The Lighthouse^®

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The Lighthouse^® is the weekly email newsletter of the Independent Institute.
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Volume 13, Issue 48: November 29, 2011

1. Economics Lessons for ‘Occupy’ Protesters
2. UN Climate Conference Needs Light, Not Hot Air
3. Mt. Rushmore Picks Reveal Limited Concern for Limited Government
4. Carden Replies to Critics of Immigration
5. New Blog Posts

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The Occupy Wall Street movement—along with its kindred spirits across the United States and even abroad—is saturated with misguided slogans and short on real insight. Although some “occupiers” have rightly criticized taxpayer-funded bank bailouts, at least as many of them have directed their anger against the free-market system. Their animus is misdirected: the bailouts, the Federal Reserve’s loose monetary policies, and the bipartisan push to broaden home ownership by weakening mortgage loan standards were the products of an interventionist mindset, not adherence to the principles of laissez-faire.

If the protesters took the time to study economics, they would see that free-market capitalism is the antithesis of the cronyism responsible for many of our current economic troubles, according to Dominick T. Armentano, research fellow at the Independent Institute. They would understand that capitalism entails the freedom to earn profits and to suffer losses. And they would realize that a policy of equal distribution of income would be both unjust and economically disastrous.

“Consumers place a higher value on Lady Gaga’s services than they do on my services and, thus, her income is far higher than mine,” Armentano writes. “Under capitalism, Lady Gaga (certainly a member of the 1% club) is entitled by right to keep what she earns in free trade . . . or give it away if she chooses. By what right would protesters advocate that government confiscate some of that income and ‘distribute’ it to people who didn’t earn it? Sounds like theft and not ‘social justice’ to me.”

Capitalism and the Wall Street Protesters, by Dominick T. Armentano (11/19/11)

Protesters Need a Plan, Not Just a Complaint, by Lech Walesa (San Francisco Chronicle, 11/15/2011)

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Don’t expect any breakthroughs at the 2011 United Nations Climate Change Conference, which began this week in Durban, South Africa. Nor is the summit likely to lead to an extension of the expiring provisions of the 1997 Kyoto Protocol—in part because the credibility of the UN-IPCC took a major hit after Climategate in 2009. (The latest release of leaked emails, dubbed Climategate 2.0, only reinforces the image that climate science has become highly politicized.) According to atmospheric physicist S. Fred Singer, the Durban conferees should stop wasting effort and resources on extending Kyoto and should focus instead on important scientific issues related to climate change and greenhouse gases—such as whether increased carbon dioxide emissions have been a boon to crop yields, and the reasons that temperature data from weather satellites, unlike data from land-based weather stations, do not show a recent warming trend.

One of the most important climate mysteries, according to Singer, a research fellow at the Independent Institute, is the reason that atmospheric temperatures have not risen faster than surface temperatures, as climate models and theory predicted.

“How, then, does one explain the absence of any warming of the atmosphere?” Singer writes in his latest op-ed. “I have real doubts about reported warming of the oceans during the same time period. And there is little question that proxy (non-thermometer) data show mostly no post-1978 warming trend. I note that the multi-proxy analysis published by Michael Mann et al (Nature, 1998) suddenly stops in 1978. I would place a small bet that this analysis shows no post-1978 warming—which may be why it was withheld.”

Durban Climate Conference, by S. Fred Singer (American Thinker, 11/28/11)

Hot Talk, Cold Science: Global Warming’s Unfinished Debated, by S. Fred Singer

Video: Hot Talk and Cold Science of Global Warming, featuring S. Fred Singer (The Independent Institute, 7/14/11)

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How would you change Mount Rushmore? In an interview earlier this month conducted by ABC News/Yahoo!, Republican presidential candidate Representative Michele Bachmann said she would like to see the likenesses of Ronald Reagan, James Garfield, and Calvin Coolidge added to the South Dakota monument. In a recent op-ed, Independent Institute Senior Fellow Ivan Eland, author of Recarving Rushmore, examines these picks.

The choice of Garfield may seem odd because the twentieth U.S. President served for only six months before he was assassinated. Bachmann’s selection of Calvin Coolidge isn’t a bad choice, Eland argues, although he ranks Silent Cal four rungs below Warren Harding, who ranks sixth on Eland’s Peace, Prosperity, and Liberty Index. Bachmann’s pick of Ronald Reagan for the honor of Mount Rushmore, however, draws staunch criticism from Eland. Reagan, he argues, doesn’t deserve his reputation as an advocate of a smaller federal government. One reason is that the federal civilian workforce (as a percentage of the population) grew more under Reagan than under any other president since Truman. Another reason is that Reagan patented what Eland calls “the fake tax cut.”

“Reagan cut taxes but never had any intention of cutting government spending,” Eland writes. “[U]nlike Bill Clinton and Dwight Eisenhower, who reduced federal spending as a portion of GDP, Reagan increased it. . . . When taxes are cut but spending is not, either future taxes have to be raised (which Ronald Reagan did several times), borrowing has to occur to cover the fiscal deficits, or money has to be printed. Thus, Reagan added greatly to the national debt, from which taxpayers are still burdened with interest costs long after Reagan’s retirement. Also, with the tax ‘reform’ of 1986, Reagan increased the legitimacy of and guaranteed robust revenues from the dysfunctional and economy-dragging U.S. tax system.”

What Michele Bachmann’s Mount Rushmore Picks Reveal, by Ivan Eland (11/16/11)

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

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Last week’s Lighthouse referenced a pro-immigration op-ed by Independent Institute economists Benjamin Powell and Art Carden that ran in the Birmingham News. In his latest piece at Forbes.com, Carden responds to comments he and Powell received about the op-ed and gives thanks to America’s immigrants. Below are two of his eight replies.

About the data on immigration on which their arguments were based, Carden writes: “We claimed that immigration is a net boon to the American economy, and indeed we agree with Julian Simon that people are The Ultimate Resource. Professor Powell discusses the case for immigration in greater detail in this article. Bryan Caplan makes a compelling case in this lecture, and Lant Pritchett’s Let Their People Come—which you can download for $0—converted me from the view that open immigration is just a good idea to the view that open immigration is a moral imperative. Simon answers the ‘there are too many people’ objection, as well.”

Here’s Carden’s response to the claim that more immigration would harm American culture: “Almost two and a half centuries of ‘multiculturalism’ in America hasn’t ruined us yet, and I don’t see any reason it will. People use different metaphors to describe American society: melting pot (one radio host said ‘cheese fondue’), salad bowl, etc. I prefer chili: the elements of chili remain distinct, in a sense—you can separate beans from beef—but they combine into something much greater than the sum of its parts.”

Send These, the Homeless, Tempest-Tost to Me: I’m Thankful for Immigration, by Art Carden (Forbes.com, 11/24/11)

Why Is Immigration Illegal Anyway?, by Benjamin Powell and Art Carden (Birmingham News, 11/20/11)

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From The Beacon:

From MyGovCost News & Blog:

The Independent Institute’s Spanish-language blog has surpassed 3 million page views! You can find it here.

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