The Lighthouse^®

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The Lighthouse^® is the weekly email newsletter of the Independent Institute.
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Volume 15, Issue 7: February 12, 2013

1. Inequality Is Not What’s Stunting the Recovery
2. New Web Resource on Firearms, Violence, and the Second Amendment
3. U.S. Should Negotiate with Russia on Threat Reduction
4. Goodman on Healthcare and Equality
5. New Blog Posts
6. Selected News Alerts

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The Independent Review: Subscribe or renew today and get a free copy of the 25th Anniversary Edition of Crisis and Levithan: Critical Episodes in the Growth of American Government, by Robert Higgs.

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The U.S. economic recovery has been anemic. An important reason, perhaps the key reason, is that various recent federal policies—including Obamacare, the Dodd-Frank financial regulations, the rising budget deficits and national debt, the growing list of regulations, and expected higher future taxes—have created a turbulent climate of uncertainty that has hampered private investment. Economist Joseph Stiglitz, however, has a different theory: in an op-ed published last month in the New York Times, the Nobel laureate blames our economic malaise on rising inequality. But Stiglitz’s case is surprisingly weak. No causal connection has ever been established between the distribution of incomes and wealth, on the one hand, and the pace of economic growth, on the other, as Independent Institute Research Fellow Burton A. Abrams notes in a new op-ed. Stiglitz is waving a political banner, not communicating established economic truths.

Stiglitz’s political agenda becomes even more clear when one sees his proposal to revive the economy: a program of populist redistribution, including tuition grants for higher education, subsidies for new public transportation projects, and a more progressive tax system. “The trouble is,” Abrams writes, “no country has taxed its way to prosperity. Countries such as Greece and Argentina provide ‘free’ education through the university level and haven’t discovered any magic bullet. China, under the old communist regime, even paid students to go to university but still its economy stagnated.”

Abrams, the director of MyGovCost.org, also notes that pressure may grow to pay down the national debt, which amounts to $145,000 per taxpayer. Although inequalities in opportunity are as small as they’ve ever been in American history, the federal government has been making it harder and harder for business owners and investors to take actions that would revive the U.S. economy. “If the government would just deal with the real factors holding back the economy, income inequality would no longer be a scapegoat for the effects of bad public policies,” Abrams concludes.

Is Inequality Stunting the Recovery?, by Burton A. Abrams (The Washington Examiner, 2/8/13)

MyGovCost.org – Home of the Government Cost Calculator

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Firearm violence and gun control have been in the news of late. To help better equip readers trying to sift through the myths and distortions, the Independent Institute has put together a new web resource that focuses exclusively on this hot topic—including op-eds, blog posts, and videos of some of our most engaging writers.

Contributors include Independent Institute Research Fellows Anthony Gregory, Stephen Halbrook, Don B. Kates, and John C. Goodman, Institute President David J. Theroux, and others.

And while you’re exploring the site, please be sure to check out information regarding Halbrook’s superb books, That Every Man Be Armed, The Founders’ Second Amendment, and Securing Civil Rights—each one a gem of historical research and a critically acclaimed contribution to the literature on the right to armed self-defense in American history.

Firearms, Violence, and the Second Amendment

That Every Man Be Armed: The Evolution of a Constitutional Right, by Stephen P. Halbrook

The Founders’ Second Amendment: Origins of the Right to Bear Arms, by Stephen P. Halbrook

Securing Civil Rights: Freedmen, the Fourteenth Amendment, and the Right to Bear Arms, by Stephen P. Halbrook

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Last October, Russia announced that it would withdraw from cooperative threat reduction (CTR) with the United States, programs in which Washington works with former members of the Soviet Union and other countries to reduce their stockpiles of nuclear weapons and keep them from falling into the hands of terrorists. If Moscow makes good on its promise, the world will become a more dangerous place. The interests of people around the world would be well served by U.S. diplomatic efforts to get Russia to renew its participation, according to Independent Institute Senior Fellow Charles V. Peña.

For cooperative threat reduction to continue, the U.S. government may need to change its policy toward missile defense in Europe—one of the hot spots in U.S.-Russian relations. In addition, American taxpayers who are justifiably fed up with the billions and billions of dollars spent on the military must maintain their perspective: the approximately $1 billion per year Uncle Sam spends on the cooperative threat reduction is a drop in the bucket—“less than 0.1 percent of the defense budget,” Peña writes—but it makes everyone safer.

Working with other countries to safeguard or reduce their weapons stockpiles may reap even greater benefits, potentially saving even more lives, as the United States begins to work on cooperative security engagement (CSE)—which is like CTR but includes more than just securing weapons—with Pakistan, Afghanistan, and various countries in Africa and Southeast Asia. “An integrated whole-of-government approach to CSE can better leverage that taxpayer investment to incorporate the capabilities of all interagency partners,” Peña continues. “More important, CSE isn’t a U.S. military incursion, thereby avoiding the charge of unwarranted U.S. interference—especially in Muslim nations—as a reason for making the United States a target for terrorism.”

A Comprehensive Approach to Security Engagement, by Charles V. Peña (Defense News, 1/21/13)

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Independent Institute Research Fellow John C. Goodman is unlikely to be mistaken for an out-and-out egalitarian, but in his latest op-ed for Right Side News, the economist declares that, on the issue of healthcare, at least, he considers himself more egalitarian than most liberals.

One reason, he argues, is that he believes that the defined-benefit approach to healthcare, the one favored by many who are left of center, often promises more than it delivers. In contrast, a defined-contribution approach often results in better health outcomes and tends to have more egalitarian results, he argues.

The Affordable Care Act, for example, “does almost nothing to ensure that providers will actually be able to deliver what has been promised,” he writes. “After 2018, the problem will get immeasurably worse as the Obamacare subsidies grow no faster than gross domestic product, while the cost of the insurance that everyone has to buy will be growing at twice that rate.”

Why I Am More Egalitarian than Most Liberals on Health Care, by John C. Goodman (Right Side News, 2/7/13)

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

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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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