The Lighthouse^®

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The Lighthouse^® is the weekly email newsletter of the Independent Institute.
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Volume 14, Issue 42: October 16, 2012

1. Economic Freedom and the Poor
2. The Lack of Representation
3. The Man Who Saved Colombia
4. Laying an Egg on Big Bird
5. New Blog Posts
6. Selected News Alerts

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Economic freedom delivers benefits across all income groups in a society. According to the latest study, the poorest tenth in the world’s economically freest countries earned about $8,735 per year, compared to $1,061 for the poorest tenth in the world’s least free countries. Freer is also healthier, in terms of both average longevity and infant mortality. The reduction of economic freedom helps explain why it has become harder and harder for many in the United States to become more prosperous.

In his latest op-ed, Independent Institute Research Fellow John C. Goodman identifies the top two obstacles to success in the U.S. economy, both of which are products of restrictions on economic freedom: bad schools and regulatory barriers in the labor market. According to Goodman, the biggest obstacles to school and labor-market reforms are one and the same: the unions.

“Teachers’ unions have steadfastly opposed almost every reform idea that has any promise whatsoever in every city and town throughout the country,” Goodman writes. “As for barriers to entry into the labor market, who is the foremost backer of minimum wage laws, Davis Bacon Act restrictions, medieval-guild-type occupational licensing laws and labor union monopolies everywhere? You guessed it: the labor unions themselves.” Goodman cites a study by the Council of Economic Advisers published in 1989 suggesting that the U.S. poverty rate would be lower had there never been a welfare state: the rising tide of economic growth would have sufficed to lift all ships.

Who Really Cares about the Poor?, by John C. Goodman (Townhall, 10/13/12)

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

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James Madison and George Mason argued vehemently about the U.S. Constitution: the former supported it, the latter opposed it. Among other concerns, Mason worried that the House of Representatives would remain too small for meaningful representation. Madison tried to assuage anti-Federalist concerns by arguing that the House would grow over time. And Congress did expand it—at least for a while. In 2012, however, the lower body of Congress is no bigger than it was in 1910, when the United States had a population of only 92 million. Writing in USA Today, Independent Institute Research Fellow William J. Watkins, Jr., argues that this low ratio explains the high rate of reelection of House incumbents and the public’s apparent apathy about their local representatives. In his words, representation in Congress is “a sham and a shame.”

Large voting districts make it virtually impossible for U.S. Representatives to rub shoulders with their constituents, as the Founders had envisioned. With 435 Representatives—an average of one for every 710,767 people—the United States lags far behind the United Kingdom (one representative in Parliament for every 95,000 residents), Japan (one member of the legislature for every 264,000), and France (one for every 118,000). This helps explain why voters tune out congressional elections.

Expanding the size of the House would make Congress more representative and help in other ways, Watkins argues. “It would be easier for third-party candidates to compete in elections because in small districts, the price of reaching voters would drop,” he writes. “Lower costs mean less influence for those big donors.”

Who Cares about Congress?, by William J. Watkins, Jr. (USA Today, 10/10/12)

Reclaiming the American Revolution, by William J. Watkins, Jr.

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Alvaro Uribe Vélez is among the most remarkable political leaders in recent history, but few North Americans know much about him. When he became president in 2002, some said Colombia was in its death throes. Homicides and kidnappings were common, paramilitary drug traffickers controlled half of the country, and a crippling 16 percent unemployment rate dashed hopes of material progress. By the time Uribe left in 2010, the violence had plunged, many of the paramilitary troops had been demobilized, and the investment rate had more than doubled to 28 percent of GDP. Some of that success can be attributed to Uribe’s willingness to challenge Ecuador and Venezuela for harboring Colombia’s narcoterrorists and to his village-by-village efforts to revive civil society.

“What is most interesting about No Lost Causes, Mr. Uribe’s engaging memoir, isn’t so much the narrative of his achievements but the insight he offers into his own character and the life experiences that created it,” writes Alvaro Vargas Llosa, senior fellow at the Independent Institute, in a book review for the Wall Street Journal.

Uribe wasn’t flawless. For one thing he responded slowly to revelations of corruption in his own administration. “His sense of purpose led him to be less obsessively vigilant about the means than the end,” writes Vargas Llosa. And he erred in not stopping a process that would have permitted a second re-election before a constitutional court ended that effort. But if his successor Juan Manuel Santos succeeds in negotiating a peace with the FARC paramilitary group, it will be because Uribe paved the way. “Whatever happens, the terrorists have never been closer to defeat, and Colombia is a country reborn—thanks to the effort of Mr. Uribe and his brave countrymen,” Vargas Llosa concludes.

The Man Who Saved Colombia, by Alvaro Vargas Llosa (The Wall Street Journal, 10/10/12)

Lessons from the Poor: Triumph of the Entrepreneurial Spirit, edited by Alvaro Vargas Llosa

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A poll conducted by CNN last year revealed the public’s drastic misperception about the size of public broadcasting in the federal budget: a whopping 40 of respondents believe that the Corporation for Public Broadcasting—the outfit that runs PBS—consumes a whopping one to five percent of federal spending! In fact, “PBS funding accounts for 0.014 percent of federal spending,” writes Independent Institute Research Fellow Art Carden in the Washington Examiner.

“Given these wild misperceptions, it is not surprising that people are paying a lot of attention to funding for public broadcasting,” Carden continues. “The reality, however, is that funding for public broadcasting is very small relative to the overall federal budget.”

Federal subsidies for public broadcasting are small fish in an ocean of budgetary whales like agricultural subsidies and wars. But that means only that they must be put into proper perspective, not that Uncle Sam should continue to subsidize them. As Anthony Gregory puts in a recent blog post, privatize Sesame Street! “Of all the characters on that show, [Big Bird] was never my favorite,” Gregory writes. “It’s not so much his bumbling and invincible naiveté; he just seems to lack rich character development.�But I’m perfectly happy to leave him alone. I do resent paying for his birdseed, however.”

Public Broadcasting: Wrong Battle for the Right, by Art Carden (Washington Examiner, 10/13/12)

Privatize Sesame Street!, by Anthony Gregory (The Beacon, 10/10/12)

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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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