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

Volume 14, Issue 35: August 28, 2012

  1. From Medicare to Mediscare
  2. Zoning Against Charity
  3. FBI: The Federal Bureau of Instigation?
  4. New Blog Posts



1) From Medicare to Mediscare

Recent discussions about Medicare and the Ryan nomination have kept healthcare economist John C. Goodman busy. In an op-ed for USA Today, the Independent Institute Research Fellow argued that differences between Paul Ryan’s Medicare plan and the Obama administration’s plan are smaller than many people believe. “Although Ryan favors an expansion of private Medicare plans, his budget implicitly endorses the same payment cuts that are incorporated in the health law,” Goodman and co-author Thomas R. Saving write. There are notable differences, however. “Ryan’s approach has the advantage of making the cuts less painful by allowing market-based reforms instead of suppressing provider fees.”

In a separate piece, Goodman challenges five claims about Medicare made by the Obama administration or its supporters. One is that health reform is good for seniors. According to Goodman, “Under ObamaCare, the average amount spent on [Medicare enrollees who turn 65 this year] over the remainder of their lives will fall by about $36,000 at today’s prices.” Goodman also cites a memorandum from the Medicare Office of the Actuary. It explains that cuts in Medicare spending mean that in a few years many hospitals will be forced to close, making it harder for seniors to obtain care.

Goodman also takes on the claim that health reform has made Medicare more solvent and that the new healthcare law is fully paid for. Lastly, he argues that the new law will not make Medicare more efficient—not unless one views a reduction of care for seniors as desirable. According to the Congressional Budget Office, the pilot programs and demonstration projects that were designed to make the healthcare system more cost effective either have not worked or have worked only very modestly. “In the absence of such efficiencies, the law basically mandates a reduction in provider fees,” Goodman concludes.

Mediscare, by John C. Goodman (Townhall, 8/25/12)

Medicare Wars, by John C. Goodman (RightSideNews, 8/21/12)

Medicare Drama More Hype than Reality, by John C. Goodman and Thomas R. Saving (USA Today, 8/16/12)

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

Video: John C. Goodman on C-SPAN2’s Book TV (8/12/12)

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2) Zoning Against Charity

Last month, 13-year-old hot-dog vendor Nathan Duszynski saw his sidewalk enterprise shut down by a city zoning official—ten minutes after he set up shop. The Holland, Michigan, resident hoped to use his profits to help provide for his disabled parents. More recently, Angela Prattis of Chester, Pennsylvania, was required to stop giving away free lunches to the dozens of children who came to her yard each day; municipal officials said she was violating a town zoning ordinance, even though she had been complying with the town’s reporting requirements and allowing a state worker to visit every other week. These cases are notable because they show how government regulation can stifle both commerce and social entrepreneurship, as Independent Institute Senior Fellow Benjamin Powell explains in his latest op-ed.

“In the case of zoning, [government regulation] prevents people from innovating and adopting their own ways to steer land use policies,” Powell writes in the Huffington Post. “In cases like Angela’s and Nathan’s, it prevents people from engaging in community action to help their families and their neighbors.”

City officials sometimes use zoning ordinances to protect politically connected business owners from competition, although the laws are often rationalized as necessary remedies for the problem of “inappropriate” land uses, such as keeping hypothetical smokestacks from being built next to a hospital. But as Powell notes, there are better ways to reduce potential conflicts over land use. Harris County, an unincorporated part of Houston, Texas, has an alternative that seems to work well for its more than one million residents. “The unincorporated section’s ordinances control flooding, drainage, and plotting of property, but it has no traditional zoning regulations delimiting what can be done on private property,” Powell writes. “Instead, when neighborhoods desire to limit conflicting land uses, they adopt protective covenants that place limits on what someone can do on their property…. When the covenants seem to prevent a reasonable activity, individuals like Angela and Nathan can appeal to neighbors and customers, rather than paying thousands in fees for a zoning variance.”

Zoning Stifles Civil Society, by Benjamin Powell (The Huffington Post, 8/23/12)

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

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3) FBI: The Federal Bureau of Instigation?

A news report published last week in the San Francisco Chronicle charges that the first man to provide firearms to the Black Panthers radical group, the late Richard Aoki, was an FBI informant. The revelation, although it reportedly shocked many who knew Aoki, should come as no real surprise: the agency has a long history of aiding, encouraging, and provoking dissident groups, activists, and misfits. Sometimes these capers have been concocted not to prevent crimes already planned, but rather to instigate crimes whose commission would help discredit a cause at odds with official policy. Sometimes they were hatched so that agency officials could bask in the media spotlight and score political points after they have foiled a criminal plot. Sometimes the strategy has backfired—like domestic versions of “Fast and Furious.” Although Congressional hearings in the mid-1970s about FBI abuses led to a reduction in the agency’s counterintelligence program, similar schemes made a comeback after the 9/11 terrorist attacks, according to Independent Institute Research Fellow Anthony Gregory.

“In the last decade, when the FBI wasn’t preoccupied with spying on the ACLU or Quakers, it has busied itself encouraging acts of ‘Islamic’ terrorism,” Gregory writes in the Huffington Post. “A staggering number of foiled terror plots have involved entrapment reminiscent of COINTELPRO. In Dallas, Washington, D.C., Chicago, New York, and Portland, FBI informants have goaded people into planning attacks that they likely would have never concocted on their own, in some cases supplying fake explosives, and swooping in at the last minute to save the day.”

Nor has the agency employed its dubious tactics of encouragement and entrapment only against Islamic militants. Last October, an FBI informant provided a group of Occupy protestors in Cleveland with C-4 explosives to blow up a bridge; the agency broke up the plot that it had encouraged before the plan became operational. And a few years ago, the FBI infiltrated the right-wing Hutaree militia in Michigan and charged its members with conspiracy to overthrow the U.S. government by using weapons of mass destruction. A judge’s ruling that the G-men lacked sufficient evidence to make the charge stick suggests the magnitude of poor judgment exercised by the agency. “With the FBI posing as dear friend,” Gregory concludes, “American law and order need no enemies.”

The FBI Lurking Behind Every Corner, by Anthony Gregory (The Huffington Post, 8/27/12)

To Serve and Protect: Privatization and Community in Criminal Justice, by Bruce L. Benson

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4) New Blog Posts

From The Beacon:

From MyGovCost News & Blog:

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

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