The Lighthouse^®

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The Lighthouse^® is the weekly email newsletter of the Independent Institute.
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Volume 13, Issue 22: June 1, 2011

1. War Costs and Casualties Mount under Obama
2. Tax Hike Would Undermine Domestic Oil Production
3. Immigration and Sweatshops as Foreign Aid
4. U.S. Ignores Strife in Kurdistan at Its Own Peril
5. New Blog Posts

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What are the wars in Iraq and Afghanistan costing Americans? Anthony Gregory, research editor at the Independent Institute, addresses this question and related issues in his new Independent Policy Report, What Price War? Afghanistan, Iraq, and the Cost of Conflict. An op-ed based on this report was published last week in the Sacramento Bee, Salt Lake Tribune, Dallas Morning News, and elsewhere.

Among other conclusions, Gregory argues that Obama’s policies look a lot like his predecessor’s and in many cases they are worse. In his May 19 speech on the Middle East, the president in effect embraced the Bush doctrine of preventive war. He has also increased military spending, outsourced more operations to private contractors, and bombed Libya without congressional approval—a violation of the War Powers Act—and he is petitioning Iraq to stay beyond the end of 2011, the withdrawal date set by the Bush administration. “Meanwhile, the stepped-up war in Afghanistan has offset much of the savings we could have expected in Iraq,” Gregory writes in his op-ed.

The cost in terms of blood has also risen under Obama. In 2010, 559 U.S. troops died in the two wars, compared to 469 during Bush’s final year in office. In some months during Obama’s reign, more private contractors were killed than soldiers. “Those who voted for Obama in 2008, expecting a shift in defense policy, must face a sad fact,” Gregory continues. “The United States would have likely spent less money and spilled less American and foreign blood in its wars had the president simply continued on the path charted by President Bush. Instead, we now have Bush Plus.”

What Price War? by Anthony Gregory (Dallas Morning News, 5/24/11)

What Price War? Afghanistan, Iraq, and the Costs of Conflict, by Anthony Gregory (Independent Institute Policy Report, 6/1/11)

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U.S. oil production rose in 2009, the first increase in more than 25 years, thanks to the $2 trillion the industry has spent on capital projects since 2000. President Obama has proposed policy initiatives he says would increase domestic oil production, such as leasing more drilling rigs in the Gulf of Mexico and reducing bureaucratic delays for more oil exploration. But his call for higher taxes for major oil companies would have the opposite effect: his proposed tax hike would collect an estimated $21 billion over the next ten years and would act to dampen oil production.

“If Congress approves the White House tax proposal—a knee-jerk response to oil industry profits—domestic oil companies are likely to move drilling rigs to other countries, such as Brazil, and invest less in alternative energy sources,” writes William F. Shughart II, senior fellow at the Independent Institute, in his latest op-ed.

Although the White House now touts the notion that developing domestic oil reserves is critical for reducing America’s reliance on imports from unfriendly or unreliable oil-producing countries, it won’t admit that the tax hikes are inconsistent with its expressed goal of increased domestic oil production. Continues Shughart: “Encouraging production with one hand while discouraging it with the other is schizophrenic at best and counterproductive at worst.”

Obama’s Schizo Energy Policy, by William F. Shughart II (The Washington Times, 5/24/11)

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

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Mexican authorities recently discovered 513 people who paid human traffickers $7,000 to hide them in two tractor-trailer trucks bound for the United States. Just as the would-be immigrants would have benefited from freer immigration, rather than policies that make border crossings more costly and risky, so factory workers in poor countries would benefit from greater foreign investment that raises their productivity, rather than anti-sweatshop legislation that lowers the demand for their labor, argues Independent Institute Research Fellow Art Carden in his latest column at Forbes.com.

Legislation that mandates workplace safety standards may sound noble, but they can harm sweatshop workers by reducing the demand for their labor, Carden explains. Because those mandates hurt a firm’s ability to upgrade its capital goods, they also harm worker productivity and wages. Moreover, sweatshops are often the best prospect for improving the standard of living of workers in poor countries, a point explained in more detail in studies co-authored separately by Independent Institute Research Fellows Benjamin Powell and Emily Skarbek, notes Carden.

Those who wish to help workers in poor countries should therefore support policies that raise investment and ease the burden of migration. “More capital invested in poor countries means higher incomes for workers in those countries,” Carden continues. “More immigrants in rich countries means higher incomes not only for the migrants, but also for native workers in those countries. If advocates for the world’s poor really want to do something that actually helps the world’s poor, they should quit protesting sweatshops and start working to eliminate barriers to free trade and free immigration.”

Immigrants, Sweatshops, and Standards of Living, by Art Carden (Forbes.com, 5/19/11)

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Inspired by the popular uprisings in Tunisia and Egypt, protestors in Kurdistan rallied against oppressive two-party rule for two months until Kurdish security forces quashed their protests in April. The U.S. embassy in Iraq issued no rebuke of the crackdown, and the protestors were left to speculate about the reasons the White House did not speak out even though it expressed support for recent uprisings elsewhere in the Middle East.

The general reason is that the White House views democratic revolts against certain autocratic regimes—those in Bahrain, Yemen, and Saudi Arabia, for example—as inimical to U.S. interests. In the case of Kurdistan, the region has long been considered by Washington to be a tranquil success story in otherwise violent Iraq. But the U.S. government errs by ignoring political strife in Kurdistan, according to Ivan Eland, director of the Independent Institute’s Center on Peace & Liberty.

“The United States should take Kurdish instability as a warning sign and resist the temptation to keep U.S. troops in Iraq longer than the date for their scheduled withdrawal at the end of the year, should the Iraqi central government ask them to remain,” Eland writes in his latest op-ed. If Iraq descends again into civil war, the oil-rich and highly contested city of Kirkuk may ignite the Kurdish tinder keg.

U.S. Reticence on Thuggish Repression in Kurdistan, by Ivan Eland (5/18/11)

The Empire Has No Clothes: U.S. Foreign Policy Exposed, by Ivan Eland

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

Partitioning for Peace: An Exit Strategy for Iraq, by Ivan Eland

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From The Beacon:

From MyGovCost News & Blog:

The Independent Institute’s Spanish-language blog is available here.

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