The Purge at Cato

September 2nd, 2010 at 2:27 pm David Frum | 62 Comments |

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The summer’s biggest inside-Washington story was the abrupt and simultaneous departure of co-authors Brink Lindsey and Will Wilkinson from the Cato Institute.

Lindsey was Cato’s vice president for research; Wilkinson a Cato scholar. They were working together on a book arguing for a new political approach fusing libertarianism and liberalism – a concept that Cato has previously endorsed on issues like drug control, foreign policy, and sexual freedom.

Lindsey and Wilkinson missed the memo announcing that Cato was going all-in with the Tea Party movement. In early July, Lindsey negatively reviewed at the liberal American Prospect website a new book by American Enterprise Institute president, Arthur Brooks. Brooks had provided an intellectual manifesto for the Tea Party, arguing that the United States now faced a culture-dividing battle over the continued existence of the free enterprise system. Lindsey’s view: “The attempt to turn economic policy disputes into a populist cultural crusade rests on deep-seated confusion about the nature of those disputes and how best to effect constructive policy change.”

A few days later, Lindsey – whoosh! – abruptly departed to a new job at the Kauffman Foundation, Wilkinson to a part-time blog at the Economist.

The story bubbled among libertarian bloggers and tweeters. It broke into the larger blog conversation last week, when Dave Weigel asked the obvious question: were Lindsey and Wilkinson purged?

[Y]ou have to struggle not to see a political context to this. Lindsey and Wilkinson are among the Cato scholars who most often find common cause with liberals. In 2006, after the GOP lost Congress, Lindsey coined the term “Liberaltarians” to suggest that libertarians and liberals could work together outside of the conservative movement. Shortly after this, he launched a dinner series where liberals and libertarians met to discuss big ideas. (Disclosure: I attended some of these dinners.) In 2009 and 2010, as the libertarian movement moved back into the right’s fold, Lindsey remained iconoclastic. Just last month he penned a rare, biting criticism of The Battle, a book by AEI President Arthur Brooks ….

Granted: people are terminated by Washington think tanks all the time, for a gamut of normal employer-employee reasons. Not news. But over recent years, we have seen a series of high-profile terminations from right-of-center think tanks for reasons that are anything but normal. Lindsey’s and Wilkinson’s apparent terminations are perhaps the most shocking and ominous to date.

First, let me say at the outset that I have known Brink for a quarter century, since our days at the Harvard Law School chapter of the Federalist society back in the mid-1980s. I have zero doubt that Lindsey and Wilkinson were terminated. They are not talking, but they are not denying either, as you would expect them to do. I am led to my belief not only by the suggestive timing, but also by Cato’s revealing statements about the departure.

Here’s Ed Crane in an internal email:

Catoites,

As you may by now have heard, our longtime colleague and friend Brink Lindsey has accepted a senior position at the Kansas City-based Kauffman Foundation.  He will be a senior fellow in research and policy.  The good news is that he will be working here in Washington with, among others, our old friend Bob Litan (formerly with Brookings).  Brink has made many meaningful contributions to Cato over the nearly two decades he has worked here, not least of which include the establishment of our Center for Trade Policy Studies and our online Cato Unbound.  This looks to be a terrific opportunity for Brink.  Please join me in thanking him for his contributions to Cato and wishing him well in his new endeavor.

As Crane says, Lindsey had worked at Cato for almost 20 years. You’d think there might be a cocktail reception for him on his way out the door? Maybe some speeches, tributes, thanks? But no. Just a through-gritted-teeth emailed appreciation of Lindsey’s “meaningful” contributions. This is not how Washington think tanks bid farewell to their vice presidents. It looks very much instead as if Lindsey was shoved. Thanks to his own prominence and intellectual value, Lindsey was quickly snapped up by a rising competitor. Which is good news for him and his family – but does not at all correct the ugly message of the termination for the larger right-of-center world.

Obviously nobody has a right to be employed at a think tank. Inescapably, think tanks must pick and choose among many potential scholars and fellows. The people who donate money to think tanks have every right to expect those institutions to use donated funds to advance stated values and principles.

At the same time, think tanks are supposed to adhere to intellectual norms and standards. Supposedly there exists some difference between a think tank and, say, a PR agency, which will say whatever it is paid to say.

Yet as with the notorious firing of Bruce Bartlett from the National Center for Policy Analysis in 2005 after his book critical of President George W. Bush; as with my own termination at the American Enterprise Institute in March; the Lindsey-Wilkinson apparent termination raises very troubling questions about what has happened to the right-of-center think-tank enterprise.

Consider this:

The leading right-of-center student of healthcare policy in the whole country is Mark McClellan. McClellan taught at Stanford in the 1990s. He came to the American Enterprise Institute in 2000. He was hired into government by President Bush, rose to head the Centers for Medicare and Medicaid Services. He left government in 2006 to write and think. Did he return to AEI? He did not. He went to Brookings. Why?

The question might be magnified. It’s very sobering to review the work produced by the leading Washington conservative think tanks over the past 5 years, and compare it to the work of prior periods. Even more sobering to review the work produced over the past 2 years. You might say that there has been much more “tank” than “think” – that these institutions have been acting not as the Harvards of the right, but as the armored fighting vehicles of the policy world.

Until now, you could hold some hope that things would soon improve. In Bartlett’s case, the think tank was at least small and thinly financed. One could hope that the big and wealthy institutions of Washington could afford more independence.

In my case, the institution seems to have acted impulsively at a moment of high emotion, the immediate aftermath of President Obama’s healthcare victory. One could hope that in more normal times, independent thought would have more leeway.

But in the Lindsey-Wilkinson case, we confront the problem of the closing of the conservative mind in its purest form. Unlike NCPA, Cato is not a marginal institution.  Unlike AEI’s action with me, Cato’s apparent termination of Lindsey and Wilkinson seems the result of a considered strategic decision.

It might be objected that Cato and the others have no choice. The waters are surging in the conservative world, and conservative institutions must either ride the wave or be swamped. But if wave-riding is all that these very expensive institutions are doing, who needs them?

Right-of-center think tanks claim to do objective research that can be trusted by all policy players, regardless of point of view. They boast that they care about ideas, not parties or personalities. They aspire to set a broader agenda for the right, in lieu of the narrow demands of K Street special interests.

These claims look increasingly false. The right-of-center world is poorer for the dessication of the institutions that used to act as the right’s brains.

We are likely soon to have a Republican majority in the House of Representatives, maybe the U.S. Senate too. And what will that majority do? The answer seems to be: They have not a clue. Unlike the Republican House and Senate majorities of 1994, unlike the Republican Senate majority of 1980, these new majorities will arrive with only slogans for a policy agenda. After staging a for-the-record vote against Obamacare, and after re-enacting the Bush tax cuts, it will be policy mission accomplished.

There’s little other policy inventory, because the think tanks have not done their proper work. Without a think tank agenda, the new majority will rapidly decline into a brokerage service for K Street.

After the GOP lost its majority in 2006, a leading think tanker said to me: “Somehow I always thought we’d get more done before we became completely corrupt.” How much will we get done next time given the poverty of our think tank work over the past half decade? And how can we expect better work from institutions that have so emphatically warned their employees that an unwanted answer can end a career?

The losers here are not Brink Lindsey (who has moved to a fine new position) or Will Wilkinson (whose personal future is more unsettled, but whose talents will surely also be recognized). The loser is a conservative political movement waiting at the end of the intellectual conveyor belt for a product that increasingly arrives so shoddy and defective that it might as well not come at all.

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62 Comments so far ↓

  • balconesfault

    cottonmouth // Sep 3, 2010 at 12:15 am
    balconesfault : Out of curiousity, do you know how much of the increase in budget deficit in the time period Jan 2009-Jan 2010, versus Jan 2008-Jan 2009, was due to falling tax revenues related to the recession rather than “Keynesian” spending?

    Your point is one dimensional.

    Actually, no – my point is at least two dimensional.

    The one dimensional perspective here is just “the deficit is up – OMG!”

    You could say it’s two dimensional to add in looking at the source of the deficits – including in this case not simply any spending increases, but a big drop in tax revenues concurrent with the recession.

    The issue is not which caused the greater downturn, but whether Keynesian spending, as it is a implemented strategy not a market condition, is the correct option and does anything to improve the situation, which it is not and which it does not.

    So you say. I disagree.

    The downturn in revenues is a fact for the foreseeable future. Compounding this downturn by increased government spending, not only doubles down on the deficit in the short term but trebles down in the long term.

    Now we’re past second dimension, and into third and fourth dimensional analysis. And as part of that, you need to consider the effects of joblessness – not only in decreasing tax revenue, but in increasing the need for social safety net spending. So “increased government spending” done right actually serves to reduce both the downturn in revenues and the committed entitlements that require additional spending (people prematurely taking SS benefits, as well as going into unemployment, tapping into welfare and medicaid, etc).

    One does not want the government to be the employer of first resort. But in a case where the private sector is bleeding jobs, to just say “damn, less taxes are being paid because of the downturn, we’d better not be spending money on government jobs!” is where the real “doubling down” occurs, because each job lost represents an additional cost to society. Granted, the cost of losing a private sector job is greater, because taxes aren’t paying for that job, but there is also a societal cost to losing a public sector job – particularly if that job is providing services critical to continued economic and public good.

    Increased spending is surely to be followed by higher taxes especially given as you cleverly pointed out the already falling tax revenues. This reduces business appetite for risk and expansion, thereby greatly reducing their revenue and thus taxes.

    Aha. Here is where we have a massive disagreement – a chasm, actually. I don’t believe that a corporation will avoid doing things which will make them a profit simply because that profit will be taxed. In fact, every corporation out there realizes that if they fail to act on an opportunity, it may structurally disadvantage them well into the future, since their competitors may take advantage and close out that opportunity to them in the future. A corporation would be run by idiots to say “well, tax rates might increase 5% in the future, so we’d better forego taking steps to increase our profits less we have a greater tax liability down the road because of those profits”.

    This is exactly what we are seeing as businesses sit on $2 trillion dollars in cash. Uncertainty and fear, no expansion, no revenue, no taxes.

    The uncertainty isn’t over taxes. It’s over revenues. It’s over consumers and profits. It’s over the fear that there won’t be demand for whatever they produce, so it’s safer to sit on a big pile of cash.

    And that is the dangerous cycle of thinking that will press an economy downward, and what the stimulus spending is intended to reverse. Government contracts create demand, people having money and certainty creates demand, and when there is demand corporations will open their wallets and start spending to position themselves to profit from that demand.

  • Rabiner

    “The uncertainty isn’t over taxes. It’s over revenues. It’s over consumers and profits. It’s over the fear that there won’t be demand for whatever they produce, so it’s safer to sit on a big pile of cash.”

    It’s also fear of deflation. Businesses sitting on to cash have no incentive to use it if inflation is zero or deflation is occurring which actually increases the value of their cash relatively speaking without them having to do anything with it.

  • sdspringy

    What a business will do is look at the new HCR and the requirements on healthcare and wonder if hiring will add to the profit margin or the expense margin. Maybe they will move those jobs overseas, which will reduce their cost and increase their profit margin. Very likely, profit for the shareholders, no employment back in the USA.

    Large and small businesses are continuing to hold waiting until some direction is determined concerning carbon taxing, healthcare taxing, repeal of Bush taxcuts, Wall Street reform. They are not and will not expand in this country until those factors are known.

    For all the bluster the major and massive problems facing this country still loom larger than ever. Wall Street reform did nothing to correct Fann/Freddi and the TRILLIONS which the taxpayer will get hooked for.
    HCR did nothing to LOWER healthcare costs, and now starting OCT 1, everyone with insurance is facing cuts in benefits and increased insurance costs.
    For all their talk the deficit is massive and growing and no leadership from the Dems is coming.
    The Dems have lost this election, and probably the one in 2012 as well.

  • balconesfault

    What a business will do is look at the new HCR and the requirements on healthcare and wonder if hiring will add to the profit margin or the expense margin. Maybe they will move those jobs overseas, which will reduce their cost and increase their profit margin. Very likely, profit for the shareholders, no employment back in the USA.

    The reality is that those decisions have been being made a lot over the last decade, healthcare or not. And it has a lot more to do with $3/day laborers in the Pacific Rim, and tax policies which actually benefitted them moving those jobs abroad.

    And guess what – the salaries of the higher end executives who were leveraging their value by doing the exporting grew by leaps and bounds, at the same time we were radically slashing the taxes on their brackets. The portfolios of their investors grew at the same time we were radically slashing their capitol gains tax. We pretty much established a tax policy to encourage and reward moving jobs abroad.

    You want to take healthcare out of the equation? A lot of those jobs are fleeing to Vietnam, and Thailand, and India, and China, and Singapore, and Japan, and South Korea, and Taiwan – all of which have public run universal healthcare systems.

    Large and small businesses are continuing to hold waiting until some direction is determined concerning carbon taxing, healthcare taxing, repeal of Bush taxcuts, Wall Street reform.

    This, by and large, I agree on. The uncertainty over those things has been far more destructive to our pullout from the Bush recession than most have acknowledged. For the Republicans in Congress – Mission Accomplished. Had they worked with the Dems over the last 2 years, and crafted and supported bipartisan legislation that reflected some key GOP concerns, those uncertainties would have largely been resolved long ago.

    But the GOP leadership has put their chips on “stall, let the pain continue, and convince people that the pain is all Obama’s fault”. So far it looks like it might be working.

    Wall Street reform did nothing to correct Fann/Freddi and the TRILLIONS which the taxpayer will get hooked for.

    First, a place where a bipartisan push for stronger reforms during the crafting of the Finance bill would have been awesome. A lot of bad compromises were made on the Democratic side to be able to get a bill to the floor, considering that 38 or so GOP filibuster votes were virtually guaranteed.

    Second, the TRILLIONS aren’t due just to FANNIE/FREDDIE. They’re due to the whole process of keeping the financial system from collapsing during the last months of the Bush Administration under the weight of trillions in credit default swaps sold with poor or no real auditing and rating accountability.

    HCR did nothing to LOWER healthcare costs, and now starting OCT 1, everyone with insurance is facing cuts in benefits and increased insurance costs.

    For the most part, not that many of the HCR provisions have come into play. That said, I’ll agree that the HCR bill did a lot more to enhance the profits for insurance companies than limit them. Again, faced with almost universal opposition from Senate GOPers, expansion of healthcare coverage to tens of millions of more Americans ended up being accomplished with less than ideal compromises between Dems who wanted a bill to pass, and Insurance State Dems like Ben Nelson who would only vote for cloture if their sponsor industries were protected.

    For all their talk the deficit is massive and growing and no leadership from the Dems is coming.

    The leadership has been there all along. It’s just that you disagree with it, and you refuse to acknowledge any of its successes. It’s a combination of ideological stubbornness and pure partisanship on your part.

    The Dems have lost this election, and probably the one in 2012 as well.

    2012 puts the GOP in a dilemma – if they want to win the White House, they risk a backlash if they gain the majority in the House or Senate, because they’ll be viewed as part of the problem. Their only path to defeating Obama, short a scandal, might simply be to remain an obstructionist minority to keep dragging the country down so they can stand on its carcass and beat their chests.

  • jakester

    sdspringy
    Some wonder examples of great intellectual government thought has to be the Bushbots, who at that time had the support of 90% of the today’s teabaggers, getting us into Iraq in the first place based on faulty thinking and falsehoods. Of those saps who flocked to Washington like lemmings to Beck and Palin’s phony rally last week, I bet you hardly any of them opposed the war and thought the anti-war protesters were traitors and appeasers, yet now they are crying about how badly the media treated them and their silly protests.

    I mean Saddam not only had nothing to do with 9/11 and Al Qaeda, even Bush admitted as much, yet the same Saddam was going to give Al Qaeda his precious only a-bomb to sneak into America, and the talk radio brainwashed fools like all those Beck & Palin’s bots bought it all. Good work, now the next point, why didn’t your omniscient Bush do something about Fannie May etc before it all collapsed?

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    This is the difference between ‘conservative’ and ‘right-wing’. There appear to be fewer & fewer conservatives and more & more right wingers.

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    “Standing on the carcass and beating their chests” will be the only activity the GOP can enjoy. They have become the party of Government Nihilists. If they are lucky, they will do nothing, the economy will improve in 10 or 15 years on its own, and they can seek even more tax cuts as a panacea for all ills in 2026.

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  • ReardenMetal

    This is absolute rubbish. No wonder you got fired. Why would AEI allow an apologist for the left to occupy valuable real estate space? As for your claim that Republicans have no agenda, that may be true, but do not dare blame Cato for that. Are you uninformed or just dishonest? Cato’s position on health care reform has been consistent since at least 1992! Why would any organization devoted to free markets worry about silly alliances with liberals with respect to drug-legalization and “sexual freedom” when actual freedom is under assault? You are purged because you become corrupted by the system. It is you who no longer offers unbiased information. You are now a part of the left; the remnants of the statist Nixon-wing of the Republican Party. Why do you seek to infiltrate the ranks of the defenders of free-enterprise and become angry when your access is rightly denied? Would the Center for American Progress not “purge” John Bolton?

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