The Crisis in the Sudan

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Memo
To: Sen. John Edwards [D-NC]
From: Jude Wanniski
Re: A Worthy Cause

Congratulations
on being selected by Senator Kerry as his vice-presidential running
mate. I’d frankly hoped he would choose others on the list
being circulated, but I do hope you will be a help to his candidacy,
as I am actively considering voting for the Democratic ticket this
year for the first time since 1964. I’d actually planned to
write about the crisis in the Sudan today, expecting Mr. Kerry would
not be making his choice known until later in the week, but it now
occurs to me that I might interest you in taking up as your own
personal cause the poverty and political turmoil in Black Africa.
We are being told that you are a rags-to-riches political person
who sees the world from the bottom-up, as opposed to the top-down,
born well-to-do perspective of Mr. Kerry or President Bush. As a
successful trial lawyer, you’ve taken on the biggest corporate giants
on behalf of the little guy. You could do the same in this worthy
cause.

It
wouldn’t take much at all to “fix” the problems of
Black Africa, Senator, given the fact that most of them have been
caused by the Movers and Shakers of Corporate America who pull the
strings at the International Monetary Fund. It is clear that your
populism identifies with the folks on the bottom of the ladder,
not the Movers and Shakers at the top. In that sense alone, you
most resemble Ronald Reagan’s approach to policymaking, at
home and abroad. I’ve been trying to get Republican political
leaders for years and years to see the destructiveness of the IMF
and World Bank in creating the conditions that invite poverty and
civil wars in the undeveloped world, but the Movers and Shakers
in the multinational power structure have no interest in the kinds
of changes I’m talking about. Our industrial powers do not
want competition from undeveloped countries to become too developed
by our big banks are not interested in growth, only in getting paid
back on their loans to the Sudans and Zimbabwes and Ethiopias of
the world.

In
case you had not heard, the situation in the Sudan is now as ugly
as anything the world has seen since the slaughter in Rwanda a decade
ago. A million refugees have been displace by the civil war and
an estimated 10,000 per MONTH are dying from disease, starvation
and hostilities. There have been tensions and low-level killings
in the Sudan for decades, but in the last two years the Arabs of
the north and the blacks of the south have been killing each other
at an escalating rate, with the blacks getting the worst of it.

The
Sudan is a big place, Senator. There are only 38 million people
living there, but at 966,000 square miles it could hold all of Alaska,
Texas, New York, Pennsylvania, New Jersey, Massachusetts, Connecticut,
Rhode Island, New Hampshire and Vermont. Put another way, it would
take up one third of the continental United States. That means the
central government in Khartoum has quite a job policing the country
and it has to make do with less than $1 billion per year in revenues,
a sizeable chunk of which goes to pay the army.

Then
there are the payments to the IMF/World Bank. Fifteen years ago,
Sudan had $15 billion in dollar debts, but with interest payments
piling up when they could not make payments, the debt is now $30
billion. Hamid Ali, a PhD candidate in economics at the University
of Texas who is from the Sudan, tells me that to help Sudan Malaysia
now pays $5 million a month to the IMF to meet its minimum requirements.
He also tells me the IMF, wanting to get paid back on principle,
is demanding the Khartoum government undertake further “austerity
measures,” cutting spending and collecting taxes.

Now
here is the fun part, Senator Edwards. If I told you the top rate
of tax on personal incomes in the Sudan was 30%, you would almost
certainly say that tax policy could not be the problem because our
tax rates in the U.S. are higher than that, considerably higher
when you add federal to state tax rates. But what if I then told
you that the 30% rate is encountered at an annual income of $54.
That’s right Fifty-four dollars. The workers who are on payrolls
have 30% of their wages lopped off after they make $1 and pennies
per week. The per capita income is $371, and no wonder, as it is
impossible for capital to form. And the personal income tax is only
one tax, which collects almost no revenue because there is so little
actual business that can take place when smothered by this kind
of confiscation. Income from business profits is taxed at 45% on
anything over $40 per year. Hamid Ami says the government gives
tax gatherers a percentage of what they bring in, and the tax agents
“guess a number that is amount you ought to pay as tax and
the burden on you is to prove otherwise.”

Is
it any surprise that when the IMF/World Bank is strangling the national
economy, the people of the Sudan might as well be living in the
15th century. They would be living much better back then, without
state governments to act as agents of the power structure in New
York and Washington. But when there was distress, a shortage of
calories to eat or to heat with, the tribes would war with each
other, killing off a percentage of each other until there were enough
calories to go around. Slavery was not such a bad condition back
then, when the alternative was cannibalism.

This
is not only happening in the Sudan, but all over Africa, which has
been victimized in many ways by the floating U.S. dollar, which
causes distress in our national economy, but boom-and-bust catastrophes
in the commodity-producing developing world. Just think about this
as a worthy cause you might take up. I’ve not been able to
get my Republican friends at the Club for Growth interested because
they are chiefly interested in policies that help stocks and bonds
on Wall Street. The editors at The Wall Street Journal know
the story, but they are mostly interested in promoting pre-emptive
wars against the Axis of Evil. I’ve tried to get my friends
at the Congressional Black Caucus interested, but they are mostly
interested in helping Africa where they can by getting U.S. taxpayers
to channel aid to the worst cases in Africa, although I point out
that the financial aid is generally confiscated by the big banks
as payments on their debts. I’ve tried to interest several
reporters and editors at The New York Times in taking up
this worthy cause, but they prefer to write about the corruption
of political leaders in Africa as the chief problem. And tax reform
sounds too much like supply-side economics, which the Times loathes
and detests.

If
you are interested at all, please let me know. I have the tax tables
for all of Africa, both black and Arab and mixed, courtesy of my
old friend Rep. Charlie Rangel and the Library of Congress. With
the smallest amount of effort, you could produce the greatest amount
of benefit for the greatest number of people. No kidding.

July
8, 2004

Jude
Wanniski [send him mail]
runs the financial/political advisory service Wanniski.com.
(If you subscribe,
and check LewRockwell.com
in the referring website pull-down,
LRC gets 10%).

Jude
Wanniski Archives

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