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

Volume 6, Issue 29: July 19, 2004

  1. Iran and Al-Qaeda
  2. Out-of-State Wineries to Get Day in Court
  3. THE INDEPENDENT REVIEW -- Summer 2004 Issue Now Available

1) Iran and Al-Qaeda

The theocrats in Iran -- Saddam Hussein's greatest natural enemies -- have benefited more from the Iraq war than any other regime. Unfortunately for the United States, Tehran has had more involvement with the al Qaeda terrorist network than had Baghdad, according to Ivan Eland, director of the Center on Peace & Liberty at the Independent Institute.

While the White House continues to defend the invasion of Iraq as an essential component of the war on terrorism, evidence is mounting that Iran -- not Iraq -- maintained a "collaborative relationship" with al Qaeda. However, although noted in the 9/11 Commission's interim report, this connection has received little attention by the press.

Up to 10 of the 9/11 hijackers were given safe passage in Iran the year before the 2001 attacks, according to intelligence reports reviewed by the commission. Furthermore, al Qaeda operatives traveled with Iranian-sponsored Hezbollah operatives to paramilitary training camps in southern Lebanon. These findings are consistent with several years of U.S. State Department reports listing Iran as the leading terrorism-sponsoring nation and with the idea that the largely secular regime of Saddam Hussein had reason to fear subversion or attacks by militant Islamists.

Had the White House connected the dots better, it might have been tempted to invade Iran, but with Iran's larger population, larger military, and more mountainous terrain, such an attack would have been far riskier than attacking Iraq.

"Given that Iran was more of a threat, was the Bush administration’s invasion of Iraq undertaken to have a 'demonstration effect' to scare the stronger Iranians into better behavior?" asks Eland. "If so, the intervention seems to have achieved the opposite: Iran is accelerating its nuclear program, while pretending to cooperate with the international community. Anyway you cut it, the radical Iranian regime is the main beneficiary of the naively muscular U.S. policy toward Iraq."

See "Oops, They Invaded the Wrong Country?" by Ivan Eland (7/20/04)

"Senate Intelligence Committee Lets the Bush Administration Off the Hook on Iraq," by Ivan Eland (7/13/04)

Center on Peace & Liberty

Information on Ivan Eland's forthcoming book, THE EMPIRE HAS NO CLOTHES: U.S. Foreign Policy Exposed

Order a copy of the video, UNDERSTANDING AMERICA'S TERRORIST CRISIS: What Should be Done?

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2) Out-of-State Wineries to Get Day in Court

The U.S. Constitution's interstate commerce clause was intended to create a national free-trade zone, but the 21st Amendment, which abolished Prohibition, asserted an exception: transporting alcohol across state lines was deemed illegal by the federal law if doing so violated state law. Consequently, wine drinkers in New York, Michigan, and several other states, have been prohibited from purchasing many of their favorite wines directly from out-of-state wineries.

Fortunately for wine drinkers, the U.S. Supreme Court has agreed to hear two legal challenges to state laws banning direct sales to consumers. But while a decision to throw out the state law would give wine consumers an occasion to toast, alcohol distributors and local producers would have little reason to celebrate. Douglas Glen Whitman, research fellow at the Independent Institute, explains why this is the case in a recent op-ed.

Direct-sale bans, writes Whitman, "tip the playing field in favor of local suppliers, distributors and retailers.... Their purpose is to shield the profits of domestic producers from outside competition. But unlike federal tariffs, which privilege American producers by discriminating against foreign producers, the state wine importation laws privilege some Americans by discriminating against other Americans."

Whitman is in a position to speak with authority. His recent book STRANGE BREW: Alcohol and Government Monopoly is the first book to systematically examine other state regulations that enrich alcohol distributors at the expense of consumers and suppliers -- especially "franchise termination laws," which hinder the ability of alcohol producers to fire their distributors. And just as distributors have fought to reform franchise-termination laws, which reduce competition in the distribution of alcohol, so they would likely fight hard in the event that the Courts rule against the direct-shipping bans, Whitman argues.

"If the Supreme Court strikes down shipping bans, it will be a victory for consumers but likely a temporary one," writes Whitman. "State legislatures might respond by extending their shipping bans to cover all winemakers, regardless of geography. Although local vintners would no longer be protected, local distributors and retailers would still have guaranteed markets. Indeed, the distributors’ lobbying efforts will probably underwrite the campaign to expand the scope of the bans instead of ending them. Without a constitutional argument on their side, wine lovers will have no option but to petition their state legislators to say 'no' to the special interests."

See "Only Distributors Reap Harvest of Wine Shipping Ban," by Douglas Glen Whitman (EAST BAY BUSINESS TIMES, 7/9/04)

A summary of STRANGE BREW: Alcohol and Government Monopoly, by Douglas Glen Whitman (The Independent Institute, 2003), see

Purchase STRANGE BREW: Alcohol and Government Monopoly

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3) THE INDEPENDENT REVIEW -- Summer 2004 Issue Now Available

We are pleased to announce the publication of the Summer 2004 issue of THE INDEPENDENT REVIEW: A Journal of Political Economy (edited by Senior Fellow Robert Higgs), the peer-reviewed, 160-page quarterly from The Independent Institute.

This issue addresses such questions as:
* Who predicted the stock-market bubble and crash of 2000?
* To what extent were recent vaccine-supply problems caused by FDA regulations?
* Would the Supreme Court have upheld the New Deal in the absence of Roosevelt's pressure?
* How does RICO, the federal anti-racketeering statute, affect criminal prosecutions, civil liberties, and the rule of law?
* What did Richard Cobden, a 19th-century classical liberal, say about the relationship between markets and the military?
* Did Federal Reserve Chairman Alan Greenspan deserve support for another term?
* How does the epistemological relativism of multiculturalists affect the mission of the universities?
* Do arguments commonly thought to justify democracy better support other forms of government?
* How has the growth of government affected civic participation by ordinary citizens?
* What were American anti-statists debating at the dawn of the 20th century?
* What's wrong with conventional measures of the size and growth of government?

Books reviewed:
* THE CASE AGAINST THE DEMOCRATIC STATE, by Gordon Graham
* DOWNSIZING DEMOCRACY: How America Sidelined Its Citizens and Privatized Its Public, by Matthew A. Crenson and Benjamin Ginsberg
* THE DEBATES OF LIBERTY: An Overview of Individualist Anarchism, 1881-1908, by Wendy McElroy

Contributors:
Mark Thornton, Arthur E. Foulkes, William F. Shughart II, William L. Anderson, Candice E. Jackson, Gerard Radnitsky, Edward Stringham, Joseph T. Salerno, Max Hocutt, James R. Otteson, Robert Heineman, Edward Stringham, and Robert Higgs

A summary and links to selected articles and to all book reviews

For back issues (entire contents posted after two issues)

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