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The Lighthouse®

The Lighthouse® is the weekly email newsletter of the Independent Institute.
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Volume 8, Issue 31: July 31, 2006

  1. Bush Policies Strengthen Iran, Eland Argues
  2. Chavez on the U.N. Security Council?
  3. Shelby Steele's "White Guilt" Transcript Now Online
  4. For Montenegro, Economic Reform Must Follow Independence

1) Bush Policies Strengthen Iran, Eland Argues

U.S. foreign policy in the Middle East continues to strengthen Iran, according to Ivan Eland, director of the Independent Institute's Center on Peace & Liberty. The latest example is U.S. silence on Israel's bombing of Qana, Lebanon, in its military campaign against Hezbollah.

Not only is Hezbollah likely to survive and rise in stature in the region, "the group's weapons and equipment will be replenished, and a stronger Hezbollah will reflect favorably on Iran, its principal benefactor," writes Eland in his latest op-ed.

"Once again, excessive or unnecessary foreign military action -- by Israel or the United States -- has benefited Iran," Eland continues. "Iran's rise began when the United States took out one of Iran's major adversaries -- the Taliban regime -- in Afghanistan. Then the ayatollahs in Tehran received another and even bigger gift: U.S. taxpayers funded the destruction of their principal rival -- Saddam Hussein's Iraqi regime. Even better for the Iranians, U.S. forces remained to protect what became an Iranian-friendly, theocratically oriented Iraqi government from Sunni insurgents. The quagmire also undermined U.S. leverage in pressuring Iran to forgo its alleged quest for atomic weapons, while the U.S. invasion of neighboring Iraq provided greater Iranian motivation to acquire a nuclear deterrent to a future U.S. attack. The United States needs Iranian help to contain Shi'ite militias and death squads in Iraq. If the U.S. gets too feisty in demanding that Iran get rid of its nuclear program, Iran could give the Shi'ites in Iraq the green light to escalate action to a full-blown civil war. The U.S. invasion of Iraq made it less likely that Iran -- fearful of being the target of a similar future U.S. action -- would ever negotiate away its nuclear program."

"The Bush Administration’s Iran-Friendly Foreign Policy," by Ivan Eland (7/31/06)
"La afable política exterior con Irán de la administración Bush"

THE EMPIRE HAS NO CLOTHES: U.S. Foreign Policy Exposed, by Ivan Eland

Center on Peace & Liberty (Ivan Eland, director)


2) Chavez on the U.N. Security Council?

Venezuelan President Hugo Chavez has come one step closer to gaining a seat on the United Nations Security Council. By winning an endorsement from Mercosur, the South American common market, Chavez effectively defeated Chilean President Michelle Bachelet, who had also sought to win a seat on the Security Council (and who stood silently when the endorsement was announced recently at a South American summit in Argentina), as Independent Institute Senior Fellow Alvaro Vargas Llosa explains in his latest op-ed.

"Adding insult to the injury [of Bachelet's loss], Mercosur invited Fidel Castro to the summit and signed a 'trade' deal with him that was more political than commercial, while the host nation, Argentina, provided him with a platform for a three-hour speech at the University of Cordoba in which he defended everything that Mercosur is supposedly against: one-party rule, jailing political opponents, ideological confrontation with the U.S., and a socialist economy."

Feelings of regional inferiority, the lure of ideological radicalism -- and the economic fallacy of regional protectionism -- have contributed to Mercosur's backing of Chavez's bid on the U.N. Security Council, according to Vargas Llosa, who directs the Independent Institute's Center on Global Prosperity: "Since its creation in 1991, Mercosur has failed to generate wealth because it reproduced at the regional level the national barriers to the free flow of goods, services, ideas and people. The result has been constant dispute -- from the one between Brazil and Argentina over car exports to the current brawl between Argentina and neighboring Uruguay over the latter country’s green light to the construction of two pulp mills near the border. Chile, the best economy in the region, has not joined Mercosur because the rules forbid member countries from pursuing open trade with nations outside the bloc. The protectionism of Mercosur will be reinforced by Venezuela's incorporation."

"Has Mercosur Gone Bananas?" by Alvaro Vargas Llosa (7/27/06)
"MERCOSUR: ¿Se han vuelto locos?"

LIBERTY FOR LATIN AMERICA: How to Undo Five Hundred Years of State Oppression, by Alvaro Vargas Llosa

THE CHE GUEVARA MYTH, by Alvaro Vargas Llosa

Center on Global Prosperity (Alvaro Vargas Llosa, director)

El Independent: El Blog del Centro Para la Prosperidad Global de The Independent Institute


3) Shelby Steele's "White Guilt" Transcript Now Online

The American civil rights movement of the 1960s helped delegitimize white supremacy worldwide, but it also instilled in white society a sense of guilt that led to the adoption of policies that have unintentionally hindered the progress of blacks and other minorities, noted author Shelby Steele argued at the May 9 Independent Policy Forum, "Is White Guilt Destroying the Promise of Civil Rights?" (A transcript of this event is now available online at

The passage of the Civil Rights Act of 1964 and the Voting Rights Act of 1965 -- and the implicit admission by most of white society that racially discriminatory laws were immoral and unacceptable -- was "America's greatest moment" and "one of the greatest moral evolutions in all of human history," said Steele, author of White Guilt: How Blacks and Whites Together Destroyed the Promise of the Civil Rights Era. Unfortunately, according to Steele, the sea change in attitudes that made this advancement possible was also accompanied by desires of the country's institutions to avoid the new stigma of racism by promoting policies that have assuaged collective "white guilt" more effectively than they have helped African-Americans advance economically or socially. At their worst, "white guilt" policies have helped to eviscerate the black family, devastate America's inner cities, and shackle rather than liberate the black underclass.

The challenge for American blacks today, according to Steele, isn't to try to remove every last vestige of a discredited racism from white society, but instead is to acquire the education, job skills, values, and attitudes most conducive to thriving under the conditions of a newly acquired freedom. Concluded Steele: "Instead of constantly saying there's racism around every corner, and racism is a big barrier in my life, say instead there may be racism, but I am free. I have opportunities. I can do whatever I want in life. I can go as far as I want to go."

For a transcript, audio recording, and video clip of "Is White Guilt Destroying the Promise of Civil Rights?" -- featuring Shelby Steele -- see


4) For Montenegro, Economic Reform Must Follow Independence

Having recently become independent from Serbia, the 620,000 people of Montenegro must now figure out how to keep their country from fragmenting along ethnic and regional lines. In addition, Montenegrins must discover how best to stimulate economic growth in a country where per capita income is only about $3,000 per year and 10 percent live below the poverty line.

According to Boris Begovic, adjunct fellow at the Independent Institute, if it is to enjoy the benefits of a market economy Montenegro must move its distribution of goods and services away from the personal networks that make corruption, cronyism and monopolistic pricing common. In addition, they must rein in government spending and taxation.

"With a consolidated central government expenditure of 45 percent of GDP, the tax burden necessary to keep the fiscal balance and to 'protect' the constituency that heavily depends on transfers from the budget is quite high (only one-third of the budget is spent on the provision of 'public' goods)," writes Begovic. "The public sector generates about 60 percent of jobs. That leaves rather limited room for entrepreneurship and makes most of the constituency dependent on the incumbent government and its fiscal policy -- quite fertile ground for patronage."

"Independent Montenegro: The Case of the Sugar Republic," Boris Begovic (7/28/06)

Center on Global Prosperity (Alvaro Vargas Llosa, director)


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