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The Lighthouse is the weekly email newsletter of the Independent Institute.
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Volume 18, Issue 30: July 26, 2016

  1. Trump, Clinton, and the Fiscal Crisis
  2. Police Killings: Causes and Consequences
  3. Environmental Rhetoric, Economic Reality: Coal Edition
  4. Liberating Africa from the African Union
  5. New Blog Posts
  6. Selected News Alerts


1) Trump, Clinton, and the Fiscal Crisis

Come November, American voters will face the prospect of getting trapped, fiscally speaking, between a rock and a hard place. That’s because neither Donald Trump nor Hillary Clinton offers any realistic hope for getting the nation’s books in order. Judging by their budget proposals, each would increase the shortfall between spending and revenue. The question then becomes: Which would be least bad? In two recent posts at MyGovCost News & Blog, Independent Institute Research Fellow Craig Eyermann looks at the candidates’ budget proposals and into the fiscal abyss.

Under Trump’s plan, according to Eyermann, federal spending would claim a larger share of the U.S. economy than it does today—22.5 percent of GDP over the next ten years, compared to 22.1 percent under the current trend. The projected increase looks minor, but the fiscal gap would remain. The good news, such as it is, is that Trump’s post-convention budget isn’t nearly as reckless as his pre-convention proposal. The bad news is that the GOP candidate’s latest plan is merely a campaign promise—and campaign promises are the first casualty of political expediency.

As for Clinton’s plan: It would raise the budget deficit’s share of GDP slightly faster than Trump’s plan and would raise taxes on the rich. But although tax-the-rich schemes sound populist, they can actually act against the interests of low-income households, according to Eyermann. That’s because the incomes of ultra-high-income earners are more sensitive to the ups and downs of the business cycle than are other revenue sources. Such volatility is partly the reason why, when the Great Recession hit, California’s fiscal health sank to the ranks of “the bottom 10 of all states” and prompted cuts in public services. But back to the Big Picture: Whether made by Republicans or Democrats, the fiscal promises of election season aren’t worth the paper they’re written on—thus the impossibility of predicting whose fiscal regime would be worse. “Between now and the elections in November, the main thing Americans should expect are even more promises and proposals that will bear little relationship to fiscal realities,” Eyermann concludes.

Clinton and the Future U.S. Budget, by Craig Eyermann (MyGovCost News & Blog, 7/25/16)

Trump and the Future U.S. Budget, by Craig Eyermann (MyGovCost News & Blog, 7/22/16)

What does the federal government cost you? Find out at MyGovCost.org.

Award-winning video series: Love Gove: From First Date to Mandate

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2) Police Killings: Causes and Consequences

Recent police shootings in Minnesota, Baton Rouge, and elsewhere in America—and the reactions, including the retaliatory killing of police officers in Dallas and Baton Rouge—highlight the racial tensions that continue to plague the United States more than 50 years after passage of the Civil Rights Act. According to Independent Institute fellows Jonathan Bean, Ivan Eland, John C. Goodman, and Randall Holcombe, these incidents underscore uncomfortable truths that have not been given their full due.

First, it’s worth noting that Independent Institute is not a monolith that always speaks with one voice. Rather, our analysts and scholars hold differing views on many subjects, including the one at hand. Thus, whereas Research Fellow Randall Holcombe writes that “black lives are the ones most threatened by the ever more adversarial police state,” Senior Fellow John C. Goodman cites a recent Harvard/NBER study that “finds there is no bias against black civilians in police shootings.” Although the two views aren’t necessarily in conflict (bias-free policing doesn’t necessarily mean that the outcomes of police encounters are equal), the differences are large enough to underscore the diversity of thought among our fellows.

It’s also crucial to recognize, according to Research Fellow Jonathan Bean, that liberal social welfare campaigns such as the failed War on Poverty have “compounded the problems” of unemployment and family disintegration that have afflicted black communities in particular. For Research Fellow Randall Holcombe, it is a different causal factor—the disastrous War on Drugs—that best demonstrates that America’s law-enforcement policies are not, racially and ethnically speaking, an equal opportunity annoyer. As to the consequences related to the recent violence, Eland warns that the use of a bomb to kill the man believed responsible for the deaths of five police officers at a protest rally in Dallas sets a troubling precedent that could, like U.S. military campaigns overseas, inflict numerous casualties on innocent bystanders, thereby precipitating “blowback” and perpetuating the vicious circle of violence. The deadly militarization of domestic law enforcement “make[s] it easier to kill, something that should not be encouraged,” Eland writes. “With the continued militarization of the country’s police forces, including the offensive use of bombs, we may be heading toward what the founders dreaded most.”

Black Lives Matter, by Randall Holcombe (The Beacon, 7/18/16)

Big Government, Racial Violence, and the Police, by Jonathan Bean (The Beacon, 7/21/16)

Why Race Relations Have Gotten Worse under Barack Obama, by John C. Goodman (TownHall.com, 7/14/16)

Should Police Use Bombs to Kill Criminals?, by Ivan Eland (Huffington Post, 7/16/16)

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3) Environmental Rhetoric, Economic Reality: Coal Edition

The city council of Oakland, Calif., last week upheld a regulation prohibiting the storage and handling of coal and petroleum coke within city limits. Rather than infinite wisdom, the ban is a classic case of harming some people while trying to protect others, according to Independent Institute Senior Fellow and Research Director William F. Shughart II.

“The council members’ decision pits the interest of one group of vulnerable people against those of others,” write Shughart and co-author Michael Jensen in an op-ed for the East Bay Times. “No one wants to live where a child or elderly parent would have trouble breathing. On the other hand, no one wants to struggle to feed their family because they can’t find a job.”

In the case of Oakland’s coal prohibition ordinance, however, it’s not a case of health protection compensating residents for the economic harm done, Shughart and Jensen argue. That’s because, had Oakland’s ban been lifted, residents would have possessed the means to ensure that health risks were minimized—by holding the would-be operator of the coal shipping terminal legally accountable for the infliction of any harm caused by the coal. “Instead, City Council members are hung up on creating a feel-good policy that may hurt the very people they think they are protecting,” Shughart and Jensen conclude.

Oakland Coal Ban Won’t Protect Vulnerable, by William F. Shughart II and Michael Jensen (East Bay Times, 7/14/16)

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

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4) Liberating Africa from the African Union

African nations should take a lesson from Britain and leave the African Union (AU), the moribund bureaucracy to which nearly every nation on their continent belongs. To do so isn’t to mindlessly mimic a European country—in fact, it was Euro-mimicry that led to the AU’s creation in the first place: Like its forbearer, the Organization of African Unity, the AU was designed to act like the European Union. But the AU is worse for Africans than even the staunchest proponent of the Brexit believes the EU is for the British, Independent Institute Research Fellow George B. N. Ayittey suggests.

The AU “was the brainchild of the late Libyan strongman Muammar al-Qaddafi,” but his later “critique of the African Union was sound,” Ayittey writes in Foreign Policy. The organization is highly centralized but weak. It has failed to ensure peace, advance human rights, or promote economic development (except for politically connected thieves, whose pockets it has lavishly lined). Rather than graft a centralized, EU-like structure on a continent with an immense variety of institutions—and encompassing “more than 2,000 distinct ethnic groups”—Africa should embrace an earlier tradition, one it possessed before the advent of colonialism and political centralization.

“The continent has a long history of effective institutions for good governance: loose confederacies, participatory forms of democracy based on consensus under chiefs, and free village markets, to name just a few,” Ayittey writes. “Markets were likewise ubiquitous in precolonial Africa, and prices were typically determined by bargaining, not dictated by authorities.” Unlike the AU, Ayittey envisions for the continent a “looser style of confederacy that allows national actors to coordinate decisions with one another, rather than imposing choices on them.... At a minimum, each member state should be democratic and respect Africa’s heritage of free markets, free enterprise, and free trade.”

Disband the African Union, by George B. N. Ayittey (Foreign Policy, 7/10/16)

Video: The New Path for Africa: Establishing Free-Market Societies, featuring George B. N. Ayittey

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5) 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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6) Selected News Alerts

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