Message-ID: <24512039.1075861753968.JavaMail.evans@thyme> Date: Mon, 26 Nov 2001 17:37:47 -0800 (PST) From: djtheroux@independent.org To: lighthouse@independent.org Subject: THE LIGHTHOUSE: November 26, 2001 Mime-Version: 1.0 Content-Type: text/plain; charset=ANSI_X3.4-1968 Content-Transfer-Encoding: 7bit X-From: "David J. Theroux" X-To: Lighthouse X-cc: X-bcc: X-Folder: \KLAY (Non-Privileged)\Lay, Kenneth\Deleted Items X-Origin: Lay-K X-FileName: KLAY (Non-Privileged).pst THE LIGHTHOUSE "Enlightening Ideas for Public Policy..." Vol. 3, Issue 47 November 26, 2001 Welcome to The Lighthouse, the e-mail newsletter of The Independent Institute, the non-politicized, public policy research organization . We provide you with updates of the Institute's current research publications, events and media programs. Do you know someone who would enjoy THE LIGHTHOUSE? Please forward this message to a friend. If they like it, they can add themselves to the list at http://www.independent.org/tii/lighthouse/Lighthouse.html. ------------------------------------------------------------- IN THIS WEEK'S ISSUE: 1. Phony Stimulus Package Won't Fix the Economy 2. Crisis and Ratcheting Up Government Growth 3. De-politicizing the Final Choice ------------------------------------------------------------- PHONY STIMULUS PACKAGE WON'T FIX THE ECONOMY "Although understandably preoccupied with the war on terrorism, the Bush administration needs to give some leadership to the economy. This means recognizing its own mistakes," writes Independent Institute research fellow Paul Craig Roberts, in a recent syndicated column. For starters, Bush should recognize that his tax cuts -- which are phased-in and temporary rather than immediate and permanent -- will do little to stimulate investment. Furthermore, the pork-barrel spending package "is not a stimulus; it simply crowds out an equivalent amount of private spending and prevents resources from being used more productively," writes Roberts. As Roberts says, the so-called "stimulus" package ignores the lessons for stimulating long-term growth taught by supply-side economics twenty years ago. "The solution to the economy's problems is obvious and simple," Roberts argues. "Effective immediately, abolish the alternative minimum tax, accelerate depreciation on a permanent basis and cut tax rates on personal income." See "Don't Forget the Economy," by Paul Craig Roberts (11/22/01), at http://www.independent.org/tii/lighthouse/LHLink3-47-1.html For more on fiscal policy, see "Twenty Years after Humphrey-Hawkins: An Assessment of Fiscal Policy," by Jody Lipford (THE INDEPENDENT REVIEW, Summer 1999), at http://independent.org/tii/content/pubs/review/TIR41_lipford.html. For supply-sider insights on the Reagan era deficits, see "What Really Happened in 1981," by Alan Reynolds and Paul Craig Roberts (THE INDEPENDENT REVIEW, Fall 2000), at http://www.independent.org/tii/content/pubs/review/tir52_reyn.html. ------------------------------------------------------------- CRISIS AND RATCHETING UP GOVERNMENT GROWTH The wasteful pork in the recent spending package, and the dubious new anti-privacy powers of the federal government, illustrate clearly how government grows during national crises. Less obvious, however, is the fact that when the emergencies subside, the new programs are seldom dissolved. Often they are transformed into new programs or agencies with new missions, ratcheting up government's growth. The International Monetary Fund is one of thousands of examples that could illuminate this government pathology, explain Independent Institute research fellow Steve Hanke and senior fellow Robert Higgs in a new op-ed for the FINANCIAL TIMES. Formed in 1944 as part of the Bretton Woods agreement, the IMF was intended to stabilize the global financial system -- by providing credit to countries experiencing balance-of-payments problems under the postwar pegged-exchange-rate system. But when President Nixon closed the U.S. gold window in 1971 -- effectively ending the Bretton Woods agreement -- the IMF became a multi-million dollar agency in search of a new mission. It soon found one. The IMF reinvented itself during the oil shocks of the 1970s, and in the 1980s, with President Reagan's seal of approval, by subsidizing loans to developing countries. Today, the IMF is contemplating ways to financially assist coalition partners in the War against Terrorism and to deny funds to less-than-cooperative countries. Government programs and institutions aren't the only things that get ratcheted-up during national crises. "The ratchet continues to operate on ideology, too," write Hanke and Higgs. "A recent poll conducted by THE WASHINGTON POST indicates that 53 percent of Americans think the government 'is run for the benefit of all the people,' up from 35 percent last year. Only 37 percent agreed that 'the government is pretty much run by a few big interests looking out for themselves,' the lowest percentage since 1966, when 33 percent embraced that view. "It may be too much to expect a speedy end to the law of the ratchet, but it is time to acknowledge what is going on. That, at least, may make it easier to reverse the trend during times of stability." See "Wake Up To the Law of Ratchet," by Steve Hanke and Robert Higgs, at http://www.independent.org/tii/news/011126Higgs.html. Also see: "When Temporary Economic and Political Measures Become Permanent," by Lisa Meyer (TheStreet.com, 10/10/01), at http://www.independent.org/tii/lighthouse/LHLink3-47-2.html "Crisis, Bigger Government, and Ideological Change: Two Hypotheses on the Ratchet Phenomenon," by Robert Higgs (EXPLORATIONS IN ECONOMIC HISTORY, Vol. 22, 1985), at http://www.independent.org/tii/news/850000Higgs.html. For more on the ratchet effect, see CRISIS AND LEVIATHAN: Critical Episodes in the Growth of American Government, by Robert Higgs, at http://liberty-tree.org/ltn/crisis-and-leviathan.html. ------------------------------------------------------------- DE-POLITICIZING THE FINAL CHOICE One of the most dramatic battles between federal and state governments -- and a painful illustration of how drug prohibition cripples human dignity -- is brewing in Oregon, where a federal judge recently issued a court order to block U.S. Attorney General John Ashcroft from interfering with the state's physician-assisted suicide law. (Declaring that physician-assisted suicide "was not a legitimate medical purpose for prescribing drugs," Ashcroft -- who earier had promised to uphold federalism over federal encroachment upon the states -- had threatened to have the medical licenses of participating doctors revoked.) Many civil libertarians, understandably, see Ashcroft's threat as a direct assault on human dignity in a matter too private and sensitive to allow government interference between doctor and patient. However, according to psychiatrist Thomas Szasz (member, Independent Institute Board of Advisors), the fundamental problem is that our laws make it unlawful to use lethal drugs to commit suicide -- except, as in the case of Oregon, when it is physician-assisted, and even then only under limited circumstances. In other words, no matter how painfully one may suffer from a terminal illness, one's ultimate choice must be prescribed by a physician. Undoubtedly, this needlessly prolongs the suffering and anguish of those law-abiding sufferers who decide that waiting for nature to take its course is too long and too painful. Drug and suicide law reform, however, would help restore genuine dignity to those suffering from unspeakable pain. "Physician-assisted suicide," writes Szasz in a new op-ed, "is but one of the consequences of our drug laws." By expanding their range of lawful options, drug and suicide law reform would enable the terminally ill to take matters lawfully into their own hands without interference from the state. It would also help lift the burden from physicians struggling to interpret the Hippocratic Oath. "The American people are ceaselessly propagandized about the real dangers from which drug prohibitions are intended to protect us," Szasz concludes. "The damage the prohibitions cause are glossed over in silence or, more often, are unrecognized. We avoid confronting problems of living as moral problems and choose instead to treat them as medical problems. It is not a good choice." See "Assisted Suicide Is Bootleg Suicide," by Thomas Szasz (LOS ANGELES TIMES, 11/23/01), at http://www.independent.org/tii/lighthouse/LHLink3-47-3.html Also see: "Beware of Pharmacracy," by Thomas Szasz (UPI, 8/21/01), at http://independent.org/tii/news/010821Szasz.html. "The Therapeutic State: The Tyranny of Pharmacracy," by Thomas Szasz (THE INDEPENDENT REVIEW, Spring, 2001), at http://www.independent.org/tii/content/pubs/review/tir54_szasz.html. For more on federalism, see "Arguments for Federalism," by Alex Tabarrok, research director of The Independent Institute, at http://www.independent.org/tii/Presentations/Federalism.html. ------------------------------------------------------------- THE LIGHTHOUSE, edited by Carl P. Close, is made possible by the generous contributions of supporters of The Independent Institute. If you enjoy THE LIGHTHOUSE, please consider making a donation to The Independent Institute. 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Thank you! ------------------------------------------------------------- For previous issues of THE LIGHTHOUSE, see http://www.independent.org/tii/lighthouse/Lighthouse.html. ------------------------------------------------------------- For information on books and other publications from The Independent Institute, see http://www.independent.org/tii/pubs.html. ------------------------------------------------------------- For information on The Independent Institute's upcoming Independent Policy Forums, see http://www.independent.org/tii/forums/events.html. ------------------------------------------------------------- To subscribe (or unsubscribe) to The Lighthouse, please go to http://www.independent.org/subscribe.html, choose "subscribe" (or "unsubscribe"), enter your e-mail address and select "Go." ------------------------------------------------------------- THE LIGHTHOUSE ISSN 1526-173X Copyright ? 2001 The Independent Institute 100 Swan Way Oakland, CA 94621-1428 (510) 632-1366 phone (510) 568-6040 fax