The Lighthouse^®

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The Lighthouse^® is the weekly email newsletter of the Independent Institute.
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Volume 17, Issue 1: January 6, 2015

1. Peter Thiel on Entrepreneurship, Liberty, and the Future (San Francisco, 1/27/15)
2. What Cubans Really Need
3. University Taps Students to Cover Pensions Shortfall
4. True Statistics about ‘Rape Culture’
5. New Blog Posts
6. Selected News Alerts

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What does successful entrepreneurship tell us about meaningful innovation? And what can it teach us about the prospects for human freedom? We are delighted to announce that noted entrepreneur, investor, and Independent Institute Research Fellow Peter Thiel will take on these questions at “Developing the Developed World: Entrepreneurship, Liberty, and the Future,” a luncheon event in San Francisco on Tuesday, January 27.

In his #1 New York Times bestselling book with Blake Masters, Zero to One, Thiel presents his often contrarian ideas about competition, progress, technology, and finding value in unexpected places—to build a future that we have yet to dream, but that may someday become reality. In “Developing the Developed World” he will offer insights on how to create genuine innovations—and how to foster a peaceful, prosperous and freer future.

This presentation and luncheon will be held at the Olympic Club’s City Clubhouse, 524 Post Street, San Francisco.

Date: Tuesday, January 27

Time: Noon – 2:00 p.m. (Luncheon)

Where: The Olympic Club
524 Post Street
San Francisco, CA 94102

Tickets: Regular Seating: $125 ($100 for Institute Members)
Preferred Seating: $150
Tables of 10 Starting at $1,250
Business Attire Required

Book: Peter Thiel’s Zero to One: Notes on Startups, Or How to Build the Future (Pre-order at $20 per copy: 25% Discount)

Event page

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President Obama’s announcement that the U.S. government would restore diplomatic relations with Cuba has been met with both jubilation and skepticism. Those celebrating the “normalization” include released prisoners from both sides (and their families), as well as those who believe the new engagement will usher in an era of liberty and prosperity for Cubans. Skeptics include various Cuban dissidents, such as Yoani Sanchez, who argue that such measures don’t guarantee a move toward genuine political freedom and in some ways actually strengthen the Castro regime. The skeptics have a valid point, according to Independent Institute Senior Fellow Alvaro Vargas Llosa.

“The only way the Cuban people could truly benefit from an agreement would be if the island was inundated with U.S. investment and trade, none of which will happen because the federal embargo prohibits this,” Vargas Llosa writes. “Only the U.S. Congress could lift it.”

Unless Congress ends the Helms-Burton Act and other trade restrictions, it will be the Castro regime, not the cause of freedom, that will benefit from the closer ties between Washington and Havana, according to Vargas Llosa. That’s because official U.S. recognition of the dictatorship will open up lines of credit from multinational financial organizations. Writes Vargas Llosa: “The deal with Washington therefore gives the Castro Brothers much-needed sources of cash.”

Castro Regime, Not Cubans, the Big Winners in U.S.–Havana Deal, by Alvaro Vargas Llosa (The Globe and Mail, 1/2/15)

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

Normalizing Relations with Cuba: Good Policy, by Randall Holcombe (The Beacon, 12/17/14)

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In November, the nation’s largest public university system—the University of California (UC)—announced a 25 percent increase in student tuition over the next five years. Although school officials claim this is necessary for maintaining “academic excellence,” the real reason for the hike, according to Independent Institute Senior Fellow Lawrence J. McQuillan, is that the university wants to tap students to help make up for its own mismanagement of the school’s retirement plan. Analysts estimate that the plan’s pension liabilities exceed its assets anywhere from $8 billion to $16 billion. Little wonder, then, that the tuition announcement sparked student protests.

The insolvency of the university’s retirement system was years in the making. On the funding side, the UC Regents had suspended employer and employee contributions and state lawmakers also stopped funding the plan. “This ‘pension contribution holiday’ lasted 20 years,” McQuillan writes in National Review. “To top it off, during this period, university officials boosted pension benefits a half-dozen times. By 2012, more than 2,100 UC retirees were each collecting six-figure pensions for life.”

University officials want students to take a hard blow, but their proposed tuition hikes will make up only a small fraction of the shortfall. Instead of levying what amounts to a pension-bailout tax on the students, they should overhaul the retirement system, in part by changing it from a defined-benefit plan to a 401(k)-style defined-contribution plan, as state officials in Alaska and Michigan have done. “These plans are more affordable, always fully funded, and limit the public’s long-term obligations,” McQuillan continues. “If UCRP were to do the same, students could not be used as piggy banks to pay for future unfunded liabilities.”

UC’s Pension Fiasco, by Lawrence J. McQuillan (National Review, 1/5/15)

Detroit Bankruptcy Reveals 401(k)’s Virtues, by Lawrence J. McQuillan (USA Today, 8/18/14)

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Rolling Stone magazine’s poor editorial judgment in publishing its shoddy University of Virginia rape article muddied the already murky waters surrounding the emotionally charged topic of rape and sexual assault in America. Fortunately, a federal study released last month sheds light on the underlying topic. Published by the Bureau of Justice Statistics (BJS), the report finds that about one in fifty women fall prey to such predations on campus—a far cry from the “one in five” claim that many activists repeat like a mantra. Moreover, the agency’s data show that “the rate of [sexual] assault is lower on campuses than off,” writes Independent Institute Research Fellow Wendy McElroy. “Females are safer on campus.”

What accounts for the discrepancy? Perhaps the most fundamental reason is one of definition: The BJS looked at rapes (attempted, threatened, and actual) and sexual assaults, whereas the “one in five” claim derives from two online surveys that included additional categories of sexual violence, such as unwanted groping and forcible kissing. Perversely, the revelation that rape and sexual assault are much less common on American campuses than many had believed may be unwelcomed news in some quarters.

“The good news is unlikely to be greeted as such by Obama [who repeated the 1-in-5 claim last January] or ‘rape culture’ zealots who are demanding draconian measures to combat campus rape,” McElroy continues. “The new procedures for campus rape hearings are so blatantly unjust to males that they must be sold as a response to a crisis; gender feminists need the rape culture to have their solution to it accepted.” If the BJS data face continued resistance, this would lend credence to a disheartening, though highly plausible claim: that the concept of “rape culture” is political theater designed to impose gender policies and solidify voting blocks. Stay tuned.

Obama and the Fiction of ‘Rape Culture’, by Wendy McElroy (The Hill, 12/24/15)

Confronting the C-Word, by Wendy McElroy (The Daily Bell, 11/27/14)

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

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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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