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

Volume 6, Issue 4: January 26, 2004

  1. Iraqi Caucuses a Long Way from Iowa
  2. Diesel Engine Lawsuit Illustrates Hidden Costs of Regulation by Litigation
  3. Child Abuse Death Abetted by Bureaucratic Abuses

1) Iraqi Caucuses a Long Way from Iowa

For many pundits, last week's electoral caucuses in Iowa invoked warm and fuzzy notions about grassroots democracy. The contrast with U.S.-occupied Iraq is striking. Huge protests in favor of immediate elections, inspired by Shiite cleric Grand Ayatollah Ali al-Sistani, have been answered by U.S. officials with a promise to pull out in July, but with no promise of elections by then. (The official reason given is that no census can be completed in time to produce full voter rolls by July.)

As the rationale for the war shifts from ridding the world of Saddam's purported weapons of mass destruction to bringing democracy to the Middle East, U.S. officials find themselves in a quandary. If they allow elections immediately, this could result in being asked by the Shiite majority to leave the country -- thus throwing a wrench in the U.S. plan to transfer its Persian Gulf bases from Saudi Arabia to Iraq. And if they postpone elections indefinitely -- or if they sponsor an election that transparently guarantees pro-U.S. results -- they look insincere.

The U.S. is even taking immense heat from Shiite leaders for its plan for Iraqi caucuses to elect a national assembly.

"When the U.S. occupation authority's plan for caucuses is examined closely, it is not hard to see why Iraqi Shiites disapprove," writes Ivan Eland, director of the Independent Institute's Center on Peace & Liberty, in his latest op-ed.

"Unlike the Iowa version of the caucuses, open to everyone, participants in the Iraqi version, under the current administration plan, have to be selected by the Iraqi Governing Council -- the hand-picked body of Iraqis fronting for U.S. viceroy Paul Bremer's rule of Iraq -- or chosen by local government officials who are cooperating with the U.S. occupation authority."

This strategy, too, is fraught with risk: the perception that the electoral process is unfair could ignite a civil war.

"So after an ill-advised invasion and occupation of Iraq, the administration now has no good option," Eland continues.

"In the face of continuing guerrilla attacks, the administration would be best advised to abandon its desire for bases in that unstable land and to bring in international supervision for delayed direct elections, which will ensure genuine popular political participation in Iraq. Then perhaps Iraqis will be as happy as Iowans are with their political process."

See, "Why Do Iowans Like To Caucus but Iraqis Don't?" by Ivan Eland (1/21/04)

Center on Peace & Liberty

War on Terrorism

PUTTING "DEFENSE" BACK INTO U.S. DEFENSE POLICY: Rethinking U.S. Security in the Post-Cold War World, by Ivan Eland

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2) Diesel Engine Lawsuit Illustrates Hidden Costs of Regulation by Litigation

In recent years, federal regulators have found an alternative to traditional regulation by rule-making or regulation by negotiation: regulation by litigation. The tobacco settlement was probably the most visible case of regulation by litigation, but the strategy is employed increasingly in environmental regulation. The Environmental Protection Agency, for example, sued heavy-duty diesel engine manufacturers in an effort to get the industry to scuttle technology it had developed to conform to previous EPA dictates. (Apparently, although meeting the letter of their previous edicts, the EPA considered the technology to be a violation of their spirit.)

Although litigation by regulation has lowered regulatory costs for the EPA, it has raised costs significantly to the diesel engine industry -- with the added cost of uncertainty to the industry probably far exceeding the amount of penalties imposed by courts or through settlements, according to a study by economists Bruce Yandle and Andrew P. Morriss, published in the winter issue of THE INDEPENDENT REVIEW.

Diesel engine makers settled the suit at a cost of $1 billion, but that outcome did not necessarily translate into a cleaner air, Yandle and Morris argue.

"When agency-sponsored suits are piled on top of agency rules, regulated firms and their customers get caught in a maze so filled with unexpected costs and outcomes that the motivating public-interest goals, if present at the outset, can get lost in a dizzying hurricane of briefs and penalties. After a while, for example, no one seems to be checking on air quality."

One result of the litigation is that it accelerated the number of orders that buyers of (pre-settlement) heavy-duty trucks placed with the manufacturers, because consumers didn't know whether or not the new trucks would perform as well as the older ones.

If regulation by litigation typically entails greater costs than regulation by rule-making or regulation by negotiation, why do regulators pursue it?

In the diesel engine case, traditional regulation was temporarily blocked because of a prior agreement with the industry not to impose new regulations for a few years. Furthermore, "the EPA and the Clinton administration could reap immediate political rewards by appearing 'tough on polluters' during the runup to the 2000 presidential election." Finally, because the EPA has power over diesel engine manufacturers, it was in a very strong bargaining position to ensure the large settlement it favored.

In other words, it employed regulation by litigation because it could -- not because it was the best strategy to ensure clean air.

See "Regulation by Litigation: Diesel Engine Emission Control," by Bruce Yandle and Andrew P. Morriss (THE INDEPENDENT REVIEW, Winter 2004)

Also see, CUTTING GREEN TAPE: Toxic Pollutants, Environmental Regulation and the Law, ed. by Richard L. Stroup and Roger E. Meiners

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3) Child Abuse Death Abetted by Bureaucratic Abuses

The tragic abuse and death of a 4-year-old Indiana boy, Anthony Bars -- at the hands of his foster parents -- is an example of the downside of replacing the rule of law with rule by bureaucratic discretion, according to Wendy McElroy, research fellow at the Independent Institute and editor of LIBERTY FOR WOMEN: Freedom and Feminism in the Twenty-first Century.

Young Anthony had been removed from the home of his previous foster parents and placed in the home of those who became his killers because, apparently, a social worker had falsified reports in an adoption proceeding. While the social worker's falisfications were illegal, the procedure of removing children from one set of foster parents to another is legal -- all that's necessary is for someone to accuse the parents of abuse, McElroy argues in her latest column for FoxNews.com.

"The increased power of child welfare agencies to [remove children from parents accused of abuse] comes from legislation dating back to the Mondale Act of 1974," McElroy writes. "That act established huge financial incentives for state agencies to uncover abuse, without providing checks or balances to protect those wrongfully accused. It also virtually immunized child welfare workers and false accusers from liability."

It also represents a sea change in the courts' interpretation of the Fourth Amendment, which was formerly understood as the enshrinement of the principle that "a man's (or woman’s) home is castle." Searches and seizures required probable cause (of law breaking) "supported by oath or affirmation," as the Amendment puts it.

Unfortunately, in some circles today, "a closed door in-and-of-itself is reason to suspect the presence of violence. Warrants, probable cause, and oaths are no longer deemed necessary. They should be. And, without them, front doors in North America should slam shut and remain closed," McElroy concludes.

See "A Man's (and Woman's) Home Is a Castle," by Wendy McElroy

LIBERTY FOR WOMEN: Freedom and Feminism in the Twenty-first Century, by Wendy McElroy

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