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The Lighthouse


The Lighthouse is the weekly email newsletter of the Independent Institute.
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Volume 19, Issue 24: June 13, 2017

  1. ‘Educrats’ Are Blind to Evidence on Education
  2. Three GOP Universes of Healthcare Reform
  3. Coercion Is Not Compassion: Pope Francis and the Caring Society
  4. Regulatory Inertia Harms Business and Technology Innovators
  5. Independent Updates


1) ‘Educrats’ Are Blind to Evidence on Education

The White House is proposing to cut $9.2 billion from the U.S. Department of Education’s $68.3 billion budget. Predictably, leaders of the education establishment are up in arms, calling the spending cuts a “wrecking ball” and “an assault on the American Dream.” The hysteria is unwarranted. As Independent Institute Research Fellows Williamson M. Evers and Vicki E. Alger explain in a new Los Angeles Times op-ed, “two-thirds of that reduction comes from eliminating programs that are duplicative or just don’t work.”

Here is just some of the evidence. The GEAR UP and TRIO programs, which would face a 10 percent cut, are supposed to help at-risk youth get through college. The data is not encouraging, however. Studies of their programs find “no detectable effects” on student outcomes, according to Evers and Alger. Similarly, the 21st Century Community Learning Centers program, an after-school enrichment project that began under President Clinton in 1994, doesn’t work. Total cost: $18 billion. Nor does the School Improvement Grant program, begun in 2001 under President Bush, show a significant impact. Total cost: $7 billion.

These negative assessments come not from groups that propose to get the feds out of education. Rather, they come from studies by evaluators chosen by the Department of Education itself. For leaders of the National School Board Association and the National Education Association, however, education funding should have little to do with evidence-based analysis.

Trump’s Education Cuts Aren’t ‘Devastating,’ They’re Smart, by Williamson M. Evers and Vicki E. Alger (The Los Angeles Times, 6/12/17)

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

VIDEO: Parental Choice in Education, featuring Vicki E. Alger (10/1/16)

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2) Three GOP Universes of Healthcare Reform

The House Republicans’ health-reform legislation would cost 24 million people their insurance coverage, according to the non-partisan Congressional Budget Office. The estimate probably isn’t 100 percent accurate—a lot can happen in ten years!—but no decent health economist would call it unreasonable, according to Independent Institute Senior Fellow John C. Goodman. What’s truly unreasonable, he argues in a new piece at Forbes, is the GOP’s failure to offer a plan that avoided such a negative assessment. Had the Republicans conducted hearings on how best to replace Obamacare in the 7 years since it was signed into law, they might have offered a healthcare plan that benefits many without harming any.

The Republicans’ failure is the result of their living in three different universes—where no one talks to inhabitants of the others. The first group is what Goodman calls the “Cafeteria Reformers.” Like buffet patrons who are too hungry to assemble a balanced meal, they pick and choose their favorites without regard to the long-term consequences. A Cafeteria Reformer might, for example, advocate lifting Obamacare’s individual mandate while still keeping its pre-existing conditions provisions intact, even though these logically entail measures to prevent consumers from gaming the system.

The second universe consists of “Luddite Reformers”—so named because they are obsessed with returning to the pre-Obamacare status quo or favor only solutions that draw from the past, such as tax credits within a managed-competition model—what some would call “Obamacare lite.” The third universe, one inhabited by only a few in Congress, is that of the “Visionary Reformers.” They can rightly be called visionary because they project an ideal healthcare system and attempt to figure out the steps needed to get there. To achieve a level playing field for individual self-insurance and third-party coverage, for example, they propose a tax credit coupled with a Roth savings account. They propose health-status insurance so that providers specializing in cancer, heart disease, and diabetes would compete on price and quality of care. And they propose to allow employers and employees to buy individually owned coverage that is portable. Remarkably, such common-sense innovations are beyond the conceptual universe of the Cafeteria Reformers and Luddites. “If Republicans are not careful, they won’t be in the Senate plan either,” Goodman concludes.

How Republicans Think About Health Care: Three Parallel Universes, by John C. Goodman (Forbes, 6/5/17)

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) Coercion Is Not Compassion: Pope Francis and the Caring Society

Pope Francis’s 18-minute videotaped TED Talk has reached 2,352,303 viewers as of this writing. The pontiff’s message—on the centrality of community to human flourishing, the urgency of helping those in need, and the added responsibilities of those who possess extra capacity to do good works—is one that resonates with far more than the 1.3 billion people who call themselves Catholics. This message, however, is at odds with many government policies that the pope advocates, according to Independent Institute Senior Fellow Lawrence J. McQuillan, in an op-ed for InsideSource.com.

“The government-coerced-redistribution model favored by Francis has left a trail of tears and destruction everywhere it has been pursued,” McQuillan writes. “Foreign aid, often government-to-government transfers, generally props up dictatorial and kleptocratic governments that murder and steal from their own people.”

To align intent and action, Pope Francis would do well to advocate an alternative approach—one based on voluntary association, commerce, and civil society. “The most effective path to lifting people from poverty by the millions is decentralized market-based entrepreneurship,” McQuillan writes. “Recent progress in China and India, where hundreds of millions of people have escaped some of the worst poverty on earth, was a result of expanding economic freedom.” Wealth creators—not coercive wealth redistributors—are society’s great benefactors. As McQuillan puts it, “Entrepreneurs are true Good Samaritans.”

The Two Sides of Pope Francis, by Lawrence J. McQuillan (InsideSources.com, 6/5/17)

Forthcoming: Pope Francis and the Caring Society, edited by Robert M. Whaples, foreword by Michael Novak (Publication Date: 9/1/17 )

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4) Regulatory Inertia Harms Business and Technology Innovators

Run by a businessman who famously promised to overthrow a lethargic, anti-business status quo, the Trump administration promised to be friendly to the American worker. It can’t make good on this promise, however, until it adds enough of the right people to the understaffed Federal Trade Commission, according to Independent Institute Research Director William F. Shughart II.

The White House’s failure to carry through—it has yet to fill three of the agency’s five Commissioner positions—“has allowed President Obama’s anti-business legacy to continue unchecked, leaving pending lawsuits and proposed business mergers in limbo,” Shughart writes in a piece for Real Clear Markets.

Case in point: Under the Obama administration, the Federal Trade Commission brought a lawsuit against Qualcomm due to a microchip patent dispute with Apple. Businesses such as Qualcomm can’t move forward while rivals or the agency hinder the company’s operation with lawsuits based on what the agency’s Acting Chairperson called “a flawed legal theory.” The case would have been scrapped by now, had the agency vacancies been filled. “No matter what you think about its performance, nowadays or in the past, [the Federal Trade Commission] cannot do much of anything until its three vacant seats are filled,” Shughart concludes.

Gridlock at the FTC Prolongs Washington’s Regulatory Status Quo, by William F. Shughart II (Real Clear Markets, 5/11/17)

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

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5) Independent Updates

The Beacon: New Blog Posts

MyGovCost: New Blog Posts
Featured Video
News Alert

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