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The Lighthouse


The Lighthouse is the weekly email newsletter of the Independent Institute.
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Volume 18, Issue 28: July 12, 2016

  1. Federal ‘Educrats’ Have Failed America’s Children, New Book Shows
  2. Can Dems and Reps Agree on Health Reforms?
  3. Clinton and Trump on the Nuclear Umbrella
  4. Trade with U.S. Would Help Make Cuba Free
  5. Join Independent Institute at Two San Francisco Events!
  6. New Blog Posts
  7. Selected News Alerts


1) Federal ‘Educrats’ Have Failed America’s Children, New Book Shows

When President Jimmy Carter established the U.S. Department of Education in 1979 as the thirteenth cabinet-level agency, many hailed the move as victory for America’s taxpayers, educators, and school children. More than three and a half decades later, however, the federal education bureaucracy has yet to fulfill its promises, according to Independent Institute Research Fellow Vicki E. Alger. In her new book, Failure: The Federal Misedukation of America’s Children, Alger reveals the failures, their causes, and their solutions.

In every major aspect, the federal “educrats” deserve a failing grade, Alger explains. Contrary to their promises, they have failed to eliminate waste from federal education programs (one of the initial rationalizations for the agency’s creation). Their wielding of fiscal carrots and sticks has robbed the states of their independence in setting educational policies and priorities (exactly as critics had predicted many decades ago). And they have failed to make American school children among the best educated in the world. (In fact, 17-year-olds as a group are reading at the same skill level as they were in 1971, and their math skills are only slightly better than they were in 1978.) The one promise that the Education Department has fulfilled, according to Alger, is dubious at best: It has helped make education policy a national issue. Consequently, K-12 schooling and higher education are more politicized than ever.

By international standards, U.S. high-school graduates on average are underperformers. So, what is it that the world’s best school systems have that America lacks? The top ones, Alger finds, feature decentralization and parental choice. Building on this lesson, Alger offers a detailed plan for making fundamental, systemic improvements in American schooling—including a blueprint for dismantling the federal education bureaucracy brick by brick, with some programs transferred to the states and others to be cast atop the dustbin of history. From top to bottom and from kindergarten to the graduation podium, federal involvement in education, Alger concludes, has been a disaster of such magnitude that it warrants a single overarching guideline: “End it, don’t mend it.” Fostering greater decision-making and accountability at the local level and expanding educational options (i.e., more parental choice) would make schools have to compete for customers and would introduce strong incentives to improve educational quality for all.

Failure: The Federal Misedukation of America’s Children, by Vicki E. Alger

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2) Can Dems and Reps Agree on Health Reforms?

Getting Obamacare’s supporters and detractors to agree on anything might seem like a fleeting fancy. Recent developments, however, suggest that a consensus on health insurance reform is emerging. House Speaker Paul Ryan has unveiled a new framework on which to erect reform. Its central plank is a refundable tax credit for those with no access to insurance through an employer. As Independent Institute Senior Fellow John C. Goodman notes, “the idea of a health tax credit is not even particularly controversial in the health policy community.” Nevertheless, several measures could be incorporated into the Ryan plan to make it even more attractive across the political aisle—measures featured in legislation sponsored by in the House by Pete Sessions of Texas and in the Senate by Dr. Bill Cassidy of Louisiana. So where’s the sign of an emerging bipartisan consensus?

One source of light may surprise many readers of The Lighthouse: Hillary Clinton. Although the former Senator and Secretary of State doesn’t advocate that the Affordable Care Act be “repealed and replaced,” she is proposing a tax credit designed to correct some flaws of Obamacare, according to Independent Institute Senior Fellow John R. Graham.

“Both House Republicans and Hillary Clinton agree (at least some) of the tax credits subsidizing health care should be spent by patients directly, instead of flowing through insurers,” Graham writes. “They also agree tax credits should be structured to minimize disincentives to work. House Republicans should never increase Obamacare spending. However, if they could agree with a future President Clinton to restructure the current tax credits so they phase out at a flat rate, and allow patients to use them for out-of-pocket costs as well as premiums, that would be a significantly positive reform to Obamacare.”

A Bipartisan ‘Yes’ on a Health Care Tax Credit, by John R. Graham (Real Clear Health, 7/8/16)

Paul Ryan’s Universal Health Tax Credit, by John C. Goodman (Forbes, 6/21/16)

Paul Ryan’s Health Plan, a New Alternative to Obamacare, Draws from Independent Institute Book (6/27/16)

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) Clinton and Trump on the Nuclear Umbrella

In a major televised speech in San Diego last month, Democratic presidential contender Hillary Clinton excoriated presumed GOP nominee Donald Trump for his “dangerous” views on foreign policy. The prospect of a temperamental, inexperienced Trump possessing the nation’s nuclear codes, Clinton suggested, is uniquely horrifying and would pose unthinkable risks to American security. But is it? In a recent op-ed for The National Interest, Independent Institute Senior Fellow Ivan Eland offers an alternative take on the two candidates’ foreign-policy stances.

“Clinton’s biting attack on Trump got high marks from many in the media,” Eland writes. “Yet, ironically, Trump’s foreign policy views, if you think about it, are less scary . . . than Clinton’s belligerent interventionism—sold as ‘American world leadership.’”

Were he elected to the Oval Office, Trump has asserted, he would remove (or threaten to remove) the American nuclear umbrella that covers wealthy U.S. allies such as Japan and South Korea. This represents a significant departure from the so-called foreign-policy consensus. Clinton, in contrast, represents the status quo. But it is precisely business as usual—U.S. protection for nations that offer in return no tangible security benefits for Americans—that constitute a greater threat to U.S. troops, taxpayer dollars, and even the lives of civilians on the American homeland. The “formal and informal alliances,” Eland continues, “are the core of an overextended American foreign policy that requires having hundreds of U.S. military bases overseas and conducting countless—now seemingly perpetual—military campaigns, such as the wars Clinton supported in the Balkans, Iraq and Libya, to support this informal American Empire.”

Hillary’s Foreign Policy Is Scarier than Trump’s, by Ivan Eland (The National Interest, 6/17/16)

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

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4) Trade with U.S. Would Help Make Cuba Free

Cubans were overjoyed, if not exactly totally euphoric, when President Obama visited their island nation earlier this year. Offering a message of hope, the leader of the free world brought Cuba’s beleaguered population a sense of the opportunities that life under freedom will bring them—someday. But that “someday” would arrive much sooner if Congress were to lift the U.S. economic embargo, according to Independent Institute Senior Fellow Benjamin W. Powell, who has just returned from a trip to Cuba.

More than five decades ago Fidel and Raul Castro turned Cuba into a virtual prison, where the exercise of free speech is a crime. Economic opportunities were limited—and tied to political obedience. Havana blamed Washington for Cuba’s dysfunction. It’s true that the embargo has negative consequences, but mostly it’s because they have allowed the Castro brothers to avoid having to take responsibility for their disastrous policies.

The Cold War is over, and the U.S. embargo is its relic. Many Cubans, especially young people, believe that interactions with Americans make them “become a little freer,” to quote one university student in Havana that Powell met. “If U.S. politicians can find the will to repeal the embargo,” Powell writes, “it might just be the nudge Cuba needs to make the market reforms that will loosen more of the shackles that bind the Cuban economy and people.”

Ending the Cuban Embargo Could Spur ‘Contagious Capitalism,’ by Benjamin W. Powell (South Florida Sun Sentinel, 6/28/16)

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

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5) Join Independent Institute at Two San Francisco Events!

Independent Institute is co-sponsoring two special events this month in San Francisco, California. Come join us and hear presentations by Independent Institute Senior Fellow Lawrence J. McQuillan and Senior Vice President Mary L. G. Theroux.

July 12:
Free Market Road Show 2016
“The Road to Serfdom from Austria to America: How Lessons Can Be Learned”
Infinity Club Lounge
333 Main Street, San Francisco
5:30 PM – 8 PM
Event details

July 19 & 20:
d10e San Francisco
“Decentralization Technologies: Celebrating Fearless Minds”
Marriott Marquis, 780 Mission Street, San Francisco
July 19, Networking Social, 6:00 PM – 9:00 PM
July 20, 9:00 AM – 9:00 PM
Event details

Independent Institute is building a bright future—with your help!

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6) New Blog Posts

From The Beacon:

From MyGovCost News & Blog:

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

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7) Selected News Alerts

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