Donald Gutstein

The Sun’s opinions editor has his sources, way to the right.

8 Apr 2005

Most Mondays, Vancouver Sun editorial page editor Fazil Mihlar lectures us on the wonders of capitalism but if he’s going to be credible he needs to be more candid about some of the sources he uses.

In an October 2004 column, Mihlar promoted the idea of what he calls individual unemployment accounts (IUA) as the solution to the problems in Canada’s Employment Insurance program. This is odd because there are no problems with employment insurance except that the period of qualification has been greatly extended and the benefits reduced, meaning that fewer Canadians can benefit from this key social safety-net program.

In the IUA scheme, employer and employee contribute equally but, unlike the current system where contributions are pooled in a large insurance fund, the IUA would be owned individually by the employee, who can invest the funds as she or he sees fit. If she loses her job, she can access the funds until they are used up. Let’s hope she didn’t invest in Nortel.

Mihlar’s source for this harebrained scheme is a paper by two professors at Central Michigan University in Mount Pleasant, Michigan. You might think it would be difficult to track down such an obscure study in such an obscure place. But Mihlar neglects to mention a more important affiliation of the professors: one is an adjunct scholar with the Mackinac Center for Public Policy, a libertarian think tank in nearby Midland, Michigan, while the other is on the Mackinac’s board of scholars.

Think Mackinac, not Central Michigan University, if you want to understand individual unemployment accounts. Mackinac is one of dozens of libertarian and neo-conservative think tanks plastered from one end of the U.S. to the other, whose collective goal is to roll back the social, political and economic gains of the twentieth century and replace them with the nineteenth century’s naked capitalism and individualism. Privatizing unemployment insurance, as Mihlar proposes here, will be one more nail in the coffin of our collective society.

Ideology with firm foundations

The success of the right-wing information infrastructure is rooted in the deep pockets of dozens of right-wing foundations.

Mackinac is funded by the Walton Family Foundation (money from anti-union Wal-Mart), the Ruth and Lovett Peters Foundation (Procter & Gamble, supports National Right To Work Legal Defense Fund), and Dow Chemical Co.

In addition, the authors of the IUA study received a grant from the Earhart Foundation (oil money, supports ‘free market’ scholars).

Their study was published by the Independent Institute in Oakland California. This organization is funded by Earhart, and the David H. Koch (oil billionaire), John M. Olin (chemicals and munitions), and William E. Simon (financier, key mover of modern reactionary movement) foundations, among many others.

The study also showed up on the web site of the Heartland Institute in Chicago, Illinois. Heartland is supported by the Charles G. Koch (oil billionaire’s billionaire brother), and Barre Seid (Chicago industrialist) foundations as well as some of the oil giants.

The study’s brief appearance in Canada was on the Sun’s editorial page (with a reprint in the Windsor Star the next Saturday).

Worked for Fraser Institute

The Mackinac Center specializes in propaganda about school choice, also known as privatizing education. Another Mihlar column was about a work by Mackinac senior fellow Andrew Coulson, who might be known to Mihlar because Coulson authored a chapter in an anti-public education book published by the Fraser Institute. Mihlar was director of regulatory studies (i.e., deregulation) at the Fraser Institute between 1996 and 1999.

Mihlar discusses Coulson’s controversial work in a piece titled “The Muslim weapon of mass indoctrination.” Says Mihlar: “Many Muslim children in the Middle East, Asia, Europe and North America are being taught in public schools and religious schools to hate Jews, Christians and even fellow Muslims who don’t follow the puritanical version of Islam practiced by the Wahhabi-led regime in Saudi Arabia.”

Mihlar doesn’t mention that Coulson attributes this situation to the Americans themselves who set up the system in the 1980s to encourage Muslims to hate the Soviet Union. With the Soviet threat gone, the tables are turned on the Americans and they don’t like it one bit.

Coulson’s solution is unsurprising given his ideological bent: redirect private U.S. aid toward expanding access to fee-charging private schools. He doesn’t explain why these schools are less likely to promote hatred.

When Ronald Reagan died, Mihlar’s assessment of the Reagan legacy was based on a book by Dinesh D’Souza, whose entire career has been financed by the right-wing establishment, including a stint in the Reagan administration.

Well, it sounds official

In the past 15 months Mihlar has discussed six reports by the National Bureau of Economic Research – most recently in February 2005 – but never mentions the conservative slant of its research. NBER is headed by Martin Feldstein, who was Ronald Reagan’s chief economic advisor and is a guru for ‘Bush-enomics.’ NBER has received over $10 million from right-wing foundations such as Bradley (Milwaukee-based, largest and most important right-wing foundation), Olin, Scaife (Richard Mellon Scaife, oil and banking, funds the “vast, right-wing conspiracy,” as Hillary Clinton claimed) and Smith Richardson. This last foundation, whose money comes from Vicks Vapo-Rub, started funding NBER’s work on the privatization of social security in the mid-90s, a project which is now at the top of the Bush agenda.

This is the way the system works: reactionary foundations support think tanks that locate and support sympathetic scholars who write the reports whose proposals are disseminated by the think tanks and mainstream media. After constant repetition, the proposals end up on the political agenda.

Mihlar devotes a column to the work of Tyler Cowen, a professor at George Mason University in Fairfax, Virginia. Cowen’s contribution is to attempt to apply market principles to the arts and culture. Mihlar does not mention that Cowen also heads the James Buchanan Center for Political Economy and the Mercatus Center, both at the university. George Mason is a hotbed of libertarian and conservative activity. Over the years it has received more than $45 million from right-wing foundations, two of the larger recipients being the Buchanan and Mercatus centres.

Odd conclusions

To be fair, Mihlar does discuss articles by business and management experts without a covert ideological agenda except perhaps for an emphasis on the centrality of capitalism. A recent Mihlar column about a California venture capital expert, for instance, makes the argument that the type of innovation a company pursues should depend on where a product is in its life cycle.

He discusses four studies by global consulting firm McKinsey & Co., and suggests variously that · Canada should outsource medical care to India · Bus drivers should work split shifts to increase efficiency · High tech firms need to improve efficiency · Companies need to wring more profits from their servicing activities.

Nor is it true that Mihlar acts solely as a conduit into Canada for lavishly supported American libertarian and conservative ideas. He has discussed several Canadian studies but seems to draw erroneous conclusions from them.

One is a Bank of Canada study about the “wealth effect:” the observed fact that people spend more than they have at a particular time. This study finds that the wealth effect relates to the booming real estate market. For every dollar a family’s house goes up in value, the family will spend an additional 5.7 cents, even though the family doesn’t actually have any more money.

Layton accused of ‘appalling economic illiteracy’

The study was concerned about the effect of increased spending on inflation. Mihlar’s conclusion is a non sequitur: families can’t keep spending indefinitely so “what we need is a tax cut that will put a little more money in the pockets of Canadians,” repeating the right’s favourite slogan.

In three columns before the 2004 federal election, Mihlar goes after NDP leader Jack Layton’s “appalling economic illiteracy.” Layton’s crime, it seems, is to propose higher taxes on corporations and the wealthy because they don’t pay their fair share. This is an absolute no-no in Mihlar’s world where, evidently, tax cuts equal economic literacy.

Fair enough. We accept that the editorial pages express the views of the owner and editors and if they hate social democratic principles, so be it. But there needs to be fuller disclosure of sources. Otherwise opinion veers dangerously close to propaganda.

First published in The Tyee.

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