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The Lighthouse


The Lighthouse is the weekly email newsletter of the Independent Institute.
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Volume 17, Issue 44: November 3, 2015

  1. Europe’s Refugee Crisis—and Ours
  2. Hillary Clinton’s Bad Medicine
  3. Gas Prices Will Stay Low Unless the White House Interferes
  4. Children Are Not Creatures of the State
  5. New Blog Posts
  6. Selected News Alerts



1) Europe’s Refugee Crisis—and Ours

The Aegean Sea claimed the lives of more refugees last week, and the European Union continues to grapple with the question of how best to manage its largest influx of refugees in more than 50 years. Several nations have responded by tightening their borders or by being slow to agree to take in any refugees at all. Compounding the problem is an inflexible rule: refugees can be officially processed only in the EU country they entered first. This has burdened refugees and front-line nations alike.

“More sensible and flexible rules, and more willingness to act by all the members of the EU, would have defused this issue a long time ago, and we would not even be talking about it today,” writes Independent Institute Senior Fellow Alvaro Vargas Llosa, author of Global Crossings: Immigration, Civilization, and America.

Not all blame rests with EU policies on processing refugees or with European countries that have prevented the disbursement of refugees across the continent. In fact, much blame may rest with decision-makers in our nation's capital. According to Independent Institute Senior Fellow Ivan Eland, “the U.S. response to the Syrian civil war and resulting refugee crisis may be a warning to us about the decay of our own original principles and traditions: avoiding unneeded foreign wars while being a beacon of liberty and prosperity to the world.” Thus a moral crisis in Washington, DC, has contributed to a refugee crisis an ocean away.

Europe’s Reaction to Refugees and the Reinstatement of Borders: It’s Tragic, by Alvaro Vargas Llosa (The Globe and Mail, 10/26/15)

U.S. Response to Syrian Civil War and Refugee Crisis Is Telling, by Ivan Eland (The Huffington Post, 9/8/15)

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

The Economics of Immigration: Market-Based Approaches, Social Science, and Public Policy, edited by Benjamin W. Powell

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2) Hillary Clinton’s Bad Medicine

Hillary Clinton has pledged to impose price controls on prescription drugs if she wins the race for the White House. Such a measure may have popular support—almost three-fourths of respondents in a recent survey said drug prices are “unreasonable”—but price controls would be bad medicine for drug makers and, by extension, their customers. Standard price ceilings prevent supply from meeting demand, thus causing shortages. Clinton’s proposed approach would do this and more, as Independent Institute Senior Fellow John R. Graham explains in a new op-ed.

Clinton would mandate that drug makers set their prices by relying on a government-created equation that ostensibly has some relationship to the costs of research and development. As Graham notes, however, R&D costs are very difficult for a firm to calculate precisely; the same research may be applicable to many different drugs—or none at all if the efforts hit a dead end. Clinton also proposes junking federal tax statutes that allow pharmaceutical companies to deduct advertising costs as business expenses. Like direct price controls, this measure would reduce the funds available to drug companies for R&D.

If Clinton and other presidential hopefuls want to see pharmaceutical prices fall, they should champion a policy alternative that would lower prices without hindering the development of new medicines: “reducing needless FDA red tape and streamlining the drug review and approval process, which adds billions of dollars to pharmaceutical R&D costs and delays the introduction of many lifesaving and effective drugs,” Graham writes. “The next president needs to lead this reform effort, not grandstand against high prescription prices.”

Hillary on Drugs: Bad Prescription, by John R. Graham (Washington Examiner, 10/14/15)

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

Priceless: Curing the Healthcare Crisis, by John C. Goodman

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3) Gas Prices Will Stay Low Unless the White House Interferes

The American consumer is enjoying gasoline prices not seen in years—less than $2 per gallon in nine states at the time of this writing, according to the GasBuddy.com website; and even in the most expensive states—Hawaii, California, and New York—gas is selling for under $3 a gallon. The shale revolution is a major cause of this good fortune, but another factor is also at work, one inadequately covered by the news media: OPEC nations such as Saudi Arabia have been flooding the world oil market in the hope of killing off higher-cost competitors. But this tactic isn’t working well against American rivals.

“Much to OPEC’s chagrin, while a few overextended U.S. producers are folding, the industry at large is very much alive and kicking,” writes Independent Institute Research Director William F. Shughart II. Moreover, American energy suppliers still have plenty of unused wells they can tap into if oil prices start to rise.

Consumers have benefited tremendously from the shale revolution, but the Obama administration hasn't helped. It’s imposing new regulations on shale producers and has threatened to veto a bipartisan bill that would lift the federal ban on oil exports. “OPEC’s ministers and Vladimir Putin must be tickled pink,” writes Shughart. Consumers and the energy sector, he adds, would be better off if the president and his successor reversed course. “Our future economic well-being depends on it.”

Next President Must Embrace Brave New World of Oil and Gas, by William F. Shughart II (Deseret News, 10/28/15)

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

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4) Children Are Not Creatures of the State

Common Core has polarized many communities. Parents often detest the results of surrendering local control of education. Independent Institute Research Fellow Vicki Alger, who is writing a book on federal education policy, reported recently on schooling controversies in Arizona and New England.

Last week, Arizona’s state board of education voted 6-2 in favor of repealing Common Core State Standards. “The existing standards will stay in place for the time being, but Arizona now has the freedom to enact standards its citizens think are best,” Alger writes in The Beacon.

In another corner of America, towns in a few states have a long tradition of school choice. “Vermont and Maine have had town tuition voucher programs since 1869 and 1873, respectively, and more than 9,000 students are currently using publicly funded vouchers to attend schools of their parents’ choice in those states,” Alger writes. Moreover, in 2012 New Hampshire enacted one of the nation’s most unique tax-credit scholarship programs. “It allows businesses to take credits against their state taxes for contributions to non-profit scholarship organizations so parents can send their children to the private or home school programs of their choice,” Alger writes. Children are not creatures of the state, neither in theory nor (sometimes) in practice.

No More Common Core in Arizona, by Vicki Alger (The Beacon, 10/26/15)

Children Are Not Creatures of the State: New Hampshire Edition, by Vicki Alger (The Beacon, 10/26/15)

More on education

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5) New Blog Posts

From The Beacon:

From MyGovCost News & Blog:

Inside a Bad Debt Deal
Craig Eyermann (10/27/15)

Bullet Train Has Costly Tunnel Vision
K. Lloyd Billingsley (10/26/15)

Negotiating in Bad Faith
Craig Eyermann (10/25/15)

The Truth on Unfunded Pension Liability
K. Lloyd Billingsley (10/21/15)

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