The Lighthouse^®

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The Lighthouse^® is the weekly email newsletter of the Independent Institute.
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Volume 18, Issue 25: June 21, 2016

1. Orlando Massacre, the FBI, and ISIS
2. Are the Young Being Fleeced?
3. George Gilder on Knowledge and the American Dream
4. Can You Tell Apart Voting Fact from Voting Fiction?
5. New Blog Posts
6. Selected News Alerts

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The Orlando killer, Omar Mateen, had been investigated by the FBI, but the authorities later deemed he was no longer a person of interest. What does this say about law enforcement and national security? Independent Institute Senior Fellow Ivan Eland weighs in.

“The mass shooting in Orlando, Florida at a gay nightclub, by a man pledging a seemingly last-minute allegiance to the ISIS terror group, leads to questions about whether the U.S. government has been adequately protecting its citizens,” Eland writes. The Orlando case may be different, but Eland notes a pattern of many domestic terrorism incidents.

Citing former FBI undercover officer Mike German, Eland observes that domestic terrorism suspects have often been targets of government entrapment, people who had posed little or no danger until they were egged on—and in some cases armed by—federal law enforcement. One reason the feds have used this tactic is that it allows them to obtain prosecutions without having to get a court order to search a suspect’s property and to seize evidence. Moreover, Eland notes that U.S. foreign policies have fed the rage, and sometimes even the funding and training, of militant groups that have later turned their sights on American targets. Thus, Eland warns Americans to pay close attention to what national security policy is doing on their supposed behalf.

Given Orlando, Has the U.S. Government Been Adequately Protecting the Public?, by Ivan Eland (The Huffington Post, 6/13/16)

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

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The Millennial Generation—and for that matter every age group after them, as far as the eye can see—can expect to get much less for their tax dollars than have their elders. Social Security is the obvious example, but young people disproportionately bear the cost for numerouspublic policies they had little say in creating. This problem—intergenerational injustice—is one that moral philosophers have badly neglected, but University of Virginia philosophy professor Loren Lomasky takes steps to remedy the deficiency in his thoughtful and thoroughgoing feature essay, “Fleecing the Young,” the lead article in the summer issue of The Independent Review.

Lomasky begins by offering three principles essential for a moral analysis of intergenerational justice. He then shows how they apply to specific problems, such as public debt (which often puts young people on the hook for debts run up by older voters) and minimum wage laws (which make it harder for younger, less-skilled workers to get jobs). Lomasky concludes by making three recommendations to promote intergenerational justice. First, laws and regulations under consideration could be required to include a “generational impact statement” that explains how a proposed change would affect different age groups.

Second, government decision-making bodies could be required to have someone tasked with representing the interests of young people, including the unborn—call it a “generational ombudsman.” Third, Lomasky calls for long-term government commitments, such as public pension contracts, to be made subject to voter affirmation or nullification by a pre-determined date. While these recommendations might greatly help prevent older generations from imposing burdens on the young, Loren notes that the adoption of all three of them together would not guarantee that intergenerational justice prevails. Something more fundamental is necessary. “Until and unless the moral underpinnings of the liberal democratic welfare state undergo intensified skeptical interrogation,” he writes, “there is little hope for relieving burdens on the young—and on the rest of us.”

Fleecing the Young, by Loren Lomasky (The Independent Review, Summer 2016)

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Capitalism is not chiefly a system of incentives; it is a system of knowledge creation. At the most fundamental level, wealth is knowledge and economic growth is learning.The failure to see things from a knowledge-based perspective explains why U.S. economic policymakers have not been able to fully restore the health of the economy in the wake of the 2008 financial crisis. Such was the theme of George Gilder’s June 7 talk at Independent Institute headquarters, “The Secret to Restoring the American Dream,” based on his latest book, The Scandal of Money: Why Wall Street Recovers but the Economy Never Does. (A video recording of the event is available here.)

Virtually everything has a “learning curve,” according to Gilder, but some things “learn” faster than others. Rainforest slime, for example, has a better learning curve than do public sector unions. Moreover, government itself stifles the learning that creates growth. Thus, although the Federal Reserve’s low interest-rate policy since late 2008 has sought to induce businesses to expand and hire more workers, it has unintentionally sent a bad signal to would-be borrowers: It suggests that something in the economy is stifling investment opportunities and that now is therefore not a good time to borrow and invest. More broadly, whenever governments are in control of the money supply, Gilder argued, they can wave money around like a magic wand, in the hope that people will believe that illusions are reality.

In contrast, money governed by the free market serves as a stable “measuring stick,” enabling buyers and sellers, borrowers and savers, to compare trade-offs free of the distortions caused by a government’s monetary mischief. In the days before central banks got full control of the reins, gold-based money was the norm, as was economic stability. Today, cryptocurrencies such as bitcoin offer a similar advantage that gold money once offered: Their supply cannot be increased by governments. If gold and cryptocurrencies were free to work together as money, this would, according to Gilder, enable the economy to live up to its full potential, economically maximizing the use of knowledge in society and putting the American Dream within reach of virtually anyone.

VIDEO: “The Secret to Restoring the American Dream,” featuring George Gilder (Independent Institute, 6/7/16)

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There may be great reasons to vote in public elections—for example, to motivate oneself to follow the government affairs at national, state, and local levels. But this is hardly the same as parroting the common election-year propaganda slogan, “Every Vote Counts.” First, there is the most basic statistical truth. As Independent Institute Research Fellow Gary M. Galles notes, any given voter casts only one vote out of thousands or millions of others. Therefore the odds of casting a decisive vote are infinitesimal, if that vote can even be deemed more important than any other—which it can’t.

Second, one voter’s victory at the ballot box is a rival voter’s loss. Can it be said that the vote of the losing rival also “counted” in any meaningful way? But there’s also a third way in which “Every Vote Counts” is far off course. It involves, as Galles notes, the fact that so many ballot measures or politicians that win elections actually interfere with the kind of voting that many people engage in everyday, whether the polls are open or not. By this he means the “votes” that people cast in the marketplace, where their spending decisions express a preference and help to decide which products and services sellers will offer in the future.

Writes Galles: “Those who proclaim obeisance to the principle that ‘every vote counts’ in fact use their power, derived from the only political votes that matter—those for the winner—to override millions of Americans’ votes about what they would do with themselves and their property. We should recognize that hypocritical hyperbole both for what it is, and what it is not—‘liberty and justice for all.’”

Why Every Vote Does Not Count, by Gary M. Galles (Newsday, 6/16/16)

Beyond Politics: The Roots of Government Failure, by Randy T Simmons

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6) Selected News Alerts

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