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Volume 18, Issue 35: August 30, 2016
- The Economy in 2066: Prosperity or Peril?
- National Park Service Turns 100
- Free Speech under Fire
- In Defense of Payday Loans
- Independent Updates
1) The Economy in 2066: Prosperity or Peril?
Fifty years from now we can expect to see tremendous progress in the material well-being of people from all income levels. But a world of widespread prosperity is not a sure thing: Although unlikely, taxation, regulation, cronyism, and/or public hostility to wealth creation could greatly undermine or even eviscerate the ability and willingness of businesses to deliver life-enhancing innovations to the marketplace. This message of cautious optimism is a major theme of the new Independent Institute book, Future: Economic Peril or Prosperity?, edited by economists Robert M. Whaples, Christopher J. Coyne, and Michael C. Munger.
According to the books 19 contributors, the economy of 2066 will featuring amazing delights: World poverty will likely be only one-half of todays level, thanks to economic freedom in the developing world. Everyday products will be programmed to automatically respond to human needs. Households will be able to sell surplus electricity to the smart grid. And lower energy usage will reduce the human impact on the environment. But the future is never predetermined, and numerous obstacles are easy to imagine.
Increases in U.S. government spending, for example, may divert scarce capital away from productive use in the private sector. The regulatory state, driven by power-mad bureaucrats and well-connected special interests, may extend its reach even deeper into the economy, harming opportunity and prosperity. And unprecedented levels of wealth may bring greater complacency, with fewer people willing to work to secure the economic liberties, personal freedoms, and equal rights that helped create a world of prosperity. The future looks bright, but only if we avoid making major mistakes, according to Whaples: And we all have a say in the matterindividually and in the policies enacted by those we elect.
Future: Economic Peril or Prosperity?, edited by Robert M. Whaples, Christopher J. Coyne, and Michael C. Munger
Detailed book summary
2) National Park Service Turns 100
On Thursday the National Park Service celebrated its 100th anniversary. Unfortunately, its mismanagement and misguided pursuit of political objectives make the agency more deserving of scorn than praise. “The Park Service has a history of making politically expedient but environmentally and recreational harmful policy choices,” writes Independent Institute Research Fellow Ryan M. Yonk, co-author of Nature Unbound: Bureaucracy vs. the Environment.
The agency’s backlog of deferred maintenancepartly the result of pushback from Congresstotals nearly $12 billion. But even if Congress were to open the money spigot, much of the funds would be wasted. The Park Service has many costly, high-priority needs, such as upgrading its poor roadways, fixing its dilapidated sewage and water systems, and improving campgrounds and trails. Too often, however, it succumbs to special interests.
One example is its program for controlling elk herds in Yellowstone. While the agency used to recognize that culling the elk population was necessary to protect vegetation, it stopped its culling efforts and instead adopted a policy favored by many environmentalistsso-called “natural regulation,” that is, relying on nature to “do the right thing.” The result was a disaster for biodiversity, as plant populations fell easy prey to the voracious elk. “Like budgeting by crisis,” Yonk writes, “this political management has dreadful consequences for those who care about our national parks.”
Leave Politics Outside of National Parks, by Ryan M. Yonk (The Daily Caller, 8/25/16)
Nature Unbound: Bureaucracy vs. the Environment, by Randy T Simmons, Ryan M. Yonk, and Kenneth J. Sim
Video lecture: Nature Unbound: Bureaucracy vs. the Environment, featuring Ryan M. Yonk
3) Free Speech under Fire
On January 20, 2017the next Inauguration Daythe forty-fifth president of the United States is scheduled to take an oath to preserve, protect and defend the Constitution of the United States. Hillary Clinton, however, still embittered by the Supreme Courts 2010 Citizens United decision, has promised that, if elected president, she will seek to amend the Constitution, effectively gutting First Amendment protections for corporations, unions, and other groups engaged in political speech.
Free speech is supposed to help strengthen democratic self-rule by ensuring that issues are freely and vigorously debated in the court of public opinion. Allowing this to change, as Clinton proposes, would give one entitythe governmentthe power to decide the truth for the rest of us, writes Independent Institute Research Fellow Donald A. Downs.
Todays attack on free speech isnt limited to the presidential hopeful who was on the receiving end of critical videos made by Citizens United. Several state attorneys general are seeking to sue groups that deem to question climate-change alarmism. Ironically, they, like Clinton, profess to be defenders of the little guy. But suppose political efforts to silence dissent were the legal norm before the civil rights era. What would Rev. Martin Luther King, Jr., have done? Todays free-speech haters imagine only a world in which their foes are silenced. Amazingly, they havent addressed what would happen if the shoe were on the other foot.
Hillarys Vow Shows She Has No Understanding of the First Amendment, by Donald A. Downs (The Sacramento Bee, 8/25/16)
Restoring Free Speech and Liberty on Campus, by Donald A. Downs
4) In Defense of Payday Loans
Payday loans are hardly the cheapest tool for short-term financing. But for many of their customers, they are the only game in town. The attack on payday loansfrom the likes of the ultra-rich Google to the lawyer-led Consumer Financial Protection Bureauis therefore deeply misguided, according to Independent Institute Research Fellow Abigail R. Hall Blanco.
A payday loan of $100 may cost $15 in interest over a two-week period. The rate seems astronomical, but so too is the risk of default. A third of payday borrowers defaulted within six months of taking out the loans, Hall Blanco writes. Nearly half46 percentdefaulted within two years.
The annual percentage rate on a loan like the one described above works out to almost 400 percent, but comparing that rate with, say, a 3.5 percent, 30-year, fixed home loan is like comparing apples to oranges: The pay period for most payday loans is two weeks. Capping interest rates on payday loans would drive borrowers to pricier options like online peer-to-peer lenders or loan sharks. Thus, taking the payday-lender option away harms only the most vulnerable people, who will have no choice but to turn to far less attractive alternatives, concludes Hall Blanco.
What If You Needed a Loan, Like Now?, by Abigail R. Hall Blanco (Foundation for Economic Education, 8/11/16)
5) Independent Updates
The Beacon: New Blog Posts
MyGovCost: New Blog Posts