperately craves: a license to commit any depravity and escape with a reputation for being decent.

“No organization can resolve conflicts if it evades the objective difference between right and wrong, and perversely treats an aggressor as the moral equal of his innocent victim. The U.N. is far from a means to achieving peace. Because it arms and bestows a moral sanction on vicious regimes, it is an accessory to their incalculable atrocities and murders.”

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Atlas Shrugged on Floor Displays at Largest Bookstores

Atlas Shrugged on Floor Displays at Largest Bookstores

Washington, D.C., June 29, 2009– Shortly after Independence Day, new free-standing floor displays of Ayn Rand’s novel Atlas Shrugged, first published 52 years ago, will be placed in more than 850 bookstores across the United States. Borders will display the novel’s trade edition at 520 of its stores and Waldenbooks will feature the mass market paperback edition at 336 of its stores. Thousands of copies of Atlas Shrugged will be on display.

Barnes & Noble also had copies of Atlas Shrugged for sale in special floor displays in most of its bookstores from late May into early June.

According to Dr. Yaron Brook, executive director of the Ayn Rand Center for Individual Rights, “This is the most prominent and widespread display for this novel in all of its publishing history. It is particularly remarkable because it comes more than a half century after its initial publication.

“The fact that the largest bookstore chains in America have chosen to make such a prominent display of Atlas Shrugged is a testimony to the current and growing interest in Ayn Rand’s novels and ideas, and an encouraging sign for America’s future.

“As Americans confront the scary growth of government control over their lives and the economy, they need, more than ever, to learn about Ayn Rand’s conception of a new morality of rational self-interest and her unprecedented defense of freedom and individual rights.”

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Diplomacy Encourages North Korea’s Belligerence

Washington, D.C., May 28, 2009–In reaction to North Korea’s explosion of what appears to have been a nuclear device and its launching of long-range missiles, Elan Journo, fellow at the Ayn Rand Center for Individual Rights, said America should stop appeasing North Korea’s dictatorial regime and face up to the enormous threat it poses.

“The US should stop rewarding North Korea for its aggression.

“North Korea has become a significant threat precisely because we have appeased it for years with boatloads of oil, food and money.

“The pattern of America’s suicidal diplomacy is clear: the North threatens us, we respond with negotiations, gifts and concessions, and it emerges with even greater belligerence.”

According to Mr. Journo, this cycle of appeasement was made possible by the fact that our political and intellectual leaders cling to the amoral fiction that North Korea shares the basic goal of prosperity and peace. “This fantasy,” said Mr. Journo, “underlies the notion that the right mix of economic aid and military concessions can dissuade North Korea from its nuclear ambition. It evades the fact that the North is a militant dictatorship that acquires and maintains its power by force, looting the wealth of its enslaved citizens and threatening to do the same to its neighbors.

“Years of rewarding a petty dictatorship for its belligerent actions did not disarm it, but helped it become a significant threat to America.

“There is only one solution to the ‘North Korea problem’,” concluded Mr. Journo: “the United States and its allies must abandon the suicidal policy of appeasement.”

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Atlas Shrugged Triples in Sales

Irvine, CA, May 12, 2009 – Reports from trade sources indicate that consumer purchases of Ayn Rand’s Atlas Shrugged have tripled in the first four months of 2009 compared to the first four months of 2008.

According to Dr. Yaron Brook, executive director of the Ayn Rand Institute, “The tripling in sales of Atlas Shrugged is remarkable, especially considering that in 2008 a new all-time record in annual sales of the novel was established with more than 200,000 copies sold in the United States.”

As Dr. Brook pointed out, “Annual sales of Atlas Shrugged have been increasing for decades to a level not seen in Ayn Rand’s lifetime. Sales of the U.S. paperback editions averaged 74,000 copies a year in the 1980s, 95,000 copies a year in the 1990s and 139,000 copies a year in the current decade. After reaching an all-time high during the novel’s 50th anniversary in 2007, another new high was reached in 2008 and an even higher mark is expected for 2009.”

More than 6,500,000 copies of Atlas Shrugged have been sold to date.

“As America faces a devastating economic crisis fundamentally caused by government policies, it is a hopeful sign for the future that increasing numbers of concerned Americans are turning to Atlas Shrugged and discovering Ayn Rand’s original morality of rational egoism and her uncompromising defense of laissez faire capitalism.”

In Defense of Speculators and Short-Sellers

By Amit Ghate

Everywhere today government bureaucrats and media pundits blame unwanted price movements on speculators and short-sellers. If prices are “too high”–it’s the fault of greedy speculators; if prices are “too low”–it’s the work of evil short-sellers. To hear these critics tell it, speculators have the ability to create artificially high prices, while short-sellers can wantonly destroy sound companies. (Ignore for now the obvious question: “Where are the short-sellers in markets that are ‘too high’ and the speculators in markets that are ‘too low’?”)

The critics then claim that since neither speculators nor short-sellers perform any positive economic function, barring them from the marketplace is an appropriate remedy, one that’s long past due. (Recently the United States did just this by making some shorting illegal.)

So to begin, let’s ask what the critics consider a “correct” price? Clearly it’s not the price which obtains when all market participants are free to engage in trade based on their best judgment, because this is precisely the free-market price–a price which they so vociferously condemn. But if “too low” and “too high” aren’t judged relative to the free market, what is the standard? Stripped of euphemism: their wishes.

For example, they wish–contrary to all relevant facts–that oil be priced at $20/barrel and that Lehman’s stock trade at $80/share. Never mind that environmental policy has prevented the drilling of oil and the development of nuclear power for decades now, or that Chinese and Indian oil consumption is growing relentlessly; forget too that Lehman chose to leverage itself at 35:1 and made riskier trades year after year–if these critics wish for a price, then that should be the price, facts be damned!

But of course, attempting to set prices by wishing doesn’t–and can’t–work, not for Lenin, Stalin or Brezhnev; or for Paulson, Bernanke and Bush. If prices are to reflect reality, they must be the result of an objective process of discovery and judgment performed by interested actors.

So just as doctors specialize in identifying and evaluating the facts affecting health and disease, speculators and short-sellers specialize in identifying and evaluating the facts pertinent to market prices. They make it their business to understand economic facts like supply and demand, and then risk their capital on their judgment, properly profiting if they’re right and losing if they’re wrong. Thus in a free market, rather than prices being set by wish or decree, they are set by a rational process, one which benefits from the knowledge of all who participate.

For instance, if speculators believe that future oil supplies won’t match demand, they buy oil, increasing its price. If they’re right, and oil prices continue to increase, they sell their positions, profiting from their insight but also capping prices as their supply comes to market; furthermore, their initial effect on prices signals to the market that greater oil supplies are needed and reduced oil consumption is appropriate–efficiently allowing market participants to adjust their actions to the facts.

So too for short-sellers. If they judge that Enron is cooking the books, or that Lehman is insolvent, they can seek to profit from their insight by short-sales. These lower stock prices in the present and convey to the market that there are potential problems with the companies, helping others avoid losses in the stocks. And if shorts are proved correct, rather than exacerbating any price slide, they actually mitigate price declines when they buy their positions back. (Of course, short-sellers, like speculators, only profit if their judgment is correct. If they short a productive, undervalued firm, say, e.g., Wal-Mart or Apple, they lose when the actual facts belie their predictions.)

Consider the recent failure of Lehman, where critics claim that short-sellers caused the decline by obscuring and distorting the company’s true value. The facts say otherwise. When the government shopped Lehman to potential buyers, opening the books to them, not a single buyer emerged, not at any price! Everyone who examined the company concluded it was worthless. This was the fact that short-sellers grasped earlier than others–it wasn’t a fact they created.
 
Speculators and short-sellers don’t create facts, they seek to identify and respond to them; and in the process they help adjust prices to economic conditions and establish smooth and liquid markets. As a result–instead of being scapegoated and banished–they should be respected and welcomed for the productive role they play in our markets.

Amit Ghate is a guest writer for the Ayn Rand Center for Individual Rights, a division of the Ayn Rand Institute. He is a full-time trader who often speculates and shorts.

Islamic Censorship by Default

Washington, DC–Random House has called off publication of a historical novel about the Prophet Muhammad’s wife Aisha, after the company received advice the book could incite violence by Islamic radicals.

“Random House’s decision is the tragic result of America’s failure to defend free speech against totalitarian Islam,” said Yaron Brook, executive director of the Ayn Rand Institute.

“In 1989, when Ayatollah Khomeini called for the execution of Salman Rushdie and Islamists firebombed American bookstores, the United States did nothing. In 2006, when two major book chains refused to sell copies of Free Inquiry magazine featuring the Danish cartoons of Muhammad for fear of Muslim violence, the United States did nothing. Is it any surprise that some Americans are now afraid to publish material that could be deemed ‘offensive’ to Islam?

“If a publisher faces the prospect of violent reprisals, and knows that the U.S. government will do nothing to protect it, that is censorship–as much as if our own government had shut down Random House’s printing presses.

“The American government exists to protect our rights, including our right to free speech. By defaulting on its responsibility, it has allowed theocratic thugs to dictate what Americans can say, write, and publish. It needs to send a message that it will no longer tolerate any threat against the right of Americans to speak freely about any subject, including Islam.

“How much longer will our government allow Islamic radicals to tell us what we can say?