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

Volume 15, Issue 35: August 27, 2013

  1. House GOP Should Get Real about Immigration Reform
  2. Guess Who’s Blaming Unemployment on Policy Uncertainty?
  3. Climate Science’s Other Hockey Stick
  4. U.S. Intervention in Syria Would Worsen Terrorism
  5. New Blog Posts
  6. Selected News Alerts

The Independent Review: Subscribe or renew today and get a free copy of the 25th Anniversary Edition of Crisis and Levithan: Critical Episodes in the Growth of American Government, by Robert Higgs.


1) House GOP Should Get Real about Immigration Reform

Conservatives frequently deride the “social engineering” of their liberal adversaries. Liberal social programs, they rightly note, often create perverse incentives that cause bad outcomes; good intentions don’t guarantee good results. But liberals don’t have a monopoly on lawmaking that yields undesirable consequences. The serious problems that stem from current immigration law—the product of decades of bipartisanship—corroborate the validity of this “iron law” of public policy. Republicans in the U.S. House of Representatives should therefore look warmly at the immigration bill passed recently by the Senate, according to Independent Institute Senior Fellow Alvaro Vargas Llosa.

The Senate bill isn’t perfect—among other flaws, it puts forth a “path to citizenship” that would take newcomers an inordinately long time to complete. But such shortcomings are minor compared to the legislation’s virtues in correcting the flaws of current policy, Vargas Llosa argues. Perhaps the bill’s greatest virtue is its relative flexibility: it allows for significant increases of immigration visas in various categories (merit-based, high-skilled, low-skilled, etc.) if certain labor-market conditions are present. This approach is much more realistic than attempting to prescribe the number of immigration visas for specific sectors.

“House Republicans should start looking at immigration reform with a healthy mistrust of top-down solutions and an open mind towards the changing dictates of human interaction,” Vargas Llosa writes.

Immigration—Get Real, by Alvaro Vargas Llosa (The Hill, 8/23/13)

Global Crossings: Immigration, Civilization, and America, by Alvaro Vargas Llosa

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2) Guess Who’s Blaming Unemployment on Policy Uncertainty?

One silver lining of the current economic malaise is that it’s prompted a growing interest in Independent Institute Senor Fellow Robert Higgs’s landmark paper on the duration of the Great Depression. Astute readers have noted that this analysis, first published in The Independent Review in 1997, also helps explain today’s economy: Just as uncertainty about the security of property rights under the New Deal caused businesses to postpone their purchases of capital equipment and their re-hiring of workers, so today’s prevalent uncertainty about several economic policies—Obamacare, the Dodd-Frank financial reforms, the federal deficit and the debt ceiling, and Federal Reserve monetary policy—has kept the level of net private investment from returning to its pre-recession peak. The silver lining’s brightest thread may be this: the thesis is being taken seriously in unlikely quarters—the Federal Reserve.

As Independent Institute Senior Fellow Lawrence J. McQuillan notes, two economists at the Federal Reserve Bank of San Francisco have published a study examining this hypothesis, and they conclude that heightened uncertainty about economic policy has contributed significantly to recent unemployment. “Their statistical analysis found that a sharp and sustained jump in economic policy uncertainty before, during, and after the Great Recession accounts for a full two-thirds of the higher than normal post-recession unemployment rate,” McQuillan writes. “Indeed, according to their calculations, the unemployment rate is 1.3 percentage points higher than it would be without such uncertainty: meaning some two million people are unemployed who needn’t be. That’s half the number of long-term unemployed in the country.”

It’s hard to predict how this finding, accompanied by the “establishment” credentials of its source, will be received in Washington, DC. It’s entirely possible that it will inspire a new and productive line of questioning when President Obama’s nominee to succeed Federal Reserve Chairman Ben Bernanke faces the Senate Banking Committee. If this happens, remember that you heard it here first.

The High Cost of Economic Policy Uncertainty, by Lawrence J. McQuillan (The Washington Examiner, 8/15/13)

The Sluggish Recovery of Real Net Domestic Private Business Investment, by Robert Higgs (The Beacon, 3/22/13)

Regime Uncertainty: Why the Great Depression Lasted So Long and Why Prosperity Resumed after the War, by Robert Higgs (The Independent Review, Spring 1997)

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3) Climate Science’s Other Hockey Stick

Many moons ago, climate alarmists made quite a stir with the publication of the so-called “hockey stick”: earth scientist Michael Mann’s chart depicting flat global temperatures from about the years 1000 to 1900, followed by a seemingly unprecedented rise—the blade of the stick. Much has changed since then: Mann’s data and statistical methods have faced devastating criticisms, and the Intergovernmental Panel on Climate Change has not used the hockey stick in any assessment report published after 2001. Mann, however, has never retracted his famous (or rather infamous) paper. This may seem odd, given that he’s published charts showing considerable temperature variation in the form of a Medieval Warm Period (c. 1000 to 1400) followed by a Little Ice Age (c. 1400 to 1800). But as atmospheric physicist and Independent Research Fellow S. Fred Singer notes, the field of climate science is filled with anomalies—including puzzles that challenge the views of both skeptics and alarmists.

One conundrum involves the historical record on carbon-dioxide concentrations. The CO2 trend line is shaped like...a hockey stick! But unlike Mann’s similarly shaped chart, this one is free of statistical tricks meant to “hide the decline”; the data come straight from atmospheric carbon dioxide captured in Antarctic ice cores. What’s especially interesting, according to Singer, is that the CO2 curve challenges the notion, held by extreme climate skeptics, that carbon dioxide increases are mostly caused by global warming. In reality, according to Singer, it appears that CO2 causes warming, rather than the other way around. Moreover, Singer writes, “the isotope evidence seems to indicate that the human contribution from fossil-fuel burning clearly dominates during the last 100 years.” At first glance the CO2 trend line—and its cause—might look like a slam-dunk for climate alarmism, but it’s not.

By itself, the proposition that fossil-fuel use warms the atmosphere tells us nothing about the magnitude of any future warming that might result from growing concentrations of carbon dioxide. The reason it doesn’t, according to Singer, is that climate sensitivity (CS)—the actual effect of CO2 on global temperatures—has decreased steadily since the IPCC’s first assessment report. “I believe confidently that the real CS values may be much lower—although not quite zero,” Singer writes. “The scientific puzzle is why IPCC climate models predict large values for CS while the observations show only small ones.”

A Tale of Two Climate Hockey Sticks, by S. Fred Singer (American Thinker, 8/20/13)

Hot Talk, Cold Science: Global Warming’s Unfinished Debate, by S. Fred Singer

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4) U.S. Intervention in Syria Would Worsen Terrorism

The White House’s policy on Syria is rapidly approaching a crossroads. The riskiest path—that of increased military involvement—would likely reignite the so-called War on Terror by creating terrorist groups hostile to Americans, according to Independent Institute Senior Fellow Ivan Eland. New groups targeting countries that are more active than the United States in the Syrian civil war have already emerged.

“To demonstrate, a new Al Qaeda affiliate is emerging out of the Syrian civil war—the Islamic State in Iraq and Syria—but its head, Abu Omar, didn’t list the United States as a target of the group,” Eland writes. “Instead, he listed Iran and Russia. Why? Because Iran and Russia have provided significant military assistance to the Assad regime in Syria, and the United States, to date, hasn’t.”

If the Obama administration increases its military involvement in Syria, it will confirm that Americans have failed to learn two foreign-policy lessons of the past decade. Eland writes: “The two major problems with the American war on terror under both Bush and Obama remain 1) that the American people, especially in the wake of the painful 9/11 episode, were never honest with themselves about the causes of Islamist terrorism, and 2) that the American mentality of policing the world didn’t allow the government to distinguish between those Islamist groups that attacked the United States and those that didn’t, thus focusing any military action on only those in the former category.”

Obama Seems Unable to Limit the Counterproductive U.S. War on Terror, by Ivan Eland (8/22/13)

Video: Eland on the Syrian Crisis (8/23/13)

No War for Oil: U.S. Dependency and the Middle East, by Ivan Eland

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5) New Blog Posts

From The Beacon:

Balanced Budget Amendments, Good and Bad
J. Huston McCulloch (8/25/13)

Aircraft Targeted for Unconstitutional Searches
Randall Holcombe (8/23/13)

Coming Soon: The Strange Case of the Chong Chon Gang
Juan Antonio Blanco (8/22/13)

The Inescapable Reality of Blowback
Anthony Gregory (8/22/13)

Is Equality the Right Public Policy Goal?
John C. Goodman (8/21/13)

From MyGovCost News & Blog:

Government Mental Case
K. Lloyd Billingsley (3/26/13)

TSA Imposes Double Jeopardy
K. Lloyd Billingsley (8/23/13)

Where Welfare Pays More Than Work
Craig Eyermann (8/22/13)

Federal Tutoring Program Designed to Fail
K. Lloyd Billingsley (8/21/13)

You can find the Independent Institute’s Spanish-language website here and blog here.

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6) Selected News Alerts

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