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

Volume 10, Issue 29: July 21, 2008

  1. The Federal Spending Juggernaut
  2. Ivan Eland Excoriates Terror Watch List
  3. Chavez’s Charities Aren’t What They Seem
  4. What’s New on The Beacon: The Blog of the Independent Institute

1) The Federal Spending Juggernaut

How out of control is the federal government’s spending? The government’s accountants estimate that total federal debt will reach $9.65 trillion when the fiscal year 2008 ends September 30 and $10.5 trillion by the end of fiscal year 2009. Yet neither Barack Obama nor John McCain has spelled out how his administration would end Washington’s out-of-control spending spree.

This is very worrisome, as it means the imposition on future generations of both huge direct costs (through the burden of higher taxes to service the mounting debt) and huge indirect costs (via a reduction of private investment, capital formulation, and economic growth). Already “we’re spending more than $250 billion a year just on interest on the national debt,” writes Independent Institute Senior Fellow William F. Shughart II in a new op-ed.

“Borrowing nevertheless is politically popular because postponing the bill lowers the immediate cost of government to today’s taxpayers—and frees candidates to spend more,” Shughart concludes.

“Spending Addicts,” by William F. Shughart II (The Washington Times, 7/20/08)

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

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2) Ivan Eland Excoriates Terror Watch List

CNN investigative reporter Drew Griffin wrote stories critical of the Transportation Security Administration and found he had been added to the agency’s terrorism watch list, which significantly impeded his ability to travel. Was the agency out for revenge, or was it merely incompetent?  Neither answer is reassuring, especially with a terrorist watch list with the names and pseudonyms of 400,000 alleged terrorist suspects.

“The terrorist watch list is downright unconstitutional,” writes Ivan Eland, director of the Independent Institute’s Center on Peace & Liberty. “Under the Fourth Amendment to the Constitution, no warrants shall be issued unless there is probable cause that a crime has been committed.” If the government has probable cause, it should arrest criminal suspects, but it shouldn’t have the capacity to harass the innocent or impede their mobility.

Similarly, the U.S. State Department maintains its own terror watch list. Five countries charged with supporting terrorism and 44 foreign terrorist organizations are on the list. But trying to find the country or organization among them that directs terrorism against American citizens isn’t easy. The real reason these lists are maintained? They are a convenient bargaining chip.

“Are 400,000 Terrorists, 44 Terrorist Groups, and Five State Sponsors of Terror Trying to Attack the United States?” by Ivan Eland (7/21/08)

The Empire Has No Clothes: U.S. Foreign Policy Exposed (Updated Edition), by Ivan Eland

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3) Chavez’s Charities Aren’t What They Seem

Hugo Chavez hoped his social-service projects—funded with revenue from the national oil company—would help him win a constitutional referendum. The reality, however, is that Chavez’s “missions” are proven disasters—both economically and politically, according to Alvaro Vargas Llosa, director of the Independent Institute’s Center on Global Prosperity. Mercal, a mission ostensibly devoted to subsidizing food for the poor, is rife with corruption, with government workers stealing the food and selling it for higher prices on the black market. Barria Adentro, a medical mission supported by Fidel Castro, has lost 60 percent of its Cuban doctors to desertion.

“It would seem that many of the Cubans were pursing emigration rather than altruism when they traveled to Venezuela to help Chavez establish Barrio Adentro,” writes Vargas Llosa in his latest column for the Washington Post Writers Group.

The Chavez administration claimed that Mercal and Barria Adentro reached 70 percent of Venezuela’s poor. But two researchers with no particular axe to grind, Yolanda D’Elia and Luis Francisco Cabezas, found that at its peak in 2004, Barrio Adentro reached no more than 30 percent. “Today, it reaches no more than one in five poor Venezuelans, while six of every 10 citizens supposedly fed by Mercal are not really benefiting from that program.” Price controls and inflation have made chicken, meat, eggs, and milk a hard-to-find luxury. Many supermarkets have been forced to close. And Venezuelans have had to turn to stores that do not participate in the Mercal program. Chavez, Vargas Llosa concludes, vastly over promised and vastly under delivered.

Also of note, in a recent letter to the editor of the Wall Street Journal, Vargas Llosa criticized an article that underreported the number of executions committed by Che Guevara. “While it is true that he executed hundreds ‘from the Batista regime,’ he also executed people not connected to the regime,” he wrote. “Javier Arzuaga, the Basque chaplain who served at ‘La Cabaña’ [prison] at the time, told me that among the 800 prisoners there were some journalists, businessmen and merchants.”

“Mission Not Accomplished,” by Alvaro Vargas Llosa (7/16/08) Spanish Translation

“Che Guevara Was No Hero to the Many He Abused,” by Alvaro Vargas Llosa (Wall Street Journal, 7/2/08) Spanish Translation

Purchase Lessons from the Poor: Triumph of the Entrepreneurial Spirit, edited by Alvaro Vargas Llosa.

Lessons from the Poor shows that the mightiest soldiers in the war on poverty are poor people themselves.... The message of the book is profoundly hopeful—as governments remove obstacles to entrepreneurship, there is much potential for the poor to lift themselves out of poverty.”
—William R. Easterly, Professor of Economics and Director, Development Research Institute, New York University

Purchase The Che Guevara Myth and the Future of Liberty, by Alvaro Vargas Llosa

The Che Guevara Myth and the Future of Liberty is a timely and masterful critical piece on the Left’s heroic figure and on the Latin America he tried to change but only made worse in the process. Che Guevara has become a myth to many around the world who really do not understand or know who this man was all about. Alvaro Vargas Llosa exposes the real Che with the facts of who he really was. He takes off the beret, the cigar, the façade of the handsome revolutionary figure and exposes the violent, unjust, and arbitrary side of the real Che. More importantly, Vargas Llosa puts his demystification of Che in the context of what has gone wrong with Latin America in the past decades.”
—V. Manuel Rocha, former U.S. Ambassador to Bolivia and Argentina

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4) What’s New on The Beacon: The Blog of the Independent Institute

If you’ve bookmarked The Beacon, you probably know what’s new on the Independent Institute blog. If not, here’s a sampling:

Carl Close examines the disastrous legacy of “urban renewal” in San Francisco.
David Theroux looks at the oil price squeeze.
Robert Higgs examines the so-called “credit crunch.”
Art Carden looks at election prediction markets.

As always, The Beacon is open for your comments.

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