JUNE 2007

CATO CELEBRATES 30^TH ANNIVERSARY

2007 marks the Cato Institute's 30th anniversary. To commemorate our three decades of pioneering work we have assembled a succinct look back – in words, pictures and videos – of where we and our country have been. And we renew our dedication to the dignity of the individual, which is the heart of our work. At this milestone we want to especially express our ongoing gratitude to all those who support us and share our steadfast commitment to the traditional American values of individual liberty, free markets, limited government and peace.

NEW CATO POLICY REPORT

In the new issue of Cato Policy Report, Cato scholar Brink Lindsey makes a compelling case that the social, political, and business dynamic of the second half of the 20th century created a broad libertarian consensus in America that is socially tolerant and at the same time appreciative of market capitalism. Cato Institute founder and president Edward H. Crane surveys the current political landscape and concludes that it's a great time to be a libertarian.

CATO UNIVERSITY SUMMER 2007

July 22 - 27, 2007 • Rancho Bernardo Inn • San Diego, CA

For complete information: www.cato-university.org

Join us at the Cato Institute’s premier educational event of the year. This annual program brings together outstanding faculty and participants from across the country. You’ll spend high-quality time with some of the best speakers (and minds!) in the country, in the company of fellow participants who share your love of freedom and your commitment to liberty and learning.

This year’s program will be held at the Rancho Bernardo Inn, a luxurious resort near San Diego. It’s the perfect way to vacation while learning about liberty and receiving a one-of-a-kind grounding in economics, law, history, and philosophy.

Price: $925 – the lowest we have been able to offer for a number of years.

CATO IN THE NEWS

Michael Tanner on Obama’s health care proposal in National Review Online.

Steve H. Hanke on hyperinflation in Zimbabwe and Montenegro in Forbes.

Daniel T. Griswold on U.S. trade policy with China in the Detroit News.

Roger Pilon on drug re-importation in the Wall Street Journal.

Chris Preble on Hillary Clinton's foreign policy in Reason.

DAILY COMMENTARY

Africa's Zimbabwe Problem, by Brett D. Schaefer and Marian L. Tupy

Unfulfilled Trade Policy, by Daniel J. Ikenson

Consider What's Next for the Second Amendment, by Robert A. Levy

Private Property Saved Jamestown, And With It, America, by David Boaz

Entitlements Rob Americans Of $51 Trillion, by Jagadeesh Gokhale

Forging a Broader Consensus for Withdrawal from Iraq, by William A. Niskanen

In the End, Yeltsin Went the Way of Freedom, by Andrei Illarionov

POLICY STUDIES

The Myth of the Rational Voter: Why Democracies Choose Bad Policies, by Bryan Caplan. The American public's eagerness to embrace government intervention to correct "market failures" is based upon a fundamental misunderstanding of economics. Caplan analyzes how shortcomings in public thinking lead to poor public policy. "The optimal mix between markets and government depends not on the absolute virtues of markets, but on their virtues compared to those of government," Caplan cautions. "What economists currently see as the optimal balance between markets and government rests upon an overestimate of the virtues of democracy."

Bryan Caplan is an associate professor of economics at George Mason University and an adjunct scholar at the Cato Institute. This study is an excerpt from Caplan's book, The Myth of the Rational Voter: Why Democracies Choose Bad Policies (Princeton University Press, 2007).

Federal Aid to the States: Historical Cause of Government Growth and Bureaucracy, by Chris Edwards. Federal spending on state aid is the third largest item in the budget, behind entitlement and defense expenditures, totaling $449 billion in fiscal 2007. The number of federal aid programs has doubled over the past 20 years, but politicians have made no meaningful effort to trim the excesses since the Reagan years. In this study Edwards examines how federal aid programs harm federalism, weaken accountability, and cause wasteful and ineffective spending. "The federal aid system is not about financing and operating programs in the most efficient manner, it is about politics," Edwards concludes.

The Alternative Minimum Tax: Repeal Not Reform, by Chris Edwards. Without relief from Congress, 23 million taxpayers will be hit by the Alternative Minimum Tax in 2007. The average liability will be more than $3000, and will come as a surprise to most families. Congress passed an AMT repeal in 1999, but the legislation was vetoed by President Bill Clinton. This year, Congress has another opportunity to kill this complex and expensive levy.

Chris Edwards is director of tax policy studies at the Cato Institute and author of Downsizing the Federal Government (2005).

Comprehensive Immigration Reform: Finally Getting It Right, by Daniel Griswold. Any lasting solution to the challenge of illegal immigration must recognize the important contribution that immigrants have made and continue to make to the success of America's free-market economy. To succeed, comprehensive reform must accommodate the legitimate need of American employers to hire the workers they require to meet the demands of their customers.

The Fiscal Impact of Immigration Reform: The Real Story, by Daniel Griswold. This study examines the criticism that comprehensive immigration reform would impose a burden on U.S. taxpayers by increasing the number of low-skilled workers. Griswold shows that such fears are exaggerated and fail to consider the broader economic benefits of a more market-based immigration system.

Daniel Griswold is director of trade policy studies at the Cato Institute.

The Corporate Welfare State: How the Federal Government Subsidizes U.S. Businesses, by Stephen Slivinski. The Federal government spent $92 billion in direct and indirect subsidies to business and private-sector corporate entities in fiscal 2006. Subsidies go to some of America’s largest companies. In addition, the federal crop subsidy programs continue to fund the wealthiest farmers. One way to reform or terminate those programs would be through a corporate welfare reform commission (CWRC). That commission could function like the successful military base closure commission.

Stephen Slivinski is director of budget studies at the Cato Institute and author of Buck Wild: How the Republicans Broke the Bank and Became the Party of Big Government (2006).

Growing Pains: The Evolving U.S.-China Trade Relationship, by Daniel Ikenson. After having initiated just two formal complaints against China within the World Trade Organization during that country’s first five years as a member, the U.S. trade representative has initiated three cases in the first four months of this year alone. The recent flurry of activity has caused angst and raised questions on both sides of the Pacific. By using the WTO dispute settlement system to convey U.S. seriousness about achieving resolution, the administration should be able to keep Congress on the sidelines. If so, lingering issues are likely to get resolved and a trade war avoided.

Daniel Ikenson is associate director of trade policy studies at the Cato Institute.

BOOKS

Feds In The Classroom: How Big Government Corrupts, Cripples, and Compromises American Education, by Neal McCluskey. The federal government has drilled deep into almost every public classroom in America. Washington now tells public schools whether their teachers are qualified, their reading instruction acceptable, and what they must do when their students do not achieve on par with federal demands. McCluskey challenges much of the conventional wisdom surrounding federal involvement in education.

The Age of Abundance: How Prosperity Transformed America's Politics and Culture, by Brink Lindsey. This bold reinterpretation of the latter half of the twentieth century explains how and why the ideologies of left and right emerged in response to the novel challenges of mass prosperity.

Click here for Brink Lindsey interview on The Daily Show with Jon Stewart (May 17, 2007).

David's Hammer: The Case for an Activist Judiciary, by Clint Bolick. Challenging conventional wisdom, constitutional litigator Clint Bolick argues that a judiciary that allows the other branches of government to run roughshod over precious liberties is dangerous for the future of liberty. Bolick contends that, for better or for worse, only a vigorous judiciary can enforce the limits on executive and legislative action, protect constitutional rights, and tame unelected bureaucrats. Bolick also discussed these issues at an event at Cato on April 3.

All books and merchandise are available at www.catostore.org.

RECENT SCHOLAR TESTIMONY

Energy Efficiency: Can Tax Incentives Reduce Consumption?--May 24, 2007

Chris Edwards, director of tax policy studies at Cato, testified before the Senate Committee on Finance on energy efficiency and the federal tax code. Edwards argues that while additional tax incentives probably could reduce U.S. energy consumption modestly, narrow incentives complicate the tax code, create distortions that reduce growth, and move down the slippery slope of widespread social engineering through the tax system. "On the other hand," says Edwards, "Congress should reform tax provisions that hinder new investments in energy production and conservation. Current business depreciation rules for energy and conservation investments are unfavorable compared to the rules in other countries." Read Edwards’s full testimony.

Will REAL ID Actually Make Us Safer? An Examination of Privacy and Civil Liberties Concerns -- May 8, 2007
Jim Harper, Cato director of information policy studies, testified before the Senate Judiciary Committee, asking that Congress recognize reality and repeal the REAL ID Act. Harper stated, “Mr. Chairman, the REAL ID Act is a dead letter. All that remains is for Congress to declare it so.

The proposed regulations issued by the Department of Homeland Security on March 9th, on which comments close today, help reveal that REAL ID is a loser. It costs more to implement than it would add to our country’s protections.” Read Harper’s full testimony.

An Evaluation of the Campaign Accountability Act of 2007 -- April 18, 2007

Cato scholar John Samples testified before the Senate Rules Committee to offer an assessment of the Campaign Accountability Act of 2007, which seeks to remove party-coordinated expenditure limits. Samples testified that, "Such regulations are often used to alter the political battlefield to favor a political party or incumbent members of Congress. Here we should be concerned that the two major political parties might eliminate the party coordination limits as way to hobble other parties, individuals or groups." Read Samples's full testimony.

The Hate Crimes Prevention Act of 2007 -- April 17, 2007

Cato scholar Timothy Lynch testified before the House Subcommittee on Crime, Terrorism and Homeland Security on whether Congress should enact additional hate crimes legislation. Lynch argued that, in addition to numerous practical reasons for Congress not to enact further legislation, the proposed hate crimes bill is simply beyond the powers that are delegated to Congress. Lynch urged Congress not only to decline the invitation to pass another hate crimes bill, but to repeal all existing federal hate crime laws. Read Lynch's full testimony.

UPCOMING EVENTS - CLICK ON EVENT TITLE TO REGISTER

Unless otherwise noted, all events are held at the F. A. Hayek Auditorium at the Cato Institute, 1000 Massachusetts Ave N.W., Washington, D.C.

June 5, 2007
In Defense of Our America: The Fight for Civil Liberties in the Age of Terror
12:00 pm
Cato Book Forum
Featuring the author, Anthony Romero, Executive Director, American Civil Liberties Union.

September 17, 2007
6th Annual Constitution Day
10:00 am - 5:00 pm
All day conference
Event registration for this event - email Conference@cato.org.

Video and audio of all Cato events are archived online here.

DAILY PODCAST HIGHLIGHTS

Feds in the Classroom, featuring Neal McCluskey, 5/22/2007

The Age of Abundance, featuring Brink Lindsey, 5/21/2007

Who Snatched the GOP?, featuring Victor Gold, 5/11/2007

Importing Price Controls, featuring Roger Pilon, 5/10/2007

When Patents Block Progress, featuring Timothy B. Lee, 5/08/2007

Senator Clinton's Foreign Policy, featuring Christopher A. Preble, 5/03/2007

SPECIAL IRA ROLLOVER EXEMPTION ENDS THIS YEAR

The Pension Protection Act of 2006 allows donors aged 70 ½ and older to withdraw up to $100,000 tax-free from individual retirement accounts provided the money is donated directly to 501(c) 3 nonprofit organizations such as the Cato Institute.

However, this special provision expires at the end of 2007 and does not apply to gifts made to donor-advised funds and supporting organizations.

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