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The Lighthouse


The Lighthouse is the weekly email newsletter of the Independent Institute.
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Volume 16, Issue 40: October 7, 2014

  1. Recarving Rushmore—Ranking the Presidents from Washington to Obama
  2. The Income Inequality Diversion
  3. Mending Medicare Advantage
  4. The Case for Recycling Nuclear Waste
  5. New Blog Posts
  6. Selected News Alerts


1) Recarving Rushmore—Ranking the Presidents from Washington to Obama

During the 2008 presidential elections, supporters of Barack Obama criticized President George W. Bush for launching the Iraq War and claimed that it was the worst presidential blunder in modern times. Now that President Obama has launched his own war in Iraq and Syria, how should the public evaluate him compared to his predecessors? And now that Bush is several years out of the Oval Office, how should the public reassess his presidency? Those seeking clear-headed answers to these questions can thank presidential policy expert and Independent Institute Senior Fellow Ivan Eland for his immensely helpful new book, Recarving Rushmore: Ranking the Presidents on Peace, Prosperity, and Liberty (Updated Edition).

Readers may be surprised at first, but Eland ranks Barack Obama and George W. Bush as similarly bad presidents in terms of their war-making proclivities, economic policies, and fidelity to the U.S. Constitution. More important than Eland’s presidential rankings, however, is his reasoning. Taking a distinctly different approach, Recarving Rushmore profiles each U.S. president, from Washington to Obama, on the merits of his policies and whether or not they contributed to peace, prosperity, and liberty.

As for the four men whose images grace the side of Mount Rushmore, readers will discover why only George Washington deserves the honor; why Teddy Roosevelt has been overrated; which hypocrisies Thomas Jefferson should be best remembered for; and why the Civil War should be considered Abraham Lincoln’s colossal mistake (hint: there were less bloody ways to end slavery). As for more recent U.S. chief executives, Republicans will be astounded to learn that Richard Nixon was the last liberal president and that Ronald Reagan wasn’t all that conservative. And Democrats will be amazed to learn that Bill Clinton was in some ways more conservative than George W. Bush. Looking beyond historical myths, conventional wisdom, inflated presidential rhetoric, and false reputations, Recarving Rushmore provides readers with fascinating assessments of what the U.S. presidents actually did—not what they promised, how well they communicated, or whether or not they provided effective leadership during crises they may have had a hand in creating.

Recarving Rushmore: Ranking the Presidents on Peace, Prosperity, and Liberty (Updated Edition), by Ivan Eland

Legal Basis for U.S. War in Iraq and Syria Is Thin, by Ivan Eland (The Huffington Post, 9/29/14)

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2) The Income Inequality Diversion

Politicians such as Massachusetts Senator Elizabeth Warren and New York City Mayor Bill de Blasio cashed in on growing concerns about income inequality by employing the rhetoric of redistribution. But such rhetoric fundamentally misconstrues the realities of the knowledge economy. Consider: If politicians were to tax away the income gains accrued over the past 35 years by the wealthiest 1 percent of American households and give that money to the other 99 percent, the latter would have $7,105 more per year. But that sum is no match for the income gains that a family headed by two college graduates enjoyed over the same period compared to a family headed by two high-school grads: $30,000.

“In other words, not going to college appears to be four times more important than anything that could be gained by taxing the rich for people in the lower half of the income distribution,” writes Independent Institute Senior Fellow John C. Goodman. A college degree helps, but even more important are the self-discipline and self-control that one can gain by pursuing academic excellence.

Such character traits are by no means exclusive to college graduates, of course, as the list of billionaires who never finished college indicates. But rather than delve into the relationship between an enterprising mindset and economic success, redistributionists would rather bemoan income inequality. Why? “That answer seems pretty clear,” Goodman continues. “Because they don’t want to talk about Obamacare, Dodd-Frank, bailouts, debt, the stimulus, the rotten cronyism of energy policy, denial of education to poor and minorities, the abject failure of their policies to help poor and middle class people, and especially sclerotic growth.”

Inequality Explained, by John C. Goodman (Townhall, 10/2/14)

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

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3) Mending Medicare Advantage

Last month the Department of Health and Human Services announced that enrollment in Medicare Advantage had reached an all-time high. This admission put the White House in an awkward position: On the one hand, Medicare Advantage is one part of the U.S. healthcare system that enjoys popular support, enabling approximately 16 million seniors to bypass traditional Medicare and instead obtain subsidized coverage through approved private insurers. On the other hand, for the past two years the Obama administration has had to back off from its threats to cut the reimbursements it pays insurers who participate in the program. The reason? President Obama might like to cut Medicare Advantage, but he knows that doing so would anger an important segment of the voting public.

“The political blowback President Obama would suffer from cutting Medicare Advantage too much would be significant,” writes health-policy expert John R. Graham, a senior fellow at the Independent Institute, in an op-ed for the Daily Caller. “Medicare Advantage (MA) plans are popular for many reasons. Most importantly, they provide better care than traditional Medicare (TM).” Graham cites a recent study by two respected economists, Joseph Newhouse and Thomas McGuire, who found that MA plans “appear to offer higher value than TM” and that government policy should “move more beneficiaries into MA.”

Newhouse and McGuire’s recommendation has irritated many in the health-policy community, who complain that the government overpays Medicare Advantage plans by 6 percent and that fraud is common. Graham responds to the “fraud” criticism by noting that fraud in traditional Medicare is likely a much bigger problem. As to the “overpayment” claim, Graham urges policymakers to combat this problem by offering an alternative to business as usual: Instead of giving premium subsidies to private insurers, give it to the patients enrolled in Medicare Advantage. “As a modest first step, Medicare should give some Medicare Advantage subsidies to seniors directly, through health savings accounts, instead of handing the taxpayers’ entire contribution to insurance companies.”

Medicare Advantage: Mend It, Don’t End It, by John R. Graham (The Daily Caller, 9/30/14)

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

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4) The Case for Recycling Nuclear Waste

Climate activists love to champion solar and wind power, but few have kind words for the most potent source of renewable energy: nuclear power. Although today’s critics point to calamities such as Fukushima and Chernobyl, opposition to nuclear power goes back decades earlier, even before the Three Mile Island accident in 1979 helped popularize the anti-nuke sentiment. One common criticism involves the problem of radioactive waste. But that problem is not wholly intractable—it’s largely caused by reversible choices that our political leaders have made, according to economist and Independent Institute Research Director William F. Shughart II.

Indeed, France and Great Britain are two countries that deal with nuclear waste in a manner diametrically opposite the path chosen by American politicians. Whereas U.S. law prohibits the recycling of nuclear waste—and thereby makes the disposal problem exclusively one of long-term storage—France and England permit nuclear waste to be recycled. France, for example, allows its 58 nuclear power plants to send spent fuel rods to a recycling facility on the Normandy coast, where after a three-year cooling period the waste is turned into mixed-oxide fuel.

Strangely, the Savannah River nuclear site in western South Carolina will be allowed to make the same mixed-oxide fuel from surplus plutonium of U.S. weapons stockpiles, but not from nuclear waste. This double standard makes no sense. If the U.S. government were to let nuclear power-plant operators recycle their waste, climate activists would get two of their wishes: the country could obtain more energy using less fossil fuel, and the storage-space needed for nuclear waste would fall—by more than 50 percent, according to Shughart. Moreover, fewer local political battles over where to put long-term storage sites would break out. “Instead of requiring a political consensus on multiple repository sites to store nuclear plant waste,” Shughart writes, “one facility would be sufficient, reducing disposal costs by billions of dollars.”

Why Doesn’t U.S. Recycle Nuclear Fuel?, by William F. Shughart II (Forbes, 10/1/14)

The Failed Promise of Nuclear Power, by William Beaver (The Independent Review, Winter 2011)

The Demise of Yucca Mountain, by William Beaver (The Independent Review, Spring 2010)

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5) New Blog Posts

From The Beacon:

A New Obamacare Lawsuit from the Former Top Obamacrat
John R. Graham (10/6/14)

Brazil—Back to Normality
Alvaro Vargas Llosa (10/6/14)

NSA Mission Creep: It’s for the Children
Mary Theroux (10/6/14)

Amazon’s “Dark Side” Is a Bright Spot for Workers and Consumers
William Shughart (10/5/14)

Debunking Democracy with James M. Buchanan
Carl Close (10/3/14)

Berkeley’s Free Medical Marijuana Plan Shows Economic Thinking Has Gone to Pot
Ryan Atkinson (10/2/14)

Florida’s Very Interesting Race for Governor
Randall Holcombe (10/1/14)

U.S. National Defense: Just Another Government Program
Abigail Hall (10/1/14)

The Free Speech Movement Celebrates Its 50th Anniversary, but the Eternal Battle Between Liberty and Power Goes On
Aaron Tao (10/1/14)

Obamacare Might Have Enrolled Only 2.3 Million; Spent $73 Billion to Save Less Than $6 Billion in Uncompensated Care
John R. Graham (9/30/14)

From MyGovCost News & Blog:

The Secret Is Out on Incompetent, Arrogant “Service”
K. Lloyd Billingsley (10/3/14)

The U.S. National Debt Superhighway
Craig Eyermann (10/3/14)

How Ruling Class Railroads Taxpayers
K. Lloyd Billingsley (9/30/14)

U.S. Debt versus the Rest of the G7
Craig Eyermann (9/30/14)

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6) Selected News Alerts

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  • MyGovCost.org
  • FDAReview.org
  • OnPower.org
  • elindependent.org