The Lighthouse^®

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The Lighthouse^® is the weekly email newsletter of the Independent Institute.
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Volume 15, Issue 48: November 26, 2013

1. Unjust Detentions Must End
2. Health Insurers and Seniors Becoming Critics of Obamacare?
3. Maximum Confusion on Minimum Wages
4. Frankenstein in Havana
5. New Blog Posts
6. Selected News Alerts

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One of the most egregious violations of civil rights by the U.S. government today involves an institution that most Americans would rather forget: the Guantánamo Bay detection camp. In 2008, the Supreme Court ruled that habeas corpus rights applied to detainees at the U.S. military facility, but astonishingly little progress has been made. Eighty-seven detainees cleared by President Obama’s task force are still locked up, as Independent Institute Research Fellow Anthony Gregory explains in a recent piece.

“A lot of these people are Yemenis whom Obama doesn’t want to release back to their home country because of international politics,” Gregory writes. “Well, I say, buy them homes in Washington, DC. Perhaps right on Pennsylvania Avenue. If anyone deserves something back from the U.S. government, it is surely those who have been torturously detained for a decade.”

Suspected terrorists, who are few in number, are a different matter. If the government wants to try them, it should give them the same legal protections accorded to other criminal suspects, according to Gregory, and they should not be warehoused at Guantánamo. The detention camp should be emptied and destroyed, and the practice of indefinite detention should be ended. After the United States takes these imperfect but necessary first steps toward a more just society, we can turn our attention to ending the abuses that occur every day in our domestic prisons.

Closing Gitmo Isn’t Nearly Enough, by Anthony Gregory (The Beacon, 11/19/13)

The Power of Habeas Corpus in America: From the King’s Prerogative to the War on Terror, by Anthony Gregory

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In a recent piece for Townhall, also posted at Psychology Today and The Beacon, Independent Institute Senior Fellow John C. Goodman wonders why insurance executives have seldom criticized Obamacare in public. “During the debate leading up to the passage of the Affordable Care Act, I talked to a number of CEOs of large health insurance companies,” he writes. “I frequently heard such comments as, ‘Don’t tell anyone I told you this’ or, ‘If you use this information, don’t mention my name’ and even, ‘Don’t tell anyone that we ever had this conversation.’”

Goodman attributes the silence to fear—fear that speaking up would lead to regulatory retribution. But the days of a self-imposed silence may be coming to a close. In a recent Beacon piece, John R. Graham, the Independent Institute’s latest addition to its roster of research fellows, noted that health insurance industry spokesperson Karen Ignagni has criticized President Obama’s policy decision, designed to “encourage” insurers to end their cancellations of policies deemed noncompliant under Obamacare. She said the move could destabilize insurers and lead to higher premiums, and many state Insurance Commissioners have made similar criticisms.

In a separate piece, Graham notes that because public attention has focused on the healthcare.gov bugs and cancelled policies in the individual market, another important story has gone underreported: the reduction in Medicare Advantage plans. Obamacare, he reports, has prompted UnitedHealth Group to drop “thousands of doctors in at least ten states from its Medicare Advantage networks.” As a result, many seniors may become more critical of the healthcare reform law—especially in the rural areas that are expected to be hit the hardest.

Will Obamacare Finally Cause American Seniors to Turn Against Government Health Care?, by John R. Graham (The Beacon, 11/25/13)

Can Obama Bail Out the Health Insurers?, by John R. Graham (The Beacon, 11/19/13)

None Dare Call It Fascism, by John C. Goodman (Townhall, 11/16/13)

Priceless: Curing the Healthcare Crisis, by John C. Goodman

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In September, Gov. Jerry Brown signed legislation raising California’s minimum wage from $8 to $10 by 2016, an increase of 25 percent. Not to be outdone, President Barack Obama announced earlier this month that he supports a bill to raise the federal minimum to $10.10—more than 12 percent above the higher wage that he proposed in his State of the Union address in February. Why aren’t Brown and Obama worried that a higher minimum wage would reduce employment for young and poorly skilled workers? In his latest op-ed, Independent Institute Research Fellow Dominick T. Armentano explains one reason that advocacy for mandated wage hikes persists—and why the rationale behind it is wrong.

Mandating a wage rate above the rate set freely in the marketplace makes it harder for less-productive workers to get hired. That argument has been repeated for decades, but minimum wage activists are unmoved. Their response in recent years has been to cite empirical studies that supposedly show no effect on employment after mandated wage hikes were implemented. But they are mistaken. Economic analysis is not like a chemistry experiment, in which one can observe how a solution will react to the addition of one chemical at a time, Armentano argues. Instead, the economy is subject to multiple forces and trends, some going in opposite directions, making it impossible to completely isolate the impact of a particular wage hike on unemployment. “The best that we can say about an economic study that claims to ‘test’ some economic principle is that the findings may be ‘illustrative’ of certain expected outcomes...but that is all,” Armentano writes.

Moreover, the bulk of economic studies of minimum wage laws do not suggest that such laws are benign. “As recently as 2006, economists David Neumark and William Wascher reviewed more than 100 minimum wage studies in the economic academic literature and concluded that 85 percent of the strongest studies found that low-skilled employment opportunities declined when the minimum wage was raised,” Armentano writes. “In short, the preponderance of the evidence over the last 75 years is that low-skilled jobs (mostly held by the less-educated and less-skilled young and minorities) are extinguished by government wage fixing.”

Minimum Wages and Unemployment: Case Closed, by Dominick T. Armentano (LewRockwell.com, 11/14/13)

Out of Work: Unemployment and Government in Twentieth-Century America, by Lowell E. Gallaway and Richard K. Vedder

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Will Raúl Castro’s reforms do much good for Cubans? Experts disagree. Carmelo Mesa-Lago says the measures are “the most extensive and profound” policy changes seen in decades, but Carlos Alberto Montaner says they’re only “token gestures.” Carlos Alzugary gives the most vivid assessment of all: he likens them to Frankenstein’s monster. Raúl Castro himself, it’s important to note, has indicated that he wants only to “update” the dictatorship’s economic model—to mend it, not end it. Independent Institute Research Fellow William Ratliff traveled to Cuba this summer to try to make sense of it all.

No clear answers emerged. In large part this is because the situation is indeterminate. The prospects for significant economic progress depend on individual, cultural, and institutional factors—and these factors may be in flux—Ratliff explains in The Intellectual Conservative. Regarding the first component, individualism and individual rights have always ranked low on Raul Castro’s list of priorities. If real reform comes during his rule, expect it to look a bit more like that of China and Vietnam rather than, say, the economic transformation of the Baltic states after the breakup of the Soviet Union. Fidel Castro himself frequently promoted dependence on the government, and his legacy is deeply entrenched in Cuba’s culture and government, even if baby brother Raúl has made vague criticisms of the revolutionary government’s “excesses.”

“Raúl’s reforms to date fall far short of what China and Vietnam have done and what is needed to bring Cuba into the economically developing world,” Ratliff writes. “Even so, more Cubans are moving in the right direction now than at any previous time in the past half-century. The bottom line for U.S. policy should be to let Cubans resolve their own domestic problems as best they can without frictions deliberately generated from abroad.”

The Debilitating Legacy of Fidel: A Report from Havana, by William Ratliff (The Intellectual Conservative, 11/20/13)

Cuba’s Tortured Transition, by William Ratliff (Defining Ideas, 1/30/13)

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From The Beacon:

From MyGovCost News & Blog:

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

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