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The Lighthouse


The Lighthouse is the weekly email newsletter of the Independent Institute.
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Volume 17, Issue 34: August 25, 2015

  1. Obamacare and Corporate Cronyism
  2. The Stamp Act and the American Revolution
  3. Say No to ‘Yes Means Yes’?
  4. Venezuela’s Maduro Going All-In to Retain Power
  5. New Blog Posts
  6. Selected News Alerts



1) Obamacare and Corporate Cronyism

The Affordable Care Act is a classic example of legislation put together with extensive input from special interests. Stephen Brill nicely exposes the back-and-forth deal making in his well-received book, America’s Bitter Pill: Money, Politics, Backroom Deals and the Fight to Fix Our Broken Health Care System. The influential journalist got the basic details of the shenanigans right, but he overlooked some of the most egregious examples of cronyism that culminated in the passage of Obamacare, according to Independent Institute Senior Fellow John C. Goodman. Together, Brill’s book and Goodman’s review of it do a great job showing how America got stuck with healthcare reform that is arguably only slightly less intrusive than the version depicted in Episode 3 of our satirical Love Gov video series, “A Remedy for Healthcare Choices.”

America’s Bitter Pill describes, for example, how the pharmaceutical industry prevailed in its “negotiations” with Senator Max Baucus, head of the Senate Finance Committee. Obamacare was estimated to give Big Pharma a windfall of $200 billion during the first decade of healthcare reform, and Baucus tried to pressure the industry to repay the favor by agreeing to $130 billion in lower drug prices through Medicare and Medicaid and higher taxes on pharmaceutical revenues. But the pharmaceutical lobby would agree only to $80 billion in lost revenue (for a net gain of $50 billion), and it prevailed. Brill reports similar episodes with the health insurance industry.

Unfortunately, according to Goodman, Brill’s exposé neglects the story of big business and big labor during the Obamacare legislative process. Health reform, Goodman explains, left them mostly unscathed in return for the special tax imposed on self-insured plans. Also, Brill doesn’t give adequate treatment of Sen. John McCain’s health reform plan, even though two prominent White House advisors had favored it, although he does explain that Democratic Sen. Ron Wyden threatened to put forward a reform similar to McCain’s. “Think about that,” Goodman writes. “Instead of a completely partisan, special-interest-driven health reform, we might have had a bipartisan bill that really reformed the entire healthcare system.”

Was Obamacare Produced by Crony Capitalism?, by John C. Goodman (Forbes, 8/17/15)

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

Video: Love Gov: From First Date to Mandate

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2) The Stamp Act and the American Revolution

In August of 1765—250 years ago this month—American colonists launched violent protests against England’s Stamp Act, a law that mandated the use of specially stamped or embossed paper on nearly every type of legal and commercial document, including marriage licenses, mortgages, contracts, and even newspapers and playing cards. Independent Institute Senior Fellow and Research Director William F. Shughart II, our resident expert on selective excise taxes, has written an op-ed reminding us why this matters.

The protests began in Boston, and included harassment of Boston’s stamp distributor, Andrew Oliver, and a raid on the homes of government officials William Story, Benjamin Howell, and Thomas Hutchinson. “News of Boston’s riots spread quickly: as in England, colonial newspaper publishers championed tax resistance,” Shughart writes. “Private and public property was destroyed, but historians believe the mobs of protestors did not shed the blood of any commissioned Stamp Act distributor. Resignation from office was the only goal—and it was achieved.”

One lesson: “Overburdened taxpayers today can take heart from the colonists’ successful trouncing of the intrusive Stamp Act,” Shughart continues. “August 2015 is an occasion for reflecting on what tax protestors achieved 250 years ago.”

The Stamp Act Riots, 250 Years On, by William F. Shughart II (The Daily Caller, 8/19/15)

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

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3) Say No to ‘Yes Means Yes’?

Last year, the governors of California and New York signed “Yes Means Yes” laws, requirements that universities receiving public funding enact programs that mandate verbal consent in sexual relations. Unfortunately, although rape and sexual assault are serious offenses, such measures are both unreasonable and unworkable, according to Independent Institute Research Fellow Samuel R. Staley. In an op-ed published in the Dallas Morning News and dozens of other newspapers across the country, Staley argues that mandating verbal consent undermines a pillar of healthy sexual relations: the essential ability to read non-verbal cues from one’s prospective partner.

The intimacy, long-term trust, and empathy characteristic of a healthy sexual relationship, Staley argues, “is built using a range of verbal, nonverbal and behavioral actions, often ambiguous by legal definition.” Moreover, “a legal mandate for verbalizing consent explicitly through one mechanism—a verbal yes—adds little to the effectiveness of these already existing codes and laws” regarding sexual assault.

Because verbal consent mandates have the potential to undermine the development of stable, healthy, long-term relationships, concerned citizens and policymakers should look toward other approaches for reducing sexual assault. “Our efforts to reduce rape and sexual assault should not criminalize healthy sexual behavior,” Staley continues. “Rather, they should focus on reinforcing and expanding the respect we have for one another, our understanding of intent and consent, and the importance of relationships built on trust and communication in all of its many forms.”

Questionable Laws Turn Sex into a Police Process, by Samuel R. Staley (Dallas Morning News, 8/21/15)

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4) Venezuela’s Maduro Going All-In to Retain Power

Venezuelan president Nicolás Maduro—Hugo Chávez’s political heir—has taken strong measures to ensure his party retains power after his country’s upcoming parliamentary elections. Maduro’s administration and its allies have even trumped up false charges against several key opposition leaders and rejected offers by international organizations to monitor December’s elections, according to Independent Institute Senior Fellow Alvaro Vargas Llosa.

Numerous civil rights groups, including the UN Human Rights Council, the Inter-American Human Rights Commission, and Human Rights Watch, have exposed and denounced Maduro’s oppressive policies, but the Venezuelan strongman is holding firm and employing tactics similar to those used by the regime’s ally and advisor, Cuba. Unfortunately, this unsettling political climate has become par for the course in Venezuela.

Vargas Llosa writes, “Each time there’s an election in Venezuela, the ‘Chavista’ regime performs a weird type of geopolitical striptease, gradually revealing to the world its most-intimate parts. The result is to repel, rather than seduce.”

Coming Soon: Another Rigged Election in Venezuela, by Alvaro Vargas Llosa (The National Interest, 8/12/15)

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

Global Crossings: Immigration, Civilization, and America, by Alvaro Vargas Llosa

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

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5) New Blog Posts

From MyGovCost News & Blog:

Straight Outta Incompetence
Craig Eyermann (8/24/15)

Fed Loses Grip on Debt Markets?
Craig Eyermann (8/21/15)

Obamacare Excise Tax Inflicts Increasing Misery
K. Lloyd Billingsley (8/20/15)

When a “Great Deal” Turns Bad
Craig Eyermann (8/18/15)

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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  • MyGovCost.org
  • FDAReview.org
  • OnPower.org
  • elindependent.org