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The Lighthouse

The Lighthouse is the weekly email newsletter of the Independent Institute.
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Volume 20, Issue 24: June 12, 2018

  1. Trade Wars Put Prosperity in the Cross Hairs
  2. Teachers Unions Have Lost Support—Including from Teachers
  3. Supreme Court Provides Religious Liberty, but Not Clear Guidelines
  4. Farm Bill Likely to Continue Pricey Subsidies to Agricultural Giants
  5. The Beacon: New Blog Posts


1) Trade Wars Put Prosperity in the Cross Hairs

Near the end of last week’s G-7 Summit, President Trump, a long-time opponent of trade agreements who believes trade deficits are a sign of national victimhood, did the unexpected: He told his counterparts that the group should consider scrapping all import tariffs and export subsidies. His remark seems akin to when President Reagan proposed that the United States and the Soviet Union scrap all their nuclear weapons—a quip that expressed a far-off aspiration more than a meaningful near-term target to begin working toward. The reality is that Trump’s tariff hikes on aluminum and steel imports, which went into full effect on June 1, have prompted even so close a trading partner as Canada to announce retaliatory tariffs on U.S. goods. Whatever his latest rhetoric, Trump has thus helped show that—just as economists feared—the idiocy of trade protectionism is contagious.

What’s a trading partner faced with hostile tariff hikes to do? Writing in Forbes, Independent Institute Research Fellow Art Carden offers this advice: “The right response for Canada, Mexico, and the European Union to American tariffs would not be to retaliate with tariffs on American goods, but to look for ways to make it less beneficial for firms to seek tariffs in the first place.”

In other words, policymakers in Ottawa, Mexico City, and Brussels would do better for Canadians, Mexicans, and Europeans by figuring out how best to raise the costs or reduce the potential benefits to special interests who lobby for trade restrictions. The same advice also goes for U.S. policymakers wishing to genuinely serve the American people: Don’t fight in a trade war, because an eye for an eye makes both parties blind (or, in this case, poorer). “Every dollar of additional income to a tariff-protected firm is a dollar that comes out of American consumers’ pockets,” Carden concludes.

The Right Response to Trump’s Tough Trade Talk? Ignore It, by Art Carden (Forbes, 5/31/18)

Tariffs Are Bad Policy, by Darren Hudson and Benjamin Powell (The Hill, 4/24/18)

Book review: Edward Tower on The Fair Trade Scandal: Marketing Poverty to Benefit the Rich, by Ndongo S. Sylla (The Independent Review, Winter 2016)

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2) Teachers Unions Have Lost Support—Including from Teachers

The National Education Association is bracing for disaster. If the Supreme Court rules, in the much-anticipated Janus case, against public-employee unions charging “agency fees” to non-members, then the NEA will be prepared with a $50 million smaller budget, a reflection of the potential loss of dues from more than 300,000 teachers. It’s a prudent move after years of taking the support of teachers for granted, according to Independent Institute Research Fellow Vicki E. Alger.

Recent polls show that teachers unions have lost support from the rank and file. “Contrary to the collectivist mythos dominating union policies and practice, teachers are not a monolithic voting bloc,” Alger writes in the Washington Times. “They don’t need or want grand pooh-bahs telling them how to vote.”

In some cases, teachers feel betrayed that unions negotiating on their behalf have sought concessions that go beyond matters of teacher compensation but deal also with political issues. Many parents have also pulled back support from teachers unions. “So come November,” Alger writes, “parents, teachers, and taxpayers in Arizona and other states will certainly remember [the recent wave of teacher strikes], but likely not the way strike organizers or union bosses presume they will.”

The Teachers Unions’ Big Miscalculation, by Vicki E. Alger (Washington Examiner, 6/7/18)

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

Video: Failure: The Federal Misedukation of America’s Children, featuring Vicki E. Alger (8/30/16)

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3) Supreme Court Provides Religious Liberty, but Not Clear Guidelines

Last week the U.S. Supreme Court ruled in favor of a Colorado baker who cited religious objections for refusing to accommodate a gay couple who wanted to order a same-sex wedding cake. Citing hostile remarks by members of the Colorado Civil Rights Commission, the Court found that the baker had been a victim of anti-religious discrimination. On the one hand, the Court’s decision in favor of the baker was a victory for religious liberty; on the other hand, it avoided issuing clear guidelines for dealing with future potential conflicts between the First Amendment and public-accommodation statutes.

“With this opinion, we do not know if the artistic expression of a specialty baker is grounds for refusing to provide services under the First Amendment,” writes Independent Institute Research Fellow William Watkins in a post at The Beacon. It’s therefore anyone’s guess what the Supreme Court would do in similar cases that lacked the anti-religious hostility expressed by the Colorado commissioners.

“It seems the Court is aware of the rock-and-a-hard-place situation its recent sexuality and marriage jurisprudence has placed on orthodox Christians,” Watkins continues. “There seems to be a desire to throw them a constitutional lifeline, but there’s also evidence of alligator arms fearing to push back too much against the prevailing spirit of the age.” Only a legal challenge roughly similar to the Masterpiece Cakeshop case would tell us with certainty whether or not the Supreme Court is trying to have its biblically compliant cake and eat it too.

Religious Liberty Wins at SCOTUS...Sort Of, by William J. Watkins Jr (The Beacon, 6/4/18)

Crossroads for Liberty: Recovering the Anti-Federalist Values of America’s First Constitution, by William J. Watkins Jr.

Book review: Luke C. Sheahan on The Soul of the First Amendment, by Floyd Abrams (The Independent Review, Spring 2018)

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4) Farm Bill Likely to Continue Pricey Subsidies to Agricultural Giants

Farm subsidies—one of the K Street lobbyists’ most lucrative crops—cost Americans about $20 billion annually. As always, the biggest pigs dominate the public trough: Since 1995, almost three-fourths of all farm subsidies have accrued to the wealthiest decile of recipients. Despite attempts by some members of Congress to impose spending caps, the forthcoming new farm bill may well preserve the status quo, according to Independent Institute Senior Fellow Randy T Simmons.

“The current bill also allows subsidies to go not just to the actual farmers of corporate-size family farms, but also to nieces and nephews who have nothing to do with the farm,” Simmons writes in The Hill.

The new legislation, as with previous farm bills, also comes with a populist provision—funding for food stamps under the Supplemental Nutrition Assistance Program. “SNAP payments are unlikely to be any more restrictive than they are currently,” Simmons writes. “But lawmakers will be able to show their constituents they care and can deliver.”

Congress Is Facing Yet Another Bad Farm Bill, by Randy T Simmons (The Hill, 6/4/18)

Nature Unbound: Bureaucracy vs. the Environment, by Randy T Simmons, Ryan Yonk, and Kenneth J. Sim

Plowshares & Pork Barrels: The Political Economy of Agriculture, by Ernest C. Pasour, Jr. and Randal R. Rucker

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5) The Beacon: New Blog Posts

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