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The Lighthouse


The Lighthouse is the weekly email newsletter of the Independent Institute.
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Volume 20, Issue 4: January 23, 2018

  1. Pope Francis Needs Liberty for a More Caring Society
  2. The CONs of the Non-Profit Hospital Hustle
  3. Job Cuts Follow Minimum Wage Hikes Like Night Follows Day
  4. Zimbabwe’s New Boss—Same as the Old Boss
  5. Job Opportunity: Publications Project Manager
  6. Independent Updates


1) Pope Francis Needs Liberty for a More Caring Society

Few would deny that Pope Francis, who comforted Peruvians in the storm-ravaged coastal town of Trujillo on Saturday, is rich in compassion. The consensus breaks down, however, on whether or not the pontiff knows how best to foster economic security and a more caring society. That’s because, as Independent Institute Senior Fellow Lawrence J. McQuillan and Policy Researcher Hayeon Carol Park explain, Pope Francis emphasizes government redistribution instead of the proven path: private enterprise and voluntary charity.

“Government redistribution—whether through domestic welfare programs, foreign aid, or other means—is neither ‘giving’ nor ‘charity’ in the strict sense of these words,” McQuillan and Park write. “Government redistribution, in fact, is the opposite, requiring government to first take somebody else’s money, either through taxes or borrowing (future taxes).” Rather than promoting social harmony, coercive redistributionism pits one group against one another.

Moreover, wealth must first be created before it can be used to lend a helping hand. Here too, the pope’s criticism of the marketplace is antithetical to the cause of fostering a more prosperous society. “Capitalism is the greatest wealth creator the world has seen, lifting billions of people out of abject poverty over the past two decades alone,” McQuillan and Park continue. “Pope Francis should channel his fervor into unleashing capitalism worldwide to boost effective voluntary giving.”

Was Martin Luther King, Jr. an Economic Illiterate? Is Pope Francis?, by Lawrence J. McQuillan and Hayeon Carol Park (The Daily Caller, 1/16/18)

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

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2) The CONs of the Non-Profit Hospital Hustle

Non-profit hospitals were founded by religious groups or charity-minded individuals to serve the less well-off. Unfortunately, some of them now exploit their tax-exempt status to reap the rewards of serving high-margin clientele at the expense of serving the people they were created to help.

Independent Institute Policy Fellow K. Lloyd Billingsley highlights a recent investigation by Axios, which uncovered non-profit hospitals that focused their energies on cash-cows such as pro-sports teams, devoting few resources to low-income populations. The problem appears to have worsened since passage of the Affordable Care Act. One step in the remedy may be to promote greater non-profit transparency in return for tax-exempt status.

Another, according to Billingsley, is to open the market for hospitals to more competition. This includes dropping the regulatory requirement that a hospital first obtain a “certificate of need” before it’s allowed to enter a new region. “That [change] will empower for-profit medical operations to offer better care than under the [current] system,” Billingsley writes. “In 2018, Congress should replace the failed ACA with an open national marketplace that allows patients, not bureaucrats, to make the call on care. That would be a healthier deal for patients and taxpayers alike.”

For Better Healthcare in 2018, End Nonprofit Certificates of Need and Tax Schemes, by K. Lloyd Billingsley (The Daily Caller, 1/10/18)

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

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

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3) Job Cuts Follow Minimum Wage Hikes Like Night Follows Day

Eighteen states across the country increased their minimum wage earlier this month. Predictably, the response by some employers has been to cut jobs. Red Robin, a gourmet burger chain that started in the 1940s, announced job cuts at each of its 570 restaurants.

Company representatives say Red Robin will save $8 million in 2018 by eliminating bussers, just as it saved $10 million in 2017 by eliminating meal expediters. The job cuts might have been avoided, but only if the restaurant had responded to the mandated wage hike by adding a surcharge to customers’ bills or increasing menu prices, responses that also would have had undesirable consequences, explains Independent Institute Research Fellow Abigail Hall Blanco.

“It’s easy to vilify restaurants and other companies when they respond to higher costs with layoffs,” Hall Blanco writes. “But it’s important to place the blame where it belongs. In this case, it’s bad policy—not incompetence, not corporate greed—that’s causing people to lose their jobs.”

Wages of Awful Policy: Minimum Wage Hikes Cause Hundreds of Bus Boys to Lose Jobs at Red Robin, by Abigail Hall Blanco (The Daily Caller, 1/16/18)

The Two Moralities of the Minimum Wage, by Dwight R. Lee (The Independent Review, Summer 2014)

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4) Zimbabwe’s New Boss—Same as the Old Boss

Robert Mugabe ruled Zimbabwe for 37 years before military tanks put an end to his tyrannical career last November. It was a predictable downfall for a dictator who had once shown great promise, at first “preaching conciliation and inclusiveness to the white minority,” but who ultimately imposed Marxist-Leninist ideology and crippled the economy in the process, explains Independent Institute Research Fellow George B. N. Ayittey.

Mugabe’s history of nationalizations, price controls, and hyperinflation of the currency meant investors could never feel confident in the security of their property rights. But it was probably Mugabe’s rigging of elections that put an end to his rule. Unfortunately, Zimbabwe’s new president, Emmerson Mnangawa, isn’t cast too differently from Mugabe himself, having been his right-hand man for decades.

Zimbabwe needs change, but the new boss isn’t it. “Zimbabwe needs a clean break with the past under an interim civilian government—not what Africans would call ‘a coconut military coup’ that installs a crocodile liberator in power,” Ayittey writes. “The new president, scores of military generals and high-ranking members of the ruling party belong in jail, not in government.”

Zimbabwe’s Coconut Coup Installs a Crocodile Liberator, by George B. N. Ayittey (InsideSources, 1/12/18)

Making Poor Nations Rich: Entrepreneurship and the Process of Economic Development, edited by Benjamin Powell

Lessons from the Poor: Triumph of the Entrepreneurial Spirit, edited by Alvaro Vargas Llosa

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5) Job Opportunity: Publications Project Manager

The Independent Institute is currently seeking a Publications Project Manager to provide production and editorial support and manage the detailed aspects of producing publications and marketing collateral. This is an exciting opportunity for the right candidate to help run the production end of an award-winning book program!

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6) Independent Updates

The Beacon: New Blog Posts

MyGovCost: New Blog Posts

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