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The Lighthouse


The Lighthouse is the weekly email newsletter of the Independent Institute.
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Volume 19, Issue 39: September 26, 2017

  1. Graham-Cassidy and the Future of Healthcare Reform
  2. The Public Pension Fiasco Continues
  3. Military Fake News Network—or Lost in Space?
  4. Reagan, the Pope, and a Lesson for Eternity
  5. Independent Updates


1) Graham-Cassidy and the Future of Healthcare Reform

The prognosis for Graham-Cassidy, the latest “repeal and replace Obamacare” health-reform bill, to secure 50 votes in the Senate by the September 30 deadline looks negative (a tie in Congress’s upper chamber would give Vice President Mike Pence the deciding vote), despite a few tweaks made to the legislation Sunday night to potentially win the necessary support. However, regardless of the fate of Graham-Cassidy, with its focus on cutting regulations and block-granting Obamacare dollars to the states, it’s crucial that health reform give the states greater flexibility, argues Independent Institute Senior Fellow John C. Goodman, in a recent column on the benefits of Graham-Cassidy in Forbes.

Insurers under state-centric healthcare reform, whether Graham-Cassidy or something to emerge in the future, would be granted the flexibility to offer coverage that is: affordable for the nearly 30 million still uninsured; truly universal; tailored to low-and moderate-income families; equitable; portable; private-sector-based; and fair (states will, for example, be able to prevent people who shift costs onto others by staying uninsured until they get sick).

States under such legislation would be able to provide their citizens access to personalized care (such as $50 per month for direct-pay concierge care); specialized coverage for specific diseases; and a real healthcare insurance marketplace that protects patients—not insurers, as Obamacare’s risk adjustment does. “This is one reason for the race to the bottom—as plans try to attract the healthy and avoid the sick,” Goodman writes. In contrast, under a state-centric healthcare system, the states would be able to create risk-adjustment mechanisms such as health-status insurance, to protect patients in the event that their health status changes before they move to a new health plan.

Ten Reasons Why Every State Should Welcome the Graham/Cassidy/Heller/Johnson Health Reform Bill, by John C. Goodman (Forbes, 9/18/17)

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

Priceless: Curing the Healthcare Crisis, by John C. Goodman

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2) The Public Pension Fiasco Continues

The University of California may be the world’s leading public institution of higher education—especially for pension payouts to retired employees. “Last year, more than 5,400 UC retirees received pensions over $100,000,” the Los Angeles Times reported on Sunday. “Nearly three dozen received pensions in excess of $300,000 last year, four times as many as in 2012.” It’s a phenomenon deserving insightful analysis, which is why the Times quoted Independent Institute Senior Fellow Lawrence J. McQuillan, author ofCalifornia Dreaming: Lessons on How to Resolve America’s Public Pension Crisis.

“I think this year’s higher tuition is just the beginning of bailouts by students and their parents,” McQuillan told the Times. “The students had nothing to do with creating this, but they are going to be the piggy bank to solve the problem in the long term.”

As bad as this sounds, it’s only part of a larger problem of unfunded public-pension liabilities that will strain public services across California and other states. Fortunately, there is a solution—if policymakers would only enact it. As McQuillan has long explained, the coming public-pension hurricane could be weakened from a Category 5 catastrophe into something more manageable if pension systems were converted from defined-benefit plans into defined-contribution plans. Writing in The Beacon a while back, McQuillan stated, “Switching to 401(k)s going forward is a better approach to retirement security that will help spare our children and grandchildren from being crushed by future pension costs.”

UC Is Handing Out Generous Pensions, and Students Are Paying the Price with Higher Tuition, by Jack Dolan (Los Angeles Times, 9/24/17)

Gold Plated UC Pensions Punish Parents, Students, by K. Lloyd Billingsley (MyGovCost News & Blog, 9/25/17)

California Dreaming: Lessons on How to Resolve America’s Public Pension Crisis, by Lawrence J. McQuillan)

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3) Military Fake News Network—or Lost in Space?

Next month marks not only the 100th anniversary of Russia’s October Revolution, but also the sixtieth birthday of Sputnik, the Soviet Union’s early submission to the U.S.-Soviet space race. Coincidentally, in the coming weeks Congress will decide whether or not the United States will add a new space corps to the nation’s armed forces.

More precisely, Congress will decide whether to fund a new space corps or a new office of information warfare. As Independent Institute Research Fellow Craig Eyermann notes in MyGovCost News & Blog, the House of Representatives last July passed a defense budget that includes space corps, whereas the Senate has passed a defense budget featuring a new cyber-information bureaucracy.

“Traditionally, the U.S. Congress would act to spend even more and do both things,” Eyermann writes, “but with limited resources and political support, lawmakers may have to choose one or the other in the FY2018 defense budget bill.” Unfortunately, members of Congress are more likely to decide the matter based on local political pressures—that is, which alternative would benefit local voters the most? In other words, a cynic may say, it comes down to a few special interests deciding whether Congress will fund a remake of Lost in Space or a military-run Fake News Network. In reality, neither alternative is right for prime time.

Does America Need a “Space Corps”?, by Craig Eyermann (MyGovCost News & Blog, 9/25/17)

Video: Love Gov: From First Date to Mandate

The Independent Review: A Journal of Political Economy (Fall 2017)

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4) Reagan, the Pope, and a Lesson for Eternity

Ronald Reagan and Pope John Paul II worked in different professions but were cut from similar cloth. Both men were anticommunists who spoke truth to (Soviet) power on the world stage; both survived an assassin’s bullet in the spring of 1981. Their deep friendship is the subject of A Pope and a President, by Paul Kengor, reviewed by Independent Institute Research Fellow Robert M. Whaples, editor of a book about the views of the current pontiff, Pope Francis and the Caring Society.

Kengor’s book underscores the religious inspiration behind each man’s crusade against Soviet communism, notes Whaples, who sheds light on the American left’s ambivalence about that evil. As he points out, Jon Elster, an economist in the analytical Marxist camp, recently explained his former stance: “The reason for my misperception of the evidence (of the evils of Soviet communism) was not an idealistic belief that Communism was a worthy ideal that had been betrayed by actual Communists.” Instead it was what Elster called “the hysterical character” of those who pronounced communism as evil. They’re zealous, therefore their claims can only be gross exaggerations.

The messenger, Whaples notes, can be as important as the message. To many, this venerable maxim counsels only moderation in tone. To the independent thinker, however, it cautions something more difficult to achieve—modesty in one’s judgement of one’s self. In other words, don’t be blind to the truth that you mistake for hysteria. This lesson applies across the board, regardless of one’s politics or creed.

Robert M. Whaples reviews A Pope and a President: John Paul II, Ronald Reagan, and the Extraordinary Untold Story of the Twentieth Century, by Paul Kengor (The Independent Review, Fall 2017)

Pope Francis and the Caring Society, edited by Robert M. Whaples

The Independent Review: A Journal of Political Economy (Fall 2017)

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5) Independent Updates

The Beacon: New Blog Posts

MyGovCost: New Blog Posts

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