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The Lighthouse®

The Lighthouse® is the weekly email newsletter of the Independent Institute.
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Volume 19, Issue 8: February 21, 2017

  1. Eight Steps to Replacing Obamacare the Right Way
  2. Trump’s Flip on North Korea Is Risky, Eland Argues
  3. The Hidden Costs of Regulatory Red Tape
  4. Rethinking Prohibition of the World’s Oldest Profession?
  5. Independent Updates

1) Eight Steps to Replacing Obamacare the Right Way

The path to affordable, dependable healthcare can’t be built by “repairing” Obamacare, but only by replacing it—with eight steps that emphasize fairness, choice, and the free market. These eight steps are discussed in “Replacing Obamacare and Insuring the Uninsured,” the new Executive Summary by Independent Institute Senior Fellow John C. Goodman, along with Representative Pete Sessions (R-TX, Chairman, House Rules Committee), and Senator Bill Cassidy, M.D. (R-LA).

The essential eight steps are central to legislation that was introduced in the House and Senate—the Sessions-Cassidy Health Plan (Goodman’s analysis of that bill is here)—and in the Patient Freedom Act, sponsored by Sen. Cassidy.

If Congress and the White House complete the eight recommended steps, “we can achieve a goal the sponsors of the Affordable Care Act promised to reach, but never delivered,” write Goodman, Sessions, and Cassidy. In other words, healthcare would be made truly affordable and accessible to all. “And in case some fall through the cracks and remain uninsured, an adequately funded safety net will insure access to medical care,” they conclude.

“Replacing Obamacare and Insuring the Uninsured,” by John C. Goodman, Rep. Pete Sessions, and Sen. Bill Cassidy (Independent Institute, 2/13/17)

The Sessions-Cassidy Health Plan, by John C. Goodman (8/25/16)

A Better Choice: Healthcare Solutions for America, by John C. Goodman

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


2) Trump’s Flip on North Korea Is Risky, Eland Argues

North Korea may be three to five years away from developing the capability to strike the United States with a nuclear warhead. How will the White House respond? Probably not the way Donald Trump indicated he would back when he was stumping on the campaign trail. Back then the presidential hopeful pledged to keep America safer by reducing U.S. military commitments in East Asia and encouraging South Korea and Japan to provide for their own defense. With James Mattis running the Defense Department, however, it looks like the United States will continue the war of words and sanctions against North Korea and maintain, rather than rethink, U.S. commitments in the region.

But the best way to make America safe from a nuclear attack by the erratic Kim Jong Un, according to Independent Institute Senior Fellow Ivan Eland, is to reduce its entanglement with East Asian allies—in other words, to pursue the approach Trump articulated during the campaign. This strategy would encourage South Korea and Japan to develop a nuclear deterrence. More importantly, it would encourage China to pressure Pyongyang to drop is bellicose rhetoric and dismantle its long-range missiles and nuclear weapons.

The reason for this, Eland argues, is that China would be less worried about South Korea if it were not so closely allied with United States. “If the threat of a U.S.-dominated alliance with South Korea on their border were lessened, the Chinese could better calibrate their increased pressure on North Korea to get results but avoid Northern Korean collapse,” Eland writes at US News & World Report. Moreover, “letting wealthy Japan and South Korea do more for [their own military defense] would likely make China feel less encircled and able to do more for its own security, and everyone else’s, by pressuring North Korea towards better behavior.”

Let Trump Be Trump with North Korea, by Ivan Eland (US New & World Report, 2/17/17)

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


3) The Hidden Costs of Regulatory Red Tape

The hidden price tag of government regulations is greater than you probably thought—a whopping $4 trillion per year on regulatory compliance alone, according to one study. President Trump’s pledge to nullify two regulations for every new one that’s implemented therefore provides welcome relief.

The 2-for-1 regulatory cuts, however, “will require careful and thoughtful implementation,” writes Independent Institute Senior Fellow William F. Shughart II. The reason is that “not all rules impact the economy equally.” But the new rule is a step in the right direction—in part because the unseen consequences of government regulations go beyond first-order financial effects.

Consider two examples. When, in the aftermath of the 9/11 terrorist attacks, the feds tightened the banks’ Know Your Customer requirements, with the hope of preventing bank loans from falling into the hands of terrorists, the smaller banks found it even more difficult to compete with larger rivals. Some therefore had to close their doors, resulting in greater consolidation and concentration in the banking industry. Second example: The regulations that auto manufacturers face are much different, but their unintended consequences can be tragic. The requirement that new vehicles come with a backup camera can add $500 to the price tag—an extra cost that will discourage some drivers from replacing their risky clunker with a safer new vehicle. Thus, while the financial costs of government regulations can be significant, these sometimes pale next to the human costs.

Regulatory Red Tap Is Strangling Economic Growth, by William F. Shughart II (Sacramento Bee, 2/16/17)

Taxing Choice: The Predatory Politics of Fiscal Discrimination, edited by William F. Shughart II


4) Rethinking Prohibition of the World’s Oldest Profession?

Prostitution may be the oldest profession, but it’s hard to think of a trade that garners more contempt by polite society. This may be a double-edged sword. On the one hand, public tirades against harlotry for hire are understandable—no parents in their right mind would wish the vocation on their daughter or son. Emotional compartmentalization, an elevated risk of disease, the encouragement of vice, and the possibility of falling victim to sexual slavery are hardly the ingredients of a life of fulfillment. On the other hand, when private morality becomes public law, even laws with the best of intentions, bad consequences often ensue. In the case of bans on prostitution, the worst side-effects fall on the intended beneficiaries of prohibition—the sex workers themselves, according to Independent Institute Research Fellow Abigail R. Hall Blanco.

Voluntary institutions that encourage social norms can play a positive role in society, but laws enforcing those same norms often have the opposite effect. In the case of prostitution, prohibition undermines multiple intended goals, Hall Blanco argues. The bans don’t end bad behaviors; they send them underground. Like alcohol prohibition, prostitution prohibition encourages the emergence of a ruthless, exploitative sex trade. Without legal recourse, hookers often fall prey to the threats and abuses of violent johns, pimps, and criminal organizations. In some jurisdictions, medical reporting requirements discourage sex workers from getting frequent checkups, leading to disastrous consequences for public health.

“By decriminalizing the sex trade, governments could make serious gains in all of these areas,” Hall Blanco writes. “Prostitutes could report abuse, seek damages, and call for help without risking their own freedom.” Moreover, “researchers studying prostitutes in Canada, India, and Kenya found that legalizing sex work could decrease HIV infections by 33 percent to 46 percent.” In conclusion, Hall Blanco writes, “while we may have moral or other objections to prostitution, that is not a valid argument for criminalization.”

Decriminalizing Prostitution, by Abigail R. Hall Blanco (Sun Sentinel, 2/14/17)

Liberty for Women: Freedom and Feminism in the Twenty-First Century, edited by Wendy McElroy


5) Independent Updates
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