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

Volume 16, Issue 29: July 22, 2014

  1. Lessons from Nazi Gun Control
  2. Hobby Lobby and Costly Health-Insurance “Freebies”
  3. Will Tesla’s New Patent Policy Help Spark Reform?
  4. GOP Hopefuls Search for a Foreign-Policy Model
  5. New Blog Posts
  6. Selected News Alerts


1) Lessons from Nazi Gun Control

Will the feds require gun owners to wear electronic bracelets that would enable only registered owners to activate their firearms? It’s an idea that Attorney General Eric Holder has directed the Justice Department to look into; and it’s one that has many civil libertarians worried. And with good reason. As Stephen P. Halbrook, who will speak on Thursday at the Independent Institute in Oakland, noted in a San Francisco Chronicle op-ed last Wednesday, “History offers numerous examples of well-intentioned policies to control crime that have had disastrous consequences.” Take the case of gun control in Weimar Germany.

In the early 1930s, when social unrest was worsening, government officials thought that enacting gun registration would prevent political extremists from becoming more violent. But when the ultimate extremists—Adolf Hitler’s National Socialist German Workers’ Party—came to power in 1933, they found the gun-registration records to be invaluable for helping them to disarm “enemies of the state”—that is, anyone they viewed as an opponent. In 1938, the Nazi regime ordered Jews to turn over their guns. One hapless gun owner who had registered three handguns in 1932, Olympic gold medalist Alfred Flatow, was in the process of surrendering his firearms at a Berlin police station when he and other Jews standing in line were arrested—a scene repeated across Germany. In 1942, Flatow was sent to the Theresienstadt concentration camp, where he would starve to death.

“None of this is to claim that Eric Holder or today’s proponents of gun control are totalitarians in waiting,” Halbrook writes. “But this frightening saga is a reminder of good intentions gone horribly wrong. And unless we let the lessons sink in, we will dishonor honorable people such as Alfred Flatow—and millions more whose suffering we should never forget.”

Lessons from Nazi Gun Control, by Stephen P. Halbrook (San Francisco Chronicle, 7/16/14)

Gun Control in the Third Reich: Disarming the Jews and “Enemies of the State,” by Stephen P. Halbrook

EVENT INFO & TICKETS: Are There Lessons for Us Today from Nazi Gun Control?, featuring Stephen P. Halbrook (Oakland, CA; 7/24/14)

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2) Hobby Lobby and Costly Health-Insurance “Freebies”

In a 5-4 decision last month, the U.S. Supreme Court sided with Hobby Lobby’s challenge to a provision in Obamacare (as defined by the Department of Health and Human Services) that required the arts-and-crafts chain to provide its employees with full coverage, without copays or deductibles, for four birth-control methods that its owners objected to on religious grounds. Independent Institute Senior Fellow John R. Graham disagrees with the claim, voiced by many liberals, that the Court’s decision amounts to a “war on women,” but he does believe the critics make a valid point when they complain about employers making healthcare decisions for their female employees. His solution: Make the court decision moot by eliminating the bias in the U.S. tax code that penalizes consumers who obtain health insurance not from their employers, but from an insurance broker or directly from an insurer. Such a policy of tax fairness would end the controversy over what employers are or are not willing to cover.

How should we go about enacting tax fairness for health-insurance coverage? “The best way to get these moral decisions out of the workplace is to replace the exclusion of employer-based benefits from taxable income with a universal, refundable tax credit that every household can use to buy health insurance of its own choice,” Graham writes.

Graham also uses the Hobby Lobby decision as an opportunity to debunk a widespread myth: the notion that workers get something for nothing when their employers are required to offer coverage with no out-of-pocket costs to the employee. In fact, the reverse is true: In economic terms, such “free” benefits aren’t really free at all. They’re part of employees’ total compensation; thus, the greater the cost of health benefits that employers provide, the less is the amount available to pay out as wages. So then what do we make of the growing share of compensation paid out in the form of health insurance in recent decades? Economists, Graham writes, “have made a strong argument that the rapid increase in cost of health benefits has been a huge factor in suppressing American workers’ wage growth for many years.”

Reform Healthcare to Make Hobby Lobby Irrelevant, by John R. Graham (The Daily Caller, 7/11/14)

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

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3) Will Tesla’s New Patent Policy Help Spark Reform?

Last month, Tesla Motors CEO Elon Musk surprised observers when he announced that his electric car company would never initiate a patent lawsuit. The move sounded brash to many, but Musk’s policy may prove to be a shrewd business move for at least two reasons, according to Independent Institute Research Fellow William J. Watkins, Jr., author of Patent Trolls: Predatory Litigation and the Smothering of Innovation (whose official launch date is August 18).

“By utilizing its ideas,” Watkins writes, “Tesla’s competitors would improve the product and marketing so that all electric car manufacturers could sell more vehicles and establish new markets.” Thus, Musk’s policy of no patent lawsuits can be seen as a low-cost form of outsourcing. But there’s more. By accelerating the development of the electric car industry, Tesla will be greatly adding to the demand for its Supercharger stations. Musk’s rivals in the manufacture of electric cars will in effect become affiliates that make lots of money for his line of recharging services.

Tesla can be faulted for taking federal stimulus money and for seeking out federal loans to help fund its research and development. But its intent to avoid patent litigation is good news for a patent system poorly suited to the rapid lifecycle of today’s technology and suffering from abuse by hyper-litigious “patent trolls” who seek damages via gullible jurors, rather than sales revenues from customers in the marketplace. “Time will tell how well Tesla’s invitation to others to use its technology will work,” Watkins continues. “The fact that Musk has announced such a bold maneuver should cause us to reevaluate our current patent system.”

Rethinking Patent Enforcement: Tesla Did What?, by William J. Watkins, Jr. (Forbes, 7/17/14)

Patent Trolls: Predatory Litigation and the Smothering of Innovation, by William J. Watkins Jr.

Affording Tesla the Freedom to Fail, by Benjamin W. Powell (The Washington Times, 4/4/14)

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4) GOP Hopefuls Search for a Foreign-Policy Model

Texas Governor Rick Perry recently made his bid for the hearts and minds of the Republican rank and file (and for the 2016 GOP presidential primaries). He did so by venturing into the realm of foreign policy and penning a Washington Post op-ed attacking a more popular rival—Kentucky Senator Rand Paul—for his “isolationism.” More than that, Gov. Perry announced that his views on war and peace, not Sen. Paul’s, are more in keeping with the vision of the man who defines the aspirations of all Republican presidential hopefuls: Ronald Reagan. Perry is correct that Reagan was no isolationist (or non-interventionist, if you prefer labels devoid of pejorative connotations). But even so, Reagan’s foreign policies were must less interventionist than Perry imagines, according to Independent Institute Senior Fellow Ivan Eland.

President Reagan was much more restrained in employing U.S. military power than any of his successors, according to Eland. “Reagan avoided large-scale U.S. ground interventions and even withdrew from small peacekeeping missions when the human costs became too high,” Eland writes. His policies in Grenada, Libya, and Lebanon were hardly on the scale of the Iraq wars and the Afghanistan war. “In fact, Reagan and Eisenhower might raise an eyebrow against sinking back into the bog in Iraq, even by conducting air strikes.”

Reagan is a better role model than the Bushes, but there are better foreign-policy models than the Gipper. “Conservatives should realize, as Warren Harding and Calvin Coolidge did, that war is the biggest cause of big government in human history and in American history (many big domestic programs have originated during wartime),” Eland continues. “In addition, even ‘national greatness’ conservatives should realize that with a $17 trillion national debt and globe-girdling alliance commitments, the United States is currently overextended and may need to keep its powder dry more often overseas to renew its economic health, thus ensuring its great power status for many years to come.”

Rick Perry Wrongly Smears Rand Paul on Foreign Policy, by Ivan Eland (The Huffington Post, 7/14/14)

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

Partitioning for Peace: An Exit Strategy for Iraq, by Ivan Eland

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5) New Blog Posts

From The Beacon:

From MyGovCost News & Blog:

Federal $25 Billion Drug Bust
K. Lloyd Billingsley (7/21/14)

Who Own’s America’s Debt?
Craig Eyermann (7/21/14)

Long-Term Budget Outlook Deteriorates
Craig Eyermann (7/17/14)

Coastal Commission Carries On Fine Tradition of Bad Government
K. Lloyd Billingsley (7/16/14)

Overclassified Waste
Craig Eyermann (7/15/14)

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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