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Economy

A Cinderella Story? How The Koch Brothers Use Florida Gulf Coast University To Promote Their Agenda

It’s a great story: the virtually unknown, 15th seeded Florida Gulf Coast University (FGCU), has made it to the Sweet 16 in the NCAA tournament. But there’s something you might not know about FGCU: its economics department is, as a consequence of grants from Randian businessman John Allison and the Charles G. Koch Foundation, a haven for Ayn-Rand Style thinking:

At Florida Gulf Coast University in Fort Myers, every student who majors in economics and finance gets a copy of Ayn Rand’s novel, Atlas ShruggedFGCU now has a core group of a half dozen economists whose research supports the ideas of free-market capitalism, still an unpopular subject in most faculty lounges. They teach this material to more than 250 economics and finance students (one class is titled “The Moral Foundations of Capitalism”), organize lectures by leading thinkers, publish their research in well-respected journals and hold influential positions in groups that promote free markets.

The ideological transformation of FGCU economics began in 2009, when Allison, a famous devotee of Ayn Rand’s who was then the president of banking giant BB&T, donated $600,000 to FGCU to create the endowed “BB&T Distinguished Professor of Free Enterprise.” Allison now runs the libertarian Cato Institute, a position he gained with the support of Charles and David Koch after some controversy.

The Kochs also supported Allison’s efforts at FGCU, a largely local school with about 11,000 undergradutes. A ThinkProgress review of Charles G. Koch Foundation donations from 2008-2011 found $87,000 in donations to Florida Gulf Coast University. According to an internal BB&T professorship report, the Koch money “provide[s] operational seed funding for the yearly activities and the local BB&T Charitable Foundation sponsors our premier annual event — The BB&T Free Enterprise Lecture Series.” The internal report also included metrics on the program’s operations such as “Atlas Shrugged Distribution — Number of students reached: approximately 120.”

Strange as it may seem that private ideological organizations can support academic departments, it’s not uncommon. A massive Koch donation to Florida State University’s economics program generated significant controversy in 2011 when it came to light that the donation was accompanied by de facto Koch control over some hiring decisions and the ability to review the scholarship generated. As of February 2013, 129 colleges and universities around the country were receiving Koch Family Foundations support.

Whether or not you think these sorts of donations are threats to academic freedom, they do lay bare the somewhat surprising disadvantage progressives face when it comes to getting funding for work on their intellectual traditions. In addition to the Koch direct-donations, organizations like the conservative Intercollegiate Studies Institute and libertarian Institute for Humane Studies help promote their ideas on campus and connect their students with likeminded colleagues and employers. Progressives conspicuously lack any equivalent organizations that connect students with a broader intellectual network, providing a potentially interesting explanation for why conservative ideas seem to have a direct pipeline to Washington while progressive alternatives stay at the margins of the debate.

Immigration

Conservative Think Tank Undermines Right-Wing Misinformation On Cost Of Immigration Reform

Opponents of comprehensive immigration reform in the House of Representatives and at Heritage have stuck to the myth that a path to citizenship would “cost trillions.” Citing a debunked 2007 Heritage study about immigration reform’s impact on Medicare and Social Security, Rep. Lou Barletta (R-PA) argued on ABC’s This Week, “One thing that we’re missing in this whole debate about illegal immigration is the cost.”

Mainstream economic consensus, however, says otherwise. Immigrants contribute far more into the economy than what they receive, paying taxes and creating jobs.

And a new paper from the libertarian Cato Institute agrees, undermining the stereotype that immigrants burden the economy. According to Cato, immigrants are less likely to use a range of social safety net programs than U.S. citizens:

The most recent Census data confirm that low-income non-citizen adults and children generally have lower rates of use of public benefits than native-born adults or citizen children whose parents are also citizens. Non-citizen immigrants’ (both adults and children) utilization of Medicaid, SNAP, and SSI are lower. Adult receipt of cash assistance is uncommon (2% to 3%), regardless of citizenship status. Non-citizen children are less likely to use cash assistance than citizen children with citizen parents.

Moreover, when low-income non-citizens receive public benefits, the average value of benefits per recipient is almost always lower than for those who are native-born. This held true for both adults and children in Medicaid and SNAP, and for non-citizen children in households receiving cash assistance and SSI benefits. The average per recipient benefit levels were similar for adults receiving cash assistance or SSI.

Cato’s results are in line with findings from the Center for American Progress that show immigrants pay substantially more than what they receive in benefits. The chart below shows that immigrants receive 16 percent less in Social Security benefits than the native born:

Immigrants — legal and undocumented — are barred from many government programs, and would not be eligible for health care coverage under President Obama’s reform proposal. Right now, DREAMers granted deferred action remain ineligible for Obamacare, and even in-state tuition in many states.

That has not stopped the Heritage Foundation from arguing a path to citizenship will be too costly, or the New York Times from taking a similarly flawed snapshot that fails to include the billions of dollars in taxes immigrants pay into the system.

Comprehensive reform with a path to citizenship would expand virtually every sector of the economy, injecting $1.5 trillion to the GDP and up to $5.4 billion more in tax revenue.

Climate Progress

Cato Institute Crafts Fake ‘Addendum’ To Federal Climate Report: ‘It’s Not An Addendum, It’s A Counterfeit’

by Douglas Fischer, via Daily Climate

A new “addendum” to be released as soon as this week purports to update with the latest science a 2009 federal assessment on the impacts to the United States of climate change.

The addendum matches the layout and design of the original, published by the U.S. Global Change Research Program: Cover art, “key message” sections, table of contents are all virtually identical, down to the chapter heads, fonts and footnotes.

But the new report comes from the libertarian Washington, D.C.-based Cato Institute. And its findings – that science is questionable, the impacts negligible and the potential policy solutions ineffective – are more a rebuke than a revision of the original report and of accepted science both then and today.

“It’s not an addendum. It’s a counterfeit,” said John Abraham, an associate professor at the University of Saint Thomas in Minnesota who studies clean power sources. “It’s a continued effort to kick the can down the road: A steady drip, drip, drip of fake reports by false scientists to create a false sense of debate.”

The 2009 assessment, titled Global Change Impacts in the United States, was presented to Congress as the federal government’s best assessment of the science and potential impacts. It is part of an ongoing effort by the National Climatic Data Center to assess the state of climate change science.

The Cato Institute bills its report as a “primary reference and a guidepost for those who want to bring science back into environmental protection.” In the introduction to a review copy obtained by DailyClimate.org, Cato president Ed Crane wrote that  the effort “grew out of the recognition that the original document was lacking in scope and relevant scientific detail.”

The Cato report does its share of omitting, however, as well as selectively picking data and reviving long-discredited data and arguments.

Smaller subset

The first example is on the cover: Both reports show a satellite image of the United States, with a bar-chart showing temperature changes running along the bottom. Yet the original 2009 report graphs the dramatic rise in global temperatures from 1900 through 2008, while the Cato report uses a much smaller subset – temperatures only from the United States, and just from 1991 through 2010 – to show a seemingly random pattern.

Other examples:

Read more

Justice

Cato Senior Fellow: Koch Brothers Want To Take Over Cato Because ‘Cato Wasn’t Doing Enough To Defeat’ Obama

As ThinkProgress reported last week, energy barons Charles and David Koch recently filed a lawsuit attempting to seize majority control over the libertarian Cato Institute. According to Jerry Taylor, a senior fellow at Cato, this effort is part of a longstanding effort by the Kochs to transform Cato from a warehouse for radical libertarianism into something more purely concerned with electoral politics:

Last year, [the Kochs] used their shares to place two of their operatives – Kevin Gentry and Nancy Pfotenhauer – on our board against the wishes of every single board member save for David Koch. Last Thursday, they used their shares to force another four new board members on us (the most that their shares would allow at any given meeting); Charles Koch, Ted Olson (hired council for Koch Industries), Preston Marshall (the largest shareholder of Koch Industries save for Charles and David), and Andrew Napolitano (a frequent speaker at Koch-sponsored events). [...]

Why are they forcing out Cato board members, all strong, principled libertarians who have been heavily involved with Cato – financially and organizationally – for years? The answer was given in early November of last year when David Koch, Richard Fink (he of many Koch hats), and Kevin Gentry met with Cato board chairman Bob Levy. They told Bob that they intended to use their board majority to remove Ed Crane from Cato and transform our Institute into an intellectual ammo-shop for American for Prosperity and other allied (presumably, Koch-controlled) organizations. That statement of intent is certainly consistent with what we’ve been hearing from both Kevin Gentry and Nancy Pfotenauer. They’ve frequently complained during their short time on our board that Cato wasn’t doing enough to defeat President Obama in November and that we weren’t working closely enough with grass roots activists like those at AFP.

In its present incarnation, Cato combines a kind of Randian social Darwinism with several less extreme positions on issues such as defense and gay rights. Cato doesn’t just oppose Social Security and Medicare, it believes that they are unconstitutional. Yet Cato is also a genuine ally in the fight for marriage equality and it has at times been the most pacifistic major DC think tank. Among other things, Cato opposed the 1990 Gulf War.

Taylor is clearly concerned that Cato will abandon its commitment to a modest defense policy and potentially even its progressive views on gay rights if the Kochs take over. Koch-sponsored board member Nancy Pfotenauer is a former spokesperson for the McCain campaign who argued in support of both the Iraq War and Don’t Ask/Don’t Tell. Koch front man Kevin Gentry is a “social conservative activist.” The Kochs also tried and failed to install John Hinderaker on the Cato board, a right-wing blogger who supports the Patriot Act and the Iraq War and who once called George W. Bush “[a] man of extraordinary vision and brilliance approaching to genius.” If this is reflective of the Kochs’ vision for Cato, then they want Cato to be nothing more than a mouthpiece for the Republican Party.

If the Kochs truly are committed to transforming America’s top libertarian organization into the Campaign To Defeat The President, however, then Cato will need to moderate many of its more extreme positions on domestic policy. Jerry Taylor’s job as one of Cato’s top climate science deniers will no doubt be safe — as the Koch energy juggernaut is unlikely to cut back on an issue so near and dear to its bottom line — but Cato’s miserly view of the Constitution is wholly inconsistent with an effort to develop a winning electoral agenda for President Obama’s opponent and would have to be abandoned.

Even in 2010, when President Obama’s popularity was at its lowest ebb and America’s economic woes seemed to stretch on for years to come, candidates like Joe Miller (R-AK), Sharron Angle (R-NV), John Raese (R-WV) and Ken Buck (R-CO) — all of whom share the Cato view of the Constitution — were creamed at the polls, each of them significantly underperforming Republicans with less radical stances on the Constitution. Now, by contrast, President Obama’s polls are experiencing a sharp upturn, and our economy is likely to experience meaningful growth in 2012 absent an economic disaster in Europe. If the Cato constitutional vision was toxic in 2010, it will be downright deadly in 2012.

Update

Dave Weigel has a similar report on the consequences of the Koch takeover of Cato, except that his report attributes many of Taylor’s concerns to Cato president Ed Crane. According to Crane, the Kochs intend to transform Cato into, “a partisan adjunct to Americans for Prosperity, the activist GOP group they control.”

Climate Progress

Pollutocrat Deniers Charles And David Koch File Suit To Take Over The Cato Institute

The top funders of anti-science disinformation in this country, the Koch brothers, are fighting in court to seize control of the Cato Institute. The Washington Post’s Allen McDuffee broke the amazing story this morning. Politico further reports:

Charles G. Koch and David H. Koch, the deep-pocketed conservative activists, launched a court fight yesterday over control of the Cato Institute, one of the nation’s best-known free-market think tanks. The Washington-based public-policy group was founded in 1974 as the Charles Koch Foundation. The name was changed to Cato in 1976, with the Koch brothers as longstanding contributors. The group had four shareholders until last year: Charles Koch; David Koch; Edward H. Crane III, Cato’s president; and William A. Niskanen, who died in October.

You can read the Kochs civil filing here.

Koch officials tell Politico that the brothers think the shareholder agreement is clear that there should now only be three shareholders, while Crane thinks Niskanen’s 25-percent control should go to his widow, Kathryn Washburn. “We’ve proposed a stand-still agreement and third-party mediation,” said Wes Edwards, deputy general counsel of Koch Companies Public Sector LLC. “We feel that we’ve been refused. … We haven’t alleged any wrongdoing or sought any damages. This is not about money. We view this as a matter of shareholder rights.”

Let’s remember who the Kochs are — billionaire brothers who have done more to spread anti-science, pro-pollution disinformation than any other people on the planet:

Of course, the Cato Institute has been a bastion of anti-science, pro-pollution disinformation for a long time, with research fellows like Patrick Michaels, who is a serial deleter of inconvenient data. This power grab would just make it official that Cato is a wholly-owned subsidiary of Koch Industries.

Related Posts:

Yglesias

The Limited Racial Imagination of the American Right

An African American man lynched from a tree, 1925 (wikimedia)

An African American man lynched from a tree, 1925 (wikimedia)

The Cato Institute’s Ilya Shapiro opines that Sonia Sotomayor’s selection “represents the very worst of racial politics” as “she is not a leading light of the judiciary and would not have been considered had she not been a Hispanic woman.”

I think this is a revealing moment. Sotomayor has the normal qualifications for a Supreme Court justice—she shares the president’s political views, she lacks a record of inflammatory legal writing that would prevent confirmation, the has experience as an appellate judge, she went to fancy schools. Insofar as her background was a consideration in selecting her, which it undoubtedly was, this is also totally normal. Presidents have always sought various kinds of regional, religious, and ethnic balance in the courts. Much was made out of Samuel Alito’s Italian American ancestry, and obviously Thurgood Marshall was initially put on the court in part to make a symbolic statement about civil rights and Clarence Thomas was appointed to replace him in part out of a desire to fill Marshall’s old seat with an African-American. There was a tradition of a “Jewish seat” at various times, etc.

But even more revealing is that even if Sotomayor’s selection were somehow out of the ordinary, the idea that picking one appellate judge rather than another for a promotion could possibly be the very worst of racial politics is ludicrous. At its very worst, racial politics in the United States involved the systematic disenfranchisement of millions of people, their subjection to pervasive social and economic discrimination, and the maintenance of the apartheid system via the threat and reality of state-sponsored terrorist violence. At its very worst, racial politics in the United States involved persistent filibustering to prevent the federal government from doing anything to curb widespread lynching. At its very worst, racial politics in the United States involved a violent rebellion that sought to dismantle the country in the name of chattel slavery and led to the deaths of hundreds of thousands of people.

But despite that long history, broad swathes of the American right remain persistently and willfully blind to the problem of discrimination against non-whites. Their view is, essentially, that racism emerged as a problem sometime in the year 1967 and that the problem consists of white people being unduly burdened by efforts to remediate something or other.

Yglesias

Is Government Ownersh

Cairo Traffic Jam (cc photo by tronics)

Cairo Traffic Jam (cc photo by tronics)

Cato’s Daniel Mitchell reaches a truly puzzling conclusion about the source of a traffic jam in Washington, DC. In a kind of public choice analysis gone mad, he apparently thinks that the government seeks to maximize profits, whereas private corporations are wholly benevolent in their motives:

But when I made the right turn, I discovered why traffic was so snarled on 15th Street. There was a cop standing in the middle of Constitution Avenue waiting to snare drivers turning right from the center lane. Along with many other drivers that day, I got caught and lost another 10 minutes waiting for a ticket. But the $25 ticket is not what got me so irritated. It was the fact that thousands of commuters had to deal with horrible traffic (not only because people like me suddenly got stopped and traffic behind us also had to stop, but also because people in the right-turn-only lane also could not move with the cop blocking traffic) because some bureaucrat from the National Park Police found an easy way to fill his ticket quota.

If the private sector operated the roads (permit me to engage in some libertarian fantasizing), this would never happen. Because of a desire to please drivers (customers), the folks in charge of the road would have made right turns an option from the center lane. But when government sees a bottleneck, the reaction of politicians and bureaucrats is to figure out how to fleece people for more money — not to make travel safer and quicker.

This is ludicrous. The private sector seeks to maximize profits. If a private sector firm owned the streets of Washington, DC it would exercise its monopoly power “to fleece people for more money.” This is pretty basic. That’s what private firms are there for.

The larger issue is that whether publicly owned or privately owned, the smart thing to do with crowded roads is to charge a fee for the right to drive on them. That would generate revenue, and I wouldn’t call it “fleecing” people since it would result in reduced congestion, a smoother flow of traffic, and a more pleasant experience for the citizens slash paying customers. Of course at the moment we have very little congestion pricing in the United States because of political opposition. And since private road owners would want to engage in congestion pricing, the exact same political impediments stand between sensible public management of roads and their privatization. But if the road was publicly managed, and featured a congestion charge, then the revenue could be used to reduce the overall tax burden or else to increase the quality of the alternative forms of transportation offered.

Yglesias

Medicare is Still a Government Program

hhs2-1

Whether or not you like the idea of a Canadian-style single-payer health care system, there’s no question that we already have such a system here in the United States. The Canadians call their system “Medicare” and it’s open to all citizens. We call our version of Medicare “Medicare” and it’s open to all citizens over the age of 65. In Medicare, like in Medicare, medical services are provided by the private sector but the costs are substantially born by a government-run insurance program. Medicare in Canada has problems, but it’s very popular and Canadians show little sign of wanting it to change. Medicare in the United States also has problems, but it’s also very popular and senior citizens show little sign of wanting it to change. Older Americans are also generally skeptical of Barack Obama and thus plagued by anxiety that he’s going to somehow curtail their access to generous government-provided health insurance.

Alternatively, you could act like the Cato Institute’s Doug Bandow and treat AARP members’ skepticism as a sign of incipient libertarianism:

In Dallas, at least, the AARP staff found it tough going attempting to explain to the organization’s members why the elderly would be better off with Obama-like “reform.” These people obviously were having trouble with the line, “I’m from the government and I’m here to help you.” And they were quite vocal in stating their concerns. But they were acting well within the American political tradition, which seems to be what has spooked advocates of a government medical takeover speaking breathlessly of “mobs”–presumably like the one in Dallas–opposing “reform.”

I’m sure they did have trouble explaining because there are people like Bandow out there deliberately confusing the situation. But, again, senior citizens are already experiencing government-run health insurance. And they like it. They love it! They’re nervous that it might change. And their fears are being stoked by a right-wing campaign of deception. But they’re certainly not clamoring for a Cato-style agenda in which the government stops giving them health insurance.

Yglesias

At Last, Someone to Stand up for the White Man!

One issue I’m interested in with regard to the Supreme Court is civil liberties and executive power. On most issues, I basically assume that anyone who Obama picks is going to have views I’m satisfied with. But Democratic presidents are, you know, presidents and often don’t worry too much about presidential power run amok. So I thought I’d look and see what the libertarian Cato Institute has to say about Sonia Sotomayor’s record, since they follow these issues closely.

Well, Roger Pilon slams her as “the most radical of all the frequently mentioned candidates before him.” In the course of his condemnation he mentions her ruling in just one case, Ricci, and makes no effort to mount an argument on the merits against her position. In a second Cato post on Sotomayor, Ilya Shapiro slams her as an “Identity Politics over Merit” pick. In the course of his condemnation he mentions her ruling in just one case, Ricci, and makes no effort to mount an argument on the merits against her position.

Thank God there’s a think tank looking out for the white men of the world.

Yglesias

Doug Bandow Worries About Hypothetical Problems, Ignores Actual Ones

Cato’s Doug Bandow starts out with the observation that foreign demand for U.S. Treasuries is down:

tic_jan_1.png

So what will become of us all? Well, it’s pretty obvious. At this same time, household savings rates in the United States have gone way up. On one level, that’s pushing us further into recession. On another level, that’s necessary because household savings have been way too low. Still, Bandow is very concerned:

It’s difficult to accurately predict future demand. But U.S. borrowing will be truly staggering in coming years. If international demand is down, the Treasury will have to rely on American investors. Whether the domestic market can easily absorb so much debt — and particularly, to what extent federal debt offerings will crowd out private investment during what we hope will be a recovery — are questions that our spendthrift leaders have not bothered trying to answer.

These aren’t question they’ve “bothered trying to answer” because the future is inherently unpredictable and there’s no need to try to guess the answer. We have no way of knowing whether or not hypothetical future deficits will crowd out hypothetical future private investment at some hypothetical future point. But we do have a good way of telling, at any given time, whether or not this is what’s happening. You can tell because because interest rates go up. It was high interest rates that led the Clinton economic team to conclude in 1993 that it was more important to reduce the deficit, thus decreasing crowding-out, than it was to juice demand through fiscal expansion. These days you have a similar group of personnel in place but a different policy because they’re facing a different situation. Interest rates are incredibly low—nothing is being crowded out.

Meanwhile, the administration has outlined a longer-term plan to bring the deficit to sustainable levels. Those projections might prove wrong. Or that path might prove inadequate. In which case we’ll have to change policies. But there’s no reason to avoid doing what’s necessary for growth now just because in the future we might need to do something different. And it’s worth keeping in mind that a years-long recession would devastate our long-term budgetary picture anyway so it’s not as if there’s a huge short-term tradeoff.

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