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THE HOOVER INSTITUTION • STANFORD UNIVERSITY

RESEARCH AND OPINION

ON PUBLIC POLICY

2014 • NO. 4 • FALL

The Hoover Digest offers informative writing on politics, economics, and

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On the Cover

In 1950, American efforts to rebuild Europe
were outgrowing their original ambitions:
feed the hungry, revive trade and currencies in
allied and former enemy nations alike, resur-
rect industry, and restore stability. Now Soviet
militancy was rising, threatening Europe’s
fragile security and posing an ideological
challenge. This poster was part of a Marshall
Plan contest meant to persuade Europeans
to choose democracy and open markets and
reject the Soviet appeal. It was part of a larger
war of ideas. See story, page 202.

Hoover Digest

Research and Opinion on Public Policy

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Hoover Digest ▫ 2014 · No. 4

Contents

HOOVER DIGEST · 2014 · NO. 4 · FALL

IRAQ

9 Axis of Folly

The president of the United States proved rash, the former prime

minister of Iraq, arrogant. Why Iraq is teetering. By .

13 Best Frenemies?

As Iraq wobbles, Iran might almost look like a friend. It isn’t. By

.

16 The Price of Our “Responsible” Exit

The Iraq war never ended. We just quit fighting it. By . .

21 An Army of Revisionists

How quickly we forget our reasons for toppling Saddam—and our

politicians forget how they endorsed it. By .

THE ECONOMY

26 Why the Fed Must Return to Rules

What does the economy need from the Fed? Less intervention, more

stability. By . .

31 The Foundation Crumbles

Rising taxes and the unrestrained growth in entitlements are eating

away at the very foundation of our economy: property rights. By

. .

Hoover Digest ▫ 2014 · No. 4

INEQUALITY

35 Rickety Piketty

Economist Thomas Piketty wants to confiscate wealth, but he doesn’t

grasp where wealth actually comes from. By . .

42 The United States of Envy

What closes income gaps? Education and innovation—not

confiscatory taxes such as those Thomas Piketty proposes. By

. .

CALIFORNIA

47 Economics in a Time of Drought

Let the water flow where the market, not the government, says it

should go. By .

51 An End to Pension Patches

Meaningful ways to mend the Golden State’s pension-funding gap.

By .

THE ENVIRONMENT

56 Railroading the Environment

Block the construction of pipelines and more oil gets shipped by

train. That will make spills and accidents more likely, not less. By

. .

Hoover Digest ▫ 2014 · No. 4

HEALTH CARE

61 Side Effects May Include Collusion

Caution: ObamaCare might encourage hospitals and doctors to fix

prices. By . .

64 Waiting for Dr. Godot

Long treatment delays at VA hospitals shouldn’t shock us. In coun-

tries with government health care monopolies, waiting months—

even years—represents business as usual. By . .

72 Bitter Pills

Higher costs, fewer choices—the Affordable Care Act is becoming

harder and harder to swallow. By . .

POLITICS

78 Affirmative-Action Foibles

The Democratic Party likes racial preferences in college admissions,

but Asian-Americans don’t. Might we see a parting of the ways? By

. .

81 They Might Be Giants

Then again, they might not. If politics were baseball, President

Obama’s team would have whiffed. By .

INTELLIGENCE

86 The Secret Sharers

If leaks of secret information are so bad, why not plug them? Be-

cause both the public and the government consider them useful. By

.

Hoover Digest ▫ 2014 · No. 4

91 In Snowden We Trust? Never

Self-appointed crusaders, no matter how clever or articulate, must

never get to decide which secrets our government can keep. By

.

THE MIDDLE EAST

98 Imaginary Egypt

Egyptians told themselves a thrilling story about their revolution.

Then the fable ended where it had begun: with a pharaoh in power.

By .

107 Will Iran and Israel Meet in the Middle?

In Iran, hints of a secular thaw. In Israel, the increasing prominence

of religious parties. Two nations, antagonistic—and unsettled. By

and - .

112 Clooney of Arabia

Movie star George Clooney found a love match among the Druze, a

sect whose members have seen their own share of drama. By .

UKRAINE

122 “Ukraine Is Fighting Our Battle”

Five reasons the United States should send military aid to Ukraine.

By . .

Hoover Digest ▫ 2014 · No. 4

CHINA

128 A Modern Mandarin

Opening itself to free markets, China has lifted several hundred mil-

lion people out of poverty. That was the easy part. An interview with

Hoover fellow . By .

INTERVIEWS

133 Reform Conservatism and the Junior Senator from Utah

“In the absence of a unifying conservative reform agenda,” says Mike

Lee of Utah, “there will be a lot of bickering. We need to fill the

void.” An interview with .

143 Game of Loans

Banking crises are a product of people and strategy, not mysterious forces,

say Hoover fellows . and . .

By .

VALUES

152 The Fairness Fallacy

Wait for perfect fairness in life and you’ll wait forever. But that

doesn’t mean anybody is holding you back. By .

155 Moral Debts

The way we deal with our debts involves more than dollars and cents.

It reveals our very character as a people. By .

158 Who Will Speak?

Today, Salman Rushdie lives in freedom. But the spirit of the fatwa—

and the censor—has only grown stronger. By .

Hoover Digest ▫ 2014 · No. 4

IN MEMORIAM: FOUAD AJAMI

163 “It Would Be My Fate to Return . . . ”

Rooted in the old world, the late Hoover fellow flour-

ished in the new. A reflection from his final book, In This Arab Time.

172 Fouad’s Gift

Farewell to a friend, a guide, and a storyteller of the Arab world’s

disorder. By .

HISTORY AND CULTURE

178 Who’s Number One? Does It Matter?

Country rankings are being twisted to tell all kinds of sto-

ries—but rarely the story of how America meets its challenges.

By .

HOOVER ARCHIVES

184 One Summit, Different Dreams

The Cairo Summit offered China a chance to present itself as an

equal on the world stage. For Chiang Kai-shek it would lead to bitter

disappointment. By - .

202 On the Cover

Hoover Digest ▫ 2014 · No. 4

9

IRAQ