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The Lighthouse


The Lighthouse is the weekly email newsletter of the Independent Institute.
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Volume 17, Issue 10: March 10, 2015

  1. Lawmakers’ ‘Off-Ramp from Obamacare’ Good, Not Great
  2. Lifting the Oil Export Ban Would Boost U.S. Economy
  3. Venezuela’s Petro-Dictator Oppresses His People
  4. U.S. Response to Terrorists: Connecting the Dots
  5. New Blog Posts
  6. Selected News Alerts


1) Lawmakers’ ‘Off-Ramp from Obamacare’ Good, Not Great

Last week, on the eve of oral arguments for the latest Supreme Court case challenging Obamacare, three Republican lawmakers offered legislation that breaks significantly from the health-policy status quo. Among other features, their proposal would abolish the individual and employer mandates and provide a fixed-sum refundable tax credit for those purchasing health insurance in the individual market. Commenting on the plan, Independent Institute Senior Fellow John C. Goodman gives it two cheers.

Goodman lauds the proposal’s basic idea—what co-sponsors Paul Ryan, John Kline, and Fred Upton call an “off-ramp” from Obamcare. Without measures to create a soft landing, millions could lose health coverage if the Supreme Court decides King v. Burwell in favor of the plaintiffs and against the federal government. Goodman also lauds most of the bill’s provisions—especially its proposed tax credit, which would vary only by age. This alone would solve 90 percent of the problems with the Obamacare health-insurance exchanges. Moreover, the bill’s measures to end government-determined health-insurance benefits would mean that “people will be able to choose a health plan based on their needs rather than a plan based on the government’s needs,” Goodman writes.

So, what’s not to like? How could the Ryan-Kline-Upton bill have garnered three cheers from Goodman? The Independent Institute healthcare economist wishes it had included two additional reforms: provisions for health-status insurance and a stronger safety net for hospitals. To make up for Obamacare’s cuts to the healthcare safety net, Goodman says “we need to return some portion of unclaimed credits to the communities where the uninsured live.”

Two Cheers for the Ryan Health Plan, by John C. Goodman (Forbes, 3/4/15)

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

A Better Choice: Healthcare Solutions for America, by John C. Goodman

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2) Lifting the Oil Export Ban Would Boost U.S. Economy

The United States is on the verge of becoming a global leader in oil production, but the federal ban on exporting crude oil stands in the way. Lifting that ban would yield multiple benefits, including more domestic oil production, more jobs, low oil prices, and faster economic growth, according to Independent Institute Research Director William F. Shughart II. Permitting U.S. energy producers to sell crude oil abroad is therefore a sensible economic proposal that merits bipartisan support in the new Congress.

Allowing America’s oil producers to send their supplies abroad could create as many as 200,000 to 400,000 jobs and increase gross domestic product by $600 billion over the next five years. So why do we have the ban? It’s a relic from a bygone era. Congress imposed it during the energy crisis of the 1970s, when several OPEC countries angered by U.S. weapons sales to Israel, cut their oil output and sent world oil prices sky-high. The U.S. oil export ban was meant to prevent domestic oil supplies, whose prices were controlled, from going abroad to fetch higher prices. Whether or not it was sound policy at the time is irrelevant today, because the emergency conditions that made it seem prudent disappeared long ago. We are now undergoing a global energy boom, with the United States leading the way. Even a large minority of Americans polled—45 percent—said we should lift the export ban.

“With the House and Senate both focusing heavily on energy initiatives this past month [January], now is the time to unshackle domestic crude oil producers and allow them to participate freely in the global marketplace,” Shughart writes. “Time is of the essence if we are to capture the benefits of jobs and lower gas and heating oil prices that are sure to follow.”

Many Americans Grasp the Benefits of Exporting Crude Oil, by William F. Shughart II (The [New Bedford, MA] Standard-Times, 2/18/15)

More by William F. Shughart II

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3) Venezuela’s Petro-Dictator Oppresses His People

The worldwide oil boom has been a windfall for citizens of freer countries, but a headache for the some of the globe’s worst dictators. In Venezuela, Nicolás Maduro has discovered that he cannot afford to maintain the lavish system of patronage that his predecessor Hugo Chavez created in order to buy support from his hapless subjects. According to Independent Institute Senior Fellow Alvaro Vargas Llosa, the problem is two-fold: the Maduro-Chavez policies have undermined Venezuela’s oil production, and the fall in world oil prices means that the Maduro regime’s oil sales bring in less and less revenue per barrel.

Venezuela’s socialist controls on its oil industry began to undermine oil production well before the recent fall in prices. “That is why, a cumulative $1 trillion in oil revenue notwithstanding, the country has become an economic and fiscal basket case, throwing its social programs into crisis,” Vargas Llosa writes. Conditions have deteriorated so badly that Venezuelans are taking to the streets—and Maduro has banned the publication of photos of the turbulence. No wonder, then, that the dictator’s approval rating was only 20 percent in a recent poll.

“No words can accurately describe what Venezuela’s poor are going through these days,” Vargas Llosa continues. “In the last few years, as their condition has gone from the artificial bonanza of Chavez’s oil-fueled populism to a life of hunger, fear and hopelessness, they have tragically discovered what previous generations of Latin Americans have previously learned: that promises of a populist paradise are really a ticket to hell.”

Chavez’s Legacy: Venezuela in Shambles, by Alvaro Vargas Llosa (The National Interest, 3/3/15)

Venezuelan Dictator Nicolas Maduro Tightens His Grip, by Alvaro Vargas Llosa (The Beacon, 3/2/15)

Liberty for Latin America: How to Undo Five Hundred Years of State Oppression, by Alvaro Vargas Llosa

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4) U.S. Response to Terrorists: Connecting the Dots

ISIS and Boko Haram have engaged in shocking acts of cruelty and barbarism, including enslavement and beheadings, yet the U.S. government’s responses to the two terrorist groups are markedly different. Why the differences, and what lessons can be drawn? Independent Institute Senior Fellow Ivan Eland addresses these issues in his latest column for the Huffington Post.

Some of the biggest differences involve the U.S. military’s responses—or lack thereof. The United States led airstrikes against ISIS after the militants began to take territory in Iraq. ISIS poses no credible threat against the United States, but it has found immense propaganda value in threatening Americans: It’s helping them gain recruits. Turkey, Syria’s northern neighbor, has a security interest in seeing ISIS neutralized, but it hasn’t sent troops to fight it. Why do so if the U.S. military might send “boots on the ground,” as some in Washington have proposed? Regarding Boko Haram, until recently the U.S. military mostly ignored terrorism in Africa. In the absence of such intervention, Nigeria’s neighbors—Chad, Niger, Cameroon, and Benin—have mobilized forces to fight Boko Haram. When the U.S. military stays out, other governments try to come to the rescue.

The biggest lessons about these differences should be readily apparent. Eland writes: “The main thing that a comparison of the fight against ISIS and Boko Haram, both regional threats in oil producing areas, should tell us: If foreign countries know that the U.S. superpower will save the day, they understandably have little incentive to put out much of an effort. A further lesson from the master of diplomacy in the 19th century, the conservative Otto von Bismarck, has gone unlearned by the United States: when your enemies are fighting each other—the radical Sunni ISIS Islamists versus Iranian-backed Shi’ite militias in Iraq and against the dictatorial Assad regime in Syria—stay out of the fight.”

Allies Against Islamism in the Mideast Could Learn from the Fight in Nigeria, by Ivan Eland (The Huffington Post, 3/9/2015)

No War for Oil: U.S. Dependency and the Middle East, by Ivan Eland

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5) New Blog Posts

From The Beacon:

From MyGovCost News & Blog:

The Shell Game Starts Again
Craig Eyermann (3/7/15)

Proposition 63 Pays Off At Last
K. Lloyd Billingsley (3/6/15)

Bureaucrats Behaving Badly — A Follow-up
Craig Eyermann (3/3/15)

You can find the Independent Institute’s Spanish-language website here and blog here.

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6) Selected News Alerts

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  • MyGovCost.org
  • FDAReview.org
  • OnPower.org
  • elindependent.org