In the newest episode of the Cato Institute soap opera, the Kochs have sent out an email blast to alumni of their scholarship programs explaining their reasons for suing Kathryn Washburn, widow of shareholder William Niskanen.

Via ThinkTanked Blog (WaPo), an excerpt. The full email is at the link:

Why now for such a dispute?

We can all agree that the timing is extremely unfortunate and that at this critical time our efforts should be directed to advancing the principles that allow a free society to prosper. And Charles Koch and David Koch went to great lengths to avoid this dispute. Their efforts were numerous, sincere, and went literally up to the last minute.

The disagreement over the shareholders’ agreement has been going on for years with Charles Koch and David Koch receiving several proposals from Cato’s officers to dissolve the agreement. Charles and David consistently declined these proposals because they feel the shareholder structure is important to preserve donor intent. At the unfortunate passing of one of the four shareholders, Bill Niskanen, some issues came to the forefront with discussions about how his shares should rightfully be disposed.

Charles Koch and David Koch, mindful of how this dispute could be a distraction to Cato and its mission at this critical time, sought to resolve the issue, or alternatively, to table the issue for a year or longer.

· They proposed a standstill agreement to delay any discussion on the shareholders agreement, and to delay any shareholder meetings and maintain the current board of directors, for one year or longer.

· They proposed third party mediation.

· They proposed alternative corporate structures for the other side to consider.

All of these efforts were rejected, and Cato’s other shareholder demanded that a shareholders’ meeting be held on March 1 where a new party (Ms. Washburn – Bill Niskanen’s widow) would be named a shareholder and new directors would be named.

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As information continues to come to light about the attempted hostile takeover of the Cato Institute to make it into a tool of their political empire, the plan both confirms and exposes the ultimate realization of the Powell memo, which set out to create an indestructible infrastructure to support and sustain the far right as the dominant political force in this country. There was only one purpose to this infrastructure: Consolidation of political power to benefit business in the name of "free enterprise."

As we now know, that infrastructure extends from right wing radio networks to non-profits like Citizens United and Americans for Prosperity. Although the Cato Institute was funded with Scaife, Olin and Koch money, it has managed to remain true to libertarian principles in their purer form.

But no more. With the death of one of the founding board members and shareholders, the Kochs have made a move to pack the board with their ideological counterparts and take majority control of Cato in order to use it as an "ammo shop" for AFP, as Susie wrote about Sunday.

Dave Weigel has more details:

“They said that a principle goal was to defeat Barack Obama,” remembered Levy. “The way David [Koch] put it was, ‘We would like you to provide intellectual ammunition that we can then use at Americans for Prosperity and our allied organizations.’ AFP and others would apply Cato's work to advance their electoral goals.”Levy asked them: “What gives you the impression that [Cato isn’t] providing intellectual ammunition?” He says now: "I never got a satisfactory answer. The only answer that makes sense was that Cato needed to be more responsive to their needs. We would take closer marching orders. That’s totally contrary to what we perceive the function of Cato be.”

Cato’s leadership didn’t respond to this directive, nor did they change anything about the think tank. The Kochs began to change it for them. In February, they nominated 16 people for four slots on Levy’s board. Levy and others were aghast at some of the names. One nominee, Tony Woodlief, a former leader of several Koch-funded groups, had blogged in the past about “sanctimonious libertarians” who refused to get serious about policy. “Libertarianism in practice largely consists of a homogeneous group of people talking to one another about a narrow set of things that matter most to them (legalized drugs, lower taxes), and hoping that the rest of America will wake up and elect them to office,” he sneered in a 2002 post. “The majority of Americans are not, in fact, ‘live and let live’ types.” John Hinderaker, a lawyer and founder of the blog PowerLine, had backed the Iraq war and called George W. Bush a “man of extraordinary vision approaching to genius.

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If you were on a scavenger hunt and had to come up with a principled conservative, you might find one at the Cato Institute. They're slightly more intellectually consistent than the rest of the Republican think tankers (remember, in the valley of the blind, the one-eyed man is king), although of course they have their barking mad moments, too - like most conservatives. Now Charles and David Koch have filed suit to take control of the organization, and the Cato people are not very happy. Via the Volokh Conspiracy:

The Kochs deny any such intent, but it seems like they want to buy the Cato credibility and use it as an attack dog in the presidential election:

We seek no ‘takeover,’ and this is not a hostile action.

This is at odds with both the words and deeds of the Koch brothers of late. Last year, they used their shares to place two of their operatives – Kevin Gentry and Nancy Pfotenhauer – on our board against the wishes of every single board member save for David Koch. Last Thursday, they used their shares to force another four new board members on us (the most that their shares would allow at any given meeting); Charles Koch, Ted Olson (hired council for Koch Industries), Preston Marshall (the largest shareholder of Koch Industries save for Charles and David), and Andrew Napolitano (a frequent speaker at Koch-sponsored events). Those four – who had not previously been involved with Cato either financially or organizationally – were likewise opposed by every member of our board save for Gentry, Pfotenhauer, and David Koch.

To make room for these Koch operatives, we were forced to remove four long-time, active board members, two of whom were our biggest donors. At this moment, the Kochs now control seven of our 16 board seats, two short of outright control.

Why are they forcing out Cato board members, all strong, principled libertarians who have been heavily involved with Cato – financially and organizationally – for years? The answer was given in early November of last year when David Koch, Richard Fink (he of many Koch hats), and Kevin Gentry met with Cato board chairman Bob Levy. They told Bob that they intended to use their board majority to remove Ed Crane from Cato and transform our Institute into an intellectual ammo-shop for American for Prosperity and other allied (presumably, Koch-controlled) organizations. That statement of intent is certainly consistent with what we’ve been hearing from both Kevin Gentry and Nancy Pfotenauer. They’ve frequently complained during their short time on our board that Cato wasn’t doing enough to defeat President Obama in November and that we weren’t working closely enough with grass roots activists like those at AFP.

We want to ensure that Cato stays true to its fundamental principles of individual liberty, free markets, and peace into the future, and that it not be subject to the personal preferences of individual officers or directors.

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The idea of Fox News getting high and mighty about Media Matters' DropFox campaign is, well...laughable. However, what might be even more laughable is the idea that they can start a campaign to strip Media Matters of their tax-exempt status. They should be careful what they wish for.

In this clip, viewer Dana Martin from New Orleans tells Fox and Friends why she is so convinced that Media Matters tax-exempt status must be revoked. So convinced, in fact, that she filled in a web form to send a complaint to the IRS about their tax exempt status. And guess where that web form is? On the Fox Nation web page, of course, where else?

But as I said, they should be careful what they wish for. Let's look at some other tax-exempt organizations who also undertake "campaigns" with taxpayer subsidies. There's the Media Research Center, headed by Brent Bozell, who routinely appears on Fox News as a commentator. One look at their website shows that they have some 'projects' of their own which are clearly not educational at all, but purely political.

And of course, there's the US Chamber of Commerce, also fully subsidized by taxpayers just like the Citizens United Foundation, the Heritage Foundation and the Cato Institute. Continuing on, we can also include the Catholic, Mormon, Presbyterian and Baptist churches as tax-exempt organizations which should be carefully scrutinized as to the legitimacy of their tax exemption. And those are just ones that come to mind quickly.

This is Media Matters' mission statement:

Media Matters for America is a Web-based, not-for-profit, 501(c)(3) progressive research and information center dedicated to comprehensively monitoring, analyzing, and correcting conservative misinformation in the U.S. media.

Seems to me they're being perfectly consistent in their purpose, but this campaign put on by Fox shows just how effective they've been in actually accomplishing it. If I take a deep breath, I'm sure I can smell Roger Ailes' aggravation from here. Or stench. Or something.

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There was a time, back before the late 1970s, when the National Rifle Association (NRA) represented their members. But not anymore.

Once they fully re-entered the world of politics on the heels of the Cincinnati Revolt, they became corrupted by the very special interest politics from which they claim to protect their members.

With their decision to reject the calculated negotiation of their previous "old guard" board members, who for example, came out publicly in support of a proposed ban on .38 Specials by then-senator Birch Bayh of Indiana, they embarked upon a "no compromise" plan of action for the future.

This, of course, made them natural allies of the gun manufacturers, who like arms dealers everywhere are far less interested in who they are selling weapons to than that they sell as many weapons as possible.

There is plenty of circumstantial evidence that the NRA's mission has nothing to do with its members, but everything to do with protecting the profits of the gun manufacturers who support the organization with big bucks - not to mention pay the million-dollar-plus salary of the NRA's executive vice president, Wayne LaPierre.

After all, those lunches at The Palm aren't going to just pay for themselves.

In the December issue of the American Institute of Philanthropy, its "Charity Rating Guide & Watchdog Report" showed that when including all categories of "compensation" LaPierre came in fourth on the "charity" list with a healthy $1.281 million per year. Apparently, some non-profits can be profitable for some.

In February of 2006, a blog called Gun Guys run by the Freedom States Alliance, a 501(c)(3) organization working "to reduce gun violence in America" found that LaPierre's then-million dollar package was the equivalent of 35,000 NRA membership renewals.

One wonders whether these members know that not only are the views of LaPierre and the rest of his leadership team way out of touch with its membership - who overwhelmingly support universal background checks for gun buyers and stopping those on terrorist watch lists from enjoying easy access to firearms (see Part I of this series for poll numbers) - but that they are also subsidizing LaPierre's lavish lifestyle.

This might explain the NRA's need for constant crisis marketing (Obama's coming with the Legion of Doom to take your guns!) to misinform the public at large and shake their members' wallets loose - the NRA's very own "We've got trouble! Right here in River City!" routine.

Of, course, the direct influence that gun manufacturers exert over the NRA and their huge windfalls when there are runs on guns and ammunition, also readily explains the NRA's play to paranoia and fringe politics, and their view that no gun sale is a bad gun sale.

In fact, if you're looking for more than circumstantial evidence, the Center For Public Integrity will make your job easy. This past week they sent out a press release that started in the following manner:

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Christopher Preble over at the Cato Institute aptly notes that starting a war against all Muslims might not, in fact, be in our national interest:

This strategy, exploiting still-raw emotion and implicitly demonizing Muslims, threatens to trade short-term political gain for medium-term political harm to the party. And it most certainly will translate into long-term harm for the country at large.

Opposing the construction of a mosque near the Ground Zero site plays into al Qaeda’s narrative that the United States is engaged in a war with Islam, that bin Laden and his tiny band of followers represent something more than a pitiful group of murderers and thugs, and that all American Muslims are an incipient Fifth Column that must be either converted to Christianity or driven out of the country, else they will undermine American society from within. [...]

[W]ho within the GOP will affirm the party’s position that declaring a war on Islam does not advance our nation’s security?

Indeed, from a sane person's point of view the desire to declare more than a billion people around the world to be your sworn enemies seems to be somewhat unwise. There is a perfectly rational counterpoint to this, however: If we let the Muslims build their mosques, they will giggle at the size of our pathetic white penises. Sam Harris logically outlines this view in a Daily Beast column:

The erection of a mosque upon the ashes of this atrocity will also be viewed by many millions of Muslims as a victory—and as a sign that the liberal values of the West are synonymous with decadence and cowardice.

Y'hear that, America? They're gonna erect something big and long right in the middle of your bosom. Are you gonna stand fer that?

Similar noises have been grunted by one of our fiercest holy crusaders, the Radical Cleric Newt al-Ginrichinedad:

There should be no mosque near Ground Zero in New York so long as there are no churches or synagogues in Saudi Arabia. The time for double standards that allow Islamists to behave aggressively toward us while they demand our weakness and submission is over.

That's right! Newt's sick and tired of submissively bending over for the Muslims! He at least demands that the Saudis give us a reach around first!

Ahem. If I may be (semi)serious for a moment:

If millions of Muslims around the world are actually anticipating a mosque being built in the same neighborhood as a Lower Manhattan strip club so that they can laugh and call us girly-men, then they really need to get lives. I mean guys, seriously. I don't sit fixated to my television waiting to see a report of a new McDonald's getting built near Mecca. There are better uses of my time.

But see, this is the beauty of living in a free society. We can't stop Muslims from building mosques and impugning our manhood*. But at the same time, we can't stop stupid wingnuts from burning the Koran, nor can we stop cartoonists from drawing Mohammad. Everyone can offend everyone else, but no one can stop another person from being offensive.

And this brings me to my final point: Some folks need to relax about this stuff. The construction of a single building does not mean the nationwide implementation of Sharia Law. History teaches us that bad things tend to happen when one ethnic group or nationality decides that another ethnic group or nationality is a monolithic, insidious horde hellbent on weakening its traditions and national character from within through both overt and covert means. Furthermore, such attitudes can give rise to unintended consequences, especially when a country decides to invade another country to simply give it "a 2-by-4 across the side of the head," even if that particular country had done nothing to attack the invading country.

As I said in the title of my post, reigniting the Crusades is probably not a very good idea.

*And yeah, I know that's not what the mosque builders are actually doing but let me play wingnut's advocate.

[Thanks to my pal Tintin for the art!]

What a dope. "I've since been studying, and Chile has done this..." During the time of Reagan, Chile's Social Security system was considered to be the wingnut Holy Grail. I guess Sharon didn't get too far in her "studying" and whatnot, or she'd know why the saner people just don't talk about Chile in much detail (of course, there's always the optimists at the Cato Institute):

Republican U.S. Senate hopeful Sharron Angle says the nation's Social Security system needs to be privatized, and she says it was done before in Chile.CBS affiliate 8 News Now reports on what the Tea Party-backed hopeful had to say on the matter in an interview on Thursday:

...Angle's new ads say she's out to save Social Security by protecting it from government raids.
But in the primary, she said that Medicare and Social Security needed to be phased out in favor of something privatized, saying, that it can't be fixed. 8 News NOW asked how is that not a flip flop.

"It is when we have a $2.5 trillion raid and pillaging going on and an empty trust fund and now we are upside down. As of last Friday, they said, (there was a) $41 billion shortfall in Social Security. $41 billion less going in than coming out. It's broken," she said.

Angle then referred to 1980s Chile -- then under a military dictatorship -- to explain her previous statements that the United States should phase out its current system.

"When I said privatize, that's what I meant," explained the Senate contender. "That I thought we would just have to go to the private sector for a template on how this is supposed to be done. However, I've since been studying and Chile has done this."

However, the pension system established in 1981 by right-wing Chilean dictator Augusto Pinochet is no longer a fully private system. Chile's system was revamped in 2008 to expand public pensions for groups left out of its system, including low-income seniors.

There are lots of reasons why, in the real world, a privatized system doesn't work.

For the first ten years, while Chile had high inflation, their investment funds did well, since about half was invested in government bonds that were indexed to inflation. But once the economy cooled down, returns fell and they now pay little in return.

Investors also pay very high fees, which hit the low wage earners harder. (Oh, and by the way? The funds are widely thought to be corrupt cartels, protected by the government. Of course, that would never happen here!) And low wage earners were notorious under-reporters of income. Another problem: the system isn't set up for short-term contract work, which is now a common form of employment.

The funds don't pay out much, especially for low wage earners. (Unlike our Social Security system.) Notice the stories the wingnuts quote all point to "average" return -- but that's artificially high due to the period of high inflation.

And it didn't pay, anyway. Because of transition costs and other factors, the Chilean privatized system costs three times as much to run.

But the regime knew what they were doing: They excluded the military from the private plans, members of which continue to receive pensions under the old, more generous system.

Suburban Guerrilla

Rolling Stone interviews Krugman on Social Security:

In selling the idea that there's a crisis, Bush has a lot of powerful words on his side: "choice," "freedom," "ownership society." What words do you have to counter his sales job?

Scam. Three-card monte. I've been thinking a lot about flying pigs. The privateers are claiming that you can have something for nothing. They're basically saying, "Let's assume that pigs can fly." And when you say, "You know, it's not good to assume that pigs can fly," they respond by saying, "What's wrong with you? Don't you understand the enormous advantage of flying pigs?"

The only reason they talk about how wonderful an ownership society would be is because we managed to win the battle over the word privatization. The Cato Institute -- which is the intellectual headquarters for all this stuff -- founded something in 1995 called the Project on Social Security Privatization. But focus groups don't like that word, so in 2002 they changed the name to the Project on Social Security Choice. They didn't announce a name change -- they just went back and scrubbed their Web site, so there's no indication that it was ever called "privatization."

If there's no crisis in Social Security, why aren't the Democrats saying that more clearly and forcefully?

There's a lot of timidity. They're desperately afraid of seeming like "Oh, well -- we have our heads in the sand, and we're not active." I would like to see them step up to the plate and say that these claims that we're going to have a crisis sometime in the next fifteen years is just garbage. Bush is handing them an opportunity by making this the centerpiece of his agenda. Democrats should treat privatizing Social Security the way Republicans treated Clinton's health-care plan -- they should say, "This is a disaster, and we will stand against it." Social Security is simply not the biggest problem facing the government today.

One of libertarians' real blind spots is that they seem to believe that only government is capable of taking away your freedoms and your rights. Which is how right-wingers like Glenn Beck and his fellow Foxheads (see especially Michelle Bachmann) have managed to turn things smack on their heads and create the Planet Bizarro talking point that "net neutrality means censorship of the Internet".

It never seems to occur to them that, you know, lots of other people are perfectly capable of taking away your freedoms. Especially the giant corporations who control our media.

Megyn Kelly gave a succinct demonstration of how this works at propaganda shops like Fox News yesterday on her America Live program. To discuss net neutrality, she brought on Jim Harper of the libertarian Cato Institute and Josh Silver of Free Press.

Kelly proceeded to let Harper ramble uninterrupted at length, pitching the hogwash notion that "free enterprise created the Internet" (um, no it didn't). Then, when it was Silver's turn to talk, Kelly aggressively interrupted him, notably just as he was getting to the major point: Maintaining net neutrality is about ensuring that there will be no corporate censorship of content -- in other words, about maintaining the architecture that made the Internet the free and open medium that it is.

Then, when Silver finally got a chance to raise that point again, Kelly again interrupted:

Kelly: Is that right, Jim? Because everything I've read about this says this is a push, the beginnings of a push by the Obama administration to control the Internet to some extent -- more so than they had in the past.

Well, she's obviously reading from diverse sources, isn't she?

In any event, Kelly again let Harper ramble on, speculating that taxes would be imposed, blah blah blah -- and cut the segment off before Silver could point out the blatant falsity of his claims.

It was quite an exhibition in "fair and balanced" TV news. And it demonstrated rather neatly what happens when corporate news channels control the flow of information: They pretend to offer "balance," but facts that undermine the predominant narrative are never given the light of day.

All the more reason to defend our Web freedoms by maintaining net neutrality. And what's bizarre is that the supposed defenders of "liberty" are on the side of the would-be corporate media controllers. But then, we already knew that libertarianism is fundamentally incoherent.

It's 2004 all over again. This little gem of a clip features Glenn Beck, Cato Institute's mouthpiece Chris Edwards and Freakonomics author Steven Dubner gnawing on how Social Security "must be privatized." For the children, of course.

Ordinarily I'm not a big fan of taking what Glenn Beck says and deconstructing it, simply because I believe what Glenn Beck says is utterly irrelevant and without enough merit to give it any attention. But this clip grabbed me because all three of these yahoos spoke as if they were granted authority from on high with regard to the future of people's pensions. Not only were they completely mistaken, they turned their arguments against health care reform into arguments FOR privatizing Social Security, serving them up with a large dollop of unwarranted certitude.

Donning my spit-proof suit to debunk some of the obvious nonsense they spewed into the airwaves...

1. Wall Street is more trustworthy than the US Government

Yes, Chris Edwards really said that. Actually, what he said is this:

"I think there's a lot less market risk than there is government risk."

He said it like everyone knows it's true, except there's not one iota of truth to it. We live in a country with an established federal government that has been in existence for about 235 years now. Since 1942, citizens eligible for Social Security have received monthly payments right on time (even by direct deposit if they want!), with small increases for cost of living adjustments. For anyone receiving Social Security, there's no doubt in their mind about when they'll receive their next check, how much it will be, and whether the check is good.

On the other hand, Edwards and Dubner say, "Hey! The stock market is above 11,000, so you people who lost your shirts in the last Wall Street raid? C'mon in, place your full confidence in the young turks of the stock market for your retirement security!!"

Of course, Edwards speaks with the authority of one who would love to take an axe to every social safety net this nation has in the name of conservative, small government values. If he states with authority that the markets are less risky than the government, he does so from his fantasy rather than looking at the government we have right now.

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