“This place is skeptical about government solutions to all of society’s problems,” said John Raisian, the director of the Hoover Institution, about the 91-year-old Stanford fixture founded by then-future President Herbert Hoover.
Recent publications by Hoover scholars have lent support to Raisian’s words and raise the question: how much of an impact does Hoover’s scholarly work have in Washington?
According to Raisian, who has served as the institution’s Tad and Dianne Taube Director for more than two decades, the Hoover Institution’s objective “is to attract the best core of talent.”
“We’re a collection of people that all have different opinions about how they think about things,” he added. “This place is not a group of scholars that all think alike.”
Recent critiques by Hoover’s independent scholars suggest a general discontent with policies put forth by the Obama administration. Just this month, Hoover scholars produced an array of articles and blog posts that call into question Washington’s response to the financial crisis, health care reform and foreign affairs.
In a recent Wall Street Journal Op-Ed, Hoover Senior Fellow and economics Prof. John Taylor cautioned against a “bailout bill” that would grant the federal government greater discretionary power and increase the chances of another financial predicament. Senior Fellow Richard Epstein, professor of law at the University of Chicago, brought to light the constitutional problems of “ObamaCare” in another Journal Op-Ed.
Earlier this year, three Hoover fellows — John Taylor Ph.D. ‘73, Ken Scott J.D. ’56 and George Shultz — examined one such Washington policy in “Ending Government Bailouts as We Know Them.” The book, edited by the three scholars and featuring articles by Scott and Taylor, delves into the problem of the bailout mentality and suggests alternative legislative and regulatory strategies for economic crises.
Scott, a professor emeritus at Stanford Law School, argued that the “financial debacle” was fundamentally triggered by housing policies and subprime mortgages. He said mortgage loans were made on the premise that things would be fine if housing prices continued to appreciate, and that the practice of pooling individual housing mortgages into complicated securities made it difficult to identify which ones were toxic when the housing bubble burst. Then the government stepped in.
“The problem of a bailout isn’t bailing out the institution or its shareholders,” Scott said. “That doesn’t happen. The stockholders of these institutions end up getting wiped out.”
“The moral hazard is that you are enabling the creditors of these institutions, as they get into trouble, not to pay serious attention to the riskiness of the loans and credit that they are extending,” he added.
Like many other Hoover publications, “Ending Government Bailouts” targets Washington legislators who are actively building and editing policy, Scott said. Whether or not legislators hearken to the institution’s scholarly work is a different matter.
“That’s an issue for all academics,” Scott said. “They do the research, they publish their findings and their ideas and their recommendations if they have any. It’s another aspect of society that decides what it is going to do with them.”
Raisian believed in his early years with the Hoover Institution that research would be well received and readily implemented in Washington.
“That was naive, honestly,” Raisian said.
He said the pace of politics makes it challenging for academics to dig deeply into any particular issue.
“If you’re lucky, 20 percent of the time you’re looking at the analysis of the situation and 80 percent of the time you’re looking at the politics of the situation,” Raisian said. “This can be a little bit discouraging for those of us that are scholars because in the end, raw politics is going to determine outcome.”
At the same time, though, a number of Hoover fellows have held government positions, including James C. Miller III and Michael McFaul ’86 M.A. ‘86. Miller’s Washington credentials are extensive: he was appointed chairman of the U.S. Federal Trade Commission by President Ronald Reagan in 1981 and went on to become director of the U.S. Office of Management and Budget. Miller said his partisanship does not “impair” his academic work.
“Scholars can have political affiliations and I don’t think that impairs their ability to do good work, just like a person can be a businessman and be religious,” Miller said.
Fellows represent a wide spectrum of partisan affiliations; while Miller served under a Republican president, McFaul currently serves as special assistant to President Obama for national security affairs and senior director for Russian and Eurasian affairs at the National Security Council.
“We’ve been a little [labeled] maybe as a ‘conservative’ institution in not thinking so much conservatively when it comes to politics to ideology, although it would be hard for me to argue that we weren’t,” Raisian said. “But conservative in the sense that any scholarly organization is naturally conservative — we’re in a bubble, we’re used to doing it our way, we just do it the way we know how to do it.”
Miller characterized the intellectual conversation among the fellows as one based in academia, but bearing strong policy relevance.
“The fellows are writing to communicate amongst themselves but are also hopeful a policymaker will read what they have to say,” Miller said. “Therefore, they bear a substantial responsibility to get the analysis right.”
Raisian added that Hoover hopes to share its work with a broad electorate, beyond the small academic and public policy-oriented “elite” that make up a large part of the institution’s audience.
Founded in 1919, the Hoover Institution originated as a collection of documents on World War I. The Institution draws 45 percent of its funding from an endowment, 40 percent from private donations and 15 percent from Stanford, which is dedicated to the library and archives.