LightSquared is a technology company that is going through chapter 11 bankruptcy despite receiving a $267 million government loan. Its satellite-based high speed wireless network has a fatal flaw: it interferes with GPS devices, making it useless. The FCC is blocking it, leaving the company with essentially zero business until they can solve the problem.

The company has laid off about half of its workforce so far. But The Hill’s Brendan Sasso and Kevin Bogardus found out that LightSquared is making sure to retain its most lucrative employees. Those would be its lobbyists, not its engineers:

Despite the financial troubles and staff cutbacks, LightSquared has yet to disband its lobbying army — an implicit acknowledgment that the company’s future is contingent upon what happens in Washington.

In other words LightSquared, just like Willie Sutton, knows where the money is. And it isn’t in the marketplace.

Businesses fail all the time. If they don’t create value for their customers, they don’t deserve to stay in business. Capital that is being wasted by these companies is then freed up for more valuable uses. Schumpeterian creative destruction doesn’t work without that destructive part. When Washington puts its thumbs on the competitive scales as it has with the LightSquared loan, it should surprise no one that companies suddenly swarm Capitol Hill for a piece of the action.

The result is less destruction, but also less creation. Corporate welfare means less innovation and less economic growth. It creates plenty of jobs for lobbyists and lawyers, but at the expense of other jobs that create actual value for consumers – such as many of LightSquared’s layoffs, who could be finding a technical solution for its GPS interference problem.

Imagine for a minute that the tsunami never happened. Japan’s GDP growth would probably be slower; Krugman is almost certainly correct on that. And yet, a tsunami-less Japan would be better off. For one, the survivors wouldn’t have 15,000 holes in their hearts where their families, friends, and neighbors used to be.

As far as the economy goes, all that reconstruction spending would instead go to creating brand new wealth, as opposed to merely replacing what people already had to begin with. It is better to build than to rebuild.

Read the whole thing here.

Senior Fellow Marlo Lewis takes apart a study claiming that ethanol lowers gas prices by more than a dollar per gallon in some regions. Unrealistic assumptions and dodgy methodology make the results less than trustworthy. Ethanol, Lewis argues, is widely used only because the federal government requires it to be. If it had to compete on a level playing field like most other products, it would be a flop.

George W. Bush may have raked in $15 million from speeches alone in 2010, but he still expensed $1.3 million to taxpayers, including $80,000 in phone bills, ABC News’s Jonathan Karl reported in “Spinners and Winners.”And Bill Clinton also made it big on the speech circuit — bringing in $10 million — and billed more than $1 million in expenses to taxpayers. Jimmy Carter, meanwhile, received over half a million in expenses, including $15,000 for postage, and taxpayers also paid $830,000 for George H.W. Bush.

Entitlement reform is what it will ultimately take to balance the books, and should be one of Congress’ highest priorities. But wasteful spending such as George W. Bush’s phone bill should be reined in, too. Fortunately, a bill from Rep. Jason Chaffetz would end taxpayer giveaways to ex-presidents with incomes over $400,000 per year.

Unemployment remains stubbornly high, more than three years after the financial crisis hit. Congress has tried a number of measures, from fiscal stimulus to stricter financial regulations. None of them have worked. That’s because they get in the way of the key driver of economic growth – innovation. And as any entrepreneur will tell you, innovation requires investment. John Berlau, CEI’s Senior Fellow for Finance and Access to Capital, suggests a number of reforms to make innovation, investment, and job creation easier.

Poverty relief is one of the noblest and most important projects in any society. The only question is how to go about it. Right now, the federal government has 126 different welfare programs; Tanner is kind enough to list them all in a 5-page appendix. Their combined annual cost is $668 billion. That’s a lot of money – about $14,848 for every person in poverty.

The trouble is that the results have been disappointing. The poverty rate is currently 15.1 percent, the highest it’s been in a decade. If the chosen means aren’t achieving the end, then it’s time to choose some different means.

One solution is to make it easier to find a job. About one third of all occupations require a license. The people in charge of handing out licenses are typically members of the occupation, and have a vested interest in keeping potential competitors out. By removing licensing requirements from most occupations, more people can find jobs in fields ranging from interior decorating to hair-braiding to driving a taxi. More competition also means lower prices for consumers, so their dollars go further. That’s important for people who don’t have a lot of dollars.

The regulatory thicket also discourages people from starting their own businesses. Lightening paperwork burdens and compliance costs would make it easier for people to open stores, provide services, create jobs, and lift people out of poverty.

Education is important for getting a good-paying job. But good schools, especially good public schools, are mainly the province of the rich. Introducing some competition into the failed monopoly school system through tax credits or vouchers would do wonders for delivering a better education to the kids who need it most.

There is no single magic bullet to poverty relief. The ideas above are just a start, and a modest one at that. But $15 trillion later, it is clear that the War on Poverty has failed the poor. It’s time to look elsewhere for solutions that actually work.

“You could actually say that Apple is bringing more competition to the market, not less,” through its deals with the book publishers, Ryan Young told us. He’s a fellow in regulatory studies at the Competitive Enterprise Institute. “It gives Apple a foothold in the market, instead of there just being two e-book players, Amazon and Barnes & Noble. The cost of producing e-books is close to zero, just a few electrons. So what’s the correct way to price e-books? I don’t know. The Department of Justice doesn’t know. Apple, Amazon and Barnes & Noble don’t know, either. Nobody knows. Only the market can sort it out as consumers express their preferences.”

Antitrust is a blunt instrument for something that changes as fast as an economy. Especially when it’s wielded by people who suffer from Certainty with a capital C.

In this video, our good friends over at the Cato Institute make the case for simplification. Maybe moving Tax Day and Election Day closer together would spur Congress to do something about it. Meanwhile, the U.S. is falling behind other countries that are adopting simpler systems every year, such as a flat tax or a fair tax.

Click here if the embedded video below doesn’t work.

Yesterday the Justice Department sued Apple and five major publishers over their e-book pricing model, alleging price fixing. Associate Director of Technology Studies Ryan Radia thinks the lawsuit is a mistake, and should be dropped.