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The Lighthouse is the weekly email newsletter of the Independent Institute.
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Volume 16, Issue 50: December 16, 2014

  1. Martin Luther King’s Message for Today
  2. Sexual Assault on Campus
  3. Congress Ends Taxpayer Exposure for Obamacare’s Insurance “Bailouts”
  4. Happy Holidays to Amazon and Its Founder
  5. Ideas into Impact: 2014 Annual Report
  6. New Blog Posts
  7. Selected News Alerts



1) Martin Luther King’s Message for Today

Fifty years after Martin Luther King, Jr., accepted the Nobel Peace Prize, his call for peace and harmony remains timely, as has been made clear by the widespread protests, some of them turning violent, following grand-jury exonerations of the policemen who killed Michael Brown and Eric Garner. “Some have dubbed today’s mistrust in law enforcement a ‘crisis of confidence,’” Independent Institute Policy Fellow Robert L. Morris, Jr., writes in the Oakland Tribune. “This sentiment and its underlying causes are disturbing, but all Americans would do well to recall the words and deeds of King.”

Morris notes that although the overt racism of the Jim Crow era has been pushed to the fringes of society, significant black-white gaps remain, as reflected in widely diverging rates of unemployment, incarceration, poverty, and even preschool disciplinary actions. King believed the key to eliminating such disparities was tied closely to establishing a culture that emphasizes individual character, not the color of one’s skin.

“If greater gains are to come, particularly on the economic front, character remains the key,” Morris continues. “Individually and collectively, African-Americans need to keep their eyes on that prize.”

Fifty Years after King’s Peace Prize Speech, Much Remains to Be Done, by Robert L. Morris, Jr. (Oakland Tribune, 12/9/14)

Race and Liberty in America: The Essential Reader, edited by Jonathan Bean

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2) Sexual Assault on Campus

One day before Rolling Stone magazine published “A Rape on Campus,” its now-unraveling story alleging a gang-rape incident at a University of Virginia fraternity house in September of 2012, Independent Institute Research Fellow Wendy McElroy took to the stage at Brown University’s largest lecture hall to debate the existence of a “rape culture.” Her thesis: North America doesn’t have one, and the push to promote the claim that it does has helped create an atmosphere hostile to due-process protections for the accused. McElroy recounts the debate—and the controversy leading up to it—at Reason.

After explaining her personal context as a victim of sexual assault, McElroy defined “rape culture” and explained where it applies and where it doesn’t. “North America does not resemble such a culture,” she writes, unlike certain parts of Afghanistan, for example, where a woman may be arrested after she’s been raped. Next, McElroy argued that campus rape hearings have been plagued with injustices—including a lack of legal protections for the accused and no opportunities for the accused to cross-examine their accusers. Such injustices are driven in part by the U.S. Department of Education putting pressure on schools receiving federal funding to adopt ill-considered policies and procedures; they’re also partly driven by overinflated rape statistics from shoddy social-science research.

As interesting as the above is, perhaps even more captivating is McElroy’s reporting about the unusual actions Brown University officials took prior to the November 18 debate. For one thing, the school’s president felt compelled to send out an email to the Brown community stating her disagreement with what she mistakenly believed was McElroy’s position. In addition, the school hastily scheduled an alternative event about “rape culture” that coincided with McElroy’s debate. All this and more simply reinforce McElroy’s point that sexual assault on campus is too explosive a topic—and too important—to entrust to university officials to properly investigate and adjudicate. Sexual-assault cases are better left to the police and the justice system.

Is Challenging ‘Rape Culture’ Claims an Idea Too Dangerous for University Students?, by Wendy McElroy (Reason, 11/26/14)

Liberty for Women: Freedom and Feminism in the Twenty-First Century, edited by Wendy McElroy

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3) Congress Ends Taxpayer Exposure for Obamacare’s Insurance “Bailouts”

On Saturday night, two days after the House of Representatives passed the “CROmnibus” spending bill (so named because the measure mixes features of a continuing resolution and an omnibus expenditure plan), the Senate did the same. According to Independent Institute Senior Fellow John R. Graham, the move takes a small but significant step toward overturning Obamacare.

One feature of Obamacare, as Graham has taken pains to explain (including in testimony in June to the House Oversight and Investigation Committee) is its provision for “risk corridors” that compensate health-insurance companies for losses resulting from the mispricing of premiums in the early years of the Obamacare roll out. Although this provision requires profitable insurers to pay the federal government to help fund the payouts to unprofitable firms, if those funds were insufficient, taxpayers would be on the hook for the remainder—to the tune of more than $1 billion, in the individual market, according to one analyst at Citibank.

Fortunately, the CROmnibus eliminates the taxpayer liability for risk corridors—a move that has irked health insurers—even though health plans in the Obamacare exchanges amount to a small component of their business. Graham advises these insurers to stop crying and focus on their core business: “For what is actually a very small price to health insurers, Congress has given [health plans] a very big signal that they should move beyond Obamacare and participate in developing a replacement where their profits and losses will be determined by their ability to attract customers, not politicians’ promises.”

Bye, Bye “Bailout”: CROmnibus Takes a Small but Important Bite out of Obamacare, by John R. Graham (Right Side News, 12/15/14)

Healthcare Solutions for Post-Obamacare America, by John C. Goodman

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

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4) Happy Holidays to Amazon and Its Founder

December 15 was reportedly the busiest day of the year for Amazon.com. In an op-ed for the Seattle Times, Independent Institute Research Director William F. Shughart II defends the e-commerce giant and its visionary founder, Jeff Bezos, against critics who deride it as a “monopoly” that unfairly profits from its market share.

Much has been made of Amazon’s pricing advantages over some brick-and-mortar retailers—advantages brought about in part by a 1992 Supreme Court decision prohibiting the states from collecting sales taxes on goods sold and delivered across state lines. But as Shughart notes, Amazon also faces a special challenge: Unlike traditional stores, its potential customers can’t closely inspect many of the goods it offers for sale. Moreover, the company faces stiff competition from other technologically innovative retailers. This is one reason by the U.S. Department of Justice would be doing consumers a favor by dropping all antitrust cases against Amazon.

“In a competitive marketplace, nothing is fixed in stone forever,” Shughart writes. “The ‘monopolist’ of today is tomorrow’s victim of a process that the Austrian-American economist Joseph Schumpeter aptly described as ‘creative destruction,’ which arises when existing companies fail to recognize or exploit new ideas and technologies. Jeff Bezos should be a hero to progressives, not a bête noir, unless all they really want is to protect existing firms from competitive market pressures at consumers’ expense.”

Jeff Bezos and Amazon Should Be a Hero to Progressives, by William F. Shughart II (The Seattle Times, 12/10/14)

Taxing Choice: The Predatory Politics of Fiscal Discrimination, edited by William F. Shughart II

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5) Ideas into Impact: 2014 Annual Report

Our 2014 Annual Report, Ideas into Impact (pdf, 23.4 MB), is now available!

The Report highlights programs that people like you have funded to make voices for liberty heard. You’ll be amazed at the impact our supporters made in 2014, on topics ranging from enterprise and healthcare to civil liberties and student programs.

If you’re already one of the generous donors who made such projects possible, thank you! If not, we hope you'll join with us to help make an even bigger impact for liberty in 2015, by contributing to our year-end campaign today!

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6) New Blog Posts

From The Beacon:

From MyGovCost News & Blog:

A Hit Show for Waste, Fraud, and Abuse
K. Lloyd Billingsley (12/15/14)

Spending Money Like Uncle Sam
Craig Eyermann (12/13/14)

Rising Interest Rates and the National Debt
Craig Eyermann (12/11/14)

EterniTax.Con
K. Lloyd Billingsley (12/10/14)

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

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7) Selected News Alerts

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