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

Volume 12, Issue 16: April 19, 2010

  1. Earth Day and Environmental Religion
  2. Central Banks Impair Financial Stability
  3. Obama’s Nuclear Weapons "Achievement" Is Overblown
  4. The Land of the Free?
  5. The Beacon

1) Earth Day and Environmental Religion

Earth Day, which turns 40 years old this week, is the globally observed holiday of a secular religion that, like the Old Testament, puts forth moral commandments and warns that “playing God” will cause sickness and destruction, according to Independent Institute Research Fellow Robert H. Nelson.

“Even without realizing it, environmentalism is recasting ancient biblical messages to a new secular vocabulary,” writes Nelson in a new op-ed. “Thus the Endangered Species Act is the new Noah’s Ark; genuinely wild places are the new cathedrals to find spiritual inspiration; Earth Day is the new Easter.”

The powerful feelings stirred by environmentalism do not automatically lead to wise and effective policies, warns Nelson, author of The New Holy Wars: Economic Religion vs. Environmental Religion in Contemporary America. “When environmental religion seeks a return to an earlier primitive and natural existence, it is embracing utopian dreams that easily can pose a danger to man and Earth alike,” he concludes.

“Beware the Latest Religion Called Environmentalism,” by Robert H. Nelson (Des Moines Register, 4/18/10)

The New Holy Wars: Economic Religion vs. Environment Religion in Contemporary America, by Robert H. Nelson

Re-Thinking Green: Alternatives to Environmental Bureaucracy, edited by Robert Higgs and Carl P. Close

A Poverty of Reason: Sustainable Growth and Economic Development, by Wilfred Beckerman

CONFERENCE: 4th International Conference on Climate Change: Reconsidering the Science and Economics (Chicago, 5/16-18). This conference “will call attention to new scientific research on the causes and consequences of climate change, and to economic analysis of the cost and effectiveness of proposals to reduce greenhouse gas emissions.” Sponsored by the Heartland Institute.

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2) Central Banks Impair Financial Stability

The recent financial crisis shows how the Federal Reserve and other central banks can fuel the financial booms that make severe busts possible. Unfortunately, theoretical discussions of central banking badly neglect its role in fostering financial instability—in part because they ignore its history and political origins, according to economist George Selgin, author of “Central Banking as a Source of Financial Instability,” the lead article in the Spring 2010 issue of The Independent Review.

The earliest central banks, Selgin explains, were established to meet the fiscal needs of their sponsoring governments, especially by extending them short-term credit. Given their origins, it should not be surprising to learn that central banks face pressure from their governments to expand credit excessively. That pressure creates huge risks: because central banks possess a legal monopoly in the provision of money, they face no inherent limit to the amount of credit they can create.

The situation was starkly different prior to central banking, when private banks were free to issue notes that circulated as money, Selgin argues. Banks that issued too many notes would lose reserves, as customers and other banks redeemed them. That prospect gave note-issuing banks strong incentives not to over-issue. Unfortunately, most economists don’t understand this market mechanism, which Selgin calls “the principle of adverse clearings.” Thus they overlook the benefits of free banking and accept central banks and their damaging monopolies in the provision of money.

“Central Banking as a Source of Financial Instability,” by George Selgin (The Independent Review, Spring 2010)

Subscribe to The Independent Review.

Good Money: Birmingham Button Makers, the Royal Mint, and the Beginnings of Modern Coinage, 1775–1821, by George Selgin

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3) Obama’s Nuclear Weapons "Achievement" Is Overblown

If ratified by the U.S. Senate, President Barack Obama’s strategic arms deal with Russia would cut deployed long-range nuclear weapons by about 30 percent and, by helping to repair relations with that country, would make it easier to reduce or eliminate shorter-range tactical nuclear weapons. Nevertheless, Obama’s nuclear stance is unlikely to make up for the damage to nuclear security caused by his predecessor’s policies toward India, according to Ivan Eland, senior fellow at the Independent Institute and director of its Center on Peace & Liberty.

By selling India nuclear fuel for its civilian reactors, the Bush administration enabled that country—which has spurned the Nuclear Non-Proliferation Treaty—to devote more resources to its nuclear weapons program. Enabling India’s nuclear program has, in turn, inadvertently encouraged Pakistan, its archrival, to step up the production of material for its own nuclear programs, Eland argues in his latest op-ed. Although Obama’s call to abolish nuclear weapons worldwide may help delegitimize nukes in the eyes of countries that lack them, Iran’s leaders have complained that Obama’s policies implicitly target Tehran’s security.

“Thus, Obama’s achievements in nuclear security and arms control are, so far, more modest than all the publicity implies,” writes Eland, “but at least Obama has refocused world attention on what is still the only existential threat in U.S. history—nuclear war—and the improbable, but potentially disastrous, threat of nuclear terrorism.”

“Obama’s Nuclear Achievements: Less Than Meets the Eye,” by Ivan Eland (4/15/10) Spanish Translation

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

CONFERENCE: National Sovereignty in an Age of Globalism: Legal, Political, Economic, and Cultural Challenges (University of California, Berkeley, 5/1/10). “Who will police a global community? Kyoto? Copenhagen? Davos? The World Trade Organization? The International Criminal Court? This conference will explore the emergence of transnationalism and its implications for representative government, U.S. Supreme Court jurisprudence, American economic vitality, and cultural identity.” Free and open to the public. Sponsored by the Intercollegiate Studies Institute, with support from the Koret Foundation.

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4) The Land of the Free?

The Italian Fascists proclaimed “Tutto nello Stato, niente al di fuori dello Stato, nulla contro lo Stato.” (“Everything for the state, nothing outside the state, nothing against the state.”) Is the United States far behind? At 2,400 pages, Washington’s healthcare reform is just the latest example that the size and scope of the state have grown leaps and bounds beyond what the Founders of the American Republic envisioned.

In fact, in the former “land of the free” there is virtually nothing of any real consequence that remains beyond the reach of state, according to Robert Higgs, senior fellow in political economy at the Independent Institute and author of Crisis and Leviathan; Neither Liberty nor Safety; Depression, War, and Cold War; and other books on the growth of the U.S. government.

“The areas of life that remain outside the government’s participation, regulation, surveillance, or manipulation by means of taxes and subsidies have become so few and so trivial they scarcely merit mention,” writes Higgs. “We verge ever closer on the condition in which everything that is not prohibited is required.”

“State’s Tentacles Choke Freedom at Every Turn,” by Robert Higgs (Charlotte Observer, 4/8/10)

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

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

Resurgence of the Warfare State: The Crisis Since 9/11, by Robert Higgs

Against Leviathan: Government Power and a Free Society, by Robert Higgs

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

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5) 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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