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The Lighthouse is the weekly email newsletter of the Independent Institute.
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Volume 17, Issue 25: June 23, 2015

  1. Healthcare Reform after King versus Burwell
  2. Crude Oil Exports Would Benefit America
  3. Understanding Russia’s Land Grab and Military Mischief
  4. Have the Courts Closed the Door to Pot Reform?
  5. New Blog Posts
  6. Selected News Alerts


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1) Healthcare Reform after King versus Burwell

How should Congress reform healthcare after King v. Burwell? As loyal readers of The Lighthouse know, Independent Institute Senior Fellow John C. Goodman offers several ideas in A Better Choice: Healthcare Solutions for America. Senior Fellow John R. Graham makes additional proposals. Writing last week at Forbes, Graham calls for ending Obamacare’s federal spending on insurance companies and redirecting the money to consumers, who would determine how much of the money would be spent directly on their medical care and how much would be spent on their health insurance premiums.

Graham would also deregulate the health plans, so that consumers could enjoy a greater range of benefit packages to choose from. One unintended consequence of Obamacare, he argues, is that “health insurers are designing plans with benefits that adhere to the regulations but seek to enroll the healthy and shun the sick, and that this feature is worse in 2015 than 2014.”

Graham also calls on Congress to repeal the individual mandate. In a separate piece for Forbes, he writes: “Relief from the individual mandate, with no other changes to Obamacare as currently executed, has significant social benefits,” with the monetary value of the benefits “at least three times greater than the cost.” The Congressional Budget Office estimated that scrapping the individual mandate would cut federal deficits by nearly half a trillion dollars through 2024. “Repealing Obamacare’s individual mandate is a necessary feature of any ‘fix’ Congress passes after a King v. Burwell victory,” Graham concludes.

King v. Burwell: How Important Is Obamacare’s Individual Mandate?, by John R. Graham (Forbes, 6/12/15)

King v. Burwell: Give Obamacare Benefits to Patients, Not Health Insurers, by John R. Graham (Forbes, 6/17/15)

A Better Choice: Healthcare Solutions for America, by John C. Goodman

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2) Crude Oil Exports Would Benefit America

Congress has been gushing with hearings about the federal moratorium on oil exports. But for anyone who has drilled deeply into the topic, the case for lifting the ban is a no-brainer. So say Independent Institute Research Director William F. Shughart II and American Council for Capital Formation Senior Vice President Margo Thorning. After reviewing five studies on the effects of lifting the ban, they conclude that allowing U.S. producers to export crude oil would “boost economic growth, expand employment, and put downward pressure on fuel prices,” they write in Roll Call.

Moreover, the gains on each of those fronts would be a significant boon to Americans. A study by the Brookings Institution, for example, valued the total economic gain from lifting the ban at $550 billion to $1.8 trillion through 2039. In addition, U.S. employment gains are estimated to range from 394,000 to 859,000 jobs per year, according to IHS, the global information and analysis firm. The Aspen Institute breaks down those jobs by category, including “as many as 217,000 new construction jobs by 2017; 148,000 professional service jobs; and around 37,000 manufacturing jobs each year over the next decade,” Thorning and Shughart write.

And lifting the ban would send oil prices falling—even in the United States. That’s because oil prices are set on the world market, and lifting the ban would increase the supply available to that market. The above benefits should persuade most people of the merits of lifting the ban, but Thorning and Shughart also offer a fourth: Allowing U.S. firms to export crude oil would help build “a secure future not only for us, but also for our allies, thus strengthening our geopolitical ties with the rest of the world.”

Numbers Don’t Lie: Crude Exports Are in Americans’ Best Interest, by Margo Thorning and William Shughart II (Roll Call, 6/9/15)

The Economic Case for Lifting the Crude Oil Exports Ban, by William F. Shughart II and Margo Thorning (6/3/15)

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3) Understanding Russia’s Land Grab and Military Mischief

The Western media have done a poor job reporting on Russia. Cable news stations and print journalists have covered Putin’s wicked annexation of Crimea and military adventurism in eastern Ukraine, but rarely has their coverage tried to convey why Moscow has taken such aggressive steps in violation of international law. To do so isn’t to justify Russia’s actions, but rather to establish a basis for predicting Russia’s behavior, according to Independent Institute Senior Fellow Ivan Eland. It might also help us to better assess Western responses, such as the G-7 leaders’ recent decision to continue their economic sanctions against the Putin regime.

Russia’s policies can be seen as attempts to create a security buffer against perceived Western build-up to its borders. Moscow has intimated, for example, that the CIA assisted in the ouster of Russian-friendly Viktor Yanukovych in Ukraine—a storyline that is consistent with the expansion of NATO in former Warsaw Pact countries after the end of the Cold War, despite President George H. W. Bush’s formal agreement to keep the Western military alliance out of what had been East Germany. Another data point: George W. Bush promised to admit Ukraine and Georgia into NATO—regions that Russia considers to be within its geopolitical sphere of influence. Eland offers other examples, as well.
“Russia feels surrounded and vulnerable and thus succumbs easily to nationalist demagogues like Putin,” Eland writes. “However, in the future, perhaps the United States will be more understanding of the relatively weak Russia’s need for a geostrategic buffer zone in Eastern Europe as the more powerful China rises in East Asia and the Americans need an ally to balance it there.”

Continued G-7 Sanctions Against Russia, but Does Russia Have a Perspective?, by Ivan Eland (The Huffington Post, 6/8/15)

Putting “Defense” Back into U.S. Defense Policy: Rethinking U.S. Security in the Post-Cold War World, by Ivan Eland

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4) Have the Courts Closed the Door to Pot Reform?

Marijuana activists across the United States saw their hopes dashed in April when federal judge Kimberly J. Mueller ruled to keep cannabis classified as a federally banned Schedule 1 drug. The judge had heard expert testimony on both sides of the debate—which had encouraged pot providers and customers—but ultimately she decided to apply a “rational basis” review to the federal classification.

According to Independent Institute Research Fellow Dominick T. Armentano, when a judge declares that a regulation will undergo a rational basis review, the regulation usually survives scrutiny. “All that matters is that Congress had some reason—any reason—to believe a law would promote the end intended,” he writes in the Orange County Register. “That it actually does (or does not) serve the goal is simply not up to the courts to determine.”

Marijuana reformers may have lost their day in federal court, but they could win in Congress. New Jersey Senator Cory Booker and Kentucky Senator Rand Paul have introduced a bill to remove marijuana from Schedule 1 classification—a standard reserved for drugs with no medical use, a potential for abuse, and lack of accepted safety under medical supervision. President Obama’s new Attorney General Loretta Lynch or her successors could also usher in a new federal policy on marijuana. In any case, federal change is more likely to come by way of the legislature or executive branch than the judiciary.

Federal Cannabis Standards Are Irrational, by Dominick T. Armentano (Orange County Register, 5/22/15)

Drug War Crimes: The Consequences of Prohibition, by Jeffrey A. Miron

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5) New Blog Posts

From MyGovCost News & Blog:

Failing Up
Craig Eyermann (6/20/15)

Bullet Train Is Slow-Speed Boondoggle
K. Lloyd Billingsley (6/17/15)

The New Long Term Outlook for the National Debt
Craig Eyermann (6/17/15)

You can find the Independent Institute’s Spanish-language website here and blog here.

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6) Selected News Alerts

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