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The Lighthouse®

The Lighthouse® is the weekly email newsletter of the Independent Institute.
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Volume 14, Issue 41: October 9, 2012

  1. Consequences of the Obamacare Mandate
  2. Wrongful Convictions and Bipartisan Blindness
  3. Presidents Often Defy Fiscal Stereotypes
  4. Robert Higgs on War-Making Rhetoric and Its Antidote
  5. New Blog Posts

Just reviewed in World Magazine and Regulation Magazine (pdf).

1) Consequences of the Obamacare Mandate

The health insurance mandate will crowd out jobs, wage increases, and other consumption. These are the biggest problems created by the new federal requirement that individuals who are not insured through their employer purchase health insurance starting next January, according to Independent Institute Research Fellow John C. Goodman, author of Priceless: Curing the Healthcare Crisis.

Workers at the lower end of the wage and salary scale may be hit especially hard. “Expect wage stagnation over the foreseeable future, as employers use potential wage increases to pay for expanded (and mandated) health benefits instead,” Goodman writes in Psychology Today. “At the low end of the wage scale, however, the effects of this new law are going to be devastating.” Employees at Walmart or chain restaurants such as McDonald’s and Denny’s may find that the additional costs for their employer has priced them out of a job.

Goodman also warns of greater lobbying that will come about as special interests compete to get their favored perks part of the mandated benefits package. “This has already happened at the state level,” Goodman writes. “All told, there are 2,156 mandates at the state level. They increase the price of insurance and have priced as many as one-in-four uninsured people out of the market.” Goodman cites a 2008 report from the US Department of Health and Human Services as evidence.

ACA: An Impossible Mandate, John C. Goodman (Psychology Today, 10/8/12)

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


2) Wrongful Convictions and Bipartisan Blindness

The exoneration of Damon Thibodeaux—the 300th convict to have been freed by DNA evidence—is one more clue that the U.S. justice system is misnamed. Instead of justice, it has institutionalized injustice. And our national leaders’ silence about the ongoing problem of wrongful convictions is further evidence that progressives and conservatives alike are blinded by their ideological assumptions.

“Thus, they trust government with the unparalleled powers of execution and imprisonment where they would distrust it to run the economy or care for the needy,” writes Independent Institute Research Fellow Anthony Gregory, in his latest piece for the Huffington Post.

“It is no wonder that almost any other issue is more likely to be discussed in the national debates than the horrible state of our criminal justice system,” Gregory continues. “Countless innocent people are being abused and have had their lives stolen from them by overzealous prosecutors and police, biased judges, and jurors willing to give the state the benefit of the doubt. This is one of the greatest injustices in modern American life and exposes the immoralities in pro-government ideologies that have come to dominate modern politics.”

The Justice System’s Imprisonment of Innocent Citizens, by Anthony Gregory (Huffington Post, 10/3/12)


3) Presidents Often Defy Fiscal Stereotypes

French President Francois Hollande opposed austerity measures before he took office in May. Back then the socialist politician could afford to ignore the fiscal pinch of the worsening euro crisis. Once in office, not so much. When he announced his intention to cut spending by $42 billion and reduce France’s budget deficit to 3 percent of GDP, Hollande wasn’t merely breaking a campaign promise: he was following the footsteps of presidents who have defied fiscal stereotypes in the face of intense pressures—like George W. Bush, Bill Clinton, and Ronald Reagan, argues Independent Institute Senior Fellow Ivan Eland.

Before, during, and after he was president, Reagan had the reputation as a friend of small government, but this view is mistaken. “Reagan’s record on cutting spending was abysmal—he actually increased the percentage of the economy consumed by federal spending,” Eland writes. Clinton, in contrast, “beat back the liberals in his administration and cut federal spending as a percentage of GDP by an average annual rate of more than 2 percent.” And as for George W. Bush—the self-described “compassionate conservative” is guilty of “increasing federal spending as a portion of GDP at an annual rate of almost 2 percent,” Eland continues.

These outcomes, although counterintuitive to those who view Democratic presidents as big spenders and Republican presidents as tightwads, have been par for the course. Eland writes: “In general, running against stereotype, during the post-Truman era, Democratic presidents have outperformed Republican presidents significantly in restraining average annual spending as a percentage of GDP, running lower average annual deficits as a portion of GDP, incurring less average annual debt as a percentage of GDP, and increasing average annual per capital GDP.” Eland concludes by suggesting that although Obama has worsened the fiscal mess he inherited, he may, if reelected, end up with a better fiscal record than his predecessor, due to the prospect of strong pressure from opponents in Congress.

Against Stereotype, Budget Hawks and War Hawks Edition, by Ivan Eland (9/28/12)

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


4) Robert Higgs on War-Making Rhetoric and Its Antidote

People who are quick to support unnecessary wars typically pay lip service to war’s horrors, but then support fighting anyway. Their excuses often follow predictable patterns based on historical errors, ill-founded speculations, and appeals to patriotic emotion and knee-jerk loyalty, rather than on fact-based argumentation. Their rationalizations are variations on a theme. Robert Higgs, Senior Fellow in Political Economy at the Independent Institute, examines fourteen types of excuse-making for war, each one of them a version of the rhetorical formula, “War is horrible, but . . .”

Does this one sound familiar? “War is horrible, but no one wants to see a world in which a regime with no regard for international law—for the welfare of its own people—or for the will of the United Nations—has weapons of mass destruction.” You might remember having heard those words in 2003: Deputy Secretary of State Richard Armitage spoke them in a speech a few weeks before the Iraq war.

The flexibility and usefulness of the war-is-horrible-but trope guarantees that it will be trotted out again and again, whenever war-wagers feel the need to win the support of their otherwise war-weary and more sensible fellow citizens. How should the tactic be countered? Higgs emphasizes the need to hold its practitioners to a very high burden of proof: make them try to prove, with verifiable empirical evidence and careful logical analysis, every one of their claims about the necessity of going to war. “If they cannot—and I submit that they almost never can—then people will serve their interests best by declining an invitation to war,” Higgs writes. “As a rule, the most rational, humane, and auspicious course of action is indeed to give peace a chance.”

“War Is Horrible, but . . .” by Robert Higgs (The Independent Review, Fall 2012)

Delusions of Power: New Explorations of State, War, and Economy, by Robert Higgs

Also see, War, the American State, and Politics since 1898, edited by Robert P. Saldin, reviewed by Michael C. Munger (The Independent Review, Fall 2012)

The Independent Review (Fall 2012)

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5) New Blog Posts

From The Beacon:

From MyGovCost News & Blog:

Buried in the Bill
Craig Eyermann (10/7/12)

The Record for Racking Up Debt
Craig Eyermann (10/3/12)

Government Pays Too Much for Pepper
Lloyd Billingsley (10/2/12)

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


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