Volume 9, Issue 13: March 26, 2007
- Silent Heroes
- Fixing Insurance Fiascos
- More on Global Warming Film
- Further Sanctions on Iran May Backfire
1) Silent Heroes
In The Lives of Others, which won an Oscar for best foreign film last month, a member of the East German secret police is ordered to spy on a playwright and his girlfriend not because they are suspected criminals or enemies of state, but because the boss hopes to lock up the playwright and steal the girlfriend. Set five years before the fall of the Berlin Wall, the film sheds light not only on the workings of a police state, but also on the everyday heroism that ultimately brings it down: the spys moral awakening to the monstrous regime he has abetted leads him to save the intended victim.
What The Lives of Others reminds us of--and the reason why it is such a timeless work of art--is that man is capable of totalitarianism, but not perfect totalitarianism, writes Independent Institute Senior Fellow Alvaro Vargas Llosa. Even when all the pegs are in place, something will alter the clockwork mechanism of the regime. That something is human nature, pure and simple. There will be moments of weakness in the least humane of despots and moments of fortitude in the most hopeless victims that will shatter the perfect order of the totalitarian system.
A similar process may be operating in Cuba, where poet Cesar Lopez recently read aloud publicly (and apparently without negative consequences) the names of writers blacklisted by the Castro regime, Vargas Llosa explains. These acts of heroism, both inside and outside the structure of power, constitute the best hope for countries in which governments continue to enslave millions of people today. But even if these acts of silent heroism are not enough to cause all despots to come tumbling down, they are at least enough to keep the human spirit alive. That is a comforting thought, Vargas Llosa concludes.
2) Fixing Insurance Fiascos
Should states attempt to improve access to homeowners insurance by mandating reductions in premiums, or by allowing greater competition to work its effects on insurance premiums? The state of Florida has recently opted for the former approach, requiring private insurers to reduce premiums by 25 percent (and requiring the state-owned Citizens Insurance to match those prices), but these measures are likely to make it harder for homeowners in the Sunshine State to obtain insurance, according to economist Dominick Armentano, author of the classic book, Monopoly and Antitrust: Anatomy of a Policy Failure.
First, the price rollbacks and increasing government and judicial control over the insurance business will create incentives for private firms to leave the Florida property insurance market, writes Armentano in a new op-ed. Second, Citizens Insurance, initially designed as an insurer of last resort, will increasingly become the insurer of first resort and do even more business at the state-mandated lower rates. Third, Citizens, which lost a ton of money charging high prices, will lose even more money charging lower rates; thus the risks for property losses will be shifted increasingly to those homeowners without losses, through increasing surcharges on their policies. Finally, the reinsurance charges are unlikely to have any major effect on private insurance firms already bent on leaving the market.
Armentanos recommendation could not be any more different: Create appropriate economic and legal incentives for existing companies to stay and for new companies to enter the market, by deregulating the entire property/casualty insurance market, he writes. Remove any legal barriers to entry. End all insurance commission and legislative price fixing of insurance products. Phase out all governmental regulation of the insurance policy contracts, and require that the courts enforce--not amend--legitimate contracts between insurance companies and policyholders. In short, move to create an open and legally secure market for selling property and casualty insurance in Florida. How can this possibly be worse than the current fiasco?
3) More on Global Warming Film
To follow up on The Lighthouse having directed readers to a documentary that aired recently in Great Britain, The Great Global Warming Swindle, Independent Institute Research Fellow S. Fred Singer, who is interviewed in that film, recaps its three central arguments in his latest op-ed.
First, variations in solar activity better explain the temperature record (including the observed cooling from 1940-75) than do climate models that attribute temperature rises to increases in carbon dioxide from the burning of fossil fuels, according to Singer. Furthermore, he argues, even if CO2 is the culprit, every nation would need to cut fuel use by 80 percent for emissions reduction to have an effect on temperatures. Finally, Singer argues that a warmer climate may be more beneficial than todays.
But the main message of The Great Global Warming Swindle is much broader, writes Singer. Why should we devote our scarce resources to what is essentially a nonproblem, and ignore the real problems the world faces: hunger, disease, denial of human rightsnot to mention the threats of terrorism and nuclear wars? And are we really prepared to deal with natural disasters; pandemics that can wipe out most of the human race, or even the impact of an asteroid, such as the one that wiped out the dinosaurs? Yet politicians and the elites throughout much of the world prefer to toy with and devote our limited resources to fashionable issues, rather than concentrate on real ones.
4) Further Sanctions on Iran May Backfire
In his latest op-ed, Independent Institute Senior Fellow Ivan Eland cautions that widening the sanctions on Iran may backfire.
Although the December 2006 United Nations Security Council sanctions that banned countries from exporting nuclear and missile materials and technology to Iran probably were prudent, widening the sanction outside the nuclear and missile areas is a mistake, he writes.
Stringent financial sanctions did not succeed in preventing war with the regime of Panamas Manuel Noriega, in 1989, and Saddam Husseins regime, in 1991 and 2003. Further, wide sanctions can have a rally-round-the-flag effect that increases the domestic popularity of the targeted regime, according to Eland, who argues that carrots rather than sticks be used to induce cooperation. In sum, a strategy of negotiation with positive incentives, and deterrence if that fails, is superior to broad, punitive sanctions that only make the autocratic Iranian regime stronger.