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The Lighthouse is the weekly email newsletter of the Independent Institute.
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Volume 12, Issue 9: March 2, 2010

  1. Inside the U.S. Recession
  2. Supreme Court to Hear Case on Chicago Gun Ban
  3. Global Warming Panel Prone to Hot Air, Singer Argues
  4. Afghanistan Outcome Hinges on Afghans’ Perceptions
  5. This Week in The Beacon

1) Inside the U.S. Recession

The United States is in the midst of a serious economic recession whose depths most pundits have underestimated, according to Independent Institute Senior Fellow Robert Higgs. On the plus side, real GDP has recovered about half the amount it lost after falling from its peak in 2008. And by the final quarter of 2009, real private consumption spending was also up by about half the amount it had fallen from its previous quarterly peak.

But pundits who focus on these two measures miss the key factor that drives economic growth: private investment—i.e., mostly business expenditures on buildings, equipment, software, and additions to inventories. From its peak in 2006 to the second quarter of 2009, private domestic investment fell by almost 34 percent. It has increased somewhat since then but is still about 29 percent below its peak. This severe investment drought portends a period of slow economic growth for at least the next few years, according to Higgs.

Moreover, increased government spending cannot compensate for depressed levels of private domestic investment. Only in the imaginations of naive Keynesians can wasteful government spending drive economic growth. “Worst of all, the investors’ famine and the government’s feast are not merely coincidental, but causally connected,” writes Higgs. Huge increases in government spending and other economic interventions have discouraged private investors from making the kinds of large-scale investments needed to restore economic health. “If this situation continues for several years longer, the U.S. economy may well suffer its second ‘lost decade’ for much the same reason that it suffered its first during the 1930s,” concludes Higgs.

“Anatomy of the Current Recession,” by Robert Higgs (The Beacon, 2/25/10)

Depression, War, and Cold War: Challenging the Myths of Prosperity and Depression, by Robert Higgs

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

Video: Robert Higgs on the Second Lost Decade (“Freedom Watch w/Judge Napolitano,” FoxNews.com, 1/13/10)

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2) Supreme Court to Hear Case on Chicago Gun Ban

On Tuesday, March 2, the U.S. Supreme Court will hear arguments in McDonald v. Chicago, a case that hinges on whether Chicago’s handgun ban is constitutional. In a new op-ed, noted attorney and legal scholar Stephen P. Halbrook argues that the ban violates the Constitution’s guarantee of the “right to keep and bear arms.” (In its 2008 Heller decision, the Supreme Court noted that Halbrook had written the leading historical account of why the Fourteenth Amendment bars states and their political subdivisions from prohibiting the ownership of firearms by ordinary citizens—a book the Independent Institute will re-release in April under the title, Securing Civil Rights: Freedmen, the Fourteenth Amendment, and the Right to Bear Arms.)

The historical record, according to Halbrook, clearly shows that the Fourteenth Amendment was created and ratified so that states and their political subdivisions would respect protections provided by the Bill of Rights, including the “right to keep and bear arms” guaranteed by the Second Amendment. The advocates of the Fourteenth Amendment considered its passage necessary due to firearm bans in the Black Codes, which various states and cities passed after the Civil War and which made former slaves less secure from violent reprisals by members of the Ku Klux Klan and others.

“Today, Chicago has its own equivalent of the Black Codes, which it argues is constitutional because everyone is equally deprived of rights,” Halbrook writes. “But in Congress, Massachusetts Sen. Charles Sumner said [that former slaves] should be protected ‘in keeping arms’ and ‘in complete liberty of speech’—not that they could be equally deprived of these rights. That same year [1866], Congress passed legislation protecting the ‘full and equal benefit’ of laws for ‘personal liberty’ and ‘personal security,’ ‘including the constitutional right to bear arms. ‘Full,’ not just ‘equal.’”

“Chicago versus the Second Amendment,” by Stephen P. Halbrook (Washington Examiner, 2/27/10) Spanish Translation

Press Release: “Does the 2nd Amendment Apply to the States?” (2/22/10)

Securing Civil Rights: Freedmen, the Fourteenth Amendment, and the Right to Bear Arms, by Stephen P. Halbrook

The Founders’ Second Amendment: Origins of the Right to Bear Arms, by Stephen P. Halbrook

That Every Man Be Armed: Evolution of a Constitutional Right, by Stephen P. Halbrook

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3) Global Warming Panel Prone to Hot Air, Singer Argues

How reliable is the Intergovernmental Panel on Climate Change (IPCC)—the United Nations organization whose reports policymakers rely on to support measures to reduce greenhouse gas emissions? Not terribly, according to atmospheric physicist S. Fred Singer. In his new op-ed, “The End Is Not Near,” Singer, a research fellow at the Independent Institute, reviews what he calls “the litany of errors that have dogged the panel over the past ten years.”

Many mistakes made by the IPCC, Singer argues, cut to the core of the case for climate-policy activism: they reflect the misuse of the temperature data and its proxies. For example, at the annual meetings of the Geological Society of America last October, geologist Don Easterbook demonstrated that IPCC Assessment Report 4 truncated Russian tree-ring data that had shown cooling after 1961, thereby creating a warming bias in the temperature proxy data. Moreover, in January esteemed meteorologist Joe D’Aleo and computer scientist E. Michael Smith reported that one of the three leading temperature-reporting organizations used by the IPCC had dropped many colder-climate meteorological stations from their databases, likely creating another warming bias.

Other problems, according to Singer, call into question the integrity of the process by which information is (1) excluded from or (2) included in IPCC reports. In the first category, the so-called ClimateGate scandal revealed that some researchers discussed how they might pressure periodicals cited in IPCC reports to reject the publication of studies whose conclusions ran contrary to their own. Errors of the second category belie the IPCC claim that everything in its reports is peer reviewed. Earlier this year, for example, came the revelation that the “IPCC’s claims that warming will cause extensive adverse effects in the Amazon rainforests and on coral reefs came not from peer-reviewed science but from publications by environmental groups such as the World Wildlife Fund and Greenpeace,” writes Singer. Taken together, these and other breaches discussed by Singer don’t say much for the veracity of IPCC publications.

“The End Is Not Near,” by S. Fred Singer (Hindustan Times, 2/4/10)

Meet S. Fred Singer at Science versus Alarmism: 4th International Conference on Climate Change, Chicago, Illinois, May 16-18, 2010.

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4) Afghanistan Outcome Hinges on Afghans’ Perceptions

Insurgencies are hard to defeat, but one counterinsurgency strategy has been employed with success in several conflicts since the mid-20th century: divide and conquer. The Greek government divided the Marxist insurgency before defeating it in the late 1940s. The British government used the strategy to defeat guerrillas in Malaya in the 1950s. The United States employed a divide-and-conquer strategy against Sunni guerrillas in Iraq—so far, with success. But the tendency is to give this strategy too much credit.

As Independent Institute Senior Fellow Ivan Eland notes in his latest op-ed, in each of these episodes other factors also contributed to the defeat of insurgents. The Greeks were fighting an insurgency that was supported by a foreign power—the Soviet Union—and therefore it could count on the support of citizens hostile to foreign influences. The insurgents in Malaya were largely ethnic Chinese, whom ethnic Malays detested; the Brits used this animosity to their advantage. And mainstream Sunni rebel groups in Iraq began to turn on more radical insurgents after Uncle Sam began to bribe them with dollars and training.

These lessons can inject realism into recent discussions about Afghanistan. Bribing the Taliban—or elements within the Taliban—may buy short-term gains for U.S. forces, but the United States can never shake the “foreign occupier” label so long as its troops remain in that country. “In the all-important quest for the hearts and minds of the Afghan public, the Taliban is at least perceived by those people as being Afghans acting independently,” writes Eland. “In addition, the Taliban guerrillas are fighting to get back their home turf, and that means they, like the North Vietnamese, will likely have much more patience than the foreign occupier.... So the U.S. escalation in Afghanistan is likely to face insurmountable long-term obstacles.”

“Learning from History: Can the U.S. Win the Afghan War?” by Ivan Eland (2/24/10)

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

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

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

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5) This Week in The Beacon

Visit the Independent Institute’s Spanish-language blog, El Independent. Below are the past week’s offerings from our English-language blog, The Beacon.

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