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The Lighthouse®

The Lighthouse® is the weekly email newsletter of the Independent Institute.
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Volume 16, Issue 25: June 24, 2014

  1. A Taxing “Alternative” to Obamacare
  2. U.S. Should Stay Out of Iraq, Institute Scholars Urge
  3. A Setting Sun on Venezuela’s Dictatorship?
  4. The Independent Review—Summer 2014 Issue Now Available
  5. New Blog Posts
  6. Selected News Alerts

1) A Taxing “Alternative” to Obamacare

Earlier this year, Senate Republicans Richard Burr, Tom Coburn, and Orrin Hatch put forth a bill designed to replace the Affordable Care Act. As Independent Institute Senior Fellow John C. Goodman noted at the time, the bill offered a tax credit for people who buy health insurance in the non-group market, but the credit phased out at income levels of $35,000 per year. Now the GOP is floating a new alternative, one crafted by James C. Capretta, a healthcare policy wonk affiliated with the Ethics and Public Policy Center as well as the American Enterprise Institute. What does Goodman think of it?

There’s much to like in the Capretta plan, which makes up a chapter in a new book by the YG Network, Room to Grow. For one thing, it offers a fixed tax credit, rather than the diminishing one that plagues the Burr/Coburn/Hatch proposal. But the Capretta plan misses two big opportunities, according to Goodman: “It misses the chance to give people at work the same opportunities it gives to people buying insurance on their own, and it misses the chance to replace the perverse incentives of managed competition with real insurance.”

Worse, the Capretta plan would raise taxes for one-quarter of those who get health insurance at work. Writes Goodman: “In other words, the cost of insuring the uninsured is to be shifted from all the special interests that helped give us Obamacare to ordinary employees and their families.”

Do Republicans Have an Alternative to Obamacare?, by John C. Goodman (Forbes, 6/11/14)

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


2) U.S. Should Stay Out of Iraq, Institute Scholars Urge

The New York Times reported today that Secretary of State John Kerry has indicated that the Obama administration may launch airstrikes against Sunni militant targets in Iraq before politicians of that beleaguered nation attempt to put together a new government to deal with the rising insurgency. But two scholars at the Independent Institute argue that American military action would be counterproductive to the cause of lasting peace and genuine U.S. interests.

According to Independent Institute Senior Fellow Ivan Eland, U.S. intervention would reduce the incentive for the Shi’ite government in Baghdad to go to the bargaining table with disenfranchised Sunnis and negotiate the best hope for a country torn by ethnic and sectarian strife: the soft partition of Iraq into a confederation of autonomous Shi’ite, Sunni, and Kurdish regions under a weak central government. Such a form of government has a better chance of minimizing conflict than would a multi-ethnosectarian power-sharing arrangement due to Iraq’s low income levels, mutual suspicion among the various groups, and the lack of a culture of compromise. Eland also notes that the case for a soft partition is as strong now as when he wrote his 2009 book, Partitioning for Peace: An Exit Strategy for Iraq.

And there are other reasons the United States should not intervene in Iraq. Independent Institute Research Fellow Anthony Gregory notes that Washington has often supported deplorable world leaders in the hope of furthering some foreign-policy goal. Yet dealing with a devil—even a “lesser evil”—can lead to horrific consequences. One example from the 1980s: U.S. support, including military intelligence, for Iraq’s Saddam Hussein, a known user of chemical weapons, in his war against Iran. Such support comes “at a great moral price, sacrificing core principles of right and wrong for the expediency of political calculation writ large,” Gregory writes. Thus, although the U.S. policymakers bear much of the blame for the turmoil that has plagued Iraq since Saddam’s defeat, trying to solve the country’s problems via more U.S. intervention would be a fool’s errand. It probably wouldn’t fix them, Gregory continues, “at least not without setting in motion something even worse in the future.”

No More U.S. Intervention in Iraq, by Ivan Eland (The Huffington Post, 6/16/14)

New Insights into Iraq, by Ivan Eland (The Beacon, 6/20/14)

Partitioning for Peace: An Exit Strategy for Iraq, by Ivan Eland

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

Enemies of Enemies, by Anthony Gregory (The Beacon, 6/16/14)


3) A Setting Sun on Venezuela’s Dictatorship?

For a decade and a half, the Venezuelan people have suffered under authoritarian rule, first under Hugo Chavez and now under his successor, Nicolás Maduro. How bad is it? The economy is in shambles, with prices rising 60 percent per year and goods in short supply. And civil liberties, especially freedom of speech and fair elections, are also under attack. But now a movement of bold political leaders and students who came of age under Chavez is on the verge of tearing down the dictatorship. “We will not sit down until they free political prisoners and stop all manner of torture,” youth leader Juan Requesens told a recent visitor to his country, Independent Institute Senior Fellow Alvaro Vargas Llosa.

Vargas Llosa puts the number of student protesters in jail in the dozens and the number indicted at more than a thousand. Oppression hasn’t deterred them. Rather, their courage has helped their movement to grow. More and more political leaders are voicing opposition to the Maduro regime, including María Corina Machado, a former legislator who endured a beating and removal from her office, and Caracas Mayor Antonio Ledzma. Their colleague in the movement, Leopoldo López, is now even more popular than the governor who nearly defeated Maduro in last year’s rigged election, Henrique Capriles.

With a solid majority of Venezuelans surveyed now opposed to Maduro, the question probably isn’t whether he’ll fall, but when. Vargas Llosa writes: “It’s hard to know just how long it will take for Venezuelans to rid themselves of this fifteen-year tyranny. But the process has begun. The government is desperately on the defensive and the opposition has finally reached critical mass.”

Venezuela: The Protesters’ Power Is Rising, by Alvaro Vargas Llosa (The National Interest, 6/11/14)

Liberty for Latin America: How to Undo Five Hundred Years of State Oppression, by Alvaro Vargas Llosa

The Che Guevara Myth: And the Future of Liberty, by Alvaro Vargas Llosa


4) The Independent Review—Summer 2014 Issue Now Available

Summer is here—and so is the summer issue of the Independent Institute’s quarterly journal. Here are some of the topics that subscribers of The Independent Review can look forward to reading about:

  • What’s wrong with recent economic studies calling for new regulations meant to reduce so-called “systemic risks” to the financial system? According to Alexander William Salter, they’ve neglected two fundamental problems. (Read a summary.)

  • What do election studies reveal about the effects of campaign contributions on the decisions of elected officials? Jeffrey Milyo offers evidence that challenges widespread views about corporate influence and political corruption. (Read a summary.)

  • Do minimum-wage laws have an ethical leg to stand on? The answer depends on a distinction between “magnanimous morality” and “mundane morality,” argues Dwight R. Lee.
 (Read a summary.)

  • What’s wrong with using “sin taxes” to discourage bad behavior and cost shifting? One problem is that this creates its own kind of social pathologies, according to Adam J. Hoffer, William F. Shughart II, and Michael D. Thomas.
 (Read a summary.)

  • Measuring human freedom is tricky. Fred McMahon and Alan Dowd assess how well recent freedom indexes have reflected conceptions of liberty put forward by two millennia of political thought. (Read a summary.)

  • Jimmy Carter wasn’t known for many economic policy successes during his tenure in the Oval Office, but thanks to economist Alfred Kahn, airline deregulation was a great success. John Howard Brown explains what this episode can teach today’s advocates of smaller government. (Read a summary.)

  • What made the late Ronald Coase among the most influential economists of the past century? John V. C. Nye offers his take on the 1991 Nobel Laureate in Economic Sciences. (Read a summary.)

  • Does the collapse of a garment factory building in Bangladesh buttress the case for boycotting sweatshops? No, not unless the goal is to prevent developing countries from using the same springboards out of poverty that the West used in its own economic development, according to Benjamin Powell.
 (Read the full article.)

  • The Federal Reserve’s zero interest-rate policy has been disastrous for those who live on interest earnings, especially many seniors. Robert Higgs explains. (Read the full article.)

Please be sure to take advantage of our special offer of your choice of a FREE book when you renew or order a new subscription online.


5) New Blog Posts

From The Beacon:

From MyGovCost News & Blog:

Americans Still Paying for IRS Mistakes and Improper Actions
K. Lloyd Billingsley (6/23/14)

“We Can’t Afford That!”
Craig Eyermann (6/19/14)

Bullet Train Bags Big Bucks
K. Lloyd Billingsley (6/18/14)

What the Stimulus Package Really Stimulated
Craig Eyermann (6/17/14)

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


6) Selected News Alerts


  • Catalyst
  • Beyond Homeless