The Lighthouse^®

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The Lighthouse^® is the weekly email newsletter of the Independent Institute.
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Volume 15, Issue 36: September 4, 2013

1. Obamacare and Jobs
2. Obama’s Hidden Motives for Attacking Syria
3. U.S. Borrowing: Then and Now
4. Ludwig von Mises Celebration Dinner—Sept. 28 in Silicon Valley
5. New Blog Posts
6. Selected News Alerts:

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The Independent Review: Subscribe or renew today and get a free copy of the 25th Anniversary Edition of Crisis and Levithan: Critical Episodes in the Growth of American Government, by Robert Higgs.

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Is the Affordable Care Act good or bad for the labor market? According to healthcare economist David Cutler of Harvard, it will boost employment by reducing healthcare costs about 5 percent by 2015. Repealing the healthcare law, he claims, would lead to 250,000 to 400,000 job losses per year. But there are good reasons to doubt this claim. University of Chicago labor economist Casey Mulligan says that Cutler has underestimated Obamacare’s explicit and implicit taxes; he estimates that by 2015 the labor market will have contracted by 3 percent—about 4 million jobs. And according to Independent Institute Senior Fellow John C. Goodman, Mulligan was too easy on Cutler because he accepts Cutler’s mistaken claims about Obamacare’s cost savings!

In a recent op-ed at Forbes, Goodman argues that, contrary to Cutler, healthcare costs will climb appreciably after Obamacare is fully implemented. This is largely because it will dramatically increase the demand for healthcare, due to greater spending on the newly insured and on new coverage mandates, such as annual wellness check-ups for seniors. In addition, the supply of physicians available to most patients will fall as some doctors opt for concierge-style care, which typically serves only one-fifth as many patients as traditional medical practices handle. Federal authorities will try to combat the resulting rising costs by copying successful cost-containment pilot programs, but so far success stories are elusive. When they see that this has failed, they will impose draconian cuts in Medicare fees for doctors and hospitals, Goodman argues.

Obamacare’s elimination of “job lock” and any other positive benefits, Goodman writes, “are likely to be overwhelmed by the negative aspects of the law―negative aspects that were never necessary in the first place if the only goal was to help the uninsured get health insurance.”

Don’t Be Fooled, Obamacare Will Drive Up Unemployment and Healthcare Costs, by John Goodman (Forbes, 8/14/13)

Obamacare Pushes Big Medical Practice Changes, by John C. Goodman (Heartland, 8/20/13)

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

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The Syrian regime poses no threat to vital U.S. interests, but President Obama and House Speaker John Boehner agree that Washington should take military action against it in retaliation for its presumed use of chemical weapons against civilians—even though such weapons account for “less than 1 percent of the more than 100,000 people killed thus far in the conflict,” writes Ivan Eland, senior fellow at the Independent Institute and director of the Center on Peace & Liberty. Clearly, other motives are also at work. One additional—and as yet unannounced—reason behind the White House’s bellicose stance is a desire to maintain “credibility” vis-à-vis another adversary in the region: Iran.

In addition, Obama hopes to maintain face: well before last month’s reports of Syria’s deployment of chemical weapons, the President announced that such actions would constitute a line drawn in the sand, the crossing of which would trigger U.S. military action. Thus, Obama has painted himself in a corner. He’s hardly the first president to do so. According to Eland, John F. Kennedy made the same mistake before the Cuban Missile Crisis. “Kennedy admitted that if he hadn’t made a speech saying that any Soviet nuclear missiles installed in Cuba would be a grave threat to U.S. security, he would never have had to do anything about the Soviet deployment that didn’t really change the strategic nuclear balance between the superpowers,” Eland writes in the Huffington Post.

Just as Obama seems to believe he has no better option than to escalate hostilities, so Syria’s Assad may feel he must respond to U.S. air strikes by deploying his deadly arsenal against even more civilians—a point made recently by Independent Institute Senior Fellow Charles V. Peña. “In a fit of desperation, [Assad] could choose to unleash whatever is left of his chemical weapons on more innocent civilians,” Peña writes in The National Interest. And if this fate were somehow avoided, it’s easy to image how U.S. air strikes could topple Assad and usher in a replacement who is even worse.

The U.S. Will Regret Intervention in Syria, by Ivan Eland (Huffington Post, 8/28/13)

Syria and the Albright Syndrome, by Charles V. Peña (The National Interest, 8/29/13)

Video: Eland on the Syrian Crisis (8/23/13)

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

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In May 2013, the U.S. national debt reached a $16.738 trillion ceiling. Since hitting that level the U.S. Treasury has managed to keep debt from climbing much—thanks in part to the Federal Reserve. In fact, Ben Bernanke and company have played a growing role in the funding of the federal government over the past few years, via their “quantitative easing” purchases of U.S. Treasury securities.

As Independent Institute Research Fellow Craig Eyermann explains at MyGovCost.org, since the end of September 2012 the Fed has increased its share of total public debt outstanding from 10.8 percent to 12.0 percent. Consequently, foreign entities own a smaller share of U.S. debt than they otherwise would have owned, although their share is still larger than it was in January 2011, when Eyermann published his first breakdown of the composition of U.S. debt holders. Back then foreigners held 28.4 percent of U.S. debt, compared to 33.5 percent today, and the national debt was $3.176 trillion less.

“The U.S. federal government’s annual budget deficit may be coming down,” Eyermann writes, “but there’s still a long way to go in cutting its spending enough to be able to actually run the annual budget surpluses needed to start bringing the national debt down.”

Then and Now, by Craig Eyermann (MyGovCost News and Blog, 9/2/13)

MyGovCost—Home of the Government Cost Calculator

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The Independent Institute is delighted to co-sponsor the 5th Annual Ludwig von Mises Birthday Celebration Dinner, to be held September 28 at the Silicon Valley Capital Club in San Jose, California. Please join us—and bring friends!

This is an excellent opportunity to enjoy fine dining with old and new liberty-minded friends, and to hear why Ludwig von Mises, the leading economist of the Austrian school in the 20th century, is also among the greatest defenders of liberty in world history.

The event’s featured speaker is Institute Research Fellow Robert Murphy, and the title of his talk is “Socialism, Capitalism, and Interventionism: The Importance of Ludwig von Mises.” As Dr. Murphy will elaborate, Mises explained that socialism’s fatal flaw is the absence of free-market prices. In revealing this flaw, he enabled the world to better appreciate the functioning of a free economy and also showed why the “third way” of piecemeal economic interventionism must eventually fail. Dr. Murphy is currently writing a book about Ludwig von Mises’s magnum opus, Human Action, to be published by the Independent Institute.

Date: Saturday, Sept. 28, 2013
Time: 6 - 10 P.M.
Place: The Silicon Valley Capital Club

50 W. San Fernando St., 17th Floor, San Jose, 95113 (Validated/free parking available in same building parking garage. It is called the Fairmont Plaza, and the entrance is on San Fernando Street between Market Street and First Street.)

Map and directions

More event details and registration

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From The Beacon:

From MyGovCost News & Blog:

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

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