The Lighthouse^®

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The Lighthouse^® is the weekly email newsletter of the Independent Institute.
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Volume 18, Issue 4: January 26, 2016

1. Hillary’s and Bernie’s Distorted Visions for Healthcare
2. Against the Federal Land Grab
3. El Chapo, Sean Penn, and the Failed War on Drugs
4. Bellicose U.S. Policies, in Word and Deed
5. New Blog Posts
6. Selected News Alerts

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The race for the Democratic presidential nomination pits one activist vision for American healthcare (Hillary Clinton’s support for Obamacare) against another (Bernie Sanders’ version of a “single-payer” system: Medicare for all). Interestingly, although eight out of ten Democrats polled say they support such a system, Clinton has called it fiscally reckless. Her proposal: tweaking Obamacare at the margin. The truth is that both of these visions for healthcare are wrong, according to Independent Institute Senior Fellow John C. Goodman.

Clinton has misdiagnosed Obamacare’s problems; consequently, her prescription wouldn’t cure an ailing system. Lighthouse readers have heard frequently about Goodman’s remedy for Obamacare, presented in A Better Choice: Healthcare Solutions for America, but his critique of Sanders’ plan is less familiar. The fatal flaw in Sanders’ plan, Goodman argues, is its major premise: that a single payer (what economists call a monopsony) would lower the cost of healthcare due to an allegedly greater power to negotiate lower prices.

This premise is demonstrably false, according to Goodman, because we see that Medicare has achieved greater value at lower social cost precisely where it relies on a myriad of private plans—in Medicare Advantage. Also, the plans run by independent doctor associations are the most cost-effective of the bunch. Moreover, Goodman argues, none of Obamacare’s major flaws would go away by adopting Medicare for all: burdensome mandates, premium distortions caused by community rating, and other existing problems would still be with us—and for a price estimated to be at least $28 trillion over ten years.

Democrats’ Healthcare Debate: Clinton and Sanders Are Both Wrong, by John C. Goodman (Forbes, 1/18/16)

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

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The standoff near Burns, Oregon, baffles many Americans. Because they treasure the Great Outdoors, they can’t fathom why ranchers in western states might seethe with anger over federal management of public lands. In part that’s because most Americans reside in counties where federal land holdings are relatively small. But for the one in ten who live in counties where the feds own more than half the land, federal policies and performance can make or break their ability to earn a decent living. And as Independent Institute Senior Fellow Robert H. Nelson explains in a recent symposium in the New York Times, federal land management is mired in political gridlock and bureaucratic paralysis.

The resulting mismanagement has horrendous consequences. According to the U.S. Forest Service, the dysfunctional statutory, regulatory, and administrative framework under which it operates has undermined wildfire suppression efforts, which in turn has contributed to the destruction of millions of acres in the past decade and a half. Other harms, regarding access to grazing pastures and the like, are visible only to the few who must deal directly with federal land managers. If the feds can’t—or won’t—step up to the plate, who could and would? Privatization advocates have made a compelling case for selling public lands, as Independent Institute Senior Fellow Lawrence J. McQuillan reminds us in his follow up to Nelson’s piece, but the political will is lacking. The best politically viable alternative, according to Nelson, is to transfer the bulk of federally owned lands—the 70 percent that are not national parks or wilderness monuments—to state and local governments.

Like charter schools, these “charter forests” would be run by land managers who have the flexibility needed to adapt to local circumstances and priorities. They would also be held more accountable than politicians and bureaucrats ensconced in the cloisters of Washington, DC. “Forests that are poorly managed at present by the Forest Service and Bureau of Land Management would be freed from their current dysfunction under centralized administration to spur more creative and locally responsive management solutions,” Nelson writes. “New charter forest managers would still be held accountable for federal standards dealing with matters such as broad land use goals, performance standards and environmental quality.”

Give States Control Over Public Land Out West, by Robert H. Nelson (The New York Times, 1/8/16)

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

Time to Privatize Federal Public Land, by Lawrence J. McQuillan (The Beacon, 1/15/16)

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The arrest of Joaquín “El Chapo” Guzmán, head of Mexico’s notorious Sinaloa drug cartel, ended a fascinating chapter in the history of the Global War on Drugs. But it by no means brought an end to the entire story, according to Independent Institute scholars Abigail R. Hall and Alvaro Vargas Llosa. Nor was it necessarily the final chapter on the adventures of a fugitive whose ability to escape confinement brought shame to Mexican prison authorities. If anything, this chapter simply presages more of the same: Another drug lord will step up, just as El Chapo did when he saw a lucrative opportunity.

The economics of prohibition make this prediction all but certain. El Chapo’s enterprise reportedly brought in $3 billion annually—a strong inducement for his cartel to carry on. “I’m not at all confident that Guzmán’s capture will have any significance whatsoever,” Hall writes. “The Sinaloa cartel will continue to operate, drugs will continue to flow into the United States, and Mexico will continue to see high rates of drug-related crime.”

Years from now Sean Penn will be remembered for his entertaining and compelling roles on the silver screen. But his inadvertent role in enabling the capture of El Chapo elevates his significance to a higher plane—at least for now. Should personalities like Penn, and journalists in general, be prosecuted for meeting with known criminals? No. If this were ever the case, we may all end up living under a government that can shut down a free press simply by outlawing contact with suspected criminals. As Vargas Llosa writes, “Press restrictions would add new problems to the existing ones—including producing less evidence of how absurdly inefficient an intelligence system is if it cannot find, using its massive technological resources, a criminal suspect who can be reached by a reporter.”

“El Chapo,” Cartels, and the Consequences of the War on Drugs, by Abigail Hall (The Beacon, 1/20/16)

Is Sean Penn Guilty or Innocent?, by Alvaro Vargas Llosa (The Beacon, 1/13/16)

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

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Napoleon Bonaparte and Otto von Bismarck were deeply flawed men—neither was a friend of free markets and limited government—yet each knew it was better, if the opportunity presented itself, to accomplish his goals without resorting to armed force. Unfortunately, the U.S. government too often discounts the economic, political, and security benefits of subtle diplomacy, in favor of the cost and commotion of military engagement. In his latest op-ed for the Huffington Post, Independent Institute Senior Fellow Ivan Eland castigates the bellicose rhetoric and belligerent policies emanating routinely from the White House, Capitol Hill, and the American media.

“Americans, raised on action movies, seem to think the nation will be seen as weak internationally if it is not constantly bombing someone, leading presidential candidates, in a democracy, to give the public what it demands—macho hot air,” Eland writes. Case in point: Obama and Syria.

It wasn’t enough that the president and Secretary of State John Kerry threatened U.S. military action if Syrian strongman Bashar al-Assad used chemical weapons. Although Obama’s words were strong enough to get Assad’s ally, Russia, to see to it that Syria got rid of its chemical weapons, Obama’s political opponents try to outdo each other to see who can sound the most warlike. But instead of a race to the belligerent bottom, they would do the nation better by revering the strategy of restraint that President Reagan, ostensibly their patron saint, showed during the Iran-Iraq war. “Unfortunately, with a nearly $19 trillion national debt, promises to defend many nations all over the world, a costly far-flung worldwide military apparatus, and ubiquitous armed interventions in unimportant places such as Syria, the American Empire, without a major retraction and renewal, will likely travel down the same road to ruin,” Eland concludes.

U.S. Foreign Policy needs Some Old-Fashioned Subtlety, by Ivan Eland (The Huffington Post, 1/18/16)

Recarving Rushmore: Ranking the Presidents on Peace, Prosperity, and Liberty, by Ivan Eland

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6) Selected News Alerts

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