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The Ethical Standard

Spring 2010

We are pleased to present our Spring 2010 edition of The Ethical Standard.

The pieces published herein offer leading-edge perspectives on two of the foremost issues confronting our national security interests today — a nuclear Iran, and an economic giant that is on a course to shape not only the world as we know it, but also America’s role in it, China. The Free Enterprise Foundation is grateful for the contributions of the pieces regarding these issues, which have been generously provided to us by Michael Soussan, L. Ronald Scheman, and Mallory Factor. Additionally, we are pleased to present a white paper of sorts which addresses perhaps the foremost issue in terms of Western Hemisphere geopolitical concerns. That issue is Venezuela President Hugo Chávez.

Finally, it is our honor to present an article which commemorates Mallory Factor’s work contesting the constitutionality of the Sarbanes-Oxley Act (SOX). This undertaking has culminated in an opportunity for Mr. Factor to formally present his arguments to the United States Supreme Court, and the court is expected to provide its ruling on the matter in May of this year. The Free Enterprise Foundation congratulates Mr. Factor for his stalwart efforts to provide the justices who represent our nation’s highest court all of the information they will need to issue a ruling that removes this cumbersome piece of legislation from the books once and for all. America’s private sector will certainly be in Mr. Factor’s debt should the court do the right thing.

Thank you for your interest in this project. As always, we very much look forward to receiving your comments on the pieces published in this edition of The Ethical Standard.

With best regards,

Michael S. Smith II Executive Editor, The Ethical Standard: Official Publication of The Free Enterprise Foundation

Contents

Sanctions? What Sanctions?

Responding to Iran’s Nuclear Challenge

Faced with Tehran’s categorical refusal to back down from the pursuit of nuclear weapons, the world’s democracies have little choice but to make good on their long-brandished threat of imposing more stringent sanctions on the Islamic republic. What options are on the table and how effective can we expect them to be? As we review the inherent limitations and the dilemmas involved in pursuing a policy of ever more stringent sanctions against Tehran, we must first assess the impact of past efforts in this direction. If the international community’s approach to date had proved effective, of course, there would be no need to consider radical changes in strategy. But as things stand today, at the onset of President Obama’s second year in office, there is no escaping the alarming prospect that, if no effective policy emerges in coming months, we will soon have to contend with a nuclear armed Iran.

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The Myth of Free Trade Without Free Currency Markets

The commitment to free trade that has guided U.S. policy since World War II has produced enormous benefits to a growing global population. It has helped to increase productivity, lower prices and bring millions of people out of poverty. However a substantial question remains as to whether trade is free if the medium of trade, the currencies that set prices, are not.

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Death By Debt: The End of America the Great

America’s thirst for debt will have far reaching implications — for our nation, foreign policy, standard of living, and even our fundamental way of life. What does this mean to your life and the lives of future Americans? Well over 200 years ago, Benjamin Franklin wrote: “When you run in debt; you give to another power over your liberty.” He also noted, “The borrower is a slave to the lender, and the debtor to the creditor.”

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Dealing with Hugo Chávez: The Tough Path Forward in South America

For more than a decade Venezuela President Hugo Chávez has taunted U.S. foreign policy-makers, first as a veritable mosquito in their ears, now as an increasingly serious cause for their concerns. According to some observers, in light of America's newly negotiated terms for its uses of military installations located throughout Colombia, Hugo Chávez is stepping up his provocative rhetoric to new levels. In addition to his paranoia regarding the agendas of American forces stationed in his neighborhood, mounting obstacles to Chávez’ ability to sustain the social programs that are the lifeblood of his waning popularity in Venezuela are prompting Chávez to employ some very vitriolic remarks, in most of which he is portraying America as the agent saboteur responsible for his country’s and his region’s woes. For some observers, it appears Chávez may be reaching a point where — in his mind at least — it is time to take a step so many dictators have historically deemed necessary to maintaining support for their agendas at home — initiate a war. According to this camp, Washington’s unwillingness to take the actions needed to put this dictator in his place may be imperiling the stability of our entire hemisphere.

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SOX: Mallory Factor is Fighting the Right Fight

It’s a busy mid-week afternoon at the Charleston, S.C. offices of Mallory Factor, Inc. The office is atwitter as Mr. Factor, his executive assistant Julie, and Ali, a research assistant, apply last-minute touches to an oped on labor issues, the deadline for which is fast approaching. “I hate to make you wait — I’ll be with you in ten minutes,” Factor assures me with a trademark pause-and-smile while en route back to his office to retrieve a hard copy of his latest edits for Julie’s review.

Known for his Emily Post-like etiquette, punctuality is a high priority for my host, even if circumstances will not permit it today. “Please: No worries. I’ve arrived a bit early. And I am in no hurry,” I relate, trying to emphasize my gratitude for the meeting to discuss a matter Mallory Factor has remained rather tight-lipped about in recent months. …

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