Cato Studies

July/​August 1996 • Policy Report

In Vinson v. Meritor Savings Bank — a case involving sexual harassment — the Supreme Court rejected the traditional, person‐​to‐​person, common law remedies for tort and contract disputes that had been used in similar cases before 1986. Instead, the Court ruled that a “hostile work environment,” rather than quid pro quo sexual extortion, was sufficient to warrant legal recourse. Vinson thus replaced an objective legal standard with a subjective one according to which the victim’s perception, rather than a specific law, defines the offense. In a new Cato study, “Feminist Jurisprudence: Equal Rights or Neo‐​Paternalism?” (Policy Analysis no. 256), Cathy Young, columnist with the Detroit News and author of the forthcoming book Gender Wars, and Michael Weiss, adjunct professor at the University of Houston Law Center, argue that if traffic laws were based on the Vinson model, there would be no traffic lights or speed limits; you would simply be fined for failing to stop when another motorist expected you to yield, or for driving at a speed that made another driver uncomfortable.

Some Lessons from the Communist Resurgence

The communist specter is making a reappearance in Central and Eastern Europe. In some cases, as in Belarus, the old communist establishment never left power. In other Soviet bloc nations, such as Lithuania, Hungary, Bulgaria, Slovakia, and Poland, the communists have returned to power. In a new Cato study, “Red Phoenix Rising? Dealing with the Communist Resurgence in Eastern Europe” (Policy Analysis no. 255), former National Security Council staff officer Roger W. Fontaine maintains that there are three important lessons to be learned from the communist resurgence: First, the nations that have pursued the most rapid and radical economic reform programs — such as the Czech Republic and Estonia — have been the least vulnerable to a neocommunist backlash. Second, most of the resurgent “communist” parties have little desire or ability to restore dictatorships or seek a confrontation with the West. Third, although America cannot dictate political and economic outcomes in Central and Eastern Europe, it ought to encourage reform and discourage retrograde trends by refusing to bail out anti‐​reform regimes with foreign aid.

Cuts in Corporate Welfare Shown to Be Inadequate

The federal government currently spends $75 billion a year on direct subsidies to business. Last year both Congress and the Clinton administration pledged to attack pervasive corporate welfare. In a new Cato study, “How Corporate Welfare Won: Clinton and Congress Retreat from Cutting Business Subsidies” (Policy Analysis no. 254), Cato’s fiscal policy studies director Stephen Moore and policy analyst Dean Stansel find that those promises have been largely unfulfilled. In fact, for the 35 corporate welfare programs examined, the Clinton administration’s 1996 budget actually requested an increase in spending. Moreover of the $19.5 billion budgeted for the programs, Congress ultimately cut just $2.8 billion. In other words, 85 percent of corporate welfare spending survived the budget process.

Critique of Cato Study Is Misguided

Benefits available to a typical welfare household substantially exceed the amount a recipient could earn in an entry‐​level job in virtually every state, according to a new paper by Institute scholars Michael Tanner and Naomi Lopez. The paper was released in response to a critique written by Sharon Parrott of the Center on Budget and Policy Priorities asserting that actual welfare benefits are lower than Tanner, Stephen Moore, and David Hartman stated in a September 1995 Cato study (Policy Analysis no. 240). But as “The Value of Welfare: Cato vs. CBPP” (Briefing Paper no. 27) demonstrates, the CBPP critique used only 2 of 77 federal welfare programs in its calculations — Aid to Families with Dependent Children and food stamps — while the initial Cato study used 7. The CBPP attack is not supported by the data and seriously underestimates the actual value of the available welfare benefits package. The annual pretax wage equivalent of welfare ranges from a high of more than $36,000 in Hawaii to a low of $11,500 in Mississippi. In eight jurisdictions — Hawaii, Alaska, Massachusetts, Connecticut, Washington, D.C., New York, New Jersey, and Rhode Island — welfare pays at least the equivalent of a $25,000-per-year job.

Clinton‐​Hashimoto Summit Overrated

Media accounts that described the April summit meeting between President Clinton and Japanese prime minister Ryutaro Hashimoto as marking a historic change in the U.S.-Japanese alliance were erroneous, according to a new paper, “Smoke and Mirrors: The Clinton‐​Hashimoto Summit” (Foreign Policy Briefing no. 41). In it, Cato’s vice president for defense and foreign policy studies Ted Galen Carpenter points out that although the United States agreed to consolidate its military bases on Okinawa, overall U.S. troop levels in Japan will remain the same. Furthermore, the Japanese gave no indication that they intend to fight alongside American forces unless Japan itself is attacked. Despite the official and media hype, concludes Carpenter, the summit agreements do not alter Japan’s status as a U.S. military dependent.