Correction, please!

Beijing's Two Faces

ITEM: "Deputy Defense Secretary Paul Wolfowitz," reported the Associated Press on May 29th, said "it is unclear whether an increasingly strong China will emerge as a force for peace in East Asia or as a 'threatening power.'"

CORRECTION: Anyone taking the time to study China's repressive history will easily see just how aggressively the Communist regime has behaved, both regionally and worldwide.

China's "worrying friendships" with sponsors of terrorism such as Iran and Libya, said London's Economist, should concern Washington. A Hong Kong magazine, Cheng Ming, has taken note of its double game. Jiang Zemin has been playing the "bad guy" by "joining hands with the axis of evil," while his vice president and likely successor Hu Jintao played the "good guy" on a Washington visit.

China's actions are telling. As reported in American Legion, Beijing has taken over from Moscow the use of Cuba as an electronic espionage center against the United States. China is paying Castro more than $200 million a year for a signals intelligence complex in Bejucal. The CIA, meanwhile, has issued a warning about China's plans for widespread cyber attacks on the U.S. and Taiwan.

Ironically, China receives backing from its targets. The Export-Import Bank, as Representative Ron Paul (R-Texas) has pointed out, is a "corporate welfare program that gives hundreds of millions of dollars to companies like Enron and governments like Communist China." Beijing, confirms the Congressional Research Service, is the single largest beneficiary of trade subsidized by the Export-Import Bank.

UN Funds Terrorist Camps

ITEM: "Amid signs of hunger and malnutrition in the West Bank and Gaza," reported London's Guardian for May 22nd, "the UN World Food Programme launched an emergency operation ... to help feed half a million of the most needy Palestinians.... 'The latest Israeli military incursions have dealt a hard blow to an already vulnerable economy, pushing many Palestinians into destitution,' [WFP Director Khaled] Adly said."

CORRECTION: The United Nations is not part of the solution, but a fundamental part of the problem for the Palestinians. Moreover, blaming the Israelis, as the Guardian is wont to do, is an exercise in scapegoating that absolves terrorists as well as much of the Arab world: Recall that when Jordan and Egypt held the West Bank and the Gaza Strip they did not mention Palestinian statehood. Wealthy Arab regimes have been rather satisfied that Palestinians be kept in refugee camps rather than admitted to their countries.

Jenin on the West Bank, the site of a camp run by the United Nations Relief and Works Agency for Palestinian Refugees in the Near East (UNRWA), has been featured in the news lately. The UN funds and staffs the schools there that propagandize and recruit for terrorism. And Jenin's UNRWA food warehouses are widely reported to also serve as munitions dumps.

U.S. taxpayers pick up the lion's share for UNRWA -- one-quarter of its entire operating costs, more than $89.5 million in 2000. Saudi Arabia, in contrast, pledged $2.5 million, or less than 1 percent of the total. "Oil-rich Kuwait pledged $2 million," reports Dov Fischer in The Weekly Standard. "Syria pledged $37,209, Egypt pledged $10,000. Iraq and Libya apparently had difficult years; they pledged nothing, although Iraq sends bounties of $25,000 each to the families of suicide bombers." Jenin, meanwhile, has "emerged as a terror center where Hamas, Islamic Jihad, Tanzim, and Al Aksa Martyrs Brigade terrorists ran wild...."

Protecting Bad Investments

ITEM: The U.S. House of Representatives "voted 408-18 to pass the Federal Deposit Insurance Reform Act of 2002," reported the Birmingham Business Journal for May 22nd. "The bill would adjust the deposit insurance fund for inflation, something that has not happened in 22 years, and provide 'greater protection to (bank) depositors, while saving the taxpayer $700 million,' according to House Financial Services Committee chairman Michael Oxley, of Ohio's fourth congressional district."

CORRECTION: When lawmakers tell you how much a new bill will save taxpayers, it pays to check your wallet. Federal deposit insurance subsidizes risky bank behavior, as pointed out by Lawrence White, a University of Georgia economics professor. Such "restrictions on [banking] competition," wrote White in a Cato Institute analysis, "ostensibly to make banks safer, protect incumbent banks to the detriment of consumers."

FDR signed federal deposit insurance legislation after just three months in office, and the limit has been raised repeatedly since. The costs may not be obvious, but the bill does come due -- as it did after the 1980s' savings and loan debacle when taxpayers had to bail out shaky institutions.

Raising the limit on deposit insurance, the Wall Street Journal has observed, is "a gold-plated invitation to what economists call moral hazard. Once Congress socialized deposit risk, thrifts were able to attract cheap deposits to roll into increasingly bad investments, mainly real estate deals. When high inflation rates later popped the bubble, taxpayers had to pick up the tab."