Monthly Archives: September 2013

In Defense of the Heritage Foundation

Think Tanks play an important role in policy formation, and I have been fortunate to work for a few, including some wonderful years at the Heritage Foundation. I’m disappointed that people are constantly trying to tear the place down. For instance, Molly Ball wrote a lengthy essay in the (“The Fall of the Heritage Foundation and the Death of Republican Ideas”) that quotes me, and in all fairness Molly quotes me accurately based on a short phone conversation we had a few days ago. She also quotes a lot of other folks who clearly have an axe to grind. I thought the essay was interesting, but I disagree with enough of the other sources that I’d like to offer my full perspective on the Foundation, Action, Jim DeMint, and scholarship on the Right in general.

For starters, I will tell anyone who will listen that the Heritage Foundation is a big tent conservative organization that employs tons of good scholars. Big tent means diverse perspectives. Some scholars are more libertarian, some more culturally conservative, and some are basically defense hawks. If one insists on putting its economic researchers into camps, there are a diverse mix of Monetarists, Supply Siders, New Keynesians and Austrians all under the same Heritage roof. The mix of ideas is what makes Heritage such an energizing place to work. It should surprise no one that the wide range of opinions at a big tent institution of scholarship will produce research that even people within the institution disagree with to some degree. That is a sign of health, not dysfunction. Just as Harvard generates a diverse mix of scholarship on every issue every year, much more at odds with itself than any think tank, so does a healthy think tank such as Heritage produce a diverse mix of opinions. In fact, the intellectual climate that Ed Feulner and Phil Truluck created should be admired. They nurtured original thought and success for a vast number of diverse scholars, and I expect that same climate will continue under Jim DeMint’s leadership.

My biggest objection to Molly’s article is this line: “Without Heritage, the GOP’s intellectual backbone is severely weakened.” That assumes the demise of scholarship itself at Heritage, which I would dispute. But it also assumes that there are no other sources of conservative ideas. On the contrary, there is a proliferation of new idea factories over the past decade. Think tank scholarship is a booming business (that’s the real story). You have AEI, Hoover, CATO, Hudson, not to mention issue-centric think tanks (Reason, Peterson, CSIS), non-partisan think tanks (look closely at Brookings, New America), and new entrants such as Mercatus and Aspen. They’re all evolving and testing new business models, and the competitive climate is itself shifting. You also see organizations that are essentially expanding into the think tank business such as CFR, CKI, and Pew. Then there are the crossover media/scholar hybrids like National Review Online or itself. The elephant in the room that is shaking up the very idea of a think tank is the rise of blogs, thousands of blogs. VOXEU, anyone? The traditional role of a think tank to link big academic ideas to policy is being short-circuited, in a sense. John Taylor is blogging. So is Paul Krugman. So is Jim Hamilton. Heck, so is Glenn Hubbard. The policy game has changed, and big ideas are bigger than ever.

What’s really not a surprise to anyone in DC is that each think tank has a unique position on the scholarship-activist spectrum. Heritage is and has always been generally more active/legislative than the generally more cerebral AEI. Both institutions would make the same claim. But let’s not pretend one place is less energized by ideas. Or wait, is the idea of defunding Obamacare unoriginal and “crazy”? Like it or hate it, defunding is purposeful, creative, riveting and important. It requires us to think about big Constitutional issues, policy implications, and yes, politics. It might well blow up on Republicans. It also might remind voters at this critical moment how hyper-partisan the passage of Obamacare was in the first place and that the President’s refusal to negotiate or compromise is the biggest factor pushing the government towards shutdown. From my seat, it looks like the House majority’s effort to fund the government however they best see fit is within their authority — they won the majority in 2012 and the Constitution gives them the power of the purse. I honestly haven’t followed the drama closely enough to know how I would recommend a Senator or Member vote, but that’s just me. It’s not a simple matter. Long-term debt is exploding, by the way, and we’ll all thank the House majority if this scheme curtails it. Or maybe this scheme will make things worse, cause a recession, and raise interest rates. Nobody knows for sure. As Ezra Klein says, this isn’t 2011. Point is: ideas are absolutely at stake.

On the issue of immigration, for anyone not keeping score, I favor more of it. Immigration is good for the economy, great for our culture, and core to who we are as a people. In contrast, a few Heritage staffers, namely Robert Rector, warn that low-skill migration is harmful. I think this: He’s wrong, I’m right, so what? If you want to avoid policy disagreements, read about pandas at the zoo. Besides, immigration policy is way, way more nuanced than other issues – definitely more than the mainstream media is able to cover – so it gets boiled down unfairly into a for-and-against debate with racial overtones. Unfortunately, that framing makes it easy to oversimplify the story of one think tank.

I disagree with the premise that good scholarship has fallen at Heritage, or the claim that the supposed fall implies a dearth of ideas on the Right. Nonsense. What you should draw from the immigration debate is this: Immigration is a complex issue where there are diverse opinions that cut across party and ideological lines. I assure you that even today not all staffers at Heritage are of one mind on this issue, even though I would agree that the consensus there shifted over the decades, just as it shifted in various directions on various issues. That’s not an indictment, and something you should expect in any organization with constant, gradual turnover of staff.

Besides, what about the hostility among those on the Left about immigration? The fact is, Left Libertarian proponents of greater immigration know that their biggest obstacle to reform is not the conservative movement nor the business community (a strong ally), but instead the dogged hostility of organized labor. Don’t believe it?  Check out the poison pill in the Senate’s comprehensive immigration bill that will penalize any U.S. company hiring a guest worker if the firm displaces any native worker during a 12-month window. Do you really think U.S. companies will hire a guest worker if the hire exposes them to a lawsuit risk every time they lay off a native worker? Imagine if a firm has to lay off or fire a native staffer for cause, especially if that staffer turns out to be a sexual predator. The need for flexibility and risk avoidance will chill guest worker hiring if the Senate bill becomes law. And guess who has published research on this exact point? You guessed it: the Heritage Foundation. Mark Zuckerberg, take note! Techies want more STEM immigrants, green cards for engineering grads, and startup visas, but I’m pretty sure they’ll be unpleasantly surprised by a government-micromanaged labor market.

The bottom line is that I admire and learn from many solid scholars working at Heritage today just as I did ten years ago. Ed Meese is a hero. Mike Needham is a friend. Jim Carafano is a superstar. In particular, I point with pride to the Index of Economic Freedom which continues to document year after year a world-class measure of institutional factors that matter for economic growth. I am very proud of leading the Index team from 2006 to 2007, and would be the first to say their scholarship in this area continues to get better.

So, let’s knock it off with the “Dummies on the Right” narrative, huh?

Speaking on Bleeding Talent: Army Navy Club of DC, 7:30am, tomorrow (!)

Bleeding Talent Cover

If anyone wants to attend my 90 minute speech & discussion about reforming U.S. military manpower, please feel welcome to attend the breakfast event tomorrow morning at the Army Navy Club in Washington, D.C.  It is open to the public, so NOT, as I thought, a club members only deal. As a preview, I will suggest that the way to finally stand up to sexual predators in the ranks is NOT by taking away more authority from commanders, rather by giving them back control over promotions and hiring decisions.

Wednesday, September 25, 2013
Registration/Breakfast – 7:30 a.m. | Program Starts – 8 a.m.
$15++ per person

901 Seventeenth Street NW
Washington, DC 20006

Not to Be Missed: The Federalist

There’s a new online magazine that deserves your attention: The Federalist. Its genesis is unknown to me, but I know a few of its founding team (here’s looking at you, Sean Davis). But that’s irrelevant. The look is fantastic. The essays so far are top-notch. This one on robots-as-job-killers by Harsanyi is just fantastic:

Are robots destroying the prospects of a vibrant future?

Maybe. But the theory has a few holes.

For starters, technology always kills jobs.  American industry did not stumble upon innovation in 2007. The first ATM machine was installed in 1969, after all, and some of you may never have spoken to a live bank teller. Are today’s modernizations really more disruptive than those hatched during the first half of the 20th century or the Industrial Revolution? It seems unlikely that Facebook is a bigger game-changer than the mass production of the automobile.

Congrats on a great start out the gate.

Econ Blogger Survey 2013

Here are some of the charts from the 2013 Survey of Leading Economics Bloggers that we just published at Hudson. Thanks to Genia Nizkorodov, one of my current interns, for help putting the final report together.

So who can spot the trick question?


Abraham Lincoln on the Existential Threat

This is from Abraham Lincoln’s first major speech, known as the Lyceum Address, given in 1838 (two decades before his presidency):

At what point then is the approach of danger to be expected? I answer, if it ever reach us, it must spring up amongst us. It cannot come from abroad. If destruction be our lot, we must ourselves be its author and finisher. As a nation of freemen, we must live through all time, or die by suicide.

Title of the speech? “The Perpetuation of Our Political Institutions”

For what it’s worth, Glenn has got me interested in Lincoln again, and is a big admirer of the 16th president.  I am engrossed in Rich Lowry’s book and hope to review it soon.

U.S. History of balanced budgets

For those who doubt the ability of Congress to balance the federal budget, consider:

The Civil War sent federal spending skyrocketing from around $70 million to more than $1 billion in 1865. Again, however, war was followed by a long period of retrenchment, as federal spending was held constant and the debt was paid down. Spending was roughly flat at about $300 million for two decades, 1870 to 1890. The budget was balanced every year from 1866 to 1893.

That’s from Chris Edwards at CATO, one of the reliably insightful and reasonable budget experts in Washington. Read Chris’s whole essay at National Review

Econ Blog Survey 2013 — Preview

Here is a preview of the Econ Blog Survey for September 2013.  This continues a survey I began over three years ago when Bob Litan and I started the blog at the Kauffman Foundation. I will put together a report discussing the full results in a day or two, but thought these results were worth previewing.  One of the questions was submitted by Bob Litan, and a related (uncoordinated) question was submitted by Donald Marron.


Notice how skewed the responses are!  I’ve never seen a response so lopsided. Great question, as it really exposes the predictable capacity for Washington to pass the buck to the next generation. Next:


Marron’s question reveals a strong preference among economics bloggers to eliminate the debt ceiling.  I’ll confess that I disagree with the majority on this one. While I favor neither presidential absolutism or the current system, that’s because I see the layered authority of Congress not as something ridiculous (as the administration spins it), but as a long-lived and well-designed check and balance on the power of the purse. Of course the executive prefers a power grab from legislators, but they would be foolish to remove this check on debt. It’s about the last meaningful dam on debt America still has. Prioritization is one improvement, but I disagree that the debt limit itself is the source of our fiscal problems.

More interesting results coming soon.