The importance of the Think Tanks in U.S Government policies

When Reagan won the U.S elections in 1980, with an overwhelming victory against the democrat candidate Jimmy Carter, it showed 2 important historic realities:

Economic Factor, when a president is considered guilty for recession or an economic depression, when is the cause for terrible foreign image abroad and is considered by the American people as ineptitude to lead the most powerful country of the world, not only generates low levels of popularity, instead of that, when a member of his party of himself run for presidency, it lose.

Think Tank consolidation, when Ronald Reagan was elected president, the HERITAGE FOUNDATION published the first Think Tank blueprint in 1981 entitled “Mandate for leadership”, containing the strategies employed by the past republican presidents, both in Public Policy & Public Management.

Okay, let’s analyze in detail the facts:

Economic Factor:

In 1932, after the “great depression”, the president Herbert Hoover (Republican) run for presidency and loose dramatically against Franklin D. Roosevelt (Democrat).

In 1980, Jimmy Carter, the first democrat to face a debt increasing, with 16% of inflation and a US $75 bn budget deficit.

In 1992, after the National Debt increasing from US $955 bn to US $4tn, the president George H W Bush (Republican) run for presidency and loose dramatically against Bill Clinton (Democrat).

And in 2008, with President George W Bush, the economic situation could not be worse, the National debt increased from US $ 5.6 tn to US $10.5 tn , the budget deficit reach US$ 500 bn, and a GDP for the third quarter of the reach reaching -0,3%, all these combined with the foreclosure problems of 3 million Americans. George Bush supported the Republican candidate John McCain (republican) who is going to lose dramatically against Barack Obama (democrat).

I attach a graph, taken from http://www.lafn.org/gvdc/Natl_Debt_Chart.html :

Think Tank Consolidation:

The Oxford English Dictionary defines a think tank as "a research institute or other organization providing advice and ideas on national or commercial problems"

These institutes, foundations and societies are the evolution of Plato´s academy for thinking how to impact the leaders with ideas to solve the society problems.

In U.S, The Heritage Foundation began in 1973, and is a Republican Think Tank; it supports 2 basic principles (employed by the past Republican Governments, including George Bush):

A) The direct attack of the communism and socialism, by establishing foreign policies focused in attacking other countries with the excuse of “National defense”. That’s the reason; Bush policies have increased the bad perception of America at international level. And counting the “Cold war”, the “Gulf War” and the “Iraq War”

B) Employ of Supply side economics theory, meaning the reduction of income taxes, and in theory causing an increasing of the revenues in the country. The reality has showed how the public policies implementing this theory have failed; let’s see 3 cases:

In Reagan government (1981-1988), the marginal tax rate for wealthiest Americans was cut from 70% to 38%, it produce an increasing of the top brackets wealth and a lost of the government incomes in 3% of the GDP.

In George H. W Bush government (1989-1992), he began with his phrase: “Read my lips: No new taxes”, but he raised taxes and the Washington Post entitled: “Read my lips: I lied”. He continue with the Reagan policies, and the result besides the debt increase was the highest unemployment rate reaching 7,8% and that 14,2% of all Americans lived in poverty by 1992.

In George W Bush government (2001-2008), he made US $630 bn tax cuts to the 1% of the Americans, the salary of the CEOs increased from 254 times the average worker to 400 times, Corporate profits increase from 17,7% in 2000 to 20,9% in 2005.

All these economic policies were considered by 2008 Economic prize laureate Paul Krugman as “Peddling poverty”.

So, all these governments, even if they have not reached their positive goals, they have been influenced by the THINK TANKS (including CATO & AEI, other republican Think Tanks).

So, in 2003, After a meeting between John Podesta (White House chief of staff under Clinton) and Senate Minority Leader Tom Daschle (D-S.D.) decided to create what Infoseek founder Steve Kirsch defined as : “‘a Heritage Foundation for the left”.

So, they began the “Majority American Institute” and then it transform to “The Centre for American Progress”, with an initial budget of US $10 mn and 75 staffers, in 2008, the budget reach the US $25mn with 150 staffers.

As is defined in their site www.americanprogress.com

"As progressives, we believe America is a land of boundless opportunity, where people can better themselves, their children, their families, and their communities through education, hard work, and the freedom to climb the ladder of economic mobility. We believe an open and effective government can champion the common good over narrow self-interest, harness the strength of our diversity, and secure the rights and safety of its people. And we believe our nation must always be a beacon of hope and strength to the rest of the world. Progressives are often described as idealistic enough to believe change is possible and practical enough to make it happen"

Barack Obama advisors include members of “American Progress”, and when he wins the presidency in November 4 of 2008, he will include in his gabinet some members of the Think Tank.

“American Progress” developed an ECONOMIC PLAN FOR THE ADMINISTRATION, call: “Progressive Growth, Transforming America´s Economy through Clean Energy, Innovation & Opportunity.

This plan contains the policies for reach the economic stability and recover the trust of Americans in United States government.

Some of the people, who worked in this plan, are going to be chosen by Barack Obama for his government, some names we are going to speak about in the future are:

Senator Dom Dachsle

Tom Kalil

Richard Samans

Gene Sperling

Todd Stern

Laura Tyson

Daniel Weiss

John Podesta

Sarah Rosen Wartell

Dan Restrepo

Cynthia Brown

We will see how the THINK TANK will impact in OBAMAs government.

Some final thoughts about our next president Barack OBAMA.

He has been supported by 68 Nobel laureates:

6 from Economy (Including Krugman and Stiglitz), 15 from Chemistry, 26 from Medicine & 22 from Physics .

Also he has been supported by 4 Pulitzer award winners.

And part of his economic advisers are: Erich Smidth( GOOGLE CEO), Indra Nooyi ( Pepsico Chairwoman) and Warren Buffet (the wealthiest man of earth in 2008).

Warren Buffet in an interview held in February 15 of 2008 spoke about corporate taxes and the policies for stimulate the economy:

“Relative to GDP, government taxation is 18.5% and spending is 20%, so we borrow the balance. The national debt should not be a scary topic and the fact that it’s gone up is fine as long as it’s proportional to GDP. Where do we get that 18.5%? There’s 2.7 trillion in government revenues. 2.2 trillion comes from individuals, and less than 1% of that comes from the estate tax. 1.1 trillion comes from income taxes, with payroll taxes consisting of 900 billion, but it’s capped at the first $100,000 of salary. We want a tax system that encourages greater prosperity, but it needs to take care of the family.

I think the best way to stimulate the economy is to give money to the poor. They will spend it. Don’t give it to guys like me. Infrastructure investment makes sense, but we haven’t done it in a while and it won’t do anything for the next 6-12 months. Infrastructure is not big relative to GDP. We are a consumer-driven society, spending 106% of production.”