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The Cato Institute: Policies for Sale

April 17, 2013

Recently I have had a mystery commenter leaving his (I have reason to believe this is a man) strong yet anonymous opinions on a couple of my blog entries. When confronted about his mask, this person insists that his identity does not matter; all that matters is the “truth” of what he writes.

I disagree. I believe that my readers should know exactly who I am; they should know my credentials and my associations in order to more competently judge my position on educational issues. My readers should especially know whether I am being financially compensated by individuals or groups that endorse a particular position, for such financial compensation could certainly bias my perspective.

My perspective has not been purchased. I am truly an independent.

I have some fellow bloggers who choose to write anonymously; however, they do so at risk because they are on the unfunded, increasingly-disenfranchised end of corporate reform. My mystery commenter is not. He propagates the current, heavily funded, ubiquitous privatization message.

I write from the perspective of the increasingly disenfranchised end.  I write on behalf of colleagues across the nation who are also increasingly being disenfranchised by a relentless corporate reform machine.

It is this hidden commenter’s insistence upon cowering that has prompted me to write about the organization I believe he represents: The Cato Institute.

Cato Introduced

On its website, the Cato Institute describes itself as follows:

The Cato Institute is a public policy research organization — a think tankdedicated to the principles of individual liberty, limited government, free markets and peace. Its scholars and analysts conduct independent, nonpartisan research on a wide range of policy issues.

Founded in 1977, Cato owes its name to Cato’s Letters, a series of essays published in 18th- century England that presented a vision of society free from excessive government power. Those essays inspired the architects of the American Revolution. And the simple, timeless principles of that revolution — individual liberty, limited government, and free markets – turn out to be even more powerful in today’s world of global markets and unprecedented access to information than Jefferson or Madison could have imagined. Social and economic freedom is not just the best policy for a free people, it is the indispensable framework for the future. [Emphasis added.]

Cato: ALEC’s Little Brother

Whenever I read that a group identifies itself as “Jeffersonian,” I immediately think of the American Legislative Exchange Council (ALEC). Notice how ALEC describes itself and its mission:

A nonpartisan membership association for conservative state lawmakers who shared a common belief in limited government, free markets, federalism (the Jeffersonian connection), and individual liberty. Their vision and initiative resulted in the creation of a voluntary membership association for people who believed that government closest to the people was fundamentally more effective, more just, and a better guarantor of freedom than the distant, bloated federal government in Washington, D.C. [Emphasis and commentary added.]

To date, ALEC’s Task Forces have considered, written and approved hundreds of model bills on a wide range of issues, model legislation that will frame the debate today and far into the future. Each year, close to 1,000 bills, based at least in part on ALEC Model Legislation, are introduced in the states. Of these, an average of 20 percent become law. [Emphasis added.]

Let me explain the shared terminology I have highlighted in the way that both the Cato Institute and ALEC represent themselves.  “Limited government”  means that these groups want no regulation or oversight from the federal government. They want the freedom to push through their ideas on the state level. “Free markets” means that the Cato Institute and ALEC both want to privatize the public sector. This is their primary motivation for all that they do: Access to public sector funding and creating the vehicles for placing that funding into the coffers of private entities, such as corporations.

“Individual liberty” is a ruse for pretending to champion the rights of an individual while pushing a predetermined agenda upon the individuals. For example, consider “school choice” (vouchers; charters): Parents are led to believe that they actually have control over where their children will attend school. However, this is not true. Parents have limited choices; they may not get their first choice for where to send their child, or, worse, they might be offered “choice” from among a group of schools no better (and perhaps worse) than their child’s original school. Also, their “choice” might incur additional fees.

Finally, “nonpartisan” means that members of both political parties are involved in advancing this unregulated privatization agenda, though most members tend to be Republican.

As to ALEC’s proudly promoting its “model legislation”: ALEC hands off this legislation to lawmakers who are ALEC members and encourages them to introduce it as their own. The legislation is heavily sponsored by corporate interests and always serves these interests. ALEC legislation overwhelmingly promotes privatization of the public sector.

ALEC has recently decided that it no longer wants to be called ALEC.  It believes its image has been tarnished. Nontheless, “The Artist Formerly Known as ALEC” does plan to continue in the very same pro-corporate, anti-public-sector practices that it have promoted since 1973.

I can call it a flower, but if it smells bad and flies buzz around it, I had best scrape it off of my shoes before walking into the house.

The Koch Connection

The Cato Institute promotes the same principles as ALEC. In fact, both organizations share “the Koch connection”:

No one knows how much the Kochs have given ALEC in total, but the amount likely exceeds $1 million—not including a half-million loaned to ALEC when the group was floundering. ALEC gave the Kochs its Adam Smith Free Enterprise Award, and Koch Industries has been one of the select members of ALEC’s corporate board for almost twenty years. The company’s top lobbyist was once ALEC’s chairman. As a result, the Kochs have shaped legislation touching every state in the country. Like ideological venture capitalists, the Kochs have used ALEC as a way to invest in radical ideas and fertilize them with tons of cash. [Emphasis added.]

ALEC was founded in 1973. The Cato Institute was founded in 1977– by Edward Crane– and Charles Koch. Furthermore, brother David Koch, Executive Vice President of Koch Industries, sits on Cato’s board of directors.

Interestingly, in discussing its history on its website, Cato avoids any mention of its founders.

The inextricable ALEC-Cato connection is a very important association for understanding that a “think tank” like Cato Institute is nothing more than another vehicle for promoting ALEC’s agenda.

ALEC Funders = Cato Funders

On its website, Cato proudly proclaims that it “accepts no government funding” in order to “maintain its independence.” That sounds very noble, except that a think tank’s “independence” is not automatic simply because it accepts no government funding.

He who greases the wheels gets to use the wagon.

Funding speaks loudly to what an organization supports. Consider this list of Cato funders as noted on

Cato’s corporate sponsors include: Philip Morris, R.J. Reynolds, Bell Atlantic Network Services, BellSouth Corporation, Digital Equipment Corporation, GTE Corporation, Microsoft Corporation, Netscape Communications Corporation, NYNEX Corporation, Sun Microsystems, Viacom International, American Express, Chase Manhattan Bank, Chemical Bank, Citicorp/Citibank, Commonwealth Fund, Prudential Securities and Salomon Brothers. Energy conglomerates include: Chevron Companies, Exxon Company, Shell Oil Company and Tenneco Gas, as well as the American Petroleum Institute, Amoco Foundation and Atlantic Richfield Foundation. Cato’s pharmaceutical donors include Eli Lilly & Company, Merck & Company and Pfizer, Inc.

Now consider this list of ALEC corporations. The overlap is astounding.

Policy for Sale

Like its “older brother” ALEC, the Cato Institute supports legislation that benefits its funders:

…Some critics have accused Cato of being too tied to corporate funders, especially in the 1990s. Critical sources report that Cato received funding from Phillip Morris and other tobacco companies in the 1990s, and that at one point Rupert Murdoch served on the boards of directors of both Cato and Phillip Morris.  The Knight Ridder newspapers reported that in the late 1990s Cato received financial contributions from the American International Group, “an insurance and financial services company whose business includes managing U.S. retirement plans” as Social Security reform emerged as a more prominent issue. Between 1998 and 2004 the Cato Institute received $90,000 of its funding from ExxonMobil — about a tenth of a percent of the organization’s budget over that period.  [Emphasis added.]

Cato believes the 1998 settlement between the tobacco industry and numerous states was unfair to the tobacco industry. Cato works to privatize Social Security. Cato sides with petroleum companies.

Here is a universal truth about so-called “think tanks” pushing for privatization:

He who pads the pockets procures the policies.

Cato Free of the Kochs– But Not Really

As for the Kochs’ influence upon the Cato Institute, in March 2012, there was trouble in paradise. Apparently Charles Koch wanted to rid Cato of fellow co-founder Ed Crane. The Kochs sued for control of an open shareholder seat. The case was settled under the condition that Crane step down. The Kochs continue to control four of the twelve board of directors’ seats. Cato and the Kochs both note that this arrangement is evidence of “scholarly independence”:

“For a majority of Cato’s directors,” a joint statement by Cato and the Kochs said, “the agreement confirms Cato’s independence and ensures that Cato is not viewed as controlled by the Kochs.” It continued, “For Charles Koch and David Koch, the agreement helps ensure that Cato will be a principled organization that is effective in advancing a free society.” [Emphasis added.]

I am sorry to disappoint those who advanced this “joint statement,” but the fact that the Kochs sued, settled, and ended up removing the man they wanted to remove in the first place doesn’t exactly instill confidence in the assertion (wish?) that Cato is “independent” of the Kochs.

Its very mission statement continues to be ALEC-modeled.

Charles and David Koch are still very much ALEC-involved.

And they have four of twelve Cato board seats.

Back to My “Mystery Commenter”

If I were connected to a group that so easily brought my motives into question, I guess I might use MS when commenting on other blogs.

Except that I am not.

And so, I don’t.


Update 04/18/13:

Since the time that I originally posted this blog yesterday night, I have heard from Jason Bedrick of the Cato Institute. He insists that he and my mystery blogger JB are not one and the same. (I purposely did not mention names in this post in order to see what the omission might yield.)  Bedrick offers as evidence that he has a different IP address than JB. (See comments following this post.)  I verified this information; moreover, I learned that JB’s IP places him in Katy, Texas, a suburb of Houston.

Is mystery commenter JB associated with the Cato Institute? I do not know. I cannot know this person’s affiliations for certain without his disclosure. The importance of commenter identity is one of the points of this post.

Has my position changed regarding my view of the cowardice associated with this person’s “mystery commentary”?  It has not.

Is the information presented in this post regarding the inextricable relationship between Cato and ALEC any less true? It is not.

Whether the mystery commenter reveals himself or not, the Cato Institute remains bad news for the public sector, traditional public education included.

From → ALEC, Koch Brothers

  1. Peg Metzger ( Bflo, NY) permalink

    This is your blog site . I think it is a great one!

    You have every right to screen and delete entries that you perceive to be “planted” . Do it!
    If the mystery commenter wants to bloviate…let him do it on his own blog.
    You don’t need to defend yourself to a jerk who won’t even use his name.

    Thank you for all the time you put into this for those of who are trying to learn and discuss our professional issues.

    You Rock !

    • Thank you, Peg. I’m happy to write and help colleagues in the process.

      Think of this entry as less of a defense and as more of a “flipping the light on in order to make the cockroaches scramble.” 🙂


  2. Lies, damned lies, and think-tanks …

  3. and of course Cato and other groups’ claims that they are not funded by government are misrepresentations at best; all donors to the group claim tax credits, tax breaks, etc when they make contributions to these organizations.

  4. Between ALECato & Al Qaeda, the first is the worst by far in the threat it poses to the American way of life.

    The relics of the real Thomas Jefferson can spin in his grave only so long —
    one day soon his Spirit will rise and smite these people for daring to use his name.

  5. CATO is one of the earliest of some 13 Koch-founded think tanks that laid the groundwork for ALEC. It gained some publicity recently because other board members were unwilling to give Koch a majority, but I guess they’ve sorted that out. The Heritage Foundation, another long-term instrument of Kochs, is spawning 59 branch Heritage Foundations throughout the U.S., presumably to keep a close eye on state governments and other entities they now control.

  6. Kyle permalink

    Vis a vis your antipathy for corporations, you seem to ignore the elephant in the room which the CATO institute has hit on time and time again, — limited liability. — When government allows the liability of shareholders in a corporation to be limited to the amount invested, it violates judicial independence, property rights, the principle of equality before the law, in addition to distorting the natural balance between risk and reward inherent to the free market.

    The latter being key here, without the guarantee that the personal assets of stockholders are off limits in a lawsuit, shareholders would assume the same risks small business owners face in their pursuit of reward. In restoring personal risk to stockholding in the all too vicarious pursuit of corporate reward, you restore the free market’s natural balance between risk and reward which acts to limit corporate growth beyond anything too concerning. Imagine if potential stockholders knew that their personal assets might be at risk in a case like the BP oil spill. Some number of shareholders would decide against taking that risk, or at least limit it by acquiring less stock.

    Regulations don’t mitigate the problem one iota either. They invariably drive up operating costs and erect barriers to new firms entering the market, which are easily absorbed by corporations, but not small businesses, due the principle of “economies of scale.” The end result is government further safeguards corporations from risk by shutting smaller firms out of the market, hindering the free market’s competitive nature. There are no regulations which help the little guy.

    • Bottom line: By virtue of its funding and its inextricability from ALEC, Cato is a compromised organization.

      • Kyle permalink

        On the contrary, to suggest CATO’s intellectual arguments are rendered moot by the source’s of its funding amounts to an ad hominem logical fallacy.

        CATO also embraces LGBT rights, liberal immigration reform, repeal of the PATRIOT act and the legalization of all drugs, contrary to ALEC policies on those matters.

      • And mobsters send flowers to funerals.

        Touching, isn’t it?

      • Kyle permalink

        And there’s your textbook argumentum ad logicam fallacy.

      • Bonus validus non congressus.

  7. I told you, I’m not Jason Bedrick.

    But who cares? If I make a good point (for example, that intent-to-treat analysis is utterly routine and uncontroversial in non-randomized social science studies), there’s no need to know who I am.

    On the other hand, if I make a bad argument, all anyone has to do is refute the argument. Again, no need to know who I am. The only reason anyone wants to know that is so as to make personal attacks and google up some guilt-by-association (or, in this case with Cato, completely non-existent association).

    • But anonymity is?

    • Puget Sound Parent permalink

      Well then, “JB”, perhaps you, yourself, can tell us why you’re hiding your true identity?

      If you really believe that “it doesn’t matter” than why the secrecy? Why not reveal who you are?

      Is there a reason you’re not using your real identity? If so, what is it?

      If not, then what’s your rationale for not going public?

  8. gigiistheone permalink

    Love it;so spot on!! Thanks!

  9. laMissy permalink

    I find it much too common that even the gray lady NYT, our newspaper of record, commonly identifies organizations such as NCTQ as non-profit as if to indicate they don’t have a dog in the fight. Structuring an organization so that it doesn’t pay taxes hardly means the organization lacks an agenda.

  10. Bertis Downs permalink

    Oh won’t you buy me a Mercedes Blog– well-done MB. And James Brown.

  11. Thank you for the honest exposé
    Let commentators anonymous or otherwise say what they like
    The facts speak for themselves

  12. Hector Solon permalink

    Great work here, as good as any of the advanced ALEC spelunkers can do. Keep it up.

  13. Hi there, just turned attentive to your site by simply The web,
    and found that it’s really useful.

  14. Ishmael permalink

    One of the tragedies in the anti-democratic reforms currently taking place across the spectrum of American society is the cynical manipulation of mainstream Americans’ belief in the presumed integrity of democratic processes and the disbelief that blatant lying, maneuvering, misinforming, and disinforming for the sake of corporate hegemony can happen in the good ol’ U.S. of A.

    More attention needs to be paid to a deliberate strategy of chaos that is being played out. While ALEC (and its other affiliations and associations) can show that it does not always have a direct connection to the agendas currently being wielded, indirect links and influence are often discovered.

    The late Paul Weyrich, co-founder of ALEC, helped Eric Heubeck write the manifesto for the New Traditionalist Movement in 2001. If such a manifesto were written by individuals outside the U.S. trying to influence U.S. policies and institutions, it would be considered terrorism, which is what it is — domestic terrorism.

    Here are some excerpts:

    “This essay is based on the belief that the truth of an idea is not the primary reason for its acceptance. Far more important is the energy and dedication of the idea’s promoters—in other words, the individuals composing a social or political movement…”

    “There will be three main stages in the unfolding of this movement. The first stage will be devoted to the development of a highly motivated elite able to coordinate future activities. The second stage will be devoted to the development of institutions designed to make an impact on the wider elite and a relatively small minority of the masses. The third stage will involve changing the overall character of American popular culture…”

    “Our movement will be entirely destructive, and entirely constructive. We will not try to reform the existing institutions. We only intend to weaken them, and eventually destroy them. We will endeavor to knock our opponents off-balance and unsettle them at every opportunity. All of our constructive energies will be dedicated to the creation of our own institutions…”

    “We will maintain a constant barrage of criticism against the Left. We will attack the very legitimacy of the Left. We will not give them a moment’s rest. We will endeavor to prove that the Left does not deserve to hold sway over the heart and mind of a single American. We will offer constant reminders that there is an alternative, there is a better way. When people have had enough of the sickness and decay of today’s American culture, they will be embraced by and welcomed into the New Traditionalist movement. The rejection of the existing society by the people will thus be accomplished by pushing them and pulling them simultaneously.”

    “We must create a countervailing force that is just as adept as the Left at intimidating people and institutions that are used as tools of left-wing activism but are not ideologically committed, such as Hollywood celebrities, multinational corporations, and university administrators. We must be feared, so that they will think twice before opening their mouths…”

    “We will be results-oriented rather than good intentions-oriented. Making a good-faith effort and being ideologically sound will be less important than advancing the goals of the movement…”

    “We will use guerrilla tactics to undermine the legitimacy of the dominant regime. We will take advantage of every available opportunity to spread the idea that there is something fundamentally wrong with the existing state of affairs. … contribute to a vague sense of uneasiness and dissatisfaction with existing society. … We need to break down before we can build up. We must first clear away the flotsam of a decayed culture.”

    “We need more people with fire in the belly, and we need a message that attracts those kinds of people…We must reframe this struggle as a moral struggle, as a transcendent struggle, as a struggle between good and evil. And we must be prepared to explain why this is so. We must provide the evidence needed to prove this using images and simple terms…”

    Support of an Elite More Valuable than Support of the Masses

    “We will initially operate according to the belief that it is more important to win over the elites (or create a new, better one) than to build up a mass movement. Furthermore, it is more important to have a few impassioned members than a large number of largely indifferent members. The amount of energy, élan, and self-assurance that we are able to inculcate in the leaders of our movement will ultimately determine its success or failure.”

    “The new movement must be, in part, exclusive and elite. It must not be afraid to pass along a body of knowledge that is not readily accessible to and understandable by everyone. The strong appeal of a feeling of exclusivity and superiority will give our members a reason to endure the slings and arrows of popular disapproval.”

    “The New Traditionalist movement will appeal to the masses, but not immediately. The ideas of the masses never come from the masses. To the extent that the masses are more conservative than the elites, this is primarily because the masses have a long collective memory, and they still value the beliefs articulated by a long-lost elite. The conservative instincts of the American people will continue to erode unless a new elite is formed to refresh that memory.”

    “We must recognize that literature and philosophy do not appeal to the masses. This is why we must develop ways to spread our philosophy using non-rational means–especially the moving image.”

    If we could be flies on the wall of the backroom meetings and deals being made in the decision-making circles, this is the language we would hear and the strategies being put forward. This is the language that is covered up when proponents of the underlying strategies make PUBLIC pronouncements.

  15. Robert Rendo permalink

    JB, you are a veritable and despicable coward. You define the word.

Trackbacks & Pingbacks

  1. ALEC and Cato: Frat Brothers on the Far Right | Diane Ravitch's blog
  2. The Cato Institute: Policies for Sale ← NPE News Briefs
  3. The Cato Institute: Policies for Sale | The More We Know Blog

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