What Happened to the Pacific Research Institute? California Needs a Policy Institute That Inspires and Dominates Intellectual Discussion about an Alternative Way to Govern the State

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The leftist magazine Mother Jones published an article today (July 19, 2012) critical of the President and CEO and the operations of the Pacific Research Institute, a free market think tank based in San Francisco. I am an Adjunct Fellow in Labor Studies at the Pacific Research Institute, although I probably won’t be after I post this commentary on my Dayton Public Policy Institute blog.

Here’s my perspective on this matter.

Once innovative, creative, and on the cutting edge of policy initiatives, many American free market think tanks in 2012 appear to be developing into a stagnant, protective, incestuous club of interlocking directorates and eccentrics who enjoy socializing in urban intellectual salons. This culture will react strongly against any outside pleas to reform the remnants of their comfortable “movement.” No version of the Tea Party has yet emerged among free market-oriented intellectuals to topple the decaying edifice and energetically rebuild it with fresh thinking and ambitious strategic planning.

The Pacific Research Institute perhaps excels among the thousands of people and organizations in this country who are trying to make a living pontificating about Obamacare. But is there any unique angle or aspect about Obamacare that still remains to be chewed on? While bashing Obamacare attracts attention and excitement, even I’m tired of it – I change the radio station whenever a talk show host begins rehashing it. (I recommend reading the June 28, 2012 U.S. Supreme Court decision and dissent in National Federation of Independent Business v. Sebelius for fresh, thoughtful perspectives on Obamacare.)

Meanwhile, the State of California and many of its local governments are careening toward bankruptcy while most citizens of the state are wringing their hands in helplessness. Almost everyone in this state knows something is terribly wrong (even the union officials and the union-backed politicians know it), but the state utterly lacks a recognized free market organization with a message that can effectively subvert the entrenched, self-preserving syndicate of politicians, big corporations, unions, and media. Some sort of intellectual force needs to develop and advance a thoughtful, principled alternative to the current way in which the state is governed.

The people of California desperately need a strong, vocal, prominent free market policy institute that not only identifies the numerous economic and governance problems in the State of California, but also proposes audacious, concrete long-term solutions that ordinary citizens can understand and support. The Pacific Research Institute in San Francisco should have that role. It has not held it for many years.

My Early Background with the Pacific Research Institute

I first met a Pacific Research Institute policy analyst – former Director of the Center for Enterprise and Opportunity Katherine Post – in Washington, D.C. in the mid-1990s. I was surprised and impressed to learn that a free market think tank was based in San Francisco.

When I began government affairs work for Associated Builders and Contractors in California in 1997, the Pacific Research Institute’s Senior Fellow in Education Studies Lance Izumi was one of the first people I met in the public policy arena. In the early 2000s, the Pacific Research Institute recognized my professional expertise on complex and costly construction labor issues and designated me as their one and only fellow in Labor Issues. I saw Milton Friedman at the institute’s 25th anniversary gala in San Francisco in September 2004.

The Pacific Research Institute especially took an interest in my lonely work researching and exposing a taxpayer-funded union propaganda program at the University of California, established in 2000 with $6 million in direct funding in the California state budget signed by Governor Gray Davis. I worked extensively on this and other labor issues with the Pacific Research Institute’s former Business and Economic Studies Director Lawrence McQuillan (now chief economist at the Illinois Policy Institute) and also with its former Editorial Director Lloyd Billingsley (author of Hollywood Party: How Communism Seduced the American Film Industry in the 1930s and 1940s).

Selected twice by the Pacific Research Institute for its Golden Fleece Award, the University of California Labor Program was an especially appropriate state issue for the Pacific Research Institute to examine and expose. Other than my employer (Associated Builders and Contractors), no other prominent organization in California was taking a leadership role in publicly criticizing the University of California Labor Program, even as the Labor Program grew to serve as the intellectual foundation of the California Labor Federation‘s political agenda at the California State Legislature and at California local governments. (The Howard Jarvis Taxpayers Association did include the program in its lists of unnecessary, wasteful, inappropriate government programs, but it necessarily had to focus on a thousand other examples of California fiscal foolishness.)

While independent free market-oriented think tanks such as the Pacific Research Institute rely on corporations, foundations, and individuals to fund their policy research, the California Labor Federation and the State Building and Construction Trades Council of California simply obtained taxpayer funding to start and maintain what should have been their own self-funded research and marketing program. To add insult to injury to California taxpayers, the Labor Program was hosted at the University of California, so union officials and their academic sycophants could add a degree of credibility to their phony and biased reports, web sites, and news releases by stamping the respected UC logo and name on them.

Neither Associated Builders and Contractors nor I had any sort of written or unwritten financial agreement with the Pacific Research Institute for any of its research and exposure concerning the UC Labor Program. The Pacific Research Institute staff was outraged about the taxpayer funding for the program and filled a policy vacuum by investigating it and reporting on it for several years, thus providing a valuable service to California taxpayers and businesses.

In 2002, I Propose to the Pacific Research Institute That It Establish the Nation’s First Free Market-Oriented Labor Studies Center

Here are a few excerpts of my October 10, 2002 memorandum to Pacific Research Institute officials, entitled “Proposal for Labor Studies Center at the Pacific Research Institute.”

New Union Think Tank Challenges Free Market Economics in California

At the request of the California Labor Federation, the California state legislature has provided a total of $17 million in the past three state budgets to establish and operate a “Multi-Campus Research Unit for Labor Studies” at U.C. Berkeley and UCLA. With taxpayer funding and the academic credibility of the University of California behind it, this “union think tank” has quickly become a powerful political tool for organized labor.

An Orange County Register editorial describes this union think tank as “a thinly veiled payoff to organized labor activists.” As cited in the same editorial, Associated Builders and Contractors contends that “studies and papers produced by this union think tank lack academic merit but make useful propaganda for the unions to advance their political agenda at the state and local levels.”

Legislators and news media now regularly cite the dozens of studies already produced by the union think tank, including studies on living wage and the supposed negative impact on the poor that would result from the breakup of Los Angeles. Directors for the union think tank have essentially become the media spokespeople for the union political agenda, displacing the angry rhetoric of union lobbyists with the calm impartiality of supposedly thoughtful university intellectuals. As one union leader said when presenting a union think tank study during a recent Antioch City Council meeting, “It’s from a college. Written by a doctor.”

There’s a Vacuum Where Opposing Views Should Be Heard

California lacks a clear voice from the free market perspective on the immediate labor issues before state and local governments. Responses from industry representatives and elected officials to union initiatives have often been lackluster or even apologetic. Unions and their Democrat supporters portray industry positions on proposed legislation as self-interested and motivated by corporate greed, and there lacks an alternative source of information to back industry positions.

On the national level, many of the intellectual champions of free market economics against the unions during the union heyday of the 1950s and 1960s have retired or died … compared to the prolific union think tank, output is minimal.

Pacific Research Institute Can Fill the Vacuum and Provide Balance

For a few years now, I’ve seen the need for an intellectual operation in California to challenge some of the unions’ academic production that is blindsiding business associations and interest groups. For example, when the UCLA union think tank and the California Research Bureau simultaneously issued studies in the fall of 2001 to support a Project Labor Agreement (PLA) for construction of U.C. Merced, opponents of PLAs lacked opposition studies. Studies and comments against the union political agenda from outside the political world could provide some balance on labor issues in the media and in Sacramento.

I believe that creating a Labor Studies Center at the already established Pacific Research Institute could be a solution. I have not been able to identify a purely research-oriented free market institute for Labor Studies anywhere in the country.

Although my proposal sparked some interest at the Pacific Research Institute, especially after the October 2003 recall of Governor Gray Davis and replacement with Arnold Schwarzenegger, the Labor Studies Center was never established, and the country still lacks anything like it.

My Relationship Fades with the Pacific Research Institute

On August 30, 2009, the San Jose Mercury-News published an opinion piece written by me under my title of Adjunct Fellow in Labor Studies at the Pacific Research Institute. It exposed the documented behind-the-scenes politics leading to a decision at the highest levels of the University of California administration to divert $4 million from other purposes to the University of California Labor Program, which had its annual budget appropriation vetoed by Governor Schwarzenegger in 2008. This op-ed stirred up a lot of controversy.

But the Pacific Research Institute seemed to be retreating from important issues at the state level. I was quoted and cited as a source in a comprehensive report released by the Pacific Research Institute in March 2011 outlining weaknesses and proposing solutions concerning California’s public records access laws (Bringing More Sunshine to California: How to Expand Open Government in the Golden State). I was disappointed at how little attention the Pacific Research Institute received for this well-documented, thoughtful report about another policy arena in which California governance is failing.

Then the Pacific Research Institute laid off some people I knew, and subsequently a few others I knew left for other employment – some to other states. The Pacific Research Institute was ditching California policy issues, while its staff – highly informed Californian policy experts – was simply moving out of the state for better opportunities. (Good riddance, I’m sure many leaders in this state are saying about those departures as they eagerly anticipate the bounty from higher tax rates on the people who are left.)

I’m guessing the unflattering profile in Mother Jones magazine will not alter the priorities of the Pacific Research Institute. I’m now waiting for the emergence of a new free market think tank, based near the state capitol in Sacramento and influential in changing the hopes and plans of the people of California. It would be ideal to see the Pacific Research Institute revitalized to tackle this ambitious project, but I expect someone outside of the traditional culture of free market think tanks will need to start it from scratch.

2 comments

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