Commentary

Politics: The Cato Institute

This article originally appeared on WashingtonPost.com on August 25, 2003.
What makes the Cato Institute different from other think tanks in Washington, D.C.? How does the Cato Institute promote “limited government, individual liberty, free markets and peace.” What is the role of think tanks in America?

Edward H. Crane, founder and president of the Cato Institute, was online to discuss the think tank, their influence and politics in general.

Crane is the coeditor of several books, publisher of Regulation magazine, serves on the Board of U.S. Term Limits, and is a member of the Mont Pèlerin Society. A graduate of the University of California at Berkeley and the University of Southern California Graduate School of Business Administration, Crane is a chartered financial analyst and former vice president at Alliance Capital Management Corp.

The transcript follows.

Editor’s Note: Washingtonpost.com moderators retain editorial control over Live Online discussions and choose the most relevant questions for guests and hosts; guests and hosts can decline to answer questions.


Edward H. Crane: Waht? No Spilchick? Happy to be participating in the think tank week with you all.


New York, N.Y.: The Cato Institute holds a leadership position in the area of libertarian scholarly research and policy recommendations. However, the majority of voting Americans either never encounter Cato’s points of view or are turned off by their scholarly tone. What is Cato doing to drive popular awareness of the libertarian message and to make it relevant to mainstream Americans?

Edward H. Crane: I get that question from supporters frequently. The fact is that to function effectively in the think tank world, it is important to avoid being perceived as an activist organization. There is a division of labor in the ongoing battle of ideas, and Cato’s is at the policy level, not the activist level. That said, we do have more than 25,000 discreet visitors to our website (www.cato.org) every day. And Cato, according to FAIR’s annual survey of 25 national think tanks, receives more major media mentions than any other organization with the exception of the venerable Brookings Institution (fair and balanced). So we are getting our ideas out there.


Harrisburg, Pa.: What are the sources of revenues for the Cato Institute? Are your records open to the public?

Edward H. Crane: We receive about 80 percent of our funds from some 15,000 individual supporters from every state in the nation. Seven percent comes from corporations, eight percent from foundations, and the rest from conference fees, books sales, etc. Our budget last year was just over $17 million. Like all 501(c)3 organizations, our financial information is available to the public on IRS form 990. Our annual report lists all major supporters.


College Park, Md.: Thanks for fielding questions. As a progressive, social Democrat, or as some call me, a socialist (which I don’t mind as long as they qualify the term with the word “democratic”), I think it is always important to have a group of people to espouse the ideals of a libertarianism. And for that, I think many in the moderate/progressive Left should congratulate you and your staff on Cato’s work. Although you’re clearly wrong on a number of issues! (I say facetiously).

What is Cato’s general view toward religious liberty and the need for the separation of the State and Church, and possibly, if you have time, your views on Chief Justice Moore’s stance on displaying the 10 Commandments in a government building?

Edward H. Crane: A “progressive” social democrat is an oxymoron, isn’t it? At least if we take the word progress seriously. We take very seriously the separation of church and state. The Founders didn’t just casually adopt that idea. They knew full well the danger of mixing religion with the power of the state. 9/11 was, after all, a faith-based initiative. I think the Bush administration’s efforts to fund successful religious charities is both unconstitutional and a subversive to that success. As for the Alabama situation, the federal court that ruled the display of the 10 Commandments had to be removed from a government building was on solid constitutional grounds.


Chicago, Ill.: Cato recently had an internal disagreement over the plan to importing of lower priced pharmaceuticals. What are the other policy areas where libertarian thought is in disagreement and may benefit from continued debate?

Edward H. Crane: Good question. Too many people think libertarianism is a closed system. The great libertarian thinker F.A. Hayek always talked of the need for humility in promoting ideas, with the thought that you may well be wrong. So, among libertarians there are vigorous debates over the appropriate tax system, intellectual property, foreign policy, monetary policy and other issues. The first principle of individual liberty often presents difficult policy conclusions.


Washington, D.C.: Cato publishes the Handbook for Congress, holds hearings on the Hill, and produces a lot of information for government representatives. However, how often does this work pay off? Are there examples of success? It seems to me government policy these days could hardly be further away from Cato’s positions?

Edward H. Crane: Thomas Jefferson said “the natural progress of things is for government to gain ground and for liberty to yield.” Ain’t that the truth? So, yes, government in the United States today is far from ideal from the Cato Institute’s perspective. Still, in our 26 years of existence we’ve seen the policy debate come a long way in our direction. School choice is now a movement gaining ground by the day. Our Center for Educational Freedom has done much to advance that cause, including the current effort to bring vouchers to the District of Columbia. Social Security privatization is now on the front burner, an issue Cato took up 25 years ago when virtually no one would face up to the problem. Our work on monetary policy, including our annual monetary conference (at which Alan Greenspan is speaking this year), has had a major influence. We published the first study on the value of Medical Savings Accounts — Patient Power by John Goodman — that got that movement going. MSAs or HMAs are the answer to our health policy problems. We need to get third party payers out of the picture, except for catastrophic situations. Our work pointing out the counterproductivity on the War on Drugs has led to more and more thoughtful people questioning the wisdom of this $40 billion a year fiasco. The efforts of our Center for Constitutional Studies are shaping the debate over judicial policy. Our Center for Trade Policy Studies has played an important role in supporting NAFTA and promoting free trade around the world. So we’re happy with the results of our efforts. Sorry for being so long-winded.


Woodbridge, Va.: The once unified conservative movement appears to be fragmenting into several sub groups (neocons, traditionalists, libertarians etc). The debate appears to force all subgroups to refine their thinking and ideologies but could threaten the movement’s ability to speak with a unified voice. Do you feel this is healthy for continued conservative dominance of public policy? How should this process be encouraged or discouraged?

Edward H. Crane: I’m not sure what the “conservative” movement is. The issue is power versus liberty. In the battle I believe the libertarian worldview is the one most consistently on the side of liberty. Neoconservatives, in my view, are a pernicious force with dismaying influence in the Bush administration. On domestic policy they support big government across the board. They were the ones who created the “faith-based initiative” and talked Bush into supporting the greatest federal intrusion in education in American history. They support a massive welfare state. In foreign affairs they are reckless interventionists. The fiasco in Iraq can be laid at their feet. What we need is an alliance of libertarians, traditional limited government conservatives and those few liberals who still support true civil liberties.


New York, N.Y.: You should be ashamed of yourselves. Cato is a big-business sponsored anarchists’ club. You advocate denying access to courts, the elimination of all safety and health regulation, and the complete return of society to the dark ages. You are personally and professionally a villain, and the enemy of all civilized people.

Edward H. Crane: Dear Sir: You may well be right.


Washington, D.C.: Mr. Crane, I love Cato and the ideas you stand for. My question is on capital punishment. As far as I can tell, libertarians seem not to have a single view on the death penalty. What is the Cato Institute’s position on capital punishment?

Edward H. Crane: To begin with, the Cato Institute does not take positions. Our scholars do. My own view on capital punishment is that it is morally justified, but that the government is often so inept and corrupt that innocent people might die as a result. Thus, I personally oppose capital punishment.


Washington, D.C.: I recently read a piece by Stan Liebowitz (“The Day the Music Died”) on digital rights and content protection. I applaud Cato for offering thoughtful presentation of divisive and complex topics like this one. How does Cato prioritize issues?

Edward H. Crane: Thanks for the comment the Liebowitz piece. He has a chapter in our book, Copy Fights: The Future of Intellectual Property, editor by our dynamic duo in the tech policy field, Adam Thierer and Wayne Crews. BTW, their most recent collaboration is Who Rules the Net” Internet Governance and Jurisdiction. As for priorities, our senior policy staff meets periodically to discuss them. The things we look for are major impact and a distinctive contribution to the debate. Certainly Social Security reform, controlling our out of control Justice Dept., fundamental tax reform (i.e., simplification), school choice, and reining in our promiscuous foreign policy are high on our list of priorities.


Spelling Land: “That said, we do have more than 25,000 discreet visitors to our website (www.cato.org) every day.”

I promise I’m not usually a pedantic jerk, but I can’t resist…

Why do they have to be discreet? Do you have dirty pictures on your Web site?

Interesting chat.

Edward H. Crane: Mea culpa. I suspect they probably aren’t very discreet, in any case.


Winneconne, Wis.: Do you ever see a flat federal income tax for all earners in America?

Edward H. Crane: Yes. Our tax code has more than 40,000 pages of social engineering, which is an insult to all Americans. The politicians who’ve created this monstrosity should be ashamed, both liberal and conservative. The tax code treats Americans like so many gerbils — do this and you get sugar water, do that and you get an electric shock. Horrible. I believe a presidential candidate who stated clearly the case for either a flat income tax or replacing the income tax altogether with a federal retail sales tax would find Americans very receptive.


Atlanta, Ga.: Education has traditionally been a state and local issue, but under the recently-implemented “No Child Left Behind” Act, it seems like the federal government is taking over our K-12 education, even going so far as to define what is and what is not a “failing” school. I am not a lawyer, so could you explain to me where in the U.S. Constitution the federal government is authorized to, in effect, run our school systems, and why the feds think they are competent enough to define failing and successful schools?

Edward H. Crane: Good questions, which I’ll take as my last. President Bush was in Florida at a grammar school having a photo-op to promote his “No Child Left Behind” initiative when those planes flew into the twin towers. We do not pay George Bush to tell us how to educate our children. Primarily, the president is paid to defend our nation. There is no mention of the word “education” in the Constitution. Ronald Reagan won the presidency in a landslide on a platform the included the abolition of the Dept. of Education. When Bush took over the Dept. of Education had a budget of $36 billion. Today, it is $59 billion. That is an outrage. Education is a state, local, private concern. The Feds should find bin Laden and respect the Constitution when it comes to education. Thanks for participating!

Edward H. Crane is the founder and president of the Cato Institute.