Issue No.

2, Summer 2012

Enterprise Report

Restoring Liberty, Opportunity, and Enterprise in America

Summer Update
by AEI President Arthur Brooks
During the dog days of summer, almost everything in Washington, DC, moves at a slower pace. But here at the American Enterprise Institute, weve been busier than ever. AEI has made it a top institutional priority to reach college students in a purposeful way. We have hired a new director of academic programs, Karin Agness, to maximize our impact with this audience. In the coming year, we are building a working presence on dozens of campuses nationwide, developing curricular materials, and launching new events and programs, as well as a new area of AEIs website specifically for students (www.aei.org/for-students). AEI is also becoming a thriving campus in its own right. This July, the AEI Summer Institute brought to Washington a select group of college undergraduates for an intensive course of study. For four weeks, some of the nations best and brightest young minds explored and debated ideas about liberty and
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free enterprise while learning the principles and methods behind public policy analysis. Daily seminars and structured conversations, led by AEI scholars and fellows, helped students develop the core skills required for rigorous and principled public policy analysis. During the first week of the AEI Summer Institute, AEI director of economic policy studies Kevin A. Hassett walked students through market dynamics and the interaction between public policy and the private sector. In week two, AEI defense experts Gary J. Schmitt and Thomas Donnelly explored the principles of democratic statecraft, American strategic culture, and current issues in national security policy. In the third week, students dug into the nitty-gritty of policy issues including entitlement reform, campaigns and elections, energy policy, modern revolutions such as the Arab Spring, and the impact of world demographic changeall under the direction of AEIs Leon Aron, Andrew Biggs, Henry Olsen, Kenneth P. Green, and Nicholas Eberstadt. In week four, Reagan and Churchill biographer Steven F.

AEI Summer Institute at a Glance

284
Applicants

Hayward examined the limits of executive power in a constitutional regime and profiled American presidents who have demonstrated extraordinary political leadership.

159 represented among applicants

Colleges and universities

My academic career opened up because of what I learned at AEI.

Courtney Albini, University of Pennsylvania
A number of other AEI scholars, including me and some guest lecturers, also had the opportunity to interact with the group. They included Michael Barone, John R. Bolton, Karlyn Bowman, Jonah Goldberg, Christina Hoff Sommers, Charles Murray, Sally Satel, Weekly Standard editor William Kristol, and Republican Study Committee executive director Paul Teller. At the end of the month, twenty-five students left AEI prepared to make a differenceas more effective intellectual and practical support-

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3.8

Undergraduates accepted to the program

Average GPA of 2012 Summer Institute class

ers of liberty, individual opportunity, and free enterprise in America and around the world. Like everyone else in Washington, we are focused on the important electoral battles this fall. But we are also preparing for the crucial work that will need to be done in 2013. We are ready to hit the ground running early next year because of the generous support of our small community of scholars and supporters. Without the philanthropists, foundations, and corporations that provide 100 percent of our funding, we couldnt do our important work. Please continue to stand with us as we defend freedom, opportunity, enterprise, and American greatness in the decades to come. We are grateful to have you in our corner.

Policy Focus

HEALTH CARE
With both the constitutionality and the wisdom of the Patient Protection and Affordable Care Act (PPACA) at the top of legal and political agendas throughout the summer, health policy will continue to play a key role in the national discussion this falland beyond. Indeed, few policy decisions loom as large for our liberties and system of free enterprise. AEI continues to be at the forefront of the fight for market-driven solutions for this vital sector of our economy. In the crucial weeks surrounding the March Supreme Court hearings on PPACA: Our scholars analyzed the oral arguments in real time, with dozens of blog posts, articles, press interviews, and media appearances. Thomas P. Miller, Joseph Antos, James C. Capretta, and Christopher J. Conover coauthored an amicus brief that was referenced by Justice Samuel Alito during oral arguments and was described by one commentator as the most important of the 136 briefs filed. On the day the Supreme Court announced its decision, Miller hosted a conference at AEI with real-time commentary. Gottlieb and Capretta took to the airwaves to provide their analysis. Antos and other scholars wrote pieces on next steps and market implications for AEIs blog, the Los Angeles Times, and other publications. Scott Gottlieb, MD, testified before the House Ways and Means Committee on the impact of PPACAs Independent Payment Advisory Board and before the House Committee on the Judiciarys Subcommittee on Intellectual Property, Competition, and the Internet on health care consolidation and competition after PPACA. Antos testified before the House Committee on Ways and Means Subcommittee on Health on premium support for Medicare. J.D. Kleinke authored an op-ed that assessed the response of the health care industry and of state governments during the watch and wait period while the Supreme Court deliberated. The battle over health care will only intensify in the months ahead. Thats why AEIs scholars are showing what an alternative to the top-down, command-and-control mandates of PPACA looks like. In doing so, they are outlining the action the next Congress can take on its first day in session in January 2013. AEIs health policy team is now crafting a reform agenda for the next administration and Congress. They are busy preparing comprehensive proposals to free up the market in Medicare, private insurance, and medical innovation. Top policymakers are coming to AEI to make the case for reform, with Sen. Orrin Hatch (R-UT) and Rep. Bill Cassidy, MD (R-LA) delivering keynote speeches on the courts decision and PPACAs bearing on employment and Medicaid. Much is at stake in todays health care battlefor our liberties, our prosperity, and our political system. AEI is fully engaged in the fight and will work to ensure that our values prevail.

To learn more about AEIs work on health policy, visit www.aei.org/policy/health

The Other War on Poverty: Finding Meaning in America

Nearly all Americans must work to live. But there is also virtue in this necessity. Above and beyond the benefits of remuneration, there is dignity in earning a livelihood, in providing by oneself not only for oneself but also and especially for ones family. Leon Kass, 2012 Kristol Lecture
In April, AEI announced the recipient of the 2012 Irving Kristol Award. This annual award by AEIs Council of Academic Advisers honors an individual who has made exceptional intellectual or practical contributions to improve government policy, social welfare, or political understanding. The winner of this years Kristol Award was Leon R. Kass, MD. Described as a philosopher who remained a man of science while seeking to defend human dignity, Kass has addressed the ethical and philosophical questions raised by biomedical advances for over forty years. More recently, his work has also included broader moral and cultural issues. His most recent book, What So Proudly We Hail: The American Soul in Story, Speech, and Song (Intercollegiate Studies Institute, 2011), seeks to promote American identity, character, and citizenship. On the evening of May 2, Kass delivered his Irving Kristol Lecture at the AEI Annual Dinner. In The Other War on Poverty: Finding Meaning in America, he examined four realms in which Americans find deep meaning: work, love and family, community and country, and the pursuit of truth. Full video of the event is available at www.aei.org/kass.

New Hires
Former senator Phil Gramm has joined AEI as a visiting scholar. As a member of the House of Representatives and Senate, Gramm co-authored a number of pieces of breakthrough economic legislation, including the Gramm-Latta Budget Bill, the GrammRudman Balanced Budget and Deficit Control Act, and the Gramm-Leach-Bliley Act. After retiring from the Senate, Gramm served for nine years as vice chairman of UBS Investment Bank. At AEI, he will be working on a comprehensive plan to fix the US economy through reform of the tax code and entitlement programs such as Social Security and Medicare.
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Phil Gramm Karin Agness Sharon Kehnemui

Karin Agness is AEIs new director of academic programs. Before joining AEI, she worked as an associate at Wiley Rein LLP. She is the founder and president of the Network of Enlightened Women, an organization for conservative women that has expanded to colleges and graduate schools across the country. She will help AEI build a substantial campus presence at more than one hundred key colleges in the next two years.

Sharon Kehnemui is the new managing editor of AEI.org. She comes to AEI after twelve years at FoxNews.com, where she was the senior politics editor. Kehnemui managed the entire website, determining daily news coverage, editing stories, and coordinating a full-time, multireporter team. Before working at FoxNews.com, Kehnemui was a producer for The McLaughlin Group.

Paul Ryan at AEI

Each year, dozens of policymakers look to AEI for intellectual firepower and empirical, unbiased, fact-based analysis of our nations greatest challenges. Leaders from both sides of the political aisle frequently come to AEI to share their ideas in public forums and debates. Representative Paul Ryan, who was recently selected as the GOP vice presidential candidate, is just one of the many leaders who use AEI as a resource and a platform to unveil major policy ideas. In each of the past two years, Representative Ryan, chairman of the House Budget Committee, has selected AEI as the venue to unveil the House GOP budget plan to the public. On March 20, 2012, he spoke to a packed house at AEI about some of the major policy proposals in the FY 2013 budget and their implications for the American people.

AEI has been an indispensable resource to policymakers like myself for many years, but more recently, I would argue, AEI has done a much better job integrating with policymakers, giving us digestible ideas, papers, and things to move forward on. What I see AEI doing is serving as one of the beachheads of the modern conservative movement. Representative Paul Ryan (R-WI), December 2010

Ten Years Ago at AEI

Over the past decade, a number of prominent intellectuals joined AEIs ranks. The following scholars joined AEI ten years ago and have since played a major role in cementing the Institute as a leading voice in their respective policy areas: Thomas Donnelly, resident fellow and codirector of the Marilyn Ware Center for Security Studies. A former professional staff member on the House Committee on Armed Services, Donnelly studies national security and defense policy at AEI. Last year, Donnelly launched Defending Defense, a major initiative to promote a sound understanding of the US defense budget. The projects highly regarded output has gained currency in light of the impending defense sequestration. Scott Gottlieb, MD, resident fellow. Gottlieb, a practicing physician and AEI health policy scholar, has held key roles at the Food and Drug Administration. One of AEIs most prolific scholars, Gottlieb writes about the intersection of regulation, technology, and the practice of medicine. Through frequent congressional testimony and op-eds, he has proposed reforms to curb harmful regulation that undermines patient care and thwarts medical innovation.
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Frederick M. Hess, director of Education Policy Studies. Hess began his career as a social studies teacher at a magnet high school, where the bureaucracy he faced inspired his pursuit to better understand the challenges of school reform. Since coming to AEI, Hess has become a leading thinker on issues such as school choice, merit pay, and market-based reform. Under his leadership, AEIs education program has become one of our most vibrant areas of study. Danielle Pletka, vice president of Foreign and Defense Policy Studies. Pletka came to AEI from Capitol Hill, where she served for ten years on the Senate Committee on Foreign Relations. At AEI, she has formed a team that examines not only issues of immediate concern, but also those over the horizon, focusing Washingtons attention on looming foreign policy challenges. This year, she oversaw the founding of AEIs Marilyn Ware Center for Security Studies, which is establishing itself as the countrys leading intellectual voice for a stronger and more secure America.

Harvey Golub, member of AEI Board of Trustees; former chairman and CEO of American Express
but it cannot ensure equality of all outcomes to all people without diminishing us all. As an economic matter and as a moral imperative, freedom requires free people in free markets who strive to achieve their own goals and determine their own best interests. The liberal conceit that government can manage our society and our economy to round any rough edges is nonsense, and every nation that has tried to do so has failed
How does AEI influence the policy process?

poverty, lower growth, fewer jobs, and less happiness.

We have always stood for outstanding scholarship conducted by great scholars who pursue their own intellectual interests. We have grafted onto that base more targeted scholarship and a much-expanded outreach program through colleges and the media. We are much more aggressive in articulating the case for free enterprise and market-based solutions.
How did you get involved?

Every humane society must care for its weakest and least able citizens, but it cannot ensure equality of all outcomes to all people without diminishing us all.
What are the greatest challenges facing our nation?

from the Soviet Union to the modern European welfare states to North Korea and Cuba. Our challenge is to avoid that fate.
What is AEI doing about this problem?

I have always been an advocate of capitalism and personal freedom and concomitant responsibility. About twenty years ago, I looked at all the think tanks supporting my world view and concluded that AEI was doing the work I could best support with my time and money. Since then, I have been amply rewarded by my association with the people in the AEI community. I am in awe of the giants who populate our scholar ranks and serve on our board. I believe, to the extent we are successful, I will have contributed to making our nation stronger and leaving a better heritage to my grandchildren.

AEI is one of a handful of institutions (albeit, I believe, the best) that study the policy issues affecting our freedom and prosperity, publishing those results and providing the intellectual rigor behind what is sometimes the inchoate passion for free enterprise and free markets. In other words, we try to educate the public and provide policymakers with needed support. People intuitively know personal freedom and personal happiness depend on the ability to make free choices. We explain why that is so. We also explain why large state power inevitably leads to more

Our greatest domestic challenge arises from the unremitting drive to increase the reach and power of the liberal welfare state. As the state becomes more and more intrusive, as it tries to solve peoples problems, it saps vitality and reduces our freedom. Freedom is required for a person to earn success and reap the rewards of that success or to fail and learn from that failure. Every humane society must care for its weakest and least able citizens,
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Spotlight

Uncovering the Moral Imperative of Freedom

As AEI scholar Leon Arons work indicates, the desire for dignity, recognition, and equality is not a product of time or place. Aron has been examining how morality can influence a revolutions inception, growth, and success. Using the fall of the Soviet Union as a case study, Arons groundbreaking project, Uncovering the Moral Imperative of Freedom, describes how communism and collectivism violate human nature, erode morality, and undermine human flourishing. of human dignity. In the modern world, economic progress is not a substitute for the pride and self-respect of citizenship. And it is in the search for dignity through liberty and citizenship that glasnosts subversive sensibility lives and will continue to live. Marking the release of his book, Aron hosted a major conference at AEI in June that united activists and intellectuals from around the world In June, Leon Aron released Roads to the Temple, a book that draws from eight hundred different primary sources. Aron challenges the conventional narrative behind the collapse of the Soviet Union, insisting that economic, political, and demographic explanations fail to fully explain its fall. Aron points instead to the desire for political and economic libertyunderstood as a fundamental moral rightas the real catalyst for regime change. Through this concrete example, he demonstrates how a values-based revolt can succeed in toppling an oppressive regimenot only in Russia but also around the world. Revolutionaries have fought and continue to fight for the advancement to discuss the moral foundation of antiauthoritarian struggles. Following a favorable review in the Wall Street Journal, Roads to the Temple jumped thousands of spots on Amazon.com and was ranked number two on the history of revolutions list, number seven on the books about Russia list, and number eight on the books about democracy list. Aron will kick off this seasons Bradley Lecture Series on September 17 with a talk entitled, For Truth and Dignity: Russias 198791 Revolution and Its Future. For more information about the lecture or to register, please visit our events page at www.aei.org/events/.
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Reviewing Roads to the Temple in the Wall Street Journal, Economist editor Edward Lucas described Arons work as a masterly survey . . . [bringing] this history of Russian journalism to life with a fine attention to detail and a bold narrative sweep. [Aron] and his researchers have read a colossal amount of newspapers and magazines from those years, and filleted them for the most telling phrases, anecdotes, and arguments.

To learn more about Roads to the Temple visit www.aei.org/book/ roads-to-the-temple

We decided to make a bequest to the American Enterprise Institute because we believe that the transmission of important ideas was the greatest gift we could leave to the future generation of Americans. AEI scholars make critical contributions to support liberty, opportunity, and free enterprisenot only in the United States but around the world. Knowing that AEI has stayed true to its mission for more than seventy years has given us confidence that our bequest will be used to foster the values we all hold dear. We are proud to be able to do our part in providing for AEIs future financial needs.
Marilyn and Michael Fedak, AEI bequest donors

The AEI Legacy Society

To make our work possible, AEI depends year in and year out on the generous annual financial support of individuals, foundations, and corporations that share our principles and purposes. But we also depend on the generosity of those who see fit to provide for AEIs future financial needs through their estate plans and planned giving strategies. Including AEI as a beneficiary of your estate is one of the best ways to ensure that your legacy lives on through this vital organization. Estate and planned gifts provide AEI with long-term financial stability, thereby ensuring the Institute will have the means necessary to continue its important work well into the future. The AEI Legacy Society is our way of recognizing those donors with such foresight for their generosity. Members of this society receive our regular articles and publications and are invited to participate in exclusive conference calls with AEI scholars. They are also invited to attend the AEI Annual Dinner and regional events in their area. For more information about AEIs Legacy Society, contact Jason Bertsch, Vice President of Development (jbertsch@aei.org or 202.862.5873).

The American Enterprise Institute is a community of scholars and supporters committed to expanding liberty, increasing individual opportunity, and strengthening free enterprise. AEIs work is made possible only by the financial backing of those who share our values and support our aims. To learn more about AEIs scholars and their work, visit 1150 Seventeenth Street, NW Washington DC 20036 202.862.5800 | www.aei.org To find out how you can invest in our scholars work, visit www.aei.org/support www.aei.org | www.american.com | www.aei-ideas.org