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The Lighthouse®

The Lighthouse® is the weekly email newsletter of the Independent Institute.
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Volume 10, Issue 24: June 16, 2008

  1. The Real Oil Barons
  2. Supreme Court Clashes in Gitmo Case
  3. U.S. Security Guarantees Subsidize Ingratitude
  4. What the Second Amendment Means Today (Wed., July 2; Oakland, CA)

1) The Real Oil Barons

Oil executives and speculators face growing blame for pushing up oil prices, but the true culprits behind the surge of world oil prices lie elsewhere. In his latest syndicated column Independent Institute Senior Fellow Alvaro Vargas Llosa argues the blame rests with misguided government policies that have artificially restricted the supply of oil while artificially increasing the demand for it.

First, the supply side: In Russia, Putin has taken control of the country’s largest oil companies, imposed a 90 percent tax on oil profits, and failed to modernize oil plant equipment, resulting in a fall in oil output and exports. Venezuela and Mexico have also allowed their oil output to fall. In the United States, strict environmental regulations have made it too costly for oil refiners to expand domestic refinery capacity. As for artificially boosting the demand for oil—the Federal Reserve Bank has pursued an inflationary monetary policy; Vargas Llosa cites the period from January 2001 to June 2004, and also after September 2007, as periods of especially rapid money-supply growth. And China’s inflationary monetary policy has also contributed to higher world oil prices.

“These causes all amount to one original sin: politicians interfering with the process of supply and demand, profit and loss,” writes Vargas Llosa. “Adding insult to injury, we now have politicians throwing around proposals that will at best do nothing to cure the problem (tax holidays) and at worst (raising taxes on Big Oil, using antitrust legislation to stem ‘market concentration,’ increasing subsidies for alternative fuels, controlling prices) will keep oil underground.”

“Oil Prices—Who Are the Culprits?” by Alvaro Vargas Llosa (6/11/08) Spanish Translation

Purchase Taxing Energy: Oil Severance Taxation and the Economy, by Robert Deacon, H. E. Frech, and M. Bruce Johnson.

Purchase Lessons from the Poor: Triumph of the Entrepreneurial Spirit, edited by Alvaro Vargas Llosa.

Lessons from the Poor shows that the mightiest soldiers in the war on poverty are poor people themselves. This fascinating book documents the remarkable creativity and entrepreneurship of the poor, ranging from the family grocer in Kenya that became a supermarket giant to the makers of traditional dyed cloth in the informal sector in Nigeria, who make as much money as corporate managers in the formal sector. The message of the book is profoundly hopeful—as governments remove obstacles to entrepreneurship, there is much potential for the poor to lift themselves out of poverty.”
—William R. Easterly, Professor of Economics and Director, Development Research Institute, New York University


2) Supreme Court Clashes in Gitmo Case

The Supreme Court’s decision last week, affirming that terrorist suspects and others held by U.S. forces at Guantanamo Bay must be given access to domestic courts, demonstrates the ongoing importance of the legal protection of habeas corpus in maintaining the rule of law. In addition, the profound differences between the Court’s majority and its dissenters illustrates an alarming gap in how members of the Court view the powers of the executive branch of government, as Independent Institute Research Analyst Anthony Gregory explains in a new op-ed published in the San Diego Union Tribune.

Justice Kennedy, writing for the majority of the Court, stated that the habeas process is supposed to provide independent judicial scrutiny, beyond “manipulation by those whose power it is designed to restrain”—the White House, in this case. Not so for Justice Scalia. In his minority decision, Scalia suggested that deference to the White House during wartime is necessary because the president is “the Nation’s Commander in Chief.” As Anthony Gregory notes, however, the U.S. Constitution refers to the president as the Commander in Chief of the Army and of the Militia—not of the nation.

Also noteworthy is how the Court’s dissenters clash with one another. Justice Scalia claimed that the perilously revolutionary Gitmo decision will have grave consequences for Americans, whereas Justice Roberts, in a separate written dissent from the majority, argued that the case was vulgarly frivolous because, in his view, the habeas corpus review supported by the Court’s majority bears little substantive difference from the military’s own review process that the majority struck down.

“The Clash over Habeas Corpus,” by Anthony Gregory (6/13/08)

More by Anthony Gregory


3) U.S. Security Guarantees Subsidize Ingratitude

In the decades since 37,000 U.S. troops lost their lives in the Korean War, South Korea has became an economic powerhouse, producing a gross domestic product about 30 times as large as that of North Korea. The United States continues to protect South Korea with U.S. troops stationed there. Nevertheless, large numbers of South Koreans regularly protest measures to open up trade with the United States. Most recently, South Korea’s protectionist and nationalist contingent has protested increased imports of U.S. beef, allegedly due to safety concerns about the possibility of mad cow disease—despite the demonstrable safety record of U.S. beef in recent years.

As Independent Institute Senior Fellow Ivan Eland explains in his latest op-ed, “Ungrateful Allies,” it’s not uncommon for empires to experience ingratitude from the allies they defend. Japan and most European NATO allies of the United States, for example, also protect their markets from U.S. competitors, despite the huge subsidies that the U.S. security guarantee provides. So long as the United States continues to guarantee their security unconditionally, these countries will have weak incentives to open up their markets to U.S. producers.

“The United States should take the radical step of abrogating these outdated formal and informal alliances and security guarantees and gradually withdraw all of its forces from South Korea, Japan, and Europe,” Eland writes. “The phased withdrawal will give such nations time to build up their own defenses. If this route is taken, the United States, South Korea, and the other allies will be more secure, and the economic playing field will be made more level.”

“Ungrateful Allies,” by Ivan Eland (6/16/08)

Purchase The Empire Has No Clothes: U.S. Foreign Policy Exposed, by Ivan Eland.

“In The Empire Has No Clothes, Dr. Eland makes a persuasive case that current U.S. national security policy is contrary to the principles of both liberals and conservatives and is actually undermining our security and civil liberties. This book is an excellent contribution to the debate on the Bush Doctrine of waging preventive wars, maintaining hegemony, and spreading democracy by force.”
—Lawrence J. Korb, former Assistant Secretary, U.S. Department of Defense

Purchase Putting “Defense” Back into U.S. Defense Policy, by Ivan Eland.

“The book is a useful addition to a wide-ranging debate on defense spending today. Recommended for general readers, undergraduates, graduate students, and professionals.”


4) What the Second Amendment Means Today (Wed., July 2; Oakland, CA)

The Second Amendment’s right “to keep and bear arms” has been among the most controversial—and least understood—rights guaranteed by the U.S. Constitution. Did the Founders intend to safeguard an individual right or a collective right? How did England’s efforts to ban firearms in colonial Boston shape the Founders’ views on how to protect citizens from government tyranny? What kinds of gun restrictions, if any, are consistent with the Founders’ aims?

How exactly has gun control in the United States affected violent crime rates? With the Supreme Court’s review of the Washington, D.C., handgun ban, along with recent shootings on school campuses and elsewhere, these questions are timelier than ever.

Please join us on Wed., July 2, in Oakland, Calif., as Stephen P. Halbrook and Don B. Kates, Jr. examine the Second Amendment and the gun control.


Stephen P. Halbrook, a leading scholar on firearms and the law, is an attorney and the author of the new book, The Founders’ Second Amendment: Origins of the Right to Bear Arms, the fullest account yet written of the Founders’ views on the Second Amendment. He is also the author of That Every Man Be Armed: Origins of a Constitutional Right, and many other books on firearms and the Second Amendment.

Don B. Kates, Jr., a criminologist and attorney, is the author of Armed: New Perspectives on Gun Control and The Great American Gun Debate: Essays on Firearms and Violence (with Gary Kleck), along with many other books on firearms and the law.

Wednesday, July 2
6:30 PM: Reception
7:00-8:30 PM: Presentations and Q&A

The Independent Institute Conference Center
100 Swan Way
Oakland, California

Map and Directions


Member price: $10 ($32 includes admission plus one hardcover copy of The Founders’ Second Amendment). Non-member price: $15 ($38 includes admission plus book). Phone Nichelle Beardsley at (510) 632-1366 to reserve seating.

Purchase The Founders’ Second Amendment: Origins of the Right to Bear Arms, by Stephen P. Halbrook.

Read a detailed book summary.

Praise for The Founders’ Second Amendment:

“Halbrook has produced what promises to be the standard work for years to come on the origins of the Second Amendment.”
—Donald W. Livingston, Professor of Philosophy, Emory University

“Stephen Halbrook’s The Founders’ Second Amendment is first-rate work, utterly convincing. This is a solid and important work.”
—Forrest McDonald, Distinguished Research Professor Emeritus of History, University of Alabama

“I enthusiastically recommend Stephen Halbrook’s book, The Founder’s Second Amendment. This is an original and valuable approach, focusing on the place of individual ownership of firearms during the time of the American Revolution and the drafting and ratification of the Constitution and Bill of Rights. It will add appreciably to the scholarship on the origins and meaning of the Second Amendment.”
—Joyce L. Malcolm, Professor of Legal History, George Mason University School of Law; former Director of Research, National Endowment for the Humanities

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