“I’m not glum.”
So said a determinedly cheerful Ed Crane, founder and president of the libertarian Cato Institute. Some pluck for a man who has seen many of his limited-government principles trampled as Washington bailed out the nation’s financial sector and took ownership stakes in private companies.
And incoming President Barack Obama is a passionate advocate for activist government, backed by large majorities of like-minded lawmakers in both chambers of Congress.
Yet Crane seems energized, rather than dejected, by this turn of affairs.
“I think it’s going to be a clearer battle,” Crane said two weeks after the elections. He said that the big-spending presidency of George W. Bush, unusual for a conservative government, muddied the waters, making it difficult to help the public understand the case for a restrained federal government.
“He was an unmitigated disaster from a limited-government standpoint,” Crane said. “I think John McCain would have been a very dangerous president, with his promiscuity in foreign affairs and with his lack of respect for the First Amendment. … The Republicans thoroughly deserved to lose.”
So even with the entire spirit of the age seeming to flow away from the libertarian perspective, Crane sees hope and opportunity. Compared with conventional wisdom at least, it’s a rather contrarian view. Then again, it took a cheerful contrarian — Crane describes himself as “an optimistic defender of the free market” — to start Cato in the first place. What now is a D.C. think tank with an annual budget of $98 million and 100 employees was started on a shoestring in 1977 in San Francisco. The then-32-year-old Crane started the group after managing the 1976 Libertarian Party presidential campaign that garnered a paltry 172,553 votes nationwide.
“I had been very impressed in very short order with the leverage that places like [American Enterprise Institute] and Brookings [Institution] had,” Crane said. “These relatively small organizations had this enormous influence.”
Libertarian presidential candidate Roger MacBride had introduced Crane – by trade and training a money manager – to industrialist Charles Koch, himself a libertarian. “Charles had been very impressed with what we had done [in the campaign] with a very limited budget,” Crane explained. Result: Koch provided the seed money for Cato’s founding.
“We had a seriousness of purpose from the get-go,” Crane said. “As an organization, we don’t question the motives of opponents. We engage in polemics but don’t engage in partisanship. And we’ve won the respect, if sometimes grudging, of Washington’s political community.”
Crane recalled particularly fondly the awards dinner in 2006 in which columnist George Will called Cato “the strongest defender of liberty in the nation.”
“That was kind of a cool quote,” Crane said.
Crane never craved, or went out of his way to attract that sort of approval, said Cato’s vice president for research, Brink Lindsey.
“Ed has been always in Washington but not of Washington,” he said.
That refusal to be co-opted, Lindsey said, gave Crane “good judgment in positioning Cato as far ahead of the conventional wisdom as you can – so you can alter the status quo – but no so far ‘out there’ as to fall off the edge to be dismissed as ‘fringe’ or irrelevant.”
Whether it is being years ahead of other organizations in pushing for school vouchers, or for private options for Social Security, or in rejecting the original arguments for war in Iraq when public opinion was going heavily the other way, Crane seems to delight in standing for a purist’s principle in a way that will be noticed and remembered.
“All libertarians do better in opposition than they do in power,” said Jim Pinkerton, a former high-ranking Reagan and Bush 41 staffer, now a fellow of the New American Foundation, who has known Crane since 1980. “Obviously we are deep into an unlibertarian phase of American politics. The presumption is that a stimulus is required anytime there is an economic downturn. … Free market economists can rail against this trend, which means, I imagine, that Ed is probably right in his element.”
Crane refuses to do business the normal Washington way, with a hand out to government. Indeed, it is Cato policy never to accept government money.
In a recent blog post about the current financial crisis, Crane told of a time in early 1995 when, uninvited, Fannie Mae offered Cato a $100,000 grant. Crane angered the would-be donors by rejecting the money because, he said, Fannie was a “government entity.” Fannie insisted it was a private corporation, but Crane said that “the implicit federal guarantee” made it a “socialist institution” — good enough reason, he thought, to reject the temptation of an awfully large bundle of cash.
He clearly feels vindicated now that the government has indeed bailed out Fannie, along with Freddie Mac, which Crane says is just government cleaning up its own mess.
“It’s not the free market that failed. It’s the distortion of the free market that has failed. … I think it’s a pretty obvious and compelling case that [the financial crisis] is a failure of government.”
Further: “I’d love to get on a platform with Nancy Pelosi and have that debate.”
Yet an observer would note that it’s a debate where Crane’s side appears to be losing, at least in the realm of actual public policy, what with bailout mania and hundred-billion-dollar “stimulus packages” being the order of the day.
The secret may be that Crane doesn’t see those conditions as particularly adverse. This is a man, after all, who spent a boatload of time in 1972 campaigning for a presidential ticket that qualified for the ballot in just two states, and who took about a 90 percent pay cut to manage the same party’s campaign four years later.
“I cannot recall when I didn’t believe that people have the right to live their lives the way they want without interference,” Crane explained. “Nothing has changed in the nature of man that would suggest that politicians and bureaucrats can somehow make more intelligent decisions about the allocation of resources than can an entrepreneur putting his own resources at risk.”
Eventually, Crane believes, such basic wisdom will hold sway in the public consciousness again. The fundamentals, he said, still are in place. “We haven’t lost the Constitution. It’s still here. And we haven’t lost the argument.”
ED CRANE
Born: Aug. 15, 1944, in Los Angeles
Education: University of California at Berkeley (active in Youth for Goldwater — not exactly a popular cause at Berkeley); MBA from University of Southern California; also a chartered financial analyst
Family: Wife Kristina; children Geoffrey, 21; Kathleen, 18; Mary, 16
Professional background: Investment counselor, Scudder Stevens & Clark; vice president, Alliance Capital Management Corporation; national chairman, 1974-1977, Libertarian Party (and presidential campaign manager, 1976); founder and president, Cato Institute, 1977-present
Biggest influences: F.A. Hayek, Milton Friedman, Thomas Jefferson, George Mason, Ayn Rand
Favorite books: “In Pursuit: Of Happiness and Good Government” by Charles Murray; “The Discovery of Freedom” by Rose Wilder Lane; “Libertarianism: A Primer” by David Boaz
Quote to live by: “Buy low; sell high.”
What he likes about Washington: The Redskins (that’s pretty much it!)
Five policy prescriptions he would offer Barack Obama:
1. Get the United States out of Iraq.
2. Stop nationalizing the private sector through federal bailouts.
3. Get federal spending under control.
4. Reverse the unconstitutional assertions of executive power that were so prevalent under the Bush administration.
5. Make a push for Social Security reform. It’ll be difficult because of recent market fluctuations, but despite the turmoil, if a person retiring today had been able to invest his payroll taxes since 1964, he’d still have a better nest egg than what Social Security provides. And he’d at least own the account.
