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Volume 12, Issue 45: November 9, 2010

  1. The American Difference
  2. Rethinking the Cuban Missile Crisis
  3. Obama’s Budget Deficits: The Fruits of Overspending, not ‘Under Taxation’
  4. Is U.S. Justice Broken? Overcoming Government Legal Failure (Oakland, CA; 12/9/10)
  5. This Week in The Beacon

1) The American Difference

France’s Nicolas Sarkozy bucked popular opinion (and sparked riots) when he proposed to overhaul his country’s pension system. Argentina’s Carlos Menem betrayed the Peronist principles of his party when he proposed privatization in the 1990s. And Margaret Thatcher met skepticism at all levels (including from her Conservative Party base) when she proposed to reduce the scope of government.

By contrast, the United States seems exceptional in its possession of a grassroots movement that pushes for smaller government, according to Independent Institute Senior Fellow Alvaro Vargas Llosa.

“With exceptions, whenever there was revulsion against big government in Europe and Latin America, it was the leaders who dragged, and eventually persuaded, the population to their view,” writes Vargas Llosa in his latest syndicated column for the Washington Post Writers Group. “[I]n the United States, it is usually the other way around—a libertarian sentiment at the grass roots is eventually seized upon by certain leaders.”

“They Do Things Differently in America,” by Alvaro Vargas Llosa (11/3/10) Spanish Translation

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

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


2) Rethinking the Cuban Missile Crisis

Ted Sorensen—John F. Kennedy’s speechwriter, who died on October 31 at the age of 82—said the most satisfying achievement of his career was the letter he wrote to Soviet Premier Nikita Khrushchev pressing for a peaceful resolution to the Cuban Missile Crisis. Sorenson’s death offers an opportunity to correct the American public’s misconceptions about that crisis, according to Independent Institute Senior Fellow Ivan Eland.

It is true that Kennedy’s confrontation with the Soviets about their installation of nuclear weapons in Cuba could have triggered Armageddon—in that sense it was perhaps the gravest crisis in U.S. and world history. But the confrontation didn’t have to occur: Kennedy and Defense Secretary Robert McNamara acknowledged privately that Cuba’s possession of Soviet nukes “didn’t significantly alter the nuclear balance between the superpowers,” Eland writes in his latest op-ed. “[E]ven before the installation of missiles in Cuba, Soviet missiles fired from the USSR could incinerate the United States.”

Moreover, after the crisis was resolved—with the Soviets withdrawing the weapons in exchange for the withdrawal of U.S. missiles from Turkey—the USSR stepped up its development of nuclear weapons and, by the early 1970s, achieved rough parity with the United States. Kennedy should also be remembered, Eland argues, for the incident that prompted the Soviets to equip the Castro regime with nuclear missiles in the first place: the botched Bay of Pigs invasion. “Thus, JFK, with the help of Sorensen, did eventually defuse the greatest security crisis in American and world history—but one that Kennedy largely created himself,” writes Eland.

“Ted Sorensen’s Death Should Cause Reflection,” by Ivan Eland (11/3/10) Spanish Translation

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

Recarving Rushmore: Ranking the Presidents on Peace, Prosperity, and Liberty, by Ivan Eland

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


3) Obama’s Budget Deficits: The Fruits of Overspending, not ‘Under Taxation’

How do the White House’s budget and deficit forecasts for 2010 (the ones made in 2009) compare with its latest forecasts? Craig Eyermann, creator of the Government Cost Calculator at, makes the relevant comparisons and draws some interesting conclusions.

A picture may be worth a thousand words, but a bar graph is worth trillions. Well, not exactly, but a decent bar graph does help us wrap our minds around trillion-dollar deficits. One of Eyermann’s graphs helps illustrate, he writes, “the long-term corrosive effect of the spending initiatives that President Obama and his majority party in the U.S. Congress have launched during the President’s first year in office.”

The other graph, Eyermann argues, shows that “Even though President Obama plans to raise taxes by quite a lot, he plans to increase federal government spending even faster.” His point? “That’s not a tax problem—that’s a spending problem.” See the graphs here:

“The Obama Spending Future,” by Craig Eyermann (, 10/31/10)

“The Obama Deficit Future,” by Craig Eyermann (, 10/29/10)

How will runaway federal spending affect your lifetime tax liability? Find out at:

MyGovCost Facebook Page

MyGovCost Twitter Page


4) Is U.S. Justice Broken? Overcoming Government Legal Failure (Oakland, CA; 12/9/10)

“If we want to reform the legal system, we must change the rules of the game so that the individual incentives of judges, lawyers, juries, and other legal actors motivate them to act in the larger social interest.” So argues Edward Lopéz in The Pursuit of Justice, a thoroughgoing book on government legal failure—the bureaucratization and politicization of the U.S. legal system and how the law really works in practice rather than in theory. From fingerprinting to criminal sentencing, from lawyer licensing to judicial selection, and from eminent domain to wealth transfers via class-action lawsuits, how do perverse incentives impact the law and what reforms would create a more just and efficient legal system?

Join Professor Lopéz (San Jose State University), David Friedman (Santa Clara University), and Judge Alex Kozinski (U.S. Court of Appeals, Ninth Circuit) as they discuss the faulty incentives at the heart of legal failures and whether market-based reforms would create a more just and efficient system of law.


Edward Lopéz is Associate Professor of Law and Economics, San Jose State University. He is the editor of The Pursuit of Justice, a path-breaking analysis of the problems of the U.S. legal system.

David Friedman is Professor of Law, Santa Clara University. He is the author of the books Future Imperfect: Technology and Freedom in an Uncertain World, Law's Order: An Economic Account, Hidden Order: The Economics of Everyday Life, and The Machinery of Freedom.

Alex Kozinski is Chief Judge of the U.S. Court of Appeals for the Ninth Circuit. His scholarly articles have appeared in such journals as Harvard Law Review, Virginia Law Review, Yale Law Journal, Columbia Journalism Review, Michigan Law Review, Texas Law Review, ABA Journal, Stanford Law Review, and Washburn Law Journal, and his popular writings have been published in Slate, New Yorker, Wall Street Journal, New York Times, Forbes, New Republic, Wilson Quarterly and National Review.


Thursday, December 9, 2010
Wine & Cheese Reception: 6:30 PM
Program: 7:00 PM


The Independent Institute
100 Swan Way
Oakland, Calif.
Map and Directions


$15 • $10 for Institute Members.
$35 Special Admission includes one copy of The Pursuit of Justice • $30 for members
Reserve Tickets Today
Event webpage

Praise for The Pursuit of Justice: Law and Economics of Legal Institutions, edited by Edward Lopéz:

“The American legal system is not just fraying at the edges, in some ways it is fundamentally broken. The Pursuit of Justice is a cutting-edge look at what went wrong and where to go from here. Everyone interested in law and economics should read it.”
—Tyler Cowen, Holbert C. Harris Chair of Economics, George Mason University, co-author,

The Pursuit of Justice does a wonderful job of using modern methods of social science to examine the actual effects of law, as differentiated from its apparent intent. This volume offers substantial insight into the way the legal system works in practice, and how it can be improved.”
—Randall G. Holcombe, DeVoe Moore Professor of Economics, Florida State University

“Judges, police, prosecutors and lawyers are all people with their own goals and constraints. They may care about social welfare, but they certainly care about other things as well. The discipline of Public Choice has contributed greatly to our understanding of political behavior by taking this perspective with respect to politicians. The Pursuit of Justice begins the very important process of applying this insight to the functioning of the legal system. The American legal system has many flaws, and this most insightful book will contribute both to understanding the source of these flaws and then to fixing them.”
—Paul H. Rubin, Samuel Candler Dobbs Professor of Economics and Law, Emory University

Purchase The Pursuit of Justice.

Read a detailed book summary.

Event Webpage:Is U.S. Justice Broken? Overcoming Government Legal Failure”


5) This Week in The Beacon

Stay informed. Get heard. Read and comment on the Independent Institute blog.


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