The Lighthouse^®

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The Lighthouse^® is the weekly email newsletter of the Independent Institute.
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Volume 18, Issue 22: June 1, 2016

1. “World’s Greatest Healthcare Bill” Draws from Independent Institute Book
2. Philadelphia Considers Soda Tax
3. Progressives Still Zoning Out on Markets and Property Rights
4. Trump Sees Risk Where U.S. Elites Seem Blind
5. New Blog Posts
6. Selected News Alerts

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Good news! The Lighthouse is delighted to report a potential game-changer for American healthcare policy: Sen. Bill Cassidy, MD, and Rep. Pete Sessions have introduced federal legislation that draws from A Better Choice: Healthcare Solutions for America, by Independent Institute Senior Fellow John C. Goodman. The bill is the most viable and far-reaching alternative to Obamacare yet offered. It would help consumers purchase health insurance by providing every adult with a uniform tax credit worth $2,500, regardless of his or her income.

Officially known as “The World’s Greatest Health Care Bill,” Goodman says he thinks it’s “the freest enterprise reform ever introduced in the U.S. Congress.” In addition to making the purchase of private health insurance much more affordable, it would reduce the federal footprint in the healthcare sector and eliminate perverse incentives that have created problems for workers and employers alike. It’s no surprise why Cassidy relied on Goodman’s book for ideas on crafting an alternative to Obamacare. “John Goodman understands the real life effects of the Affordable Care Act and the proposed alternatives,” he has written. “John also writes extremely well, making complicated concepts clear. All this makes A Better Choice a highly recommended read for those who wish to understand the current health policy debate.”

One of the first challenges to getting legislation passed, especially during an election season that’s already saturated with news stories about politics and policy, is to get attention in the news media. Fortunately, less than one week after Sessions and Cassidy introduced it, their bill is already getting respectable attention, including the following media coverage: “New Bill to Replace Obamacare Draws from Independent Institute Book” (CNBC); “GOP Lawmakers Introduce ‘The World’s Greatest Healthcare Plan’” (The Daily Caller); “Texan Pete Sessions, Realizing GOP Can’t Repeal Obamacare, Offers Alternative” (Dallas Morning News); “Sessions, Cassidy to Introduce ‘The World’s Greatest Health Care Bill. Ever’” (Fox News); “As Republicans Look for an Obamacare Replacement, Two GOP Lawmakers Make Their Own Bid” (Los Angeles Times); “GOP Lawmakers unveil Obamacare Replacement Bill” (The Hill). If you like the news, we encourage you to shout it from the rooftops—or just forward this email and post the news on social media.

New Bill to Replace Obamacare Draws from Independent Institute Book (5/31/16)

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

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

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Philadelphia mayor Jim Kenney last month called for imposing a tax on soda drinks in the City of Brotherly Love. Presidential candidate Bernie Sanders voiced opposition, complaining the cost would be borne disproportionately by low-income people. Sanders is correct. Kenney’s knowledge of public finance leaves much to be desired and his claim to hold the moral high ground is also unfounded, according to Independent Institute Research Director William F. Shughart II. In an op-ed for the Daily Caller, Shughart and co-author Josh T. Smith recap the relevant economic and ethical principles.

Regarding public finance, they write: “No tax sticks where it lands. Every tax is shifted forward, backward, or both, along the taxed good’s supply chain.” Taxes have distributive consequences. Proposals to impose a tax on lower-income consumers, who typically vote in smaller numbers, often have a strategic component: Increasing revenue by raising property taxes or general sales taxes would likely have met greater political resistance.

Regarding the soda tax’s moral status, Shughart and Smith write: “Philosopher Isaiah Berlin describes regulations like Philadelphia’s as attempts to reveal the manipulated person’s ‘real self.’... Such ideas represent monstrous impersonations of the individual’s own desires; they fundamentally undermine personal autonomy and therefore human dignity.” For what it’s worth, Sanders rival Hillary Clinton supports the proposed soda tax.

Philadelphia’s Proposed Soda Tax Is Government Manipulation, by William F. Shughart II and Josh T. Smith (The Daily Caller, 5/12/16)

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

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One hundred years ago, when New York City passed the nation’s first citywide zoning ordinance, the Progressive Era was in high gear and economists had yet to make their strongest case against government central planning. In the decades since then, however, they have offered both theoretical explanations for why government bureaucracies fail at promoting harmony and prosperity, and empirical studies measuring the negative consequences of government encroachments on free markets and private property. Unfortunately, as Independent Institute Research Fellow Gary M. Galles explains, municipal zoning policies have yet to reflect this understanding.

The scope of zoning regulations, Galles reminds us, is huge: Local officials have the power to restrict a building’s size, design, and use, provided they can defend their restrictions on the grounds of health, safety, morals, or community welfare. However, their frequent re-zoning efforts and ad hoc exemptions attest to the inefficiencies of the zoning process. In contrast, free markets and private property rights—where they are allowed and enforced—curb land-use conflicts efficiently, foster social harmony, and provide the soil for a growing prosperity. The problem, however, is that zoning regulations block the free-market path. (Houston, Texas, is the rare exception of land-use without zoning.)

“Neither zoning’s premise that government planners know enough to do it efficiently nor its promise to provide stability rather than chaos is demonstrated,” Galles writes. “Zoning reflects what [economist F. A.] Hayek called ‘the pretense of knowledge.’ Americans should reject it in favor of voluntary alternatives.”

Rethinking a Century of Zoning, by Gary M. Galles (Newsday, 4/28/16)

The Voluntary City: Choice, Community, and Civil Society, edited by David T. Beito, Peter Gordon, and Alexander T. Tabarrok

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Love him or hate him, Donald J. Trump has made an indelible contribution to public debate by broaching a topic the foreign-policy establishment has long considered taboo: the cost and risk to Americans posed by U.S. participation in NATO and military alliances in East Asia. Independent Institute Senior Fellow Ivan Eland, who was criticizing foreign entanglements even while Trump was still feeling his way around the bankruptcy courts, is relieved that a leading political figure is saying what the elites of internationalism deem “unthinkable.”

U.S. allies in Europe, Eland notes, have tremendous resources that could be re-deployed for their own defense. “The wealthy European Union has a combined GDP of at least five times that of Russia,” he writes in the Huffington Post. “Furthermore, the British and French have their own nuclear weapons that could deter any Russian aggression on Western Europe.” In East Asia, meanwhile, U.S. friends and allies also have vast untapped potential for self-defense: Collectively, they produce almost as much output annually as the People’s Republic of China.

Eland invites us to imagine the alternative to the United States holding a nuclear umbrella above its free-riding allies—a stance that poses an existential risk to presumed retaliatory targets such as New York, Chicago, and Los Angeles. “In both Europe and East Asia,” he writes, “the United States could return to the long-forgotten traditional foreign policy of the nation’s founders—which was to have commercial relations with all nations but to avoid permanent and entangling alliances or political intrigue with any of them—which lasted through most of the republic’s history until the Cold War began after World War II. A return to that restrained U.S. foreign policy would instantly make U.S. relations with China and Russia much better.”

The World Through Trump’s Eyes, by Ivan Eland (Huffington Post, 5/9/16)

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

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6) Selected News Alerts

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