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The Lighthouse is the weekly email newsletter of the Independent Institute.
Subscribe now, or browse Back Issues.

Volume 8, Issue 34: August 21, 2006

  1. Congress Raids Defense Budget to Fund Local Pork
  2. Eland and Vargas Llosa on Mid-east Cease Fire
  3. Wrongful Convictions an Intolerable Injustice
  4. Accounting for the Post-Enron Malaise

1) Congress Raids Defense Budget to Fund Local Pork

In the defense bill that currently pays for the war in Iraq, the largest modification Congress made was to add $9.4 billion in spending for a Memorial Day celebration, health care in Hawaii, Alaskan fisheries, breast cancer research, and other non-defense causes. Spending for such pork has grown steadily since 9/11.

How does Congress pay for it?

Congress's bipartisan big spenders hyped the pork to their constituents back home, but they neglected to explain that they raided the defense budget to offset the cost, according to defense budget expert Winslow T. Wheeler, author of "Congress, the Defense Budget, and Pork: A Snout-to-Tail Description of Congress's Foremost Concern in National Security Legislation," a new Independent Institute policy report.

"Worse still, no one in Congress does anything about it, not even the self-described 'pork busters,'" writes Wheeler.

See "Congress, the Defense Budget, and Pork: A Snout-to-Tail Description of Congress's Foremost Concern in National Security Legislation," by Winslow T. Wheeler (8/24/06)
http://independent.org/publications/policy_reports/detail.asp?type=full&id=21

Also see, PUTTING "DEFENSE" BACK INTO U.S. DEFENSE POLICY: Rethinking U.S. Security in the Post-Cold War World, by Ivan Eland
http://www.independent.org/store/book_detail.asp?bookID=19

Center on Peace & Liberty (Ivan Eland, director)
http://www.independent.org/research/copal/

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2) Eland and Vargas Llosa on Mid-east Cease Fire

What exactly did the war between Hezbollah and Israel accomplish? Will the cease-fire create the foundations for a new era in the Middle East? Independent Institute Senior Fellows Ivan Eland and Alvaro Vargas Llosa comment on the month-long war and the prospects for a lasting peace in two recent op-eds.

In "Lebanon -- A Perfect Mistake" (8/16/06), Vargas Llosa (director, Center on Global Prosperity), laments the devastation of Lebanon's institutions of civil society -- formerly a beacon of hope in the Arab world. "Perhaps the biggest casualty on Israel's side -- apart from the 150-plus people killed and the million-plus terrified citizens who had to take refuge in shelters in the Galilee -- is the relative strength of the forces of reason and extremism.... The wrong people have come out strong in Lebanon, Iran, and Israel. One could not have asked for a more perfect mistake."

In "The Cult of the Offensive" (8/24/06), Eland (director, Center on Peace & Liberty), argues that Hezbollah's guerilla tactics (and Israel's unwillingness to risk high casualties by fighting a ground war) made it very unlikely for Israel to achieve total victory. Both the Israeli Defense Force in Lebanon and the U.S. military in Iraq "have used massive firepower because it holds down their casualties and thus maintains support longer at home for the foreign adventure," writes Eland. "So adventure-seeking government officials are caught in the unenviable trade off of alienating the target country's population or their own at home, the two key groups to win support from during a counterinsurgency war."

"Lebanon -- A Perfect Mistake," by Alvaro Vargas Llosa (8/16/06)
http://www.independent.org/newsroom/article.asp?id=1790
Spanish Version:
"El Líbano: Un error perfecto"
http://www.elindependent.org/articulos/article.asp?id=1790

"The Cult of the Offensive," by Ivan Eland (8/21/06)
http://www.independent.org/newsroom/article.asp?id=1794

"El culto de la agresión"
http://www.elindependent.org/articulos/article.asp?id=1794

Center on Global Prosperity (Alvaro Vargas Llosa, director)
http://www.independent.org/research/cogp/

Center on Peace & Liberty (Ivan Eland, director)
http://www.independent.org/research/copal/

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3) Wrongful Convictions an Intolerable Injustice

Every year, about 10,000 people are convicted of crimes they never committed, according to Martin Yant, a private investigator whose work has exonerated 10 prisoners. Solid numbers are hard to come by, but the basic principle of justice is clear: Regardless of the number, wrongful convictions cannot be tolerated, and our standards of evidence must be made to reflect this.

In her latest column for FoxNews.com, Wendy McElroy, an Independent Institute Research Fellow and editor of LIBERTY FOR WOMEN, shows that wrongful convictions exert a high cost not only on the person incarcerated, but also on the friends and family of the accused. Just ask Clarence Elkins, who was imprisoned for more than half a decade for a murder and two rapes he never committed. Not only did Elkins have his freedom denied, his wife and children -- who believed his claim of innocence -- lost the support of disbelieving friends and family members until the real killer, Earl Eugene Mann, finally confessed.

"The moral being drawn here," writes McElroy, "is that the original victims of a crime...are further victimized when a system does not respect the rigorous safeguards intended to protect the accused. It was not merely Elkins and his family who suffered but also anyone who sought justice. The true beneficiary of the lowered standards was Mann, who was free to rape other children while Elkins sat in prison for his crime."

See "Wrongfully Convicted Man Freed," by Wendy McElroy (8/15/06)
http://www.independent.org/newsroom/article.asp?id=1795

Also see, "The Causes of Wrongful Conviction," by Paul Craig Roberts (THE INDEPENDENT REVIEW, Spring 2003)
http://www.independent.org/publications/tir/article.asp?issueID=14&articleID=72

THE TYRANNY OF GOOD INTENTIONS: How Prosecutors and Bureaucrats Are Trampling the Constitution in the Name of Justice, by Paul Craig Roberts and Lawrence M. Stratton
http://www.independent.org/store/book_detail.asp?bookID=56

LIBERTY FOR WOMEN: Freedom and Feminism in the Twenty-first Century, ed. by Wendy McElroy
http://www.independent.org/store/book_detail.asp?bookID=43

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4) Accounting for the Post-Enron Malaise

Stricter accounting regulations, prison time for corporate law-breakers, and billion-dollar out-of-court settlements arising from the corporate accounting scandals might not have been able to prevent the problems that brought down Enron and WorldCom from arising in the first place, but they have had some costly side effects, especially for financial intermediaries such as banks and brokerage firms.

One unintended consequence should especially dishearten those hoping to reduce corporate abuses or mismanagement: the new regulations and huge legal fees have led financial brokerages to reduce their research staff and thereby have reduced the outside monitoring of publicly traded companies, according to an article published in the summer issue of THE INDEPENDENT REVIEW.

"We estimate that more than half of the listed companies in the United States are now unable to attract research coverage, which is generally thought to be necessary to support investment by institutional investors," write New York University finance professors Roy C. Smith and Ingo Walter in "Four Years After Enron: Assessing the Financial-Market Regulatory Cleanup."

Discouraging institutional investors is counterproductive because attracting institutional investors that will perform their fiduciary duties "more alertly and skeptically" than previously is key to improving the integrity of corporate governance and reducing the number of corporate failures and scandals, argue Smith and Walter, who also note that the prevalence of corporate malfeasance and law-breaking has been vastly overstated.

See "Four Years After Enron: Assessing the Financial-Market Regulatory Cleanup," by Roy C. Smith and Ingo Walter (THE INDEPENDENT REVIEW, Summer 2006)
http://www.independent.org/publications/tir/article.asp?issueID=46&articleID=585

For more on Sarbanes-Oxley, see "New Regulations May Have Driven Recent Recession," by Manuel C. Cosme (10/13/06)
http://www.independent.org/newsroom/article.asp?id=1194

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