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The Lighthouse is the weekly email newsletter of the Independent Institute.
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Volume 12, Issue 22: June 1, 2010

  1. Immigration Reform: Bright Potential, Dim Prospect
  2. Bloated Spy Agencies Stymie Intelligence Reform
  3. Does It Pay to Recycle?
  4. Prisons and Nutrition: Bad Incentives at Work?
  5. This Week in The Beacon

1) Immigration Reform: Bright Potential, Dim Prospect

Microcredit—small loans for small-scale entrepreneurs—is a promising tool for reducing poverty in the developing world, but an even more effective anti-poverty policy would be allowing more immigrants to work in wealthier countries. Immigrants who work in the United States, according to economist Lant Pritchett, could earn as much money as they could earn from a lifetime of access to microcredit programs. As Independent Institute Adjunct Fellow Art Carden put it last week in a piece for Forbes: “There is nothing we can do for the world’s poor that would be better than to throw open our borders. As an added benefit, we would get richer in the process.”

The United States, however, is unlikely to adopt meaningful immigration reform so long as conservatives are deeply divided on the topic. The division within conservatism is not unique to the United States. According to Alvaro Vargas Llosa, conservatives in Spain, Britain, and elsewhere are also divided between pro- and anti-immigration camps. There is a debate about immigration on the left, but it is less pronounced than the debate on the right.

“But today, if the division were less profound on the right, immigration reform would pass,” writes Vargas Llosa. “It is the type of issue that requires a broad consensus. Yet the paramount factor today is that a faction of the right has forcefully held its ground against anything that smacks of legalizing the people who live in the shadows and creating an avenue for significant future inflows. Until the debate among conservatives is settled, no meaningful reform is possible.”

“Give Me Your Tired, Your Poor,” by Art Carden (Forbes.com, 5/28/10)

“Immigration, The Right Against the Right,” by Alvaro Vargas Llosa (5/26/10) Spanish Translation

“If Mexicans and Americans Could Cross the Border Freely,” by Jacques Delacroix and Sergey Nikiforov (The Independent Review, Summer 2009)

“The Immigration Problem: Then and Now,” by Lowell E. Gallaway, Stephen Moore, and Richard K. Vedder (The Independent Review, Winter 2000)

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

The Che Guevara Myth, by Alvaro Vargas Llosa

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

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2) Bloated Spy Agencies Stymie Intelligence Reform

Efforts to reform the U.S. intelligence community in the wake of the 9/11 terrorist attacks have fallen short. The Senate Intelligence Committee, for example, last week identified fourteen specific points of failure—including “systemic failures across the Intelligence Community”—that led to the attempted terrorist attack on Northwest Flight 253 on Christmas Day by 23-year-old Nigerian Umar Farouk Abdulmutallab. This systemic failure is partly due to the adoption of a massive, post-9/11 bureaucratic restructuring that was ill suited to fighting al-Qaeda and other fast-moving, decentralized enemies, according to Independent Institute Senior Fellow Ivan Eland.

For another example, consider the recent departure of Dennis Blair, the third Director of National Intelligence since the post was created in 2004. Blair and his predecessors bickered with the agencies they were supposed to oversee, but because their position came with no established agency of their own to manage, they had few budgetary and personnel resources with which to fight those turf battles. Their failure to successfully coordinate the sprawling intelligence community was foreseeable, Eland argues in his latest op-ed.

“In the age of more nimble opponents, the U.S. government needs to move in the opposite direction,” writes Eland. “Instead of adding bureaucracies, Congress, to improve coordination, needs to eliminate some intelligence and homeland security agencies and consolidate the remaining intelligence and homeland security functions. Only with a streamlined bureaucracy can the U.S. government hope to be most effective against groups such as al-Qaeda.”

“Intelligence Reform Is a Failure,” by Ivan Eland (5/26/10) Spanish Translation

Video: Ivan Eland on Escalating Tensions in Korean Peninsula (Russia Today, 5/27/10)

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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3) Does It Pay to Recycle?

Does mandatory recycling conserve resources? The answer isn’t obvious—and in many cases it cannot be known because mandatory recycling and other regulations make it impossible to determine whether recycling works as advertised, according to Laralyn Murphy of the Independent Institute.

The reason, explains Murphy in an op-ed for the San Francisco Chronicle, is that regulations impede our ability to compare the value of the resources used in one course of action (such as the adoption of bottle laws that mandate an artificial redemption value of 5 cents for every beverage container that is taken to a recycling station) with the value of the resources used in an alternative course of action (such as an entrepreneur’s effort to develop a recycling program that doesn’t rely on government mandates).

“When decisions are based on information from free markets, prices act as a unifying language between producers and consumers,” writes Murphy. “Using regulation to alter prices—either directly or indirectly, by politically manipulating demand—replaces a healthy economy with a Tower of Babel. Five cents no longer means 5 cents: It merely represents the power of special interests to force compliance with a politically favored behavior.”

“Is Recycling Worth It?” by Laralyn Murphy (San Francisco Chronicle, 5/24/10)

The New Holy Wars: Economic Religion versus Environmental Religion in Contemporary American, by Robert H. Nelson

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

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

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4) Prisons and Nutrition: Bad Incentives at Work?

Obesity is a growing problem throughout the United States—but not in America’s prisons, where many prisoners experience significant weight loss in their early weeks of confinement, according to a recent report in the Wall Street Journal. This trend may result not from a concrete policy to improve prisoners’ health, but from the way that prison food servers are often compensated, according to Independent Institute Senior Fellow William F. Shughart II.

“The [prisons’] contracts [with Aramark or other private food service companies] usually provide fixed compensation per meal served,” writes Shughart. “So, in order to maximize profits per serving, the private contractor has incentive to supply meals at least cost—to skimp on relatively expensive sources of protein in favor of cheap carbohydrates and other foods that may fill prisoners’ stomachs but do not nourish them adequately.”

The perverse incentives are akin to those that ship captains who transported convicts from Britain to Australia in the late 17th and early 18th centuries faced. Only about half the prisoners survived the ordeal. The reason was that the ship captains were paid according to the number of prisoners who boarded their ships, rather than the number who completed the journey, Shughart explains. Once the perverse incentives were identified and fixed, prisoner nutrition and care improved, and the death rate fell to nearly zero. This lesson could be applied to American prisons today. Writes Shughart: “Assess the performance of private suppliers of food service on the basis of weight maintenance or the nutritional status of those committed to the care of our nation’s jails and the problem of inmates’ weight loss will soon go away.”

“Inmates Buck Trends of National Obesity Crisis,” by William F. Shughart II (5/14/10)

Taxing Choice: The Predatory Politics of Fiscal Discrimination, edited by William F. Shughart II

Changing the Guard: Private Prisons and the Control of Crime, edited by Alexander Tabarrok

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5) This Week in The Beacon

Here now are the past week’s offerings from our English-language blog, The Beacon:

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