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

Volume 6, Issue 45: November 8, 2004

  1. Iraq, Al Qaeda, and the Election
  2. Regulatory Overdose at the FDA
  3. The Public Choice Revolution

1) Iraq, Al Qaeda, and the Election

"The absence of Iraqi nuclear, chemical or biological programs or weapons should have been a big clue to voters that the Iraq threat was never that acute or dangerous," writes Ivan Eland, in his first post-election op-ed. "The Bush administration has been able to get away with badly distorting reality because the public doesn't have as much personal experience with foreign policy and security issues as they do with issues such as education, health care, the economy, etc."

The strength of the Iraqi resistance shows that the White House also deluded itself, Eland argues. "[President Bush] naively believed that a foreign invasion and occupation force would be treated by Iraqis as liberators and that Iraq's entire society could be easily socially engineered at gunpoint into a Western-style, free market democracy, an alien concept in Iraqi history."

In addition to redirecting resources away from the hunt for Al Qaeda, the Iraq war has squandered billions of dollars, has killed tens of thousands of civilians, and has strengthened the grip of the imperial presidency at the expense of the constitutional separation of powers envisioned by America's founders, argues Eland.

"If the founders of the American nation -- who feared large standing armies and disdained foreign military interventions -- were alive today, they would rightly fear for the future of the republic," Eland concludes.

In his earlier, pre-election op-ed, Eland suggested that Osama bin Laden might have released a recent videotaped speech in order to benefit Bush at the polls. The Al Qaeda terrorist leader castigated the U.S. for meddling in the Middle East. However, because Bush's policies have helped bin Laden increase the number of recruits for his terrorist organization, Eland argues that bin Laden may have favored Bush's reelection.

"Certainly, we cannot stake our security on bin Laden's implicit proposal to end his attacks if the U.S. ends its militaristic adventures in the Muslim world," writes Eland. "That he seems to favor, for the continued expansion of his al Qaeda organization, the reelection of an aggressive U.S. president should make us suspicious of his peace entreaties. Al Qaeda's leaders must be captured or killed. But for the long-term, we must ask if ending U.S. meddling in the Islamic world could significantly reduce the risk of future 'bin Ladens' arising and launching anti-U.S. attacks."

"Fear for the Future of the Republic," by Ivan Eland (11/8/04)
http://www.independent.org/newsroom/article.asp?id=1415

"Bush's Electoral Prospects Get a Little Help from Overseas," by Ivan Eland (11/1/04) http://www.independent.org/newsroom/article.asp?id=1414

To purchase THE EMPIRE HAS NO CLOTHES: U.S. Foreign Policy Exposed, by Ivan Eland, see
http://www.independent.org/store/book_detail.asp?bookID=54

Center on Peace & Liberty
http://www.independent.org/research/copal/

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2) Regulatory Overdose at the FDA

Will the U.S. Food and Drug Administration soon liberalize its drug-approval process, in recognition of the safety of the numerous drugs used effectively for purposes other than those approved by the agency?

Probably not. But an important article in FORBES, describing the work of Independent Institute Research Director Alexander Tabarrok on "off-label" uses of FDA-approved pharmaceuticals, suggests that the issue may start to get a hearing in the court of public opinion.

FORBES reporter Ira Carnahan notes the contradiction of the FDA requiring a drug company to show that its new drug is safe and effective, but then allowing that drug to be prescribed by a physician for any use. Yet rather than produce misery, this policy has resulted in new and effective treatments for a host of maladies, including most forms of cancer, AIDS, and various childhood diseases. Unfortunately, the FDA forbids drug-makers from advertising off-label uses to the public, and forbids drug-makers from distributing research articles about off-label uses to physicians.

"Tabarrok and [colleague Daniel] Klein . . . offer some alternative proposals at FDAReview.org," the article states. "One is to make all FDA testing optional. Drugs that didn't go through the process would be labeled 'Not FDA Approved.' Under this approach, they say, 'the FDA would become a genuinely voluntary institution, much like Underwriters Laboratories.' Another idea is for the FDA to award letter grades, A to D, to claims made by drugmakers, much as it is considering doing for health claims for foods and dietary supplements. The FDA could still have its say, but wouldn't be able to impose long delays, since a new drug could be marketed at first as 'unrated.'

"At the least, Tabarrok argues, the FDA should permit drug companies to sell any drug that has been approved by other sophisticated drug regulators, such as those in Canada, Australia or the European Union," the article continues. "Under such a system U.S. patients would get speedier access to new medicines without losing out on safety protection."

See "Regulatory Overdose," by Ira Carnahan (FORBES, 10/18/04) http://biz.yahoo.com/fo/041018/a35f0f4520f025b8c2951003c67da3bd_4.html

Also see:

“Assessing the FDA via the Anomaly of Off-Label Drug Prescribing” by Alexander Tabarrok (THE INDEPENDENT REVIEW, Summer 2000) http://www.independent.org/tii/content/pubs/review/tir51_tabarrok.html

"Vaccine Shortage Leads To The FDA's Doorstep," by Arthur E. Foulkes and Nicolas Heidorn (INVESTOR'S BUSINESS DAILY, 10/22/04) Investor's Business Daily
http://www.independent.org/newsroom/article.asp?id=1374

“Weakened Immunity: How the FDA Caused Recent Vaccine-Supply Problems,” by Arthur E. Foulkes (THE INDEPENDENT REVIEW, Summer 2004)
http://www.independent.org/publications/tir/article.asp?issueID=38&articleID=213

For a thorough critique of the FDA, see
http://www.FDAReview.org

To order AMERICAN HEALTH CARE: Government, Market Processes, and the Public Interest, edited by Roger D. Feldman, see http://www.independent.org/store/book_detail.asp?bookID=33

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3) The Public Choice Revolution

"Public choice has demystified and undeifed the state," proclaims a heading in an informative new article "The Public Choice Revolution," written by Independent Institute Research Fellow Pierre Lemieux in REGULATION MAGAZINE.

As a school of political economy more than four decades old, Lemieux explains, public choice is a discipline that looks at political institutions -- including democratic decision-making -- not as an idealized process by which the "general will" gets translated into effective policy, but as competitive process in which special interests, including politicians, bureaucrats, and voters, attempt to redistribute scarce resources (including political prestige) from other groups to themselves.

"The starting point of public choice theory is disarmingly simple: Individuals, when acting as voters, politicians, or bureaucrats, continue to be self-interested and try to maximize their utility," writes Lemieux. Viewed in such light, it's not surprising that voters often vote for greater benefits while calling for lower taxes, that politicians propose unworkable to "solutions" that won't reveal themselves to be failures until after the next election, or that bureaucrats constantly search for new problems to help justify larger budgets.

"In a narrow sense, public choice analysis is concerned with 'state failures.' Manned by self-interested actors on a 'political market,' the state is often incapable of correcting market failures -- or, at least, of correcting them at a lower price than the cost of the original market failures themselves," according to Lemieux.

Lemieux focuses his analysis on voting, showing that even with simply majorities "it is far from clear who the majority is and what it wants." The median-voter theorem, he explains, shows why all voters but those squarely in the middle of the preference continuum are unhappy with the election results. Alternatives to simple majority voting produce other outcomes but introduce additional ambiguities.

However interpreted, writes Lemieux, "one thing is sure: public choice has destroyed the naive view that, in order to justify state intervention, it suffices to show that there exist market failures that an ideal state could correct. After the public choice revolution, political analysts cannot be satisfied with comparing real markets with an ideal state; they must analyze the state as it is before dreaming about what it should be."

See "The Public Choice Revolution," by Pierre Lemieux (REGULATION, Fall 2004)
http://www.pierrelemieux.org/artpublicchoice.pdf

For an excellent primer on the causes of government failure, see BEYOND POLITICS: Markets, Welfare, and the Failure of Bureaucracy, by William C. Mitchell and Randy T. Simmons (foreword by Gordon Tullock) at http://www.independent.org/store/book_detail.asp?bookID=34

For more on the causes and effects of government failure, see AGAINST LEVIATHAN: Government Power and a Free Society, by Robert Higgs, at
http://www.independent.org/store/book_detail.asp?bookID=53

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