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

Volume 9, Issue 7: February 12, 2007

  1. Deregulate Health Insurance
  2. Pentagon Review Reveals Unprecedented Waste, Fraud, and Abuse
  3. Guilt-Tripping the West
  4. Putin the Prophet?

1) Deregulate Health Insurance

Instead of reducing the number of people without health insurance by requiring most companies to provide health insurance for their employees, as Gov. Arnold Schwarzenegger proposed last month, policymakers should reduce the regulations that have helped increase the cost of health insurance, according to Benjamin Powell, director of the Independent Institute's Center on Entrepreneurial Innovation.

"State regulations that mandate specific coverage of various treatments such as alcohol and drug abuse treatment, chiropractic treatment, and in vitro fertilization, drive up the cost of health insurance," Powell writes. "These and many other requirements all drive up the cost of health care by eliminating people’s ability to choose to purchase inexpensive bare bones coverage that would insure only against major accidents and illnesses. In Connecticut, one of the least regulated states, a 35-year-old male can get coverage for as little as $50 a month or $600 per year.... Laws should be changed to allow health insurance entrepreneurs greater freedom to experiment more with the types of coverage they offer, such as offering coverages like bare bones, full, or any combination in between."

Policymakers should also extend this approach to other aspects of the health care industry, Powell argues. "The American health care industry suffers from government regulations that limit entry through occupational licensure, and interfere with drug adoption and many other aspects of health care in addition to the health insurance market," he writes. "Increasing reliance on markets in insurance will help to bring health care costs under control and within the reach of more Californians, but more comprehensive reforms should try to instill greater reliance on free markets in other aspects of health care as well."

"Deregulate Health Insurance," by Benjamin Powell (2/6/07)
http://www.independent.org/newsroom/article.asp?id=1908
"Desreglamentemos el Seguro de Salud"
http://www.elindependent.org/articulos/article.asp?id=1908

For more on health-care policy, see
http://independent.org/issues/search.asp?subID=25

Center on Entrepreneurial Innovation (Benjamin Powell, Director)
http://www.independent.org/research/coei/

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2) Pentagon Review Reveals Unprecedented Waste, Fraud, and Abuse

Published last week, the latest federal Quadrennial Defense Review (QDR) shows that the U.S. defense budget is rife with error, waste and fraud of historic proportions, according to defense analyst David Isenberg, a research fellow at the Independent Institute and author of a new study of the QDR.

"The levels of deceit and ignorance [revealed in the QDR] are so high that we cannot even begin to understand how bad overall American fiscal irresponsibility is," says Isenberg.

The Pentagon's misplaced spending priorities contribute to weaker operational readiness, Isenberg suggests in his 48-page study, "Budgeting for Empire: The Effect of Iraq and Afghanistan on Military Forces, Budgets, and Plans." For example, although it would cost $12.8 billion to reequip Marines with vehicles and gear lost in combat and through wear and tear in the Iraq war, there is no budget for it. "That outlay would take up a significant portion of the corps' yearly budget, which in 2004 stood at nearly $17 billion," writes Isenberg.

Nevertheless, despite these and similar omissions in the Pentagon budget, every single Cold War weapons system remains in the defense procurement pipeline. Isenberg is particularly critical of programs to develop new aircraft and navy vessels that have experienced huge cost overruns, but which lack sufficient new advantages compared to their older counterparts. These wasteful programs, Isenberg argues, including the F-22A Raptor fighter plane, the Joint Strike Fighter, the Virginia class submarine, the DD(X) destroyer, and the V-22 Osprey aircraft, and others.

See "Budgeting for Empire: The Effect of Iraq and Afghanistan on Military Forces, Budgets, and Plans," by David Isenberg (2/1/07)
http://independent.org/publications/policy_reports/detail.asp?type=full&id=23

Also see, "Congress, the Defense Budget, and Pork: A Snout-to-Tail Description of Congress’s Foremost Concern in National Security Legislation," by Winslow T. Wheeler (8/21/06)
http://independent.org/publications/policy_reports/detail.asp?type=full&id=21

ARMS, POLITICS, AND THE ECONOMY, ed. by Robert Higgs
http://www.independent.org/store/book_detail.asp?bookID=32

Center on Peace & Liberty (Ivan Eland, Director)
http://www.independent.org/research/copal/

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3) Guilt-Tripping the West

Most European countries that signed the Kyoto Protocol won't be able to meet their greenhouse gas targets by 2012 for the same reason that the U.S. Senate voted overwhelmingly not to ratify the treaty in the 1990s: because reducing emissions requires sacrificing economic growth. Environmental trade-offs can be particularly pronounced in the developing world, where price increases caused by government environmental programs can impose a larger financial burden on the poor, according to Alvaro Vargas Llosa, director of the Independent Institute's Center on Global Prosperity.

"A new form of Western guilt, environmental fundamentalism, is making the lives of the poor even worse in Mexico after triggering a huge rise in the price of corn -- the chief component of the tortilla -- thanks to a government-induced increase in the demand for ethanol in the United States," writes Vargas Llosa in his latest syndicated column.

Like the U.N.'s call a few years ago for rich countries to give $75 billion a year in foreign aid to poor countries, the U.N.-sponsored IPCC's push to reduce greenhouse gas emissions has both counterproductive and morally dubious aspects, Vargas Llosa argues. "These two competing forms of guilt are mutually -- and absurdly -- exclusive," he writes. "Implemented together, they would amount to making the world poorer in order to make it cleaner, so that the rich could continue to have a planet in which to send unproductive money to the poor so that the poor could continue to pollute the Earth because they lack the wealth to invest in clean energy -- and therefore end up extinguishing the planet anyway."

"Western Guilt, Again," by Alvaro Vargas Llosa (2/7/07)
http://www.independent.org/newsroom/article.asp?id=1909

"El Occidente y la mala conciencia"
http://www.elindependent.org/articulos/article.asp?id=1909

A POVERTY OF REASON: Sustainable Development and Economic Growth, by Wilfred Beckerman
http://www.independent.org/store/book_detail.asp?bookID=26

Center on Global Prosperity (Alvaro Vargas Llosa, Director)
http://www.independent.org/research/cogp/

El Independent: El Blog del Centro Para la Prosperidad Global de The Independent Institute
http://independent.typepad.com

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4) Putin the Prophet?

Russian President Vladimir Putin has been excoriated in the American press for his recent remarks about U.S. foreign policy, but sometimes it takes an outsider -- even a foe -- to point out one's foibles, Ivan Eland, director of the Independent Institute's Center on Peace & Liberty, suggests in his latest op-ed.

"At the international security conference, the suave Secretary of Defense Gates dismissed Putin’s unanswered specific charges on U.S. missile defense in Europe, the expansion of a hostile NATO alliance to Russia’s borders, and U.S. meddling in Russia’s traditional sphere of influence by saying that the United States felt that 'one Cold War was quite enough,'" writes Eland. "Yet Putin was right that the United States is pursuing another Cold War, this time an unstated one, against both Russia and China."

Putin opined that a global power is often weakened by its pursuit of power. "Surprisingly, Putin, a domestic autocrat himself, seems to see what the U.S. founders knew, but what the occupants of the post–World War II imperial presidency have not been able to fathom," Eland continues. "During the Roman Republic, the concentration of power associated with a militarized foreign policy led to the disintegration of the republic itself. The same thing is happening in the United States now. Thus, to safeguard one of the greatest domestic systems in the world, U.S. citizens and policy makers should drop the Tarzan foreign policy and return to the founders’ policy of minimal interference in the affairs of other nations."

"A Foreign Policy that Only Tarzan Could Love," by Ivan Eland (2/12/07)
http://www.independent.org/newsroom/article.asp?id=1911

"Una política exterior a la que solamente Tarzan podría amar"
http://www.independent.org/newsroom/article.asp?id=1911

THE EMPEROR HAS NO CLOTHES: U.S. Foreign Policy Exposed, by Ivan Eland
http://www.independent.org/store/book_detail.asp?bookID=54

Center on Peace & Liberty (Ivan Eland, Director)
http://www.independent.org/research/copal/

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