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

Volume 11, Issue 38: September 21, 2009

  1. New Deal Is No Model to Spur the Economy
  2. The Iran-Venezuela Connection?
  3. Remembering Norman Borlaug
  4. Contest to Reward Essays about Government Parasitism
  5. This Week in The Beacon

1) New Deal Is No Model to Spur the Economy

Politicians misfire when they cite the New Deal as a model worth emulating to restore today’s economy to health, according to Robert Higgs, Senior Fellow at the Independent Institute. For starters, Franklin Delano Roosevelt didn’t pull the United States out of the Great Depression. In his seventh year in office, the official unemployment rate remained high—a whopping 17.2 percent, according to official statistics. In fact, Roosevelt’s tax proposals targeting “economic royalists”—the so-called Wealth Tax of 1935, among others—helped delay economic recovery by discouraging private investment.

“If pushed, most supporters of the New Deal now admit that it never produced full recovery during the 1930s,” writes Higgs. This doesn’t mean they are quick to admit that the New Deal recovery program failed, however, or that they are skeptical of the need for “stimulus” packages to cure the economy of its current malaise.

Massive wartime spending didn’t spur recovery, either. Private investment—and production for the civilian economy—didn’t return to pre-Depression levels until after World War II. “No good purpose can be served by throwing money at make-work projects, mounting another full-scale assault on private property rights, or creating a war-type command economy,” concludes Higgs.

“New Deal Orgy No Model for Current Binge,” by Robert Higgs (Investor’s Business Daily, 9/17/09)

Depression, War, and Cold War, by Robert Higgs

Neither Liberty nor Safety: Fear, Ideology, and the Growth of Government, by Robert Higgs

Crisis and Leviathan: Critical Episodes and the Growth of American Government, by Robert Higgs

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2) The Iran-Venezuela Connection?

Earlier this month, famed Manhattan district attorney Robert Morgenthau presented evidence at the Brookings Institute he claimed shows that Iran and Venezuela are cooperating to develop “nuclear and missile technology” in Latin America. In his latest column, Independent Institute Senior Fellow Alvaro Vargas Llosa reports that several weeks earlier, private investigators had showed him similar evidence.

Three items should raise concerns about military cooperation between Caracas and Tehran, according to Vargas Llosa. First, the financial institutions Iran has established in Venezuela, allegedly to promote economic development in there, were more likely created to bypass sanctions barring Tehran from using U.S. banks for payments related to its nuclear program. Second, Iran owns factories in the Venezuelan hinterlands containing tens of thousands of tons of uranium. Third, last December, Turkey intercepted ships bound for Venezuela carrying hidden cargo capable of producing explosives.

“Regardless of how one thinks liberal democracies should respond to Iran’s development of nuclear weapons, Chavez’s involvement has unsavory implications for the Western Hemisphere,” writes Vargas Llosa. “Not since 1962 has Latin America been drawn directly by an outside power into the nuclear chess game.... Venezuela, whose anti-imperialist government has announced a nuclear program of its own, is busy bringing Latin America back to the good old days of subservience to anti-imperialist foreign powers.”

“The Enemy of Iran’s Enemy,” by Alvaro Vargas Llosa (9/16/09) Spanish Translation

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

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

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

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3) Remembering Norman Borlaug

Norman Borlaug was not a household name and his face was not instantly recognizable, but the late agronomist arguably did more that helped humanity than just about anyone in recent memory. His innovations in agriculture kicked off the Green Revolution, ending the scourge of famine in many of the world’s poorest countries.

“More than any other single person of this age, he has helped provide bread for a hungry world,” the Nobel Committee said when it awarded him the 1970 Peace Prize. “We have made this choice in the hope that providing bread will also give the world peace.”

Borlaug’s work might not have yielded a new era of world peace, but it put food in the mouths of millions, perhaps more. “Borlaug, a humble man from Iowa, was not flashy, flamboyant, or outspoken,” writes Ivan Eland, Director of the Independent Institute’s Center on Peace & Liberty. “His passing does not receive the intense media attention of Michael Jackson’s or Ted Kennedy’s, but he had a much greater effect on the 20th century and human history than either of them. And his impact was overwhelmingly positive—not much of a media story, I guess.”

“Mourning the Passing of an Unsung Giant in Human History,” by Ivan Eland (9/16/09)

Partitioning for Peace: An Exit Strategy for Iraq, by Ivan Eland

Recarving Rushmore: Ranking the Presidents on Peace, Prosperity, and Liberty, by Ivan Eland

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

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4) Contest to Reward Essays about Government Parasitism

The 2010 Sir John M. Templeton Fellowships Essay Contest is underway. Open to college students (undergraduates and grad students) and untenured college teachers from around the world, the contest will award a total of $26,500 in prize money for the best essays addressing a question prompted by political economist Frederic Bastiat.

“Everyone wants to live at the expense of the state. They forget that the state wants to live at the expense of everyone.” —Frederic Bastiat (1801–1850)

Assuming Bastiat is correct, what ideas or reforms could be developed to make people better aware that government wants to live at their expense?

Junior Faculty Division:

1st Prize: $10,000
2nd Prize: $7,500
3rd Prize: $4,000

Student Division:

1st Prize: $2,500
2nd Prize: $1,500
3rd Prize: $1,000

The deadline is May 3, 2010. The winners will be announced in October 2010. (Winners of the 2009 Templeton Fellowships Essay Contest will be announced next month.)

More information about the 2010 Templeton Fellowships Essay Contest, including rules, full eligibility requirements, bibliography, and winning essays from previous years

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5) This Week in The Beacon

Here are the past week’s offers from our blog, The Beacon.

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