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The Lighthouse

The Lighthouse is the weekly email newsletter of the Independent Institute.
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Volume 20, Issue 29: July 17, 2018

  1. U.S. Allies Need Tough Love
  2. Supreme Court Partisanship and the Tenth Amendment
  3. Obamacare Coverage Is Getting Worse
  4. Rent Control: Grand Theft Housing
  5. Help Wanted: A Pro-Freedom Visionary Who Gets Things Done
  6. The Beacon: New Blog Posts


1) U.S. Allies Need Tough Love

Judging by public reactions to his recent meetings in Europe, President Trump hasn’t lost his touch for making news. Too often, however, his controversial form obscures the substance. If the issues were not clouded by other matters, the following prescription, from Independent Institute Senior Fellow Ivan Eland in an op-ed for the Washington Times, would be more apparent: “Europeans need to do more for their own defense, and the United States likely needs to have a better relationship with Russia.”

The NATO alliance, which was created to thwart the Soviet Union but which expanded to Russia’s doorstep after the end of the Cold War, merits serious rethinking, according to Eland. Russian paranoia about its Western borders—the nation has been invaded countless times—helps explain its annexation of Crimea and occupation of eastern Ukraine, and perhaps was decisive in Putin’s meddling in the 2016 presidential election.

“Russia should have been punished more severely for meddling in the U.S. election—and still can be to deter it from doing so in the future,” Eland writes, “but in the long term the United States needs to find a way to better relations with Russia as a counterweight to a rising China, which should be more concerning to the U.S. government. Russia does have a conniving autocrat for a leader, but we must learn to deal with him.”

Tough Love for the Allies, by Ivan Eland (The Washington Times, 7/13/18)

Eleven Presidents: Promises vs. Results in Achieving Limited Government, by Ivan Eland

Recarving Rushmore: Ranking the Presidents on Peace, Prosperity, and Liberty, by Ivan Eland

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2) Supreme Court Partisanship and the Tenth Amendment

President Trump’s nomination of federal appellate judge Brett M. Kavanaugh for the U.S. Supreme Court, to fill the vacancy created by Justice Anthony Kennedy’s pending departure, has elicited a loud but predictable reaction along partisan lines. Such acrimony, which has plagued almost every pick to the High Court since the derailed nomination of Judge Robert Bork more than 30 years ago, would have been unimaginable to Alexander Hamilton, who viewed the third branch of the federal government as “the least dangerous” to “the general liberty of the people.”

“Unfortunately, the modern Supreme Court looks nothing like the picture Hamilton painted,” writes Independent Institute Research Fellow William J. Watkins Jr., author of Crossroads for Liberty. “In our post-constitutional order, it is the ‘Big Show’ where the most important policy decisions are made for the country.”

Founders such as Hamilton viewed the Court as relatively weak and uncontroversial in part because of how they understood the Tenth Amendment, which stipulates that “the powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.” The atrophy of this crown of the Bill of Rights has ensured that the federal judiciary would grow increasingly politicized. It’s also resulted in a nation increasingly beholden to nine lawyers accountable to no one. For this reason, all is not right with the republic. The American experiment, which once consisted of distinct “policy laboratories” in more-or-less sovereign states is but a shadow of its former self. Today it’s living on life support.

The Supreme Court Should Be More Than the ‘Big Show’, by William Watkins, Jr. (The Hill, 7/9/18)

Shifting the Roe Burden Back to Schumer, by William J. Watkins, Jr. (American Thinker, 7/15/18)

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

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3) Obamacare Coverage Is Getting Worse

Obamacare’s individual mandate is on the way out, but America’s healthcare system is still plagued with serious problems, many caused by Obamacare’s restrictions on health insurers. For example, patients with plans obtained through a state Obamacare exchange increasingly have trouble getting access to the best hospitals in their area—places such as Houston’s MD Anderson Cancer Center, the Mayo Clinic’s campus in Minneapolis, and Memorial Sloan Kettering in New York. And leading insurers such as Aetna, Humana, and UnitedHealth Group are bailing from the exchanges, leaving insurers such as Centene Corporation, which offers Medicaid-level coverage in the exchanges, to pick up the slack.

“What’s driving this race to the bottom? The problem starts with the community-rating system, which requires insurers to charge the same premium to all comers regardless of health status,” writes Independent Institute Senior Fellow John C. Goodman in an op-ed for the Wall Street Journal. Community rating creates perverse incentives for insurers to “seek healthy buyers and avoid sick ones.”

Obamacare’s designers anticipated such problems, but their solution, federally funded risk-adjustment payments to compensate insurers for carrying extra-costly sick patients, can fall horrendously short. And when insurers are undercompensated, they pass on the extra cost via premium hikes. Meanwhile, millions of healthy people choose to remain uninsured and game the system, obtaining a subsidized Obamacare plan only after they fall ill. For these reasons and others, Congress should reexamine the wisdom of the remaining pillars of Obamacare.

Obamacare Can Be Worse than Medicaid, by John C. Goodman (The Wall Street Journal, 6/26/18)

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

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4) Rent Control: Grand Theft Housing

When it comes to rent control, local governments can be the people’s worst enemy. That’s because mandating below-market rents chokes off the supply of new and existing housing, spurs the deterioration of housing quality, pits current renters against would-be renters, and drives a deep wedge between landlords and tenants. (For details, see Michael Keaton’s electrifying performance as the San Francisco tenant from hell in the 1990 psychological thriller Pacific Heights.) For this reason, the California legislature was acting with good sense when it passed a bill in 1994 restricting local governments from passing new rent controls—a law that voters could overturn this fall.

“The Affordable Housing Act ballot initiative on the November ballot would move rent control decisions back to local governments,” writes Independent Institute Research Fellow Gary M. Galles, in an op-ed for the Orange County Register. “That raises the question of whether rent control policy should be vested at the state or local level.”

Galles makes the case that it’s hard to vote with one’s feet after local government has made the housing supply artificially scarce in its own communities through rent control, and artificially expensive in neighboring communities through spillover demand. “That is why state determination of rent control policy may protect citizens’ right better than local determination,” Galles continues. “Just as state prohibition of grand theft, auto, regardless of the municipality it is committed in, better protects California residents, so does state prohibition of grand theft, housing, which rent control represents.”

Grand Theft, Housing, and Owners Who Can’t Vote with Their Feet, by Gary M. Galles (The Orange County Register, 5/28/18)

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

Video: Love Gov, Episode 4: House Poor

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5) Help Wanted: A Pro-Freedom Visionary Who Gets Things Done

The Independent Institute is growing and has a new job opening to fill: Executive Director. The right candidate will set the strategic direction, manage the organization, expand our donor base, and communicate with diverse audiences, all to advance our unique mission: to boldly advance peaceful, prosperous, and free societies grounded in a commitment to human worth and dignity.

Independent is also seeking a Publications Production Manager.

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6) The Beacon: New Blog Posts

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