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The Lighthouse is the weekly email newsletter of the Independent Institute.
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Volume 17, Issue 2: January 13, 2015

  1. How Obamacare Hurts Fast-Food Workers
  2. Peter Thiel on Entrepreneurship, Liberty, and the Future (San Francisco, 1/27/15)
  3. A Case for Patent Reform
  4. Terrorist Attacks Shake World
  5. Job Opening: Vice President of Development
  6. New Blog Posts
  7. Selected News Alerts



1) How Obamacare Hurts Fast-Food Workers

Obamacare’s architects promised that their overhaul of the largest sector of the U.S. economy would make health insurance affordable for people with modest incomes. In reality, the new healthcare law is hurting some of the people it was intended to help, according to Independent Institute Senior Fellow John C. Goodman. In an op-ed appearing last Friday in the Wall Street Journal, Goodman reveals Obamacare’s unintended consequences in the fast-food industry.

The root problem, Goodman suggests, is that Obamacare’s supporters paid little attention to how businesses would respond to the employer mandate—an oversight has fostered major disruptions in certain sectors of the economy. In December, Goodman surveyed 136 fast-food restaurant owners employing about 3,500 workers—approximately half of them were full-timers (working at least 30 hours per week) before 2014. The employers responded to the coming mandate by making their workers part-timers—resulting in lower incomes for the workers.

By the end of the month, only 58 workers were full-timers eligible for coverage under the employer mandate that kicked in this year. All but one turned down the Obamacare bronze plan offered by their employer, probably because paying 9.5 percent of their annual wage as an insurance premium was too big a bite to afford; “the rest will likely be in MEC [Minimum Essential Coverage] plans,” Goodman writes. These plans cover preventive care with no yearly or lifetime limits—and not much else. “Out of 3,500 employees, only one that we know of got the kind of insurance that the architects of the Affordable Care Act wanted everyone to have,” Goodman concludes.

How Obamacare Harms Low-Income Workers, by John C. Goodman (The Wall Street Journal, 1/9/15)

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

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

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2) Peter Thiel on Entrepreneurship, Liberty, and the Future (San Francisco, 1/27/15)

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
Attire: Business Casual

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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3) A Case for Patent Reform

For many decades most economists believed patents were key to the innovation and material progress enjoyed by the West. In recent years, however, many have looked at patents with growing skepticism, with some even suggesting that the patent system be scrapped. In contrast, economist Arthur M. Diamond Jr. (Univ. of Nebraska at Omaha) believes these critics miss their mark. Diamond recognizes that the U.S. patent system has major problems, including overly costly litigation, but he holds that it can and should be mended, not ended. He makes his case in the lead article of the Winter 2015 issue of The Independent Review.

Diamond begins by arguing that critics and defenders of patents often share false assumptions. For example, both camps tend to overlook what he regards as patents’ primary moral purpose: to provide justice to inventors. They also tend to misunderstand patents’ main economic function: Their actual role isn’t to incentivize inventors to invent, but rather to enable them to do so—such as through the licensing of their patents to manufacturers. (Thomas Edison relied on this practice early in his career.)

After developing these arguments, Diamond examines several proposals for improving the U.S. patent system, including crowd-sourcing aspects of the patent-review process and creating specialized patent courts to prevent opportunistic plaintiffs from shopping for a favorable jurisdiction in which to file a lawsuit (a problem that Independent Institute Research Fellow William J. Watkins Jr. closely examines in Patent Trolls: Predatory Litigation and the Smothering of Innovation). Inventors may also find relief from the development of various private-sector institutions, Diamond explains. One such example, Intellectual Ventures, a company co-founded by Microsoft founder Bill Gates, claims to help inventors by purchasing their patent rights and thus enabling them to focus on inventing. Such organizations can help make up for the flaws of the legal system, but they also have additional appeal: They involve using innovators to find ways to support other innovators.

Seeking the Patent Truth: Patents Can Provide Justice and Funding for Inventors, by Arthur M. Diamond, Jr. (The Independent Review, Winter 2015)

The Independent Review: Winter 2015

Get your e-subscription or print subscription today! (Print subscription includes FREE book.)

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

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4) Terrorist Attacks Shake World

No sooner had we put away our New Year’s Eve decorations and returned to our usual workaday lives last week when the world suffered one of the largest terrorist attacks in modern history. No, not the shootings at the satirical French magazine Charlie Hebdo. As lethal as that attack was—leaving 12 people dead—in terms of body count it is dwarfed by the latest carnage inflicted by radical Islamist group Boko Haram in Nigeria.

Up to 2,000 innocents may have died in the Baga massacre, including young children and the elderly. Child suicide bombers were deployed in related attacks. And yet, it is the murder of a small fraction of as many people that has prompted mass rallies populated by politicians and celebrities. The disparity in media coverage speaks volumes, according to Independent Institute Senior Fellow Ivan Eland. Differences in media access, reverence for freedom of expression, expectations for the “civilized” world, and psychological identification with people more like ourselves all play a role.

The French and Nigerian massacres also have important implications for public policy. Whatever their immediate motives, two of the killers in the Charlie Hebdo shootings were reportedly radicalized by Western intervention in the Islamic world—namely, the 2003 invasion of Iraq led by the United States. Another gunman in Paris, Amedi Coulibadly, reportedly identified with Islamic State—a group emboldened by the power vacuum created in part by U.S. policies in Iraq. Unless we better understand the process of radicalization, including its earliest stages, we may help repeat the cycle. Writes Eland: “Thus, sensational media hype surrounding the Paris attacks, which instills excessive fear in Americans that they will be the victim of a rare terrorist attack (a chance lower than getting struck by lightning), merely leads to the perpetuation of U.S. government policies that...well...generate more terrorism.”

Saturation Media Coverage of the Paris Terrorist Attacks Is Unhelpful, by Ivan Eland (The Huffington Post, 1/5/15)

Self Censorship, by Randall Holcombe (The Beacon, 1/12/15)

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

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5) Job Opening: Vice President of Development

The Independent Institute is seeking an experienced, successful Development professional with an understanding of and commitment to the principles of individual liberty and free societies to lead our fundraising program. For more information, please see the job listing on the Independent Institute’s website. Please DO NOT reply to The Lighthouse email address. Instead send your inquiries to Senior Vice President Mary Theroux at: mtheroux@independent.org.

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6) New Blog Posts

From The Beacon:

From MyGovCost News & Blog:

Government Tunnel Vision Shafts Taxpayers
K. Lloyd Billingsley (1/12/15)

The Future for the Deficit and Debt
Craig Eyermann (1/10/15)

Bridge Still Full of Troubled Water
K. Lloyd Billingsley (1/7/15)

How Serious Is $18 Trillion in Debt?
Craig Eyermann (1/6/15)

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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