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The Lighthouse

The Lighthouse is the weekly email newsletter of the Independent Institute.
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Volume 20, Issue 21: May 22, 2018

  1. How to Replace Obamacare: Block Grants with Input from Dems?
  2. Preschool Teachers and Unintended Consequences
  3. Rent Control Pits Current Tenants against Potential Renters
  4. DNA Evidence IDs a Mass Murderer
  5. Independent Updates


1) How to Replace Obamacare: Block Grants with Input from Dems?

Congressional Republicans made a fatal error last year that helped kill their chances of dismantling Obamacare root and branch: They barred Democrats from giving input into legislation for federal healthcare block grants to the states. This freeze-out enabled many Dems to claim (falsely) that the GOP block-grant proposal amounted to “abandoning the sick.” If Republicans wish to deliver on their multi-year promise to “repeal and replace” Obamacare, they must offer their counterparts across the aisle a seat at the table, argues Independent Institute Senior Fellow John C. Goodman, in a recent op-ed at Forbes.

“Even if [Democrats] decline, Republicans should impose two parameters on any block-grant proposal,” Goodman writes. First, people who enter the individual health-insurance market after paying for many years into group plans should be able to get the kind of coverage that employers offer for a similar premium. Second, states should enable limited-benefit insurance that could potentially cover the 30 million people still without health coverage. Provided these two strings are attached, federal legislation should give the states wide latitude on how to spend the federal block grants on health care.

Also, because the states have an essential role to play in meaningful healthcare reform, it is politically necessary to get political buy-in from enough Democrats to support it. The reason the states are essential for post-Obamacare reform is that the American healthcare system is so complex, so convoluted, that it will take several statewide experiments to determine which block-grant reforms are most effective for various states. Unless the GOP adopts this approach, Obamacare will continue to wreak havoc both in the state exchanges and in the individual market.

How Republicans Can Fix What Democrats Got Wrong on Health Care, by John C. Goodman (Forbes, 4/25/18)

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

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2) Preschool Teachers and Unintended Consequences

Many states mandate that individuals obtain a two-year college degree—or more—in order to be eligible to teach preschool. This requirement sounds eminently sensible, at least on the surface. After all, children are delicate flowers who have specific needs that are neither always obvious nor always easily met, and childcare may have long-lasting consequences, especially if its quality is very poor. But first impressions are not always reliable. Those habituated in the economic way of thinking know it is essential to ask: a two-year degree requirement...compared to what? What are the costs (broadly construed), the alternatives, and their second- and third-order consequences? Analysis posed in this way encourages insights that otherwise might not arise, explains Independent Institute Research Fellow Art Carden.

“For a lot of people, the relevant substitute for low-quality childcare isn’t high-quality childcare. It’s no childcare—and therefore, most likely, no job—at all,” Carden writes at Forbes. “It’s by no means clear that a kid who would have been in a low-quality daycare would be safer or better cared for, on net, by his or her (unlicensed!) parent in his or her (unregulated!) home.” Trade-offs are always and everywhere present when human beings make choices—and regulations for teaching pre-school are no exception.

Social scientists and philosophers may never have formalized what some call the “law of unintended consequences,” but in 1759 Adam Smith expressed it well. The proponent of active government interference in an otherwise unfettered social order of natural liberty—what Smith called the “man of system”—“seems to imagine that he can arrange the different members of a great society with as much ease as the hand arranges the different pieces upon a chess-board,” Smith wrote. “He does not consider that...in the great chess-board of human society, every single piece has a principle of motion of its own, altogether different from that which the legislature might chuse [sic] to impress upon it.” More than two and a half centuries ago, Smith articulated a timeless principle that doesn’t require a college degree to understand, but ignoring it is still one of the most common and most socially destructive of all mental vices.

Do Daycare Workers Need College Degrees? Adam Smith Probably Wouldn’t Think So, by Art Carden (Forbes, 4/30/18)

Love Gov, Episode 2: Protection from Jobs

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3) Rent Control Pits Current Tenants against Potential Renters

Los Angeles Mayor Eric Garcetti would like to expand rent control in California. Doubtless he has many supporters among current renters. Nevertheless, rent control is actually detrimental to the interests of most renters, as Independent Institute Research Fellow Gary M. Galles explains in an op-ed published in the Orange County Register, and Los Angeles Daily News, and other SoCal news outlets.

Most “renters,” it should be noted, are not current renters but potential renters. “As a result, it is truer to say rent control harms renters than to say it helps them,” Galles writes. Rent control cuts incentives for new construction, it undermines maintenance of the existing rental housing stock, and promotes evasive efforts such as the conversion of rental housing to non-housing uses. Rent control is famous for creating housing shortages. It also robs value from property owners.

“A decade ago, such loses were estimated at $120 million annually under Santa Monica’s strict rent control laws,” Galles writes. “Those tripped property values are given to current tenants, whose bonanzas are shown by the fact that those under such controls almost never leave.”

Reaming Owners and Other Renters with Rent Control, by Gary M. Galles (The Orange County Register, 5/3/18)

Housing America: Building Out of a Crisis, edited by Randall G. Holcombe and Benjamin Powell

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4) DNA Evidence IDs a Mass Murderer

Last month, Sacramento police arrested a suspect believed to be the East Area Rapist, a criminal responsible for 12 murders and more than 40 rapes. Genetic evidence was indispensable to identifying the perpetrator, thanks to the open source database at GEDmatch.com. Critics are skeptical or even disdainful of the use of DNA samples in law enforcement, but their suspicions are totally unwarranted, argues Independent Institute Policy Fellow K. Lloyd Billingsley.

“DNA is a matter of science, not conjecture,” Billingsley writes in his latest column for the Daily Caller. “DNA does not lie or change its story. DNA suffers no sudden loss of memory, and has no need to plead the Fifth Amendment.”

Genetic material is not merely a tool for state prosecutors. It’s also a tool for defending the accused when it provides exculpatory evidence. Yet somehow it suffers under a stigma. To the extent that DNA evidence in law enforcement poses legitimate risks—by falling into unauthorized hands and fostering identity theft, for example—such outcomes must be taken seriously and protected against. But this possibility hardly makes the case for banishing from the courtroom what in most contexts is a boon to the cause of justice.

Genetic Evidence Just Identified a Brutal Killer-Rapist, but Privacy Alarmists Want It Barred from Courtrooms, by K. Lloyd Billingsley (The Daily Caller, 5/11/18)

The Pursuit of Justice: Law and Economics of Legal Institutions, edited by Edward J. López

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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