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The Lighthouse is the weekly email newsletter of the Independent Institute.
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Volume 14, Issue 47: November 20, 2012

  1. Obama’s Victory and the Problem of Political Hubris
  2. The Bleak Jobs Outlook: Made in Washington, DC
  3. Should the Feds Investigate the Petraeus Investigation?
  4. Thanksgiving Lesson
  5. New Blog Posts
  6. Selected News Alerts


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Video: John C. Goodman on Obamacare and Curing the Healthcare Crisis


1) Obama’s Victory and the Problem of Political Hubris

In an address on November 9, President Obama urged Congress to come together and raise tax rates on upper-income taxpayers. Although he claimed that “the majority of Americans agree with my approach,” CNN’s election-night exit polls tell a different story. As Independent Institute Senior Vice President Mary L. G. Theroux writes in a recent piece for the Huffington Post, “63 percent of voters said taxes should not be raised to cut the deficit, and contrary to Mr. Obama’s perception, a minority—47 percent—expressed support for raising taxes only on those making more than $250,000, with an additional 13 percent agreeing to increase taxes for everyone.”

Politicians love to interpret their electoral victories as a mandate to implement their entire platform. The rest of us recognize this as hubris—or opportunism. Did votes for Obama mean support for the President’s entire record and campaign promises? That combination includes, among other things, the expectation of looser immigration restrictions after four years of border tightening and peak levels of deportations, and an aggressive foreign policy marked by a tripling of civilian deaths in Afghanistan, Theroux notes.

Equating a vote for a candidate with a vote for the candidate’s entire platform is sheer folly, of course, and like much nonsense, a good analogue can be found on television. Theroux asks us consider the set-up from the Food Network show, Chopped. Voting for a politician is almost like choosing between one of two mixed-up baskets, as is typical on the show. One basket is filled with spinach, eggs, Napa Cabernet, Velveeta, and Spam. The other is a filled with canned tuna, kale, brie, challah, and Belgian beer. Theroux writes: “Even if I much prefer brie over Velveeta and despise Spam, I might still choose the first basket, figuring I can live on spinach omelets and Cabernet, and disregard the rest. However, someone knowing only which basket I chose may easily and wrongfully conclude I want more Spam and Velveeta.”

A Mandate—For What?, by Mary L. G. Theroux (The Huffington Post, 11/15/12)

Beyond Politics: The Roots of Government Failure (Revised and Updated Edition), by Randy T. Simmons

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2) The Bleak Jobs Outlook: Made in Washington, DC

The outlook for robust job growth looks bleak: Full-time jobs will become scarcer, particularly for low-wage employees in the restaurant and hospitality sectors. The evidence for this prediction is readily available. For example, two months ago CKE Restaurants, owners of the Carl’s Jr. and Hardee’s fast-food chains, started to hire part-time workers to replace full-timers who have left their jobs. The 5,000-employee Pillar Hotels and Resorts has been doing the same. And a July 2012 survey by the consulting firm Mercer found that 32 percent of respondents in the retail and hospitality sectors said they’d likely cut back on employees who work at least 30 hours per week. The culprit behind this trend is the insurance mandate in the new healthcare law, according to Independent Institute Research Fellow John C. Goodman.

“By hiring part-time workers who put in less than 30 hours per week, employers can avoid a mandate dictated by the new health reform law: either provide expensive health insurance or pay a fine equal to $2,000 per worker,” Goodman, author of Priceless: Curing the Healthcare Crisis, writes at Forbes.com. “To make matters worse, employers don’t really know what insurance they will have to provide or what it will cost.” Uncertainty about whether the $2,000 fine will be raised to some still-to-be-determined amount also dampens the employment outlook.   

But Obamacare isn’t the only obstacle to full employment, according to Goodman. The easing of the eligibility requirements for food stamps, unemployment insurance, and housing aid created incentives that have discouraged some unemployed people from seeking employment. The average annual benefits for not working rose from $10,000 in 2007 to $14,000 in 2011 (after peaking at $16,000 in 2009). Some employers outside of construction and manufacturing—two sectors hit particularly hard by the 2008-2009 recession—have responded to labor-market conditions by using more production inputs that substitute for labor. “One thing that affects all sectors, however, is overly generous incentives not to work,” Goodman writes.

Why the U.S. Job Market Remains Terribly Bleak, by John C. Goodman (Forbes, 11/15/12)

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

Video: John C. Goodman on Obamacare and Curing the Healthcare Crisis

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3) Should the Feds Investigate the Petraeus Investigation?

The Sunday TV talk shows were aflutter with politicos and pundits speculating about the resignation of CIA Director and former International Coalition Force and U.S. CENTCOM Commander, General David Petraeus. The questions varied but focused on protocol and politics: Why didn’t the FBI inform any congressional oversight committees early on of its investigation of Petraeus? And was President Obama informed about the investigation before the election?

To this list, Independent Institute Senior Fellow Ivan Eland would like to add others: Why didn’t the FBI drop the matter after it discovered the limited national-security dimensions of the affair? Was its well-known animus toward the CIA a motivating factor? Did the FBI’s investigation of the Petraeus affair come at the expense of more important cases? And why isn’t the public scandalized by the FBI’s obsession with a private matter?

“Rather than spending taxpayer dollars on further investigation of such merely personal matters, maybe our federal snooping agencies should focus their efforts on real national security investigations,” Eland writes. “The American media will probably not focus on this mundane federal abuse of privacy and civil liberties when there are potentially salacious details in the air.”

The Real Petraeus Scandal, by Ivan Eland (11/16/12)

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

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4) Thanksgiving Lesson

The American Pilgrims found land abundant in natural resources, but those blessings weren’t enough to enable them to thrive: Bad policies gave rise to food shortages. Fortunately, those shortages ended when the Plymouth Plantation scrapped communal property rights and began to allow families to keep the crops they grew for themselves. As the Pilgrims learned in 1623, private property rights and economic incentives foster the conditions for abundance.

“It is customary in many families to ‘give thanks to the hands that prepared this feast’ during the Thanksgiving dinner blessing,” writes Independent Institute Senior Fellow Benjamin Powell. “Perhaps we should also be thankful for the millions of other hands that helped get the dinner to the table: the grocer who sold us the turkey, the truck driver who delivered it to the store, and the farmer who raised it all contributed to our Thanksgiving dinner because our economic system rewards them.”

Governor William Bradford told us as much in his 1647 journal. “That’s the real lesson of Thanksgiving,” Powell continues. “The economic incentives provided by private competitive markets where people are left free to make their own choices make bountiful feasts possible.”

“The Pilgrims’ Real Thanksgiving Lesson,” by Benjamin Powell (San Diego Union-Tribune, 11/22/04)

The Pilgrims’ Real Thanksgiving Lesson, by Mary Theroux (The Beacon, 11/22/10) See especially comments by Independent Institute President David J. Theroux.

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5) New Blog Posts

From The Beacon:

From MyGovCost News & Blog:

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

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6) Selected News Alerts

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