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The Lighthouse is the weekly email newsletter of the Independent Institute.
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Volume 6, Issue 19: May 10, 2004

  1. Individual Unemployment Accounts Would Fix Broken System, Economists Explain
  2. Iraqi Prison Scandal: Part II
  3. Responsible Parents Teach Their Kids Gun Safety

1) Individual Unemployment Accounts Would Fix Broken System, Economists Explain

Many of the problems facing the unemployment compensation system in the United States can be solved by replacing it with an alternative system of individual unemployment accounts -- IUAs -- according to the experts who have pioneered the concept.

Writing in the spring 2004 issue of THE INDEPENDENT REVIEW, economist Lawrence Brunner and psychologist Stephen M. Colarelli argue that IUAs, if adopted, would give unemployed workers greater financial security, flexibility, and incentive to search for work; remove the current system’s inadvertent encouragement of layoffs; and promote savings and economic growth.

How would individual unemployment accounts operate?

Under the proposal of Brunner and Colarelli (both of Central Michigan University), an IUA would be a mandatory and portable individual trust into which both employers and employees would contribute. Like an individual retirement account, the IUA would belong to the employee, and individuals would be free to choose which relatively liquid assets -- savings accounts, mutual funds, and/or government and corporate bonds -- they would invest their IUA funds in. If an individual loses his job, he or she could withdraw funds from the IUA without penalty, and the funds would be tax exempt only when withdrawn from the IUA.

"Individuals would also have responsibility for how they withdraw funds, how much they withdraw, and what they do with their money when they withdraw it," Brunner and Colarelli write. "An individual who lost his job might withdraw all of the money in one lump sum and use it to start a business. The other side of individual responsibility is that the individual would bear the consequences of investment decisions and of the use of the money when it is withdrawn."

The IUA, Brunner and Colarelli argue, would enable employees to accumulate much more money available in case of a layoff. It would also "give employers increased flexibility in planning layoffs and retirements. For example, knowing that senior employees have the security of large IUA accounts, an employer might begin a layoff process by asking senior employees to volunteer for layoffs and reasonably expect that some would do so."

Conclude Brunner and Colarelli: "The IUA gives the unemployed more financial security than they have now. It allows them to take the time to retrain to find employment if necessary. It is also compatible with and accommodating of the career realities of contingent workers and working mothers. IUAs will create a greater incentive for the unemployed to search for work and will remove the current system's inadvertent encouragement of layoffs. Finally, the IUA will increase savings and promote economic growth."

See "Individual Unemployment Accounts," by Lawrence Brunner and Stephen M. Colarelli (THE INDEPENDENT REVIEW, Spring 2004)

Order OUT OF WORK: Unemployment and Government in Twentieth-Century America, by Richard K. Vedder and Lowell E. Gallaway.

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2) Iraqi Prison Scandal: Part II

The Iraqi prison scandal has continued to prompt strong reactions in the halls of Washington, D.C. -- and at the Independent Institute. Reacting to Defense Secretary Donald Rumsfeld's testimony before Congress, Ivan Eland, director of the Center on Peace & Liberty at the Independent Institute, asks: "Since when did Rumsfeld -- who has jailed indefinitely without trial U.S. citizens and people rounded up in Afghanistan and Iraq -- care about defendants' rights? Only when they are the rights of U.S. military personnel, and it suits his interest in political survival."

Most interesting, perhaps, is the claim by the now-ex U.S. commandant of the Abu Ghraib prison operation, Brig. Gen. Janis Karpinski, "that the euphemistic policy of setting 'favorable conditions' for interrogations was made at a higher level." Just how far up the chain of command does responsibility for the specific abuses go?

Even if we never learn anything more about the Abu Ghraib abuses, we know plenty about war crimes authorized by higher-ups, Independent Institute Research Fellow Robert Higgs argues. The attempted U.S. bombing of "Chemical Ali" in April, 2003, for example, resulted in the deaths of 23 Iraqis -- including at least one infant -- but not the death of the target himself. Further, during the initial phase of the war and afterward, children were killed and maimed when they picked up unexploded bomblets.

"Recently, the ferocious U.S. attacks on Fallujah have yielded hundreds of additional casualties among the innocent. There, as in many other places in Iraq, U.S. troops have fired recklessly and without adequate regard for the thousands of civilians they thereby placed in mortal jeopardy," Higgs writes.

"Bush and Rumsfeld have been busy with apologies this past week, to be sure, and the prison hijinks at Abu Ghraib certainly cry out for apologies, as well as for a great deal of additional effort to restrain the sadists and sexual psychopaths among the U.S. troops in Iraq and to bring some measure of justice to those who have been wronged," Higgs writes. "Yet this whole mess, its powerful symbolism notwithstanding, has constituted a gigantic distraction from the truly monstrous crimes committed, and still being committed daily, by U.S. forces in Iraq."

See "Torture in Iraq: Appalling; Politicians' Reaction: Not Much Better," by Ivan Eland (5/11/04)

"The Crimes at Abu Ghraib Are Not the Worst," by Robert Higgs (5/10/04)

Center on Peace & Liberty

OnPower.org -- Gulf War II: War with Iraq

PUTTING "DEFENSE" BACK INTO U.S. DEFENSE POLICY: Rethinking U.S. Security in the Post-Cold War World, by Ivan Eland

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3) Responsible Parents Teach Their Kids Gun Safety

Because guns in the United States are unlikely to vanish even if the federal "assault weapon" ban is renewed in September, the organizers of yesterday's Million Mom March against gun violence could add a dose of realism to their cause by encouraging parents to teach their children basic firearm safety and awareness.

"Just as parents teach their children to use matches or the Internet safely, so, too, should they provide instruction on any gun in the house," writes Wendy McElroy, research fellow at the Independent Institute, in her latest column for FoxNews.com.

Because more than 40 percent of homes with children also have a gun in the house, cultivating safety and awareness of the dangers of firearms is essential to reduce the approximately 200 accidental guns deaths of children under 14 years old that occur each year. It also means that parents who don't own guns should teach their children basic firearm dos and don'ts.

"Parents who do not own a gun should assume that their children will encounter a weapon at some point, perhaps in the house of a friend or a relative," McElroy continues. "But don't let responsibility rest with your child."

McElroy then lists several common-sense steps that parents should take that can reduce gun accidents, including teaching children to assume that any gun they find in someone's home is loaded, to leave guns untouched, and to report them to the attention of an adult.

What's a mother to do? "Gun expert and mother Sunni Maravillosa answers, 'You can't childproof your gun. Instead, gun-proof you children."

See "Gun-Proof Your Children," by Wendy McElroy (5/5/04)

Order LIBERTY FOR WOMEN: Freedom and Feminism in the Twenty-first Century, edited by Wendy McElroy (Ivan R. Dee, 2002)

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