- The Washington Times - Thursday, June 11, 2009

ANALYSIS/OPINION:

COMMENTARY:

The Competitive Enterprise Institute (CEI), a prominent free market think tank, celebrates its 25th anniversary this week, an achievement that comes at a critical time.

America has lurched toward a crossroads between two fundamentally opposite paths - one a rediscovery of the legacies of our Founding Fathers that unleashed the entrepreneurial spirit of the American people; the other to an imitation of the heavily taxed, over-regulated, innovation-challenged economies of Western Europe so that power shifts from the people to the federal government and a cheerleading intellectual elite.

This choice between control and liberty is not new, but in the context of today’s serious recession, it has taken on a new urgency. Consider the administrations that first gave us the Great Depression and then prolonged the slump. In the face of the collapse of the stock market and subsequent failed policies of a Republican administration, Americans pinned much hope and optimism on a new Democratic president promising change.

Franklin D. Roosevelt’s administration inherited an ailing economy, but it responded not by freeing the American people’s entrepreneurial abilities - as Roosevelt had promised during the campaign - but by massively expanding the size and scope of the federal bureaucracy, putting millions of Americans on the federal dole, increasing taxes and piling on regulations that severely hampered recovery. Unemployment hit 25 percent in 1932 and hovered between 13 percent and 20 percent until 1940.

Today, we are newly burdened with bailouts costing hundreds of billions. The government now owns or controls major corporations - from automakers to financial institutions - and Treasury Secretary Timothy F. Geithner is embarking on a plan that will undermine the banking industry’s ability to recover, granting favored institutions access to taxpayer dollars and thus allowing them to profit by underpaying for assets with free leverage.

Today, Americans seem skeptical of businesses’ abilities to correct their past errors. However, unlike the 1930s, Americans today are even more skeptical of federal bureaucrats’ abilities to solve our problems. As a result, the current statist agenda is encountering far more criticism and resistance.

In the last presidential election, Republican candidate Ron Paul achieved record-breaking fundraising numbers and considerable media attention on a small-government policy platform. More recently, this year’s grass-roots Tea Parties demonstrated the taxpayer anger and frustration that the enormous bailouts, spending increases and government takeovers have unleashed.

Moreover, advocates of economic freedom and individual rights have not retreated. Indeed, they are now waging a fierce defense and laying the groundwork to regain the freedoms we’ve lost. Among the most vocal and effective of these advocates is CEI. Over its 25-year history, CEI has played a critical role in preventing the worst of the left’s utopian nightmares from becoming reality, and in undoing some of the damage those policies have created. Here are some examples:

The U.S. Supreme Court announced last month that it will hear a case brought by CEI and another free market group challenging a key element of the costly and onerous Sarbanes-Oxley Act. That suit focuses on the constitutionality of the Public Company Accounting Oversight Board (PCAOB), which the act created.

The PCAOB wields enormous powers to conduct investigations of accounting firms, to set auditing standards for publicly held companies, and to levy taxes - dubbed “accounting support fees” - to fund its operations.

The Constitution mandates that, in order to assure accountability, government officials must be appointed by the president, with the advice and consent of the Senate, or at a minimum by the individual heads of government agencies. But this wasn’t how Sarbanes-Oxley was written. To the contrary, it claimed that the PCAOB wasn’t even a federal agency. This case may go a long way to help restore the constitutional principles that are the foundations of our free enterprise system.

On the global warming front, one shudders to think what crushing energy taxes and restrictions would burden us if it were not for activists like CEI. But don’t just take my word for it. Back in 2006, Al Gore complained that, “Over 20 years, I have seen them [CEI] have a tremendous effect” in the public debate over global warming policy. That same year, two liberal senators, John D. Rockefeller, West Virginia Democrat, and Olympia J. Snowe, Maine Republican, publicly chastised a company for lending “dangerous support” to organizations like CEI that opposed all-pain, no-gain energy taxes and rationing.

For its efforts, CEI has even landed in the pages of a famous fiction thriller. The late author Michael Crichton, in his novel “State of Fear,” features a group of evildoer environmentalists that names CEI as an obstacle to their plans.

Over the years, CEI has made a huge impact in regulatory and environmental issues, drawing attention and opposition to the perverse incentives of many laws and regulations, including: the Endangered Species Act, which punishes landowners for finding a rare animal or plant on their property; the National Flood Insurance Program, which uses tax money to subsidize construction in dangerous flood zones; and the Food and Drug Administration, whose glacial, overly cautious pace of drug approval actually costs lives.

Groups like CEI are a crucial voice for entrepreneurs and all people who want to pursue their own destiny in life. That must seem like a lonely struggle at times, when businesses actively seek favors from Washington and the people place false hopes in Big Government.

Yet CEI remains hard at work, laying the groundwork for a free society. When faced with the choice between freedom and statism, I hope we will find CEI’s call to freedom loud and enduring.

Steve Forbes is chairman and chief executive officer of Forbes Inc. and editor-in-chief of Forbes magazine.


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