THE LIGHTHOUSE
"Enlightening Ideas for Public Policy..."
Vol. 3, Issue 45
November 14, 2001

Welcome to The Lighthouse, the e-mail newsletter of The Independent 
Institute, the non-politicized, public policy research organization 
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IN THIS WEEK'S ISSUE:
1. Would Government Oversight Be Charitable?
2. Drug Law Reform Up in Smoke
3. Battle Brings Out "Pork-Barrel Politics"
4. "Why Freedom Matters More Than Ever" -- Independent Policy Forum (12/4/01)

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WOULD GOVERNMENT OVERSIGHT BE CHARITABLE?

The terrorist attacks of September 11 took not only U.S. government 
officials by surprise, America's non-profit charities were totally 
unprepared to handle the huge outpouring of donations they have 
received in response to the attacks -- or to quickly dispense the 
donated funds to the victims' families. Of the $1.19 billion 
collected in the past two months, only $204 million has been 
distributed.

This has provoked a tremendous outcry from donors and news 
commentators. If the charities don't act quickly to improve 
accountability and responsiveness to donor intent, the critics say, 
federal and state governments may be justified in stepping in. 
Members of Congress even proposed federal and state oversight of the 
charities during two hearings on Capitol Hill last week.

Lack of accountability to donors is not a problem that plagues only 
charities (although in the present case, IRS laws may be largely to 
blame, since charities must take the time to ensure that aid 
recipients are legally qualified to receive charity). America's 
non-profit foundations have suffered from poor accountability since 
long before September 11, according to Randall G. Holcombe, research 
fellow at The Independent Institute, whose book WRITING OFF IDEAS 
examines the economic, cultural, and intellectual implications of 
tax-exempt organizations.

Many of America's best-known non-profit foundations -- the Ford 
Foundation, the Rockefeller Foundation and the Carnegie Corporation, 
for example -- have gone far astray from the intent of their 
founders. These foundations' trustees and officers typically promote 
redistributionist government policies rather than the spirit of 
free-market entrepreneurship that Henry Ford, John D. Rockefeller and 
Andrew Carnegie believed bestowed upon them their good fortune.

Increased government scrutiny, both for charities and for 
foundations, is tempting. But, as Holcombe explains, it is a 
temptation we better not succumb to. If they are too inflexible (the 
charities) or too politically correct (the foundations) without 
government oversight, just think of how much more so they would be 
with government oversight, as special-interest groups try to pressure 
regulators to politicize charitable activities.

"We should hope for better performance from foundation trustees and 
management," writes Holcombe. "[B]ut at this point additional 
government restrictions would be more likely to harm rather than help 
promote the public interest."

For a detailed summary of WRITING OFF IDEAS: Taxation, Foundations, 
and Philanthropy in America, by Randall G. Holcombe, see 
http://www.independent.org/tii/lighthouse/LHLink3-45-1.html.

To order WRITING OFF IDEAS, see 
http://www.independent.org/tii/lighthouse/LHLink3-45-2.html.

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DRUG LAW REFORM UP IN SMOKE

About 1.5 million Americans were arrested on drug charges last year 
-- an all-time high -- and eight out of ten of them were arrested for 
marijuana possession. If you think that this startling statistic is 
likely to drop in the near future, as law enforcement focuses on 
anti-terrorism, think again.

President Bush's new drug czar, John Walters, who was confirmed 14-5 
by the Senate Judiciary Committee last week, shows every sign of 
increasing enforcement of the nation's drug laws -- despite large 
segments of public opinion supporting drug decriminalization and a 
growing number of judges fed up with the government's 
counterproductive "War on Drugs." Even medical marijuana clubs that 
operate with voter approval can expect a crackdown under Walters.

Despite the predicted escalation of the drug war domestically, the 
Walters regime may leave its largest imprint on foreign lands, where 
U.S. drug laws reverberate even louder but far out of earshot for 
most Americans. To get a take of Walters's drug-war diplomacy: When 
the Peruvian military shot down an airplane carrying two American 
missionaries (claiming they thought it was carrying drugs), Walters 
must have viewed the missionaries' deaths as unfortunate but 
unavoidable collateral damage. He did, after all, earlier praise the 
Peruvian military's practice -- in violation of international law -- 
of shooting down planes thought to be used by drug smugglers.

So, unless Walters does something to force his resignation, such as 
have an affair with an intern, American citizens can look forward to 
increased drug incarcerations, drug turf battles, drug-related crime 
and a foreign policy tainted by a marriage of therapeutic rhetoric 
and preemptive militarism against possible drug smugglers. In other 
words, for the remainder of the Bush administration the prospects for 
positive drug-law reform have gone up in smoke.

For more information on drug law reform, see the transcript of "The 
Drug War on Trial: Two Judges Speak Out," an Independent Policy Forum 
featuring Judge James P. Gray and Judge Vaughn Walker, at 
http://www.independent.org/tii/lighthouse/LHLink3-45-3.html.

For information about the U.S. Drug War on foreign soil, see the 
transcript of "The War on Drugs: Who Is Winning? Who Is Losing?" an 
Independent Policy Forum featuring Alexander Cockburn, Jonathan 
Marshall and Peter Dale Scott, at
http://www.independent.org/tii/lighthouse/LHLink3-45-4.html.

and:

"What Will Congress Do About New CIA-Drug Revelations?" by Peter Dale 
Scott (SAN FRANCISCO CHRONICLE, 6/19/00), at 
http://www.independent.org/tii/lighthouse/LHLink3-45-5.html.

Also see op-eds by Alex Tabarrok, research director of The 
Independent Institute:

"It's California versus the Feds on Medical Marijuana" (SAN DIEGO 
UNION-TRIBUNE, 10/17/99)
http://www.independent.org/tii/lighthouse/LHLink3-45-6.html.

"Barry McCaffrey Should Resign" (PITTSBURGH REVIEW-TRIBUNE, 6/20/00)
http://www.independent.org/tii/lighthouse/LHLink3-45-7.html.

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BATTLE BRINGS OUT "PORK-BARREL POLITICS"

Reporter Jon Dougherty capably spells out the case against the 
"military-industrial-congressional complex," highlighting the ways in 
which pork-barrel politics as usual has led to an over reliance on 
Cold War-type of defense spending, rather than the rethinking needed 
in the age of global terrorism, in a recent article for WorldNetDaily.

Drawing largely upon the work of Robert Higgs, senior fellow at The 
Independent Institute, Mr. Dougherty explains that both the U.S. 
Congress and the Department of Defense are culpable in wasting 
taxpayers' money on inappropriate weapons systems.

"Higgs," writes Dougherty, "says pressure from defense contractors 
coupled with the typical bureaucracy of the Defense Department and 
politicians 'beholden to the military-industrial-congressional 
complex' is turning the war between 'the U.S. and Osama bin Laden's 
al-Qaida network into a more traditional exercise in pork-barrel 
politics."

See "Battle Brings Out 'Pork-Barrel Politics,'" by Jon Dougherty 
(WorldNetDaily, 11/9/01), at
http://www.independent.org/tii/lighthouse/LHLink3-45-8.html.

Also see by Robert Higgs:

"The Cold War Is Over, but U.S. Preparation for It Continues" (THE 
INDEPENDENT REVIEW, Fall 2001)
http://www.independent.org/tii/lighthouse/LHLink3-45-9.html.

"World War II and the Military-Industrial-Congressional Complex" 
(FREEDOM DAILY, 5/95), at
http://www.independent.org/tii/lighthouse/LHLink3-45-10.html.

"The Cold War Economy: Opportunity Costs, Ideology, and the Politics 
of Crisis" (EXPLORATIONS IN ECONOMIC HISTORY, 7/94)
http://www.independent.org/tii/lighthouse/LHLink3-45-11.html.

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"WHY FREEDOM MATTERS MORE THAN EVER" -- Independent Policy Forum (12/4/01)

To overcome the new threat of terrorism and a faltering economy, must 
freedom be restricted? Americans hold that freedom makes economic 
progress and the good society possible -- yet many support curtailing 
freedom during national crises. Economist DAVID R. HENDERSON, 
however, holds that freedom is as important during wartime and 
recession as it is during peacetime and prosperity.

Based on his insightful and inspiring new book, THE JOY OF FREEDOM, 
Dr. Henderson will demonstrate the power of individual choice and 
free markets to improve education, health, the environment, 
community, culture, and much more.

Not only is the intellectual battle for freedom exciting and just, 
according to Dr. Henderson, it is crucial for ensuring lasting peace, 
security and harmony.

SPEAKER:

-- DAVID R. HENDERSON (Professor of Economics, Naval Postgraduate 
School) is author of THE JOY OF FREEDOM: An Economist's Odyssey

WHEN:
        Tuesday, December 4, 2001
        Reception and book signing: 6:30 p.m.
        Program: 7:00 - 8:30 p.m.

WHERE:
        The Independent Institute Conference Center
        100 Swan Way
        Oakland, CA 94621-1428
        For a map and directions, see
        http://www.independent.org/tii/tii_info/about.html#map

TICKETS: $30.00 per person: includes one copy of THE JOY OF FREEDOM: 
An Economist's Odyssey. Admission without a book is $12 per person 
($8 for Independent Institute Associate Members). Reserve tickets by 
calling (510) 632-1366.

Praise for David R. Henderson's THE JOY OF FREEDOM: An Economist's Odyssey:

"THE JOY OF FREEDOM is an engaging tale of Henderson's odyssey to the 
wonders of freedom."
   -- JOHN STOSSEL, correspondent, ABC News

"THE JOY OF FREEDOM is passionate and eloquent, yet at the same time, 
thoughtful, informed, and profound. A splendid statement of the moral 
case for a free society, at the same time it is an informed and 
comprehensive survey of its practical virtues and of the harm done by 
widespread government intervention."
   -- MILTON FRIEDMAN, Nobel Laureate in Economics

"THE JOY OF FREEDOM is a dazzling intellectual memoir, a high-level 
lesson in market economics, a terrific read."
   -- DANIEL SELIGMAN, columnist, FORBES Magazine

"A superb lesson from one of the masterly economics teachers."
   -- AMITY SHLAES, columnist, FINANCIAL TIMES

For more about this event, see
http://www.independent.org/tii/lighthouse/LHLink3-45-12.html.

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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. For details on the Independent Associate 
Membership program, see
http://www.independent.org/tii/lighthouse/LHLink3-45-13.html or 
contact Mr. Rod Martin by phone at 510-632-1366 x114, fax to 
510-568-6040, email to <RMartin@independent.org>, or snail mail to 
The Independent Institute, 100 Swan Way, Oakland, CA 94621-1428. All 
contributions are tax-deductible.  Thank you!

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Institute, see
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For information on The Independent Institute's upcoming Independent 
Policy Forums, see
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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