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The Lighthouse is the weekly email newsletter of the Independent Institute.
Subscribe now, or browse Back Issues.

Volume 14, Issue 30: July 24, 2012

  1. Obama vs. Individual Achievement
  2. Pentagon Profligacy and Propaganda
  3. The Failing Drug War
  4. Freedom and the Burden of Proof
  5. New Blog Posts



1) Obama vs. Individual Achievement

“You didn’t get there on your own,” President Obama told successful Americans last week at a speech in Roanoke, Virginia. For this he has received a flood of criticism—and deservedly so. His words seem calculated to justify higher income taxes on the wealthy. If so, his logic is faulty. As Independent Institute Research Fellow John C. Goodman argues in his latest op-ed, it doesn’t follow that if you didn’t earn your wealth, then Uncle Sam is entitled to it.

“If the roll of the dice or the spin of the roulette wheel favors me rather than you, I can’t claim that I ‘deserve’ my winnings or that you ‘deserve’ your losses,” Goodman writes. “But it doesn’t follow from those facts that you are entitled to what I have won.” Blind luck doesn’t justify coercive wealth redistribution.

Moreover, blind luck isn’t the central operating principle of the free market; incomes are not distributed randomly. “For the most part, they are not the result of misfortune or luck,” Goodman continues. An individual’s income tends to reflect the economic value of his or her contribution to the total income generated in the economy. Politicians who wish to lift the poor should therefore focus on removing the educational, social, economic, and regulatory obstacles that hamper their ability to get and keep economically productive jobs. This, in turn, requires that we pay our respects to those who make high-productivity jobs possible. “Instead of deriding and belittling people who build businesses, the president should understand how helpful they could actually be,” Goodman concludes.

Obama: There Are No Self-Made Men?, by John C. Goodman (Townhall, 7/21/12)

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

Upcoming Event:

Heritage Foundation luncheon with John C. Goodman
Date: Tuesday, July 24, 2012
Time: 12:30 p.m. to 1:30 p.m.
Location: The Heritage Foundation; 214 Massachusetts Ave., N.E.; Washington, D.C.

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2) Pentagon Profligacy and Propaganda

Last Wednesday, defense contractors testified at a House committee about their worries concerning the $55 billion automatic defense budget cuts that are slated for January. Spokesmen for Lockheed-Martin, the Aerospace Industries Associations, and others asserted that the cuts would devastate their employees (one called the advertised layoffs “Armageddon”). Some even suggested political reprisals at the ballot box if the cuts weren’t avoided, citing an obscure law—the Worker Adjustment and Retraining Notification (WARN) Act—they claimed would require the contractors to send out lay-off notices to their workers days before the November election. Their claims, however, were disingenuous, according to Independent Institute Research Fellow Winslow T. Wheeler.

“They were lucky no one asked them about the schedule the WARN Act actually requires or the number of jobs that the $55 billion sequester might actually take out of defense production,” Wheeler writes. Citing reports by Bloomberg and others, Wheeler notes that the law does not require that the pink slips go out until after the election. In addition, as a former official of the Office of Management and Budget notes, the contractors’ estimates of jobs at stake were, in Wheeler’s words, “wantonly inflated by including thousands upon thousands of employees who do no defense work.”

Wheeler also points out other problems with the contractors’ testimonials. The bottom line: the sequester would return the level of defense spending to 2006 levels, leaving the Pentagon purse with “more than twice the combined defense budgets of China, Russia, Syria, North Korea, and Iran.” The sequester isn’t perfect, Wheeler adds, but its opponents have painted a distorted picture of what it would do. Fortunately, the Democrats at last week’s hearing weren’t buying it: the credibility gap of the defense establishment has become too big to ignore.

Hard of Hearing: Why the House’s Attempt to Save Defense Sending Might Flop, by Winslow T. Wheeler (Foreign Policy, 7/20/12)

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3) The Failing Drug War

The federal War on Drugs continues to focus on drug-interdiction efforts in Latin America, even as the number of drug users in the United States has fallen. There is change at the margins, however. The Drug Enforcement Agency, for example, has created “tactical diversion squads” to investigate prescription drug abuse. And the U.S. State Department has shifted its anti-drug budget toward more legal training and community building in Latin America.

“Perhaps this shift will result in fewer people—drug lords and innocents alike—dying in Mexico at the hands of the U.S.-equipped security forces, but it still will be wasting U.S. taxpayers’ dollars fighting a problem that could best be countered by drug legalization,” writes Independent Institute Senior Fellow Ivan Eland.

In other words, the drug war is slowly morphing into new ways to fail, according to Eland. Most American politicians won’t admit this, but Eland notes one who has admitted that the drug war has been a waste: “Chris Christie, a former federal prosecutor and now governor of New Jersey, argued that the War on Drugs was a failure because it imprisons people who really need to be medically treated,” Eland continues. “Drug legalization would recognize that people stupidly abuse a variety of substances—including alcohol, tobacco, and fatty foods—but it would acquiesce to the reality that the government can do very little about it and really has no right to tell us what we should put into our bodies, no matter how unhealthy it may be.”

The Drug War Finds New Ways To Fail, by Ivan Eland (7/17/12)

No War for Oil: U.S. Dependency and the Middle East, by Ivan Eland

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4) Freedom and the Burden of Proof

The friends of freedom face an uphill battle: they must convince the public that voluntary institutions are superior to the state, that trade is better than extortion, and that peace is morally superior to coercion. Yet it is freedom’s friends who are put on the defensive: the statist status quo is viewed as the given baseline, deviations from which must be justified in the court of public opinion. To many of us, this reality is strange indeed. Why shouldn’t the burden of proof fall on the statist coercers? History and logic would seem to dictate that it should, according to Independent Institute Senior Fellow Robert Higgs.

“In truth the State occupies itself overwhelmingly in extorting private wealth, transferring much of it to favored supporters, wasting a great deal of it, and retaining the balance to pay its own legions of bullies, do-gooders, and time-servers, as well as its Praetorian Guard of police and military forces,” Higgs writes. “This whole apparatus has no claim to self-evident superiority to alternative arrangements; it ought to bear the burden of proof for every step it takes.”

Volumes more have been written on the crimes and follies of the state, but its defenders seldom respond with painstaking, rational argumentation. Perhaps they feel no need. “Raw force is always the resort of those who cannot present a good argument for their actions,” Higgs continues. “Although the modern State enjoys the support of countless court intellectuals and apologists, it rests at bottom on the use of violence in the event that we do not accept the excuses it makes for its crimes. That so many people fear and loathe the State should itself be sufficient to indicate that its kingpins and supporters, not those of us who long for freedom, should always bear the burden of proof.”

Where Should the Burden of Proof Rest?, by Robert Higgs (The Freeman, May 2012)

Delusions of Power: New Explorations of the State, War, and Economy, by Robert Higgs

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5) New Blog Posts

From The Beacon:

The Aurora Shootings
David Theroux (7/23/2012)

Alexander Cockburn, RIP
Anthony Gregory (7/21/2012)

What’s Really Behind Student Fade-Out: Summer or Schools?
Vicki Alger (7/20/2012)

Obama’s Business Comment . . .
Randall Holcombe (7/19/2012)

Adults Who Say the Kids Are Alright Get It Wrong
Vicki Alger (7/18/2012)

From MyGovCost News & Blog:

‘Deceit and Thievery’: How Government Parks Money in Secret
Lloyd Billingsley (7/23/12)

A Trip Down Memory Lane
Craig Eyermann (7/21/12)

Raiding the Rainy Day Trust Funds
Craig Eyermann (7/18/12)

FDA Spreads the Surveillance Bug
Lloyd Billingsley (7/17/12)

You can find the Independent Institute’s Spanish-language blog here.

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