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Home , Adam Smith Society, Myron Magnet, Peter Berkowitz, Robert Rosenkranz, Roger Hertog, The New Criterion

PRESIDENT’S UPDATE Year-End 2018

1 2018 President’s Year-End Update

2 3 Chairman of the Board Paul E. Singer Elliott Management Corporation Vice Chairman Features Michael J. Fedak

Chairmen Emeriti 6 THE DIVERSITY DELUSION ON CAMPUS AND BEYOND Gilder Gagnon Howe & Co. LLC MI is pushing back against the victimhood ideology corrupting academe and polarizing the nation Hertog Foundation Higher Education | Race | MI on Campus

President Lawrence J. Mone 10 ECONOMIC GROWTH With having embraced policy ideas developed by Andrew Cader MI scholars, the U.S. economy is thriving Ann J. Charters  Energy and Environmental Policy | Health Care | Financial Markets Regulation Anthony P. Coles Fiscal Policy | Entitlements | E21 | Shadow Open Market Committee DLA Piper US LLP Ravenel Curry Eagle Capital Management, LLC 16 STRENGTHENING THE WORKFORCE Timothy G. Dalton, Jr. An agenda to enable all Americans to support themselves, Dalton, Greiner, Hartman, Maher & Co. their families, and their communities through work Sean Michael Fieler Equinox Management Partners, L.P. Labor Market | Vocational Education | Future of Work Kenneth M. Garschina Mason Capital Management Kenneth B. Gilman 20 CITY JOURNAL Harvey Golub MI’s quarterly magazine of urban and cultural affairs Miller Buckfire & Co., LLC Maurice R. Greenberg C.V. Starr & Co., Inc. 24 IDEAS FOR CITIES AND STATES Fleur Harlan Bringing the principles of economic choice and individual Michael A. Kaufman MAK Capital responsibility to bear on issues of state and local governance Public Sector | Pensions | K–12 Education | “ Heartland” Civic Branding | Housing | City Planning | Policing | Homelessness | NYC William Kristol Thomas E. McInerney 32 RULE OF Bluff Point Associates What Congress, the courts, and the executive branch must do to Rebekah Mercer restore constitutional government and defend individual liberty Jay H. Newman Administrative State | Overcriminalization Nick Ohnell Civil Justice Reform | Pension Fund Activism Ohnell Capital Robert Rosenkranz Delphi Financial Group, Inc. 36 NEXT-GENERATION Nathan E. Saint-Amand, MD LEADERSHIP Donald G. Smith Through programs on and off Thomas W. Smith campus, MI is educating and Prescott Investors networking the next generation Donald G. Tober of influential, free-market- Sugar Foods Corporation minded leaders Bruce G. Wilcox  Society Kathryn S. Wylde 26 The Partnership For City Young Leaders Circle 4 MANHATTAN INSTITUTE TABLE OF CONTENTS

35 RESEARCH 42 BOOKS 43 MEDIA 44 BANNER EVENTS 46 MI EXPERTS 48 MI EXPANDS 20

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Visit manhattan-institute.org 6 45 to see video and bonus content

5 2018 President’s Year-End Update

Even before ballots were cast, scholars at the Manhattan Institute were addressing these challenges head on.”

6 LETTER FROM THE PRESIDENT LAWRENCE J. MONE

Dear friends and supporters, During the recent midterms, the urban- federal judiciary, there is still more that rural divide, so prominent in 2016, can be done to encourage investment and appeared even more salient. It is a divide innovation and to shore up the rule of that is at once economic and cultural. law. In regard to state-level policy reform, Despite strong national economic growth, one of the biggest game changers of 2018 stark regional disparities have persisted. was the Supreme Court’s decision in the So, too, have citizens responded differently case of Janus v. AFSCME, ruling that it to identity politics. Even before ballots is unconstitutional to require nonunion were cast, scholars at the Manhattan public employees to pay agency fees in Institute were addressing these and other place of union dues. A victory for freedom challenges head on. of speech, the decision in Janus should also help rebalance the political playing You’ll see that we begin this year-end field in states where it has been difficult to update with a discussion of Thomas reform pensions and benefits, one of MI’s W. Smith Fellow Heather Mac Donald’s longstanding institutional priorities. latest book, The Diversity Delusion. In it, she describes how victimhood ideology, Please take some time to look through the inculcated for decades on college and pages that follow and read about MI’s work university campuses, has been influencing on these and other issues. Because your other aspects of American life—and what is interest and generosity have been essential at stake in the university’s abandonment of in enabling this work and in extending classical liberal education. our influence, I hope that you are proud of what we have accomplished together. On From there, we review how MI scholars the Institute’s behalf, I wish you a happy have been working to drive policy change holiday season. at all levels of government, efforts upon which we will build in 2019. With reformist leadership in place at many federal agencies and new appointments to the

7 2018 President’s Year-End Update THE “DIVERSITY” DELUSION ON CAMPUS AND BEYOND

Identity politics reached a fever pitch this fall, surrounding the confirmation hearings of Judge (now Justice) . As MI Thomas W. Smith Fellow Heather Mac Donald explained in a piece in shortly before the final confirmation vote: “The Kavanaugh hysteria has provided the country with a crash course in academic victim politics.” Such politics and their effects on society at large are the subject of Mac Donald’s latest book, published this year: The Diversity Delusion: How Race and Gender Pandering Corrupt the University and Undermine Our Culture (St. Martin’s Press). University of Toronto professor Jordan Peterson noted in advance praise: “Why should we care what happens in the Ivory Tower? Because what happens there very soon happens everywhere.”

Through The Diversity Delusion,

er Mac Donald dissects the offn y Sh : Terr victimhood ideology that has been Ill ustration by inculcated at all too many colleges and universities, explaining how it is predicated on delusory notions of omnipresent racism and bigotry—both on campus and in

8 21st-century America more broadly. risks compromising economic against , in As Mac Donald chronicles, not competitiveness). which thousands of students, only is this ideology promoted by many of them Asian, claim that the faculty, but it is also reinforced by In this book, Mac Donald draws school’s use of racial preferences a well-heeled and heavily-staffed upon decades of reporting on the has led to discriminatory treatment “diversity bureaucracy,” headed by state of higher education, as well as of college applicants. In an October deanlets and administrators with her personal experience of campus interview on Fox and Friends, Mac titles such as Vice Chancellor for intolerance, such as in 2017, when Donald explained that the use of Equity, Diversity, and Inclusion. at Claremont McKenna College such preferences contributes to She examines how the diversity protesters blocked the entrance to racial divisions on campus: when delusion lies behind and less qualified minority students is related to some of the struggle to keep up with their peers most noxious developments academically, diversity bureaucrats that have affected higher tell them that their difficulties are education in recent decades, because of racism, reinforcing a from the politicization of The Kavanaugh hysteria sense of victimhood. curricula in the humanities has provided the country to the abrogation of due- Since this summer, MI has been process rights for students with a crash course in working to promote The Diversity accused of sexual assault Delusion and Mac Donald in public to the failure to guarantee academic victim politics. discourse, educating citizens and . And she policymakers about victimhood explains what happens when Heather Mac Donald ideology, its false premises, and its victimhood ideology affects Wall Street Journal | October 12, 2018 pernicious effects on many areas other areas of American of American life. She has been life, from requirements that law- interviewed about the book on TV enforcement officers participate in the auditorium where she had been and radio, and op-eds and excerpts implicit-bias training (partly out invited to lecture on her previous have run in the Los Angeles Times, of a refusal to acknowledge the book, The War on Cops, forcing , and New York Daily link between high crime rates and her to speak to an empty room. News. On October 13, she was the police activity in communities) to Her research and experience have subject of the Wall Street Journal’s pressures on companies to hire on made her a go-to perspective on weekend interview. the basis of race and gender (which various issues in higher education, drew upon The Diversity Delusion including the current lawsuit in back-to-back columns in the

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25+

events across the country

50+

broadcast interviews

Washington Post. In September, Mac the conventional wisdom about ineffective in enabling upward Donald was a panelist at a forum on the Paris Climate Accord or the mobility. Over the past year, he free speech on college campuses that purported threat of climate change. has spoken at more than a dozen was convened by the Department Nor would students at Duke have campuses, including Reed College of Justice and keynoted by former heard MI William E. Simon Fellow in Portland, , which has been Attorney General . And Kay Hymowitz speak about the the scene of past protests against she has crisscrossed the country to virtues of gentrification, or students conservative speakers. An article for appear at various events. at Harvard and Wellesley heard Reed Magazine reported that while senior fellow Chris Pope on the students disagreed with parts of As an immediate response to the problems with single-payer health Riley’s argument, “it was also clear lack of intellectual pluralism care—among many other lectures. that many listeners welcomed a on many campuses, we’ve been chance to hear—and discuss—ideas sending MI scholars, such as Mac Nor, but for MI’s efforts, would that are different from the ones they Donald, to speak at colleges and many students have heard senior typically encounter on campus.” universities across the country, fellow Jason Riley’s perspective This year, MI was honored when introducing undergraduates to on race relations that goes against Riley received the prestigious perspectives on cultural and much of the victimhood ideology Bradley Prize, conferred by the economic affairs that they might described above. Riley, who joined Lynde and Harry Bradley Founda- not otherwise encounter. But for MI in 2015, has argued that cultural tion on individuals whose accom- our “MI on Campus” lecture series, handicaps, not racism or discrim- plishments reflect the Foundation’s students at UNC, College, ination, are the greatest obstacles mission to restore, strengthen, and Yale, and Williams College, for to the success of black Americans protect the principles and instituti- example, would not have heard today, and that blacks’ pursuit of ons of . senior fellow Oren Cass challenge political power has been largely

10 Q{&}A WITH HEATHER MAC DONALD What was the most intellectually enriching or inspiring course that you had while you were an undergrad at Yale in the 1970s? Wow, it’s hard to choose. My course in the Greek tragedies and comedies was earth- shattering: to experience the terrifying language of Aeschylus in The Oresteia was extraordinary, and to feel these chthonic forces that we believe we’ve conquered in our civilized modernity, but that are always with us. I’m also very grateful for the fact that my freshman English class, “Major English Poets,” was offered before the onset of multiculturalism and feminism in the 1980s. I was allowed to read Chaucer, Edmund Spenser, John Milton, William Wordsworth, and Wallace Stevens without anyone thinking to complain about their gonads and melanin.

Why have you decided to But what happened? Why did you What message about the focus so much of your writing come to distance yourself from it? purpose of a university should on the university? I spent two years at Cambridge we be focused on? Anger and sadness. I aspired to University, where I studied, among Humanistic learning, because it become an academic and could think other things, linguistics. I realized that allows all of us narrow individuals who of no greater privilege than curating linguistics, in its different forms, offered would otherwise be confined to the civilization’s great works. But as high real knowledge about language—whether particularities of our own time and theory took over the university, I realized syntax, phonetics, or, most enthrallingly, place to transcend those limitations that that possibility was foreclosed. Trying something called speech act theory. and experience something greater than to understand greatness and beauty is no Speech act theory sees language as a ourselves. Humanistic learning is an end longer encouraged or even allowed on a form of action, noting that there are many in itself. But it is also true that without an college campus. And it enrages me that utterances in human speech that are not understanding of our past and how hard- the faculty, who have been granted so descriptive; they actually do something. fought was our liberation from tyranny, great a privilege, are abusing it. “I hereby take you as my wife” does want, and scarcity, we’re in danger of not describe the world; it changes the losing that accomplishment. world by changing the status of the You were, at one point, drawn to two parties to the marriage contract. the high theory that you now see That was a completely new take on If you were designing as having done such great harm. language—one that was antithetical to a curriculum for undergraduate deconstruction, which speaks endlessly liberal arts majors, what What drew you to it originally? of how language fails. I came back to I was attracted to deconstruction Yale to start my Ph.D. in comparative five books would you because I’d always been fascinated literature and I heard my professors, like require they read? by language. Deconstruction seemed Paul de Man, regurgitating the same Aeschylus, The Oresteia; George Eliot, like a secret (if perverse) knowledge bizarre claims about language that I had Middlemarch; Max Beerbohm, Zuleika that set its holders apart from people absorbed with such uncritical fervor as Dobson; Mark Twain, Adventures of who were so naïve as to think that you an undergraduate. I thought, they’re Huckleberry Finn; William Makepeace could actually use language to convey speaking nonsense. They’re in a rut. Thackeray, Vanity Fair. I’d also include meaning. I aspired to complete a This is a complete dead-end in analyzing The St. Matthew Passion by Bach and Ph.D. in comparative literature, which language and literature. So I left and went Don Giovanni by Mozart. was then the field most dominated by to law school—perversely, in the hope of deconstruction. pursuing critical theory in the law!

11 2018 President’s Year-End Update

ECONOMIC GROWTH

Over the past two years, the American economy has shown signs of dynamism unseen for a decade. The unemployment rate—now below with senior fellow Peter Huber the recommendations from his 4 percent—is at its lowest level since in 2006, The Bottomless Well: report in testimony before the Senate 1969. GDP has been growing at The Twilight of Fuel, the Virtue of Energy Committee in September and 3 percent. Wages and corporate Waste, and Why We Will Never Run distilled them in an October op-ed profits are up. These developments Out of Energy. Since last year, the for the Financial Times. have occurred as Washington has administration has echoed Mills’s pursued a pro-growth agenda, calls to pivot from seeking “energy Opposition to increased natural gas reducing taxes and paring back independence” to pursuing “energy production, as well as environmental regulation and implementing ideas dominance,” in which the U.S. deregulation more generally, is often put forward by MI fellows in areas will leverage domestic energy for premised on the notion that climate such as energy, health care, and both economic and geopolitical change represents an existential financial services. So, too, have our gains. Consider, for example, that threat to humanity—a threat that scholars kept up their analysis on the number of nations importing some economists and scholars have how to address some of the biggest liquefied natural gas (LNG) has claimed to quantify. A 2015 study threats to long-term prosperity: the jumped from a dozen to more than by professors from Stanford and national debt and unsustainable 40 in the past two decades, with UC Berkeley published in Nature, entitlement programs. international LNG trade expected for example, predicted that climate to become a $200 billion annual change would likely reduce global In August, the U.S. Department business and an increasingly critical GDP by more than 20 percent from of Energy issued a statement fuel for growing economies. In an what it would otherwise reach by announcing that oil conservation MI report published this September, century’s end. Yet as senior fellow was no longer an economic “The Real Fuel of the Future: Natural Oren Cass has explained, such dire imperative; the fracking revolution Gas,” Mills outlined what additional predictions do not take into account has led to a boom in domestic steps Washington can take to the ways in which economic growth oil and gas production, giving accelerate natural gas exports, and technological advancement may the U.S. “more flexibility” in its such as abolishing the requirement enable humans to adapt to warmer use of our domestic assets. The that LNG producers receive federal temperatures should they occur— administration’s approach follows permission to export, as well as something that we already observe, from what MI senior fellow Mark expediting the environmental review for example, when people in warmer Mills has argued for years, beginning for infrastructure projects necessary climates install air conditioning. with his prescient book coauthored to transport the gas. Mills discussed In a Wall Street Journal op-ed,

12 Aug 8: Chris Pope | Briefing on the Trump administration’s reversal of an Obama- era rule that prevented Nov 1: Oren Cass | “What’s the insurance companies from Next Big Economic Idea?” selling short-term health Panel at the Harvard Kennedy plans, Capitol Hill School’s Institute of Politics

Apr 24: Brian Riedl | Broadcast segment discussing Sep 13: Mark Mills | Testimony on U.S. liquefied natural the nation’s entitlement crisis, gas and European energy demand, before the Special Report Senate Energy Committee

“Doomsday Climate Economics Is vehicles will go disproportionately as op-eds in The Hill and Health a Joke,” Cass noted how that 2015 to wealthier individuals who can Affairs, Pope proposed reversing study predicts that by the end of the buy such cars. As for state-level the Obama administration’s century, global warming will cause policies requiring utilities to regulation of short-term plans and Mongolia to have a per-capita income transition to greater reliance on allowing their extended duration, a four times as high as America’s. renewables, senior fellow Robert recommendation that the president Wrote Cass: “The technical term to Bryce has shown in a series of enacted through an executive order describe this analysis is ‘silly.’” This op-eds how this would end up signed in October 2017. This past op-ed was derived from Cass’s March consuming massive amounts of August, the administration went MI report, “Overheated: How Flawed land, especially for wind turbines, further to preserve such plans, Analyses Overestimate the Costs of given their limited energy output. issuing a rule to expand consumer Climate Change.” protections. This, combined with Through deregulation, Washington last December’s repeal of Warnings about climate change also has worked to ameliorate some of the individual mandate, has underlie pressures to increase the the most economically burdensome effectively restored a quality use of electric cars and transition policies enacted under the previous affordable alternative to plans that to renewable sources such as administration, with MI scholars are subject to ACA’s regulations. solar and wind. But such policies highlighting the most urgent have environmental drawbacks of and immediate opportunities for Deregulation, too, has helped their own and can impose higher reform. Senior fellow Chris Pope, bring about relief from the 2010 costs on consumers. In a May MI for example, has helped shape the Dodd-Frank Wall Street Reform report, “Short Circuit: The High administration’s actions deregulating and Consumer Protection Act. This Cost of Electric Vehicle Subsidies,” short-term health-insurance plans, past March, Congress passed and Jonathan Lesser, who recently joined which the Obama administration the president signed legislation the Institute as an adjunct fellow, had tried to suppress. Such plans to pare back Dodd-Frank’s reach, explained how widespread adoption are exempt from regulations under addressing problems brought to of electric vehicles nationwide the , carry light by MI research. The legislation, would likely increase air pollution lower premiums, and have proved for example, increases the asset compared with new internal popular among consumers. In thresholds for banks that trigger combustion vehicles. Moreover, conversations with White House greater regulatory scrutiny. The governmental subsidies for electric and congressional staff, as well thresholds were one subject of a

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14 major MI research project on the effects of Obama-era financial regulations, published last year and led by adjunct fellow Charles Calomiris. We found, for example, that midsize banks were taking actions to remain below a certain threshold and avoid compliance costs, actions that resulted in forgoing profitable growth and acquisitions, in turn reducing competition for the largest banks. Calomiris, in addition to his research and commentary on financial-markets regulation, is a member of the Shadow Open Market Committee (SOMC), a group of economists that evaluates the policy choices and actions of the Federal Reserve. Housed under the Manhattan Institute, the SOMC convened two conferences this year, with keynote addresses by Charles Evans, president, Federal Reserve Bank of ; and Robert Kaplan, president, Federal Reserve Bank of .

Though the economy has been trending in the right direction, a significant threat to long-term prosperity looms: the national debt, projected to rise to an unprecedented 194 percent of GDP in 30 years. With Washington reluctant to address this eminently predictable crisis, MI senior fellow Brian Riedl, based in our D.C.-based economic- policy shop, E21: Economic Policies for the 21st Century, has assessed the main drivers of the problem and presented a solution that can truly right America’s fiscal ship. In the Members of the Shadow Open Market Committee (SOMC) convened in March and cover story for the March 19 issue of October of 2018 to discuss a wide range of , “The Entitlement macroeconomic issues—including monetary policy, banking and financial regulations, and Crisis Ignored,” Riedl laid bare the fiscal policy matters. demographic realities behind the crisis: between 2008 and 2030, 74 million Americans born between 1946 and 1964—or 10,000 per day— will retire into Social Security and Medicare. Because of the number of enrollees, rising health-care

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CHRIS POPE IN 2018 PRINT 36 MENTIONS 18 OP-EDS 16 costs, and benefit increases enacted arrangement—which is part of Riedl’s by Congress, both programs are comprehensive solution discussed projected to run an enormous above. So, too, could deficit: $82 trillion in total over the price transparency help next 30 years (including the interest contain health-care costs, on the resulting program debt). as MI Nick Ohnell Fellow Thus, Riedl has made entitlement has explained reform the centerpiece of a in a series of op-eds this comprehensive plan to stabilize the year in publications such as national debt, published as an MI the Wall Street Journal, U.S. report this October. News & World Report, and The Hill. Coburn, a and Of that $82 trillion long-term deficit former senator, has reiterated projection, roughly half, or $40 the problems with treating trillion, comes from Medicare. Part of health care as distinct from other the problem underlying Medicare’s aspects of the economy in which unsustainable financial trajectory consumers have the information is its basic fee-for-service structure, they need to shop around—and which incentivizes medical providers providers have the incentive to to inflate expenditures, for example, compete for their business. by encouraging tests and procedures even if they contribute little to overall health outcomes. Yet within the program lies a potential Of that $82 trillion long-term opportunity to overcome this problem and deficit projection, roughly contain costs, while half, or $40 trillion, comes promoting better care for beneficiaries: from Medicare. Medicare Advantage (MA). Under MA, private insurers are paid a flat fee to deliver the whole spectrum of hospital and patient services to which Medicare beneficiaries are entitled. Insurers are thus incentivized to spend money in ways that best treat patients at the lowest cost. Chris Pope, in addition to his work on short-term insurance plans, has authored a series of essays and op-eds explaining how the encouragement of MA can help address many of Medicare’s problems. For example, in an essay for MI’s City Journal, “Medicare’s New Day,” Pope explained how moving Medicare beneficiaries into MA plans could facilitate the program’s transition into a fiscally MI’s health policy experts meeting with Secretary of Health sustainable premium-support and Human Services Alex Azar in September 2018.

17 2018 President’s Year-End Update STRENGTHENING THE WORKFORCE

As economic growth increases, a reform and vocational education to has been embraced and promoted by defining challenge of the coming new forms of collective action for many executives and influencers in years will be to enable all Americans workers and the structure of the the technology sector, among oth- to share in the nation’s prosperity—as safety net. editor ers. In March, the Wall Street Journal some have experienced rising eco- called The Once and featured Cass as a counterpoint to nomic insecurity for quite some time. Future Worker “the essential policy Facebook’s cofounder Chris Hughes in Workers without postsecondary book for our time.” Senator Marco a video that contrasted views on UBI. education have seen their wages Rubio praised it for how it “offers Contra Hughes, who would have the stagnate, while others have accrued much-needed clarity for how to make government send everyone a check minimal gains, if any, from earning the American Dream possible for the provided they perform some form of college degrees. In rural and post- many.” And according to J. D. Vance, work—even if that means being, in industrial communities that loomed effect, an amateur artist who sells a large in the last presidential election couple of paintings—Cass stressed cycle, unemployment has been high that while America should have a relative to the rest of the country, basic safety net, benefits should never economic growth from manufacturing be so high as to replace earning a pay- and growth generally have lagged, The essential policy check. It is critical that workers retain and deaths from drug overdose have a privileged status relative to those been on the rise. Meanwhile, millions book for our time. subsisting off the government. of decent-paying positions—more National Affairs editor Yuval Levin than a half-million in construction on The Once and Future Worker Such calls for a universal basic by MI senior fellow Oren Cass and manufacturing alone—go unfilled income are often based on the notion nationally because employers cannot that technology and automation will find workers with the right skills. author of Hillbilly Elegy, “Oren Cass soon make many jobs obsolete and has accomplished the feat of not leave millions of people not only It is to focus public-policy discourse only saying something truly new and unemployed but unemployable. Yet on the importance of work—not innovative about our society, but also are such concerns justified? This is simply to national economic growth doing it in a readable, engrossing the main question behind senior but also to personal well-being way. The Once and Future Worker is fellow Mark Mills’s book Work in the and the stability of families and a wake-up call to our political class, Age of Robots (Encounter Books). communities—that senior fellow and indeed the whole country, that Approaching the issue historically, Oren Cass has authored The Once rising consumption can’t replace that Mills explains that improving pro- and Future Worker: A Vision for most basic of goods—a job. A brilliant ductivity—reducing labor hours per the Renewal of Work in America book. And among the most important unit of product or service—has been (Encounter Books). In it, Cass I’ve ever read.” the hallmark of economic progress provides a fresh analysis of what for centuries. It has yet to result in has destabilized the workforce and In advancing this vision for a renewal mass unemployment, and this time, proposes a big-think agenda in of America’s culture of work, Cass has Mills argues, will not be different, response. Cass’s policy prescriptions been a determined critic of the idea of despite what has been said about the cover a range of areas from regulatory a universal basic income (UBI), which potentialities of artificial intelligence

18 (AI). The central challenge of our era barely budged. Moreover, contrary to As he described in his May Wall Street is not the prospect of the end of work conventional wisdom, a college degree Journal piece, “Not Everyone Should and systemic high unemployment but, is neither necessary nor sufficient for Go to College,” a strong non-college rather, the same as that of earlier eras: reaching the middle class. The wage track could mean that a student to deal with the inevitable disruptions and salary distributions for college begins career selection and readiness that occur along the way to enhanced graduates and high school graduates in 11th grade and starts a subsidized prosperity. overlap significantly: high-earning internship or an apprenticeship in high school graduates in a wide 12th grade. Upon completion, “[s]uch Addressing that challenge will require, variety of fields that require no col- a student could have significant work perhaps first and foremost, a change lege degree earn substantially more experience, certified skills, and $40,000 in how we approach education and than low-earning college graduates. in the bank—before being old enough the role of vocational education, in Meanwhile, in school districts across to drink.” Cass lays out a series of particular, as the push for “college-for- the country, voc-ed has largely been structural reforms to achieve this new all” has failed to benefit most Amer- relegated to second-class status. pathway in his August MI report, icans. Despite a 60 percent increase “How the Other Half Learns: in spending on secondary education Cass invites policymakers and citizens Reorienting an Education System since 1970, the percentage of students to imagine what an attractive voc-ed That Fails Most Students.” who are prepared for college has pathway could mean in practice.

19 2018 President’s Year-End Update

Q{&}A WITH OREN CASS How did working on the Romney campaign in 2012 inform the perspective you developed in The Once and Future Worker? Even then, one of the things that became clear was that the two parties weren’t necessarily all that responsive to a lot of the problems that you heard from voters. That disconnect, I think, was a very long time in the making. And the establishment, so to speak, on each side, just didn’t really have a good way to cope.

You moved from living in major cities to a more rural area; how has this affected your outlook? I live out in western Massachusetts in a very small town that is enough in the middle of nowhere that you couldn’t commute to a city for work if you tried. On the one hand, it’s culturally very vibrant. But it also has many of the challenges of deindustrialization—struggles with employment opportunities, the opioid epidemic, and so forth. Historically, when we were much less wealthy as a nation, people could build a good life in places like this. So if we’ve gotten so much richer and more technologically advanced, and suddenly people are asking whether more rural communities are still viable, something’s gone very wrong.

A Time magazine cover story from October, “How Will Outlast Trump,” discusses you and your book. Do you agree that your ideas reflect something called “Trumpism”? I think it all depends on what you mean by “Trumpism.” There’s an interesting theory that politics is really about problems; that what defines the parties and successful politicians is who speaks about problems in a way that resonates with voters. And so, if you’re talking in terms of problems, I think Trumpism is significant and important. A lot of what Trump focused on during the campaign were the right things to talk about—regional disparities in economic success, the very real challenges that trade and immigration were posing for less skilled workers, and the way the modern economy has been so wildly successful for the upper middle class and people with college degrees but not paying dividends for everybody else. So if you define that as Trumpism, then I think Trumpism is a good thing, it should and will outlive Trump, and needs to be addressed.

What are you watching on TV right now? I am binge-watching Parks and Rec on Amazon Prime.

Is that because Pawnee, Indiana, is one of those distressed postindustrial communities? That’s not why, but I suppose that’s an interesting connection. If you think about virtually all of the prominent award-winning sitcoms, they focus on professionals living on the coasts. But if you look at shows like Parks and Rec and The Office, which I write about a bit in the book, part of the premise is to poke fun at these sad people in the middle of the country and their lame jobs and lives. But the shows miss the point. These are the kinds of jobs most Americans have. And they don’t have them because they’re glamorous or changing the world. They have them because they play a valued role in their community and give them the resources to support their families and do what they want with the rest of their lives. While that’s a model that’s made fun of in the culture, it always has been and always will be the predominant one, one that we need to preserve and strengthen.

theonceandfutureworker.com @oren_cass

20 “NO ONE HAS BETTER ARTICULATED THE CONSERVATIVE ARGUMENT FOR WHY WORK MATTERS TO AMERICA’S LONG-TERM PROSPERITY THAN OREN CASS.” —

“REALLY PROVOCATIVE. MADE ME CHANGE MY MIND ON SOME ISSUES THAT I THOUGHT I’D THOUGHT ABOUT QUITE A LOT, WHICH IS ABOUT THE BEST A BOOK CAN DO.” — JASON FURMAN Chairman of President Obama’s Council of Economic Advisors

OREN CASS HAS ONE OF THE SHARPEST POLICY MINDS. HIS PEDIGREE IS SURPRISING.

21 2018 President’s Year-End Update CITY JOURNAL

STEVEN MALANGA SETH BARRON PAUL BESTON BRIAN C. ANDERSON Senior Editor Associate Editor Managing Editor Editor

America’s future is bound up with Severe mental illness is an issue mentally ill offenders away from that of its cities—great, small, and that the magazine has devoted jail and into treatment, and he has midsize. With rates of urbaniza- special attention to as of late. won wide acclaim for his success at tion on the rise, “urban policy” In cities across America, many this task. CMHP is a rare example of is directly affecting more people persons with schizophrenia and what’s going right in mental-health than ever before. Cities face critical bipolar disorder go without treat- policy today. choices on how to address issues ment and, as a consequence, pose a from economic development and danger to themselves, their fam- Eide was one of the authors education to order maintenance, ilies, and others. While asylums featured in a video, “Failing the housing, and transit. To influence have been largely phased out, an Severely Mentally Ill,” part of MI’s public discourse on these and effective alternative system has “Broadcasting City Journal” se- other areas of public policy, MI’s yet to take their place. Today, as a ries launched this year. Working City Journal tells the story of cities result, thousands of mentally ill with veteran newsman and Emmy across America—and the world. In persons are now held in jails and Award–winning journalist John this, City Journal occupies a unique prisons—an approach that is just as Stossel, MI has brought stories role in the growing field of not- inhumane, if not more so, than the from the magazine to the screen. for-profit journalism—an ever-im- asylums were. With news reports of Through these videos, Stossel helps portant source of reportage as mass shootings and persons being viewers understand what is at stake for-profit newspapers, beset with pushed onto subway tracks, City with respect to a given issue, often declining subscriptions and falling Journal has expanded its reporting calling attention to facts and real- ad revenue, have been forced to lay on the problem, along with poten- ities that they might not otherwise off reporters. Under the leadership tial solutions. For example, for the encounter through mainstream of editor Brian C. Anderson, City Autumn issue, senior fellow Ste- media outlets. In this particular Journal publishes scores of articles, phen Eide authored a piece, “Keep- video, Eide and D. J. Jaffe—adjunct thickly reported, describing how ing the Mentally Ill Out of Jail,” a fellow, City Journal contributor, and public policies and cultural factors profile of Judge Steve Leifman’s author of Insane Consequences: influence the quality of life and “Criminal Mental Health Project” How the Mental Health Industry economic vitality in all manner of (CMHP) in Miami-Dade County. For Fails the Mentally Ill—discuss the cities, from the heartland to the almost two decades, Leifman has problems with deinstitutionaliza- East and West Coasts. been working to divert low-level tion and policymakers’ inclination

22 3 MILLION+ VIDEO VIEWS

BROADCASTING CITY JOURNAL John Stossel interviews contributors on issues affecting our politics, culture, and society.

Steve Malanga and Dan DiSalvo ­— The Ticking Pension Bomb

John Stossel interviews City Journal contributors—bringing to life key issues affecting policy, culture, and society. city-journal.org/stossel

23 2018 President’s Year-End Update

to direct mental-health resources moral norms, aesthetics, and toward those who need help the other manifestations of culture. least, such as those suffering from MI William E. Simon Fellow Kay anxiety and depression—leaving Hymowitz, for example, has the more vulnerable population authored two long-form pieces of severely mentally ill individ- this year analyzing the #MeToo uals uncared-for. “Broadcasting movement and placing it in City Journal” has been a powerful historical context: “The Sexual means of disseminating ideas from Revolution’s Angry Children” the magazine and broadening our (Spring), arguing that the reach. Through a digital marketing movement represents a rejection campaign that has leveraged Stoss- of the sixties’ vision of erotic el’s strong social media following, liberation; and “#ThemToo” the six videos posted online to date (Autumn), relating the movement have garnered more than 3 million to earlier women’s crusades, such August 1, 2018 views combined. as temperance. In the spirit of the magazine’s appreciation for the Mindful of how civic life is not role of architecture in influencing shaped by public policy alone, quality of life, we have continued WILLIAM BRATTON City Journal provides a platform Bratton, former NYPD and LAPD commissioner, to publish pieces critiquing the discussed his 40+ year career in law enforcement, the for analysis of the importance of excesses of more modern forms: lessons learned in New York and Los Angeles, and the challenges facing American police. “The Architectural Sacking of Paris,” by contributing editor Claire Berlinski, warning of how proposed developments in publication in high-circulation the French capital will continue newspapers such as the Wall Street the ongoing ruination of classical Journal, Dallas Morning News, beauty; and “A Plague on Cities, Los Angeles Times, and more— and the Poor,” by Catesby bringing our articles to citizens Leigh, discussing brutalism’s and influencers nationwide. One enduring influence. And long- particularly noteworthy adaptation standing contributing editor of a City Journal article this year (and former prison psychiatrist) was Mark Pulliam’s essay from Theodore Dalrymple has used the Summer issue, “The Original his quarterly feature, “Oh, to Originalist,” on the legacy of Judge Be in England,” to explore the . Published in the Wall depths of human nature, from Street Journal, it was quoted from at its depravity as can be gleaned length by Senator Chuck Grassley from trial records (“A Quiet (R-IA) in his prepared statement Evening’s Reading,” Spring) to on the nomination of Judge Brett the individuality and humanity Kavanaugh to the U.S. Supreme expressed in the paintings Court. City Journal’s growing digital of artist Chaim Soutine, who footprint has further extended portrayed those who perform our reach, with the magazine’s essential, if not glamorous, work website on track to record upward (“The Dignity of the Humble,” of 10 million pageviews in 2018. Autumn). Social media followers, too, have increased by more than 50 percent. MI employs a variety of means, The magazine’s weekly podcast, in addition to “Broadcasting City “10 Blocks,” has also been drawing Journal,” to achieve a broad reach more listeners over the past for the contents of the magazine. year—garnering 20,000+ monthly We regularly adapt articles for downloads on average.

24 88 4K 20,000+ episodes subscribers monthly downloads

MOST DOWNLOADED EPISODE “TRADE WARS & TARIFF THREATS” featuring Milton Ezrati

Millennials and the generation behind them are starting to look at the quality of life [in cities]... and they’re finding midsize cities have a lot to offer.

MICK CORNETT Cornett’s four successful terms as mayor of ’s largest city offer a blueprint for reform-minded mayors across the country. “The Next American City,” Aaron Renn writes, “charts ’s transformation, offers examples of similar turnarounds in other cities, and describes Cornett’s personal journey from sportscaster to mayor.” October 3, 2018 25 2018 President’s Year-End Update IDEAS FOR CITIES & STATES

Manhattan Institute, for decades, has been the free-market think tank with an abiding interest in the well-being of cities—the hubs of financial, cultural, and human capital. In addition to putting forward clear, principled solutions to a host of urban issues, we have been on the ground in cities and states across the country, advising, convening, and fostering discourse among civic leaders.

Because fiscal stability is founda- who decline to join unions still late the First Amendment and that tional to the long-term health of pay “agency fees” in place of dues. because public unions’ collective cities and states, among our top pri- Public unions, in turn, became a bargaining activities are inherently orities has been to educate citizens political juggernaut, promoting the political, requiring nonmembers about the tremendous influence election of politicians with whom to pay fees violated their right to of public-sector unions. As senior they would later negotiate their freedom of speech. As DiSalvo ex- fellows Daniel DiSalvo and Steven contracts—leading to pensions and plained in his New York Times op-ed Malanga have long demonstrat- other benefits that cities and states published the day of the decision, ed, public unions are no ordinary are finding harder to underwrite, the Court’s ruling will likely result interest group. Beginning in the late despite a record-long bull market. in a decline in union membership 1950s, a majority of states adopted and revenue. Therefore, it will “re- granting unions collective bar- Yet a June decision by the U.S. balance the playing field in states gaining rights and a host of special Supreme Court promises to rein in where the power of unions makes privileges such as exclusive repre- union power. In Janus v. AFSCME, it impossible for governments to sentation for groups of employees, the Court ruled that agency fees— address the rising costs of pensions dues collection by the government, which had been required in 22 states and retiree health care, which are and the requirement that workers and the District of Columbia—vio- crowding out other spending.”

26 27 In the year run- spite a long bull market; but boards up to the ruling, that are charged with overseeing MI published a pension funds have also acted series of papers on the inappropriately. In his Septem- need for pension reform, ber report, “The Politics of Public focusing on jurisdictions Pension Boards,” DiSalvo explained that would be affected by Janus. how political appointees to the Three papers, authored by adjunct pension boards face incentives that fellow Josh McGee and senior fellow steer them away from acting in the E. J. McMahon, Malanga and McGee, funds’ long-term interest, whether and senior fellow Stephen Eide, by making questionable investment respectively, assess the pension lia- decisions or projecting unrealistic bilities of , New Jersey, rates of return. and Connecticut’s five largest cities, showing how even wealthy states Sound public finances are but and cities have assumed retirement one component of strong urban benefit policies that are crowding governance. For cities to be out spending on other priorities desirable places to live and work, and are projected to eat up larger policymakers need to get many core portions of the budget. Many of the public services right and uphold politicians who negotiated such a high quality of life. Housing, benefits with public unions have transit, education, homelessness, relied on strong stock-mar- public safety, and local economic ket returns to meet their development, among many obligations. Not only did other issues, pose challenges— this amount to wish- which can vary dramatically from ful thinking, as city to city. Whereas some cities underfunding with vibrant economies are strug- persists de- gling to accommodate an influx

28 AKRON, OHIO URBAN MIAMI, DETROIT, MICHIGAN POLICY SAN JOSE, CALIFORNIA MACON,

2018 SERIES NEW YORK, NEW YORK

of newcomers, former industrial with a diversity of backgrounds, as Heartland, a swath of the country powerhouses in the Rust Belt have well as giving them a chance to gain running from the Mississippi Delta been depopulating and seeking new an outside scholar’s perspective. through Appalachia up to the Rust foundations for their economies. At the conclusion of this series, Belt states of the upper Midwest. we published our scholars’ papers These states have become ground Though many city leaders have a as an edited volume, Urban Policy zero for male unemployment, sincere desire to address such chal- lenges, they often lack the opportu- nity to step back from their day-to- day responsibilities and deliberate on what approach will serve their community best over the long term. Our goal through this project has been It was to provide such an opportu- nity that, over the course of 2018, to develop ideas to support the specific MI scholars and authors whom we commissioned went to cities communities, as well as form insights that across the country where various can be applied more broadly. urban-policy issues were coming to a head. Our goal through this project has been to develop ideas to 2018, which we distributed to civic opioid addiction, and so-called support the specific communities, leaders nationwide. deaths of despair. With the goal of as well as form insights that can be discussing the challenges facing applied more broadly. In each city, A region of the country that has the heartland and highlighting we convened leaders from govern- been of particular focus for the potential solutions, in October ment, nonprofits, business, aca- Institute this year has been the MI convened a conference in demia, and philanthropy to discuss, American heartland—or, more Indianapolis: “The New American test, and help refine our scholars’ specifically, what senior fellow and Heartland.” We chose Indiana ideas. These were spirited discus- Harvard economist Edward Glaeser because, while it is home to sions, bringing together influencers has referred to as the Eastern many communities reeling from

29 2018 President’s Year-End Update

NEW AMERICAN HEARTLAND

This October, Manhattan Institute scholars convened in Indianapolis for a symposium on “The New American Heartland”—sparking new ideas with leading policymakers and educational innovators.

30 deindustrialization, the state has also shown how prudent fiscal and regulatory policy can help foster growth and economic dynamism, including in the manufacturing sector—policies that we wanted to elevate as examples for other cities and states. The conference featured remarks by policymakers and influencers from the heartland, including Eric Holcomb, governor of Indiana; Greg Goodnight, mayor of Kokomo, Indiana; and Daniel Horrigan, mayor of Akron.

Within the Institute’s state-and- local-policy portfolio, K–12 education reform has been a mainstay, as few issues are as important to citizens or matter as much to the nation’s future. In Governor Eric Holcomb and Lawrence Mone (L-R) 2018, to strengthen our efforts in this space, we welcomed Raymond Domanico as our new director of education policy. This is Domanico’s second stint at the Institute; in the early 1990s, Domanico was director of MI’s Center for Educational Innovation, a division that launched EDWARD several experimental public GLAESER schools, advised New York governor George Pataki on an effective Senior Fellow charter school law, and helped The need to make work pay establish charter schools in New more is particularly acute in the York. Prior to rejoining MI this year, eastern heartland” Domanico was director of education research at New York City’s Independent Budget Office, where AARON he led a team tasked with studying RENN and reporting on the policies and progress of America’s largest public Senior Fellow school system. America’s ‘flyover country’ is stronger than you think” At the core of our education-reform agenda is the encouragement of school choice, particularly through OREN the expansion of charter schools. To shape discourse on these issues, CASS we have done extensive research Senior Fellow on charter schools, examining not Elevating vocational education, only how their students fare but and prioritizing its students, must also how charters have affected the begin with a substantial reshaping performance of traditional district of American high schools.“ schools and how the latter have

31 NEW YORK CITY

done under various reform efforts. One of the biggest challenges with student wait lists suggesting This research has often led to the enabling the expansion of charters demand for charter expansion, debunking of misinformation about to meet growing demand is obtain- MI over the past year carried out charters spread by special interests ing physical space. In our home city a project to identify a financial and suggested how charter schools of New York, a solution to this issue product or other business solutions might improve their own effective- has been to colocate charter schools to help charters access private- ness. In February, senior fellow in existing school buildings that facility space in a way that is Marcus Winters published a report have unused space. Yet as MI senior affordable and scalable. While this is taking stock of the best research fellow Charles Sahm documented a pressing need for existing charter done on New York City charter in a May report, “Finding Room for operators, it is especially so for new schools to date: overall, their effect New York City Charter Schools,” entrants who do not have the proven on student performance is unam- the de Blasio administration has track record necessary to seek capital biguously positive. Contra critics been reluctant to approve new from foundations or from lenders. who allege that charters achieve co-locations, relative to the previ- Under the direction of Sarah Saint- high results by “creaming” the ous administration. Whereas the Amand, formerly senior vice president best students and not serving more Bloomberg administration had been of real-estate development for New difficult-to-educate kids, Winters approving charter co-locations at York State’s economic development found that not only do charters not the rate of 30 per year, the de Blasio agency, MI convened a series of push out low-performing students administration has approved them advisory groups with representatives but that low-performing students at the rate of 12 per year. from education, real estate, finance, are also less likely to exit charter and philanthropy to discuss what schools than they are to exit tradi- Given the current administration’s financial tools or incentives might tional public schools. resistance to co-location, and help bridge the gap for charters

32 and the private sector. Saint-Amand as an example to the nation of the and publications Howard Husock developed a variety of alternative effects of urban policy, for good and has shined a light on the terrible models by which philanthropists can for ill. Through a steady stream of physical conditions of the New York deploy their capital more efficiently op-ed writing in the New York daily City Housing Authority (NYCHA), to support charters with facilities and papers, reports, issue briefs, and our the nation’s largest public housing to bring other sources of investment e-newsletter, The BEAT, MI scholars system. Among other horrors: in the to bear. In 2019 and beyond, MI looks are working to shape public discourse winter, more than three-quarters to elevate these recommendations in in and about our hometown. We of the system’s 400,000 tenants public discourse, both in New York have made The BEAT, in particular, a were without heat and hot water; and nationally. central tool in our strategy of pro- mandatory lead-paint inspections viding New Yorkers with the facts on were not performed; and security School safety, too, has worsened issues that matter. Published three buzzers in building entrances did under the de Blasio administration, times per week, The BEAT newsletter not work, among other problems. as it has in school districts across has focused on issues from transit to Husock suggested ways to improve America. As senior fellow Max Eden housing to corruption in Albany. Since conditions in the short term but has argued, this has largely resulted last year, readership has increased also used these incidents to make from guidance issued during the more than 50 percent, with 25,000 a more basic point: the provision Obama administration by the U.S. followers, including reporters and of housing is not an appropriate Department of Justice and the U.S. editorial board members from the function of government. So, too, has Department of Education’s Office New York City’s homelessness for Civil Rights, encouraging crisis increased in recent years— schools to reduce the number despite $1 billion going toward of suspensions and to favor providing temporary housing for new “restorative” approaches approximately 60,000 people. instead, which emphasize We have made The BEAT, In a March report, senior fellow dialogue over punishment. Such Stephen Eide called for evaluating guidance was predicated on the in particular, a central tool homeless shelter performance notion that racial bias had led to on how well the shelters black students’ being suspended in our strategy of providing transition people back into stable, at disproportionately high rates. independent housing—the system Few were paying attention to New Yorkers with the facts that had been in place before the rise of disorder in schools on issues that matter. the de Blasio administration prior to Eden’s watershed report discontinued the incentives and in 2017, analyzing the results of performance benchmarking for survey data in New York City schools New York Times, Wall Street Journal, shelters that had been established showing that parents and teachers New York Post, Politico New York, New under the Bloomberg administration. alike reported that school climate had York Daily News, Newsday, The Econ- deteriorated, with more violence, drug omist, and Washington Post, among and alcohol use, and gang activity. In other news outlets. 2018, Eden has authored commentary and testified before Congress about Like most cities, New York has the decline in school safety and many programs focused on helping has urged the administration to its poorest citizens. Yet are they rescind the Obama administration’s effectively contributing to economic guidance. This spring, to that end, opportunity and serving the most Eden helped coordinate a visit of New vulnerable—especially under a York teachers and parents to the U.S. mayor who, upon being elected, Department of Education to provide pledged to “take dead aim at the Secretary of Education Betsy DeVos Tale of Two Cities”? Consider, for with their personal accounts of how example, public housing. In a series schools have become more dangerous. of op-eds in the New York Post, Wall Street Journal, and New York Daily New York, America’s largest city, with News, MI vice president for research 8.5 million people, has long served

33 2018 President’s Year-End Update

Prior to the 2016 presidential elec- provided a broad assessment tion, there were many concerns of the major forces sustaining about the future of the rule of law. the modern regulatory state and Under the Obama administration, concluded with a call for Congress the regulatory state had expanded to restrain administrative rule- its reach into American life, while making, among other reforms. A a vacancy on the Supreme Court major problem with Congress has presented the possibility of consti- been its proclivity to delegate power tutional law going adrift. Yet, since to politically insulated agencies, the election of President Trump and a trend that reached its zenith in the appointments of the Consumer Financial Protection and Brett Kavanaugh to the Supreme Bureau (CFPB). Established under Court, along with more than 80 the 2010 Dodd-Frank Wall Street other appointments to the federal Reform and Consumer Protection bench, the prospects for renewing Act and charged with writing and the rule of law have never been as enforcing rules on how banks, credit- promising. For years, MI legal-policy card companies, and other lenders director James Copland and deputy treat their customers, the CFPB is director Rafael Mangual have laid the essentially uncontrollable by the groundwork for such a moment, and elected branches of government, since the start of the new admin- with its funding coming through the istration, they have been showing Federal Reserve System (outside the what Congress, the courts, and the congressional-appropriation process) executive branch must do to rein in and its director removable only for the administrative state and restore “good cause” (outside presidential constitutional government. Even as oversight). To discuss concrete steps the recent midterm election results that the administration and Congress may make it harder to promote legal should take to reform the CFPB and and regulatory reform in Congress, the regulatory state more generally, we can at least expect the Senate to MI convened an October forum, “The continue to confirm qualified judges Future of Financial Regulation,” appointed by the administration. an event that MI cosponsored with the Center for the Study of At the federal level, Copland has the Administrative State at George focused primarily on how to rein in Mason’s Law School. the expansion of the regulatory state. The forum featured remarks by Brent In the lead essay for the Summer McIntosh, general counsel for the issue of City Journal, Copland U.S. Treasury Department.

34 RULE OF LAW

new! FELLOW & DEPUTY DIRECTOR, LEGAL POLICY RAFAEL MANGUAL

35 2018 President’s Year-End Update

Legal-policy director James Copland and deputy director Rafael Mangual met with Mark Janus soon after the U.S. Supreme Court ruled 5-4 in the landmark Janus v. AFSCME case.

MI’s efforts to strengthen the rule January of this year, Copland ing such attempts to turn corporate of law at the state level have dealt authored the latest report for MI’s governance into a de facto regulator primarily with the “overcriminaliza- Trial Lawyers, Inc. series, which pres- seeking broad policy goals that have tion” of ordinary conduct, as well as ents snapshots of the lawsuit industry nothing to do with increasing share- abuses in civil justice. This August, and its effect on the American econo- holder value. MI research continues Copland and Mangual authored a my. In this latest edition, the authors to provide the basis for coverage of report, “Overcriminalizing America: explain how Missouri has become a this issue in publications such as the An Overview and Model Legisla- magnet for venue-shopping, in Wall Street Journal and The Econo- tion for States.” Based on years of which plaintiffs seek out the most mist. And MI research continues to research, this report shows how sympathetic courts in which to file drive policy change on these issues in legislatures across many states have suit against national companies, Washington. In a May report, “Proxy criminalized behavior that is not a practice that has contributed to Advisory Firms: Empirical Evidence intuitively wrong, leaving unsuspect- driving up the overall costs of and the Case for Reform,” Copland ing and well-meaning citizens and America’s tort system. and two Stanford coauthors exam- businesses vulnerable to prosecution ined how SEC rules were permitting even when acting in good faith. Threats to the rule of law have also proxy advisory firms to facilitate The report proposes concrete steps come from certain investors in social investors’ agendas and other that states can take to overcome publicly traded companies, including decisions against the interest of the overcriminalization, such as the some state pension funds. Abetted average shareholder. Congress subse- implementation of default mens rea by loose rules promulgated by the quently held a June hearing analyzing statutes, which require that a crimi- Securities and Exchange Commis- the issue, and the SEC in September nal offense must entail intent, absent sion (SEC), these “social” investors withdrew long-existing guidance clear legislative language to the have sought to leverage their equity letters governing proxy advisory contrary—a measure that states such stakes to force changes in corporate firms. The agency is holding a Novem- as Ohio and Michigan have begun to practice relating to areas ranging ber roundtable to gather information adopt in recent years following MI’s from environmental protection to on proxy advisory firms and other is- on-the-ground efforts to educate citi- human rights to employee diversity. sues relating to corporate governance zens and policymakers. And in Copland has emerged as a national that Copland has long researched. leader in documenting and evaluat-

36 RESEARCH 2018 The Manhattan Institute annually publishes full-length research reports on topics related to key issue areas. This body of work—authored by our resident fellows, associated scholars, and outside experts—has shaped the thinking of policymakers, thought leaders, the media, and the general public.

Principal Turnover in New York’s Charter and New York’s Economic Future Rides on Its Subways Overheated: How Flawed Analyses Traditional Public Schools, 2008-18 Nicole Gelinas Overestimate the Costs of Climate Change Marcus A. Winters ISSUE BRIEF, July 10, 2018 Oren Cass ISSUE BRIEF, November 1, 2018 REPORT, March 11, 2018 Connecticut City Pensions: The Affordability Gap Closing the Racial Achievement Stephen Eide Gap in NYC Schools Benchmarking Shelter Performance in New York: REPORT, June 20, 2018 A Modest Proposal for Easing the City’s Ray Domanico Homeless Crisis ISSUE BRIEF, October 24, 2018 Streamlining Infrastructure Environmental Review Stephen Eide Charles Hughes REPORT, March 8, 2018 A Comprehensive Federal Budget ISSUE BRIEF, June 18, 2018 Plan to Avert a Debt Crisis Brian Riedl Proxy Advisory Firms: Empirical Evidence and New York City’s Charter Schools: REPORT, October 10, 2018 the Case for Reform What the Research Shows James R. Copland, David F. Larcker, and Brian Tayan Marcus A. Winters Urban Policy 2018 REPORT, May 21, 2018 REPORT, February 28, 2018 Manhattan Institute September 28, 2018 Short Circuit: The High Cost of Electric Vehicle Subsidies Explaining the Janus v. AFSCME Case The Real Fuel of the Future: Natural Gas Jonathan A. Lesser Daniel DiSalvo Mark P. Mills REPORT, May 15, 2018 ISSUE BRIEF, February 15, 2018 REPORT, September 24, 2018 Trial Lawyers, Inc.: Missouri Update The Politics of Public Pension Boards Finding Room for New York City Charter Schools Charles Upton Sahm James R. Copland Daniel DiSalvo REPORT, January 31, 2018 REPORT, September 12, 2018 REPORT, May 2, 2018

How the Other Half Learns: Reorienting Why These 10 Infrastructure How to Increase Health-Insurance Coverage an Education System That Fails Most Students Projects Deserve a Green Light by Reducing ACA Crowd-Out Oren Cass Aaron M. Renn Chris Pope REPORT, August 28, 2018 ISSUE BRIEF, April 18, 2018 REPORT, January 23, 2018

Enforcing Classroom Disorder: Trump Has Not Garden State Crowd-Out: How New Jersey’s Called Off Obama’s War on School Discipline Can U.S. Health Care Escape MACRA’s Bureaucratic Briar Patch? Pension Crisis Threatens the State Budget Max Eden Steven Malanga and Josh B. McGee ISSUE BRIEF, August 13, 2018 Chris Pope REPORT, March 28, 2018 REPORT, January 11, 2018 Overcriminalizing America: An Overview and Model Legislation for States More Housing for Better Public Transit South Carolina Overcriminalization: Update 2017 James R. Copland and Rafael Mangual Alex Armlovich James R. Copland and Rafael Mangual REPORT, August 8, 2018 ISSUE BRIEF, March 27, 2018 ISSUE BRIEF, January 9, 2018

37 2018 President’s Year-End Update NEXT-GEN LEADERSHIP Influencing the influential is at the core of MI’s strategy to shape the direction of public policy. In recent years, this has meant—in addition to our research, publications, and conferences—direct engagement with up-and-coming leaders. Not only do we provide them with edu- cation about the first principles of democratic and current policy debates, but we also focus on building national—and now, international—networks, empow- ering members to put good ideas to work. MI’s next-gen efforts take place primarily under the auspices of two programs: the Adam Smith Society on campuses; and the Young Leaders Circle for professionals generally.

38 NEXT-GEN LEADERSHIP

ADAM SMITH SOCIETY The Society has members around the globe with chapters at 33 business schools and in nine major cities. To date, more than 10,000 students and professionals have been a part of the Society’s network.

39 2018 President’s Year-End Update

The focus of the Adam Smith about public-policy issues affecting Forum, a free-market think tank Society on business schools may at the economy, as well as the morality in Israel, to start a chapter at the first seem counterintuitive, as one of capitalism more broadly—op- Hebrew University. This summer, might expect that people studying portunities that were not present Hebrew University students business would have a natural prior to this program. As one of the came to New York to discuss best appreciation for free markets. Yet, founders of our Dartmouth chapter practices, meet U.S. members, and the MBA curriculum, oriented to- said, “I’m proud of what the Adam begin planning on-campus events. ward professional formation, often Smith Society does: what it does for Next year, the Adam Smith neglects seminal thinkers such me, what it does for students, Society will commence a series of as Adam Smith and F. A. Hayek. and what it does for the name of exchanges—sending U.S. Adam Pressure has also been building in business in a broader sense ... Smith Society members to Israel business schools—of a piece with characterizing business as the and Hebrew University students to academia more broadly—to promote solution to society’s ideas of “social justice” that dispar- issues rather than the age the inherent societal benefits of villain, which it is so often for-profit business. Many students portrayed as in the media. graduate business school without I think it’s a very important a firm concept of how capitalism message, and to be a part of I’m proud of what the is morally defensible. Therefore, that is really exciting.” it is perhaps of little surprise that Adam Smith Society many business leaders seem eager The Adam Smith Society to advance au courant notions of student program expanded does: characterizing corporate social responsibility but internationally this year business as the solution are reluctant to speak up for the through the establishment of capitalist system, which, over the its first overseas chapter, at to society’s issues rather past 200 years, has been integral the Hebrew University of to technological progress, the Jerusalem. While Israel than the villain, alleviation of destitution world- boasts a dynamic economy, wide, and the stratospheric rise home to an impressive num- which it is so often in human flourishing. ber of start-ups, its culture still retains hostility toward portrayed as in the media. With the goal of reaching MBA the idea of free enterprise, students who will rise to influential with certain elements of positions as CEOs, founders of com- socialism viewed as preferable by the . Through these panies, philanthropists, and public some academics, politicians, and exchanges, we hope to deepen the servants, MI has been founding citizens. In an effort to promote education of our members in the chapters of the Adam Smith Soci- discussion about the moral foun- Society’s core subject areas, as well ety on business school campuses. dations of capitalism among future as build connections between the The Adam Smith Society provides Israeli business leaders, MI has future free-market business leaders context for discussion and debate partnered with the Kohelet Policy of both countries.

40 More than 10,000 students and professionals have been a part of the Smith Soc network.

41 2018 President’s Year-End Update

YOUNG LEADERS

42 CIRCLE Over the long term, the Adam New York, MI’s home city, attracts Michael Anton, professor and Smith Society will be a resource for young professionals from across clinical psychologist Jordan business leaders throughout their the country and the world. To Peterson, U.S. Secretary of Health careers, providing members with a engage this population of future and Human Services Alex Azar, source of continuing education and movers and shakers working in and former CEO of CKE Restaurants a supportive network. To that end, fields from finance to journalism Andy Puzder. we’ve been founding professional to law, we host a monthly lecture chapters in major cities, from San for professionals in their 20s and If you know anyone who might be Francisco to London, as well as 30s: the MI Young Leaders Circle. interested in joining the Adam Smith providing opportunities for students The Young Leaders Circle offers Society or the Young Leaders Circle, and professional members to members an opportunity—unique please contact the MI development connect with one another. These in Gotham—to hear from luminaries office at212-599-7000 . You can learn LEADERS more about these organizations include our annual conference on a range of topics in public policy in New York, multi-chapter case and culture, as well as to get to at adamsmithsociety.com and competition, as well as our Smith know other young people interested manhattan-institute.org/ylc. Soc Treks, destination-based in ideas. Notable speakers this year seminars in premier locations on included Home Depot cofounder topics in history, philosophy, and Ken Langone, former National public policy. Security Council spokesman

43 2018 President’s Year-End Update

The Diversity Delusion by HEATHER MAC DONALD Work in the Age of Robots St. Martin’s Press, September 2018 by MARK P. MILLS The Manhattan Institute’s Thomas Encounter Books Intelligence series, June 2018 W. Smith Fellow and New York Times Forecasts of mass unemployment and bestselling author Heather Mac Donald The Once and humans put out to pasture are wrong, published a new book, The Diversity Future Worker argues Manhattan Institute senior fellow Delusion: How Race and Gender by OREN CASS Mark Mills, in his concise book Work in Pandering Corrupt the University and Encounter Books, November 2018 the Age of Robots. In fact, the coming Undermine Our Culture, which explores The 2016 electoral results focused revolution in artificial intelligence and the roots of the identity politics polarizing national attention on the economic automation technology will have the America. On college campuses, millions struggles of working-class Americans, opposite effect on workers’ potential of tuition and tax dollars are spent whose woes have often been viewed as for productivity: consumer demand hiring diversity bureaucrats to foment a the inevitable result of irresistible global for drones, virtual reality systems, victim mentality among students, who and technological forces. But in this, his and biometric electronics will create then graduate into the working world debut book, Manhattan Institute senior more jobs than robots displace. Mills’s believing that human beings are defined fellow Oren Cass identifies the misguided optimism comes with an impressive by their skin color, sex, and sexual policy thinking in Washington responsible track record: praised his 2005 preference, and that oppression based for intensifying the dysfunction and book, The Bottomless Well, coauthored on these characteristics is the American disengagement found in working-class with Peter Huber, for explaining why experience. According to Shelby Steele, communities, and he offers a reform we would never run out of energy—at “not since Allan Bloom’s The Closing agenda to right the course—the premise a time when the consensus was the of the American Mind has a book so of which requires making work an opposite. Reputed for making economic thoroughly exposed the damage done… American value again. A former Bain and scientific trends accessible to a by modern liberalism’s glib commitment consultant who advised Mitt Romney’s lay readership, Mills was named the to diversity.” 2012 presidential campaign on domestic 2016 “Energy Writer of the Year” by the policy, Cass has a big-think approach that American Energy Society. is provocative and compelling. J. D. Vance calls this “a brilliant book … and among the most important I’ve ever read.”

44 45 2018 President’s Year-End Update

BANNER EVENTS 2018 Adam Smith Society National Meeting Award Dinner

Every year, the Adam Smith Society holds its National Meeting The Alexander Hamilton Award was created in New York, bringing together hundreds of MBA student and to honor those individuals who, like Hamil- alumni members from across the country for an intense weekend ton, are avid proponents of commerce and of education and networking. At the 2018 meeting, the Society civic life. Throughout the years, we have rec- presented its Principled Leadership Award to Clifford S. Asness, ognized leaders who have made remarkable managing and founding principal, AQR Capital Management. things happen in realms including public Speakers included Marilyn G. Fedak, vice president emeritus, policy, culture, and philanthropy. The 2018 Alliance Bernstein; Michael Anton, former director of strategic Alexander Hamilton Awards were presented communications, U.S. National Security Council; Ed Conard, author to Stanley Druckenmiller, chairman and CEO, and former managing director, Bain Capital; and Douglas Irwin, Duquesne Family Office; and Nikki Haley, for- Dartmouth professor and author of Clashing Over Commerce: A mer U.S. Ambassador to the . History of U.S. Trade Policy. The meeting also presented a debate on and other , cosponsored with U.S. (IQ2US), moderated by John Donvan—featuring Patrick Byrne, CEO of Overstock.com; Eric Posner, Law School; , venture capital investor; and Gillian Tett, U.S. managing editor, Financial Times.

Would I have joined the Adam Smith Society? In a heartbeat. Founder and CIO, AQR Capital It is a rare think-tank that promotes an idea that leads to real change in real people’s lives. The Honorable Nikki Haley Former U.S. Ambassador to the United Nations The Institute’s promotion of free markets, , , and the rule of law have never been more important than today. Never. Stanley F. Druckenmiller Chairman and CEO, Duquesne Family Office

46 Hayek Lecture James Q. Wilson Lecture Walter B. Wriston Lecture

The Hayek Lecture is delivered by the In honor of James Q. Wilson In 1987, the Manhattan Institute recipient of the Hayek Prize, which (1931–2012), one of the 20th initiated a lecture series in honor of honors the book published within century’s most prolific and Walter B. Wriston—banker, author, the past two years that best reflects accomplished political scientists, government advisor, and member F. A. Hayek’s vision of economic and MI sponsors an annual of the Manhattan Institute’s board individual liberty. Conceived and funded eponymously named lecture. of trustees. The Wriston Lecture by Manhattan Institute trustee Thomas In 2018, it was delivered by has since been delivered annually W. Smith, the Hayek Prize, with its MI senior fellow and Harvard in New York, with honorees drawn $50,000 award, is among the world’s University economics professor from the worlds of government, the most generous book prizes. The 2018 Edward Glaeser, on the topic academy, religion, business, and recipient was John F. Cogan, the Leonard “Capitalism and Millennials.” the arts. The 2018 Wriston Lecture, and Shirley Ely Senior Fellow at the “The Conservative Challenge in a , for his book The High Populist Moment,” was delivered by Cost of Good Intentions: A History of U.S. (Hoover Institution). Federal Entitlement Programs. The week following the event, the Wall Street Journal published “ and Populism Go Back Centuries”—an adaptation of the remarks delivered by Berkowitz.

For those of us who believe that serious study of ideas and rigorous empirical analysis go together in understanding politics and advancing , the Manhattan Institute has long set an inspiring example.

Peter Berkowitz Tad and Dianne Taube Senior Fellow, Hoover Institution,

47 2018 President’s Year-EndMANHATTAN Update INSTITUTE EXPERTS

BETH AKERS BRIAN C. ANDERSON ALEX ARMLOVICH MICHAEL KNOX BERAN CLAIRE BERLINSKI SENIOR FELLOW EDITOR, CITY JOURNAL ADJUNCT FELLOW CONTRIBUTING EDITOR, CONTRIBUTING EDITOR, CITY JOURNAL CITY JOURNAL

ROBERT BRYCE CHARLES W. CALOMIRIS OREN CASS DR. TOM COBURN JAMES R. COPLAND SENIOR FELLOW BOOK FELLOW SENIOR FELLOW NICK OHNELL FELLOW SENIOR FELLOW; DIRECTOR, LEGAL POLICY

THEODORE DALRYMPLE DANIEL DISALVO MAX EDEN STEPHEN EIDE RICHARD A. EPSTEIN CONTRIBUTING EDITOR, SENIOR FELLOW SENIOR FELLOW SENIOR FELLOW VISITING SCHOLAR CITY JOURNAL

DR. ANDREW VON TED FRANK NICOLE GELINAS EDWARD L. GLAESER VICTOR DAVIS HANSON ESCHENBACH ADJUNCT FELLOW SENIOR FELLOW; SENIOR FELLOW; CONTRIBUTING EDITOR, ADVISOR CONTRIBUTING EDITOR, CONTRIBUTING EDITOR, CITY JOURNAL CITY JOURNAL CITY JOURNAL

STEPHANIE HESSLER PETER W. HUBER HOWARD HUSOCK KAY S. HYMOWITZ GEORGE L. KELLING ADJUNCT FELLOW SENIOR FELLOW VICE PRESIDENT, WILLIAM E. SIMON FELLOW; SENIOR FELLOW RESEARCH & PUBLICATIONS; CONTRIBUTING EDITOR, CONTRIBUTING EDITOR, CITY JOURNAL 48 CITY JOURNAL MANHATTAN INSTITUTE EXPERTS

ANDREW KLAVAN JOEL KOTKIN JONATHAN LESSER HEATHER MAC DONALD MYRON MAGNET CONTRIBUTING EDITOR, CONTRIBUTING EDITOR, ADJUNCT FELLOW THOMAS W. SMITH FELLOW; EDITOR-AT-LARGE, CITY JOURNAL CITY JOURNAL CONTRIBUTING EDITOR, CITY JOURNAL CITY JOURNAL

STEVEN MALANGA JIM MANZI E. J. MCMAHON JUDITH MILLER MARK P. MILLS GEORGE M. YEAGER FELLOW; SENIOR FELLOW ADJUNCT FELLOW ADJUNCT FELLOW; SENIOR FELLOW SENIOR EDITOR, CITY JOURNAL CONTRIBUTING EDITOR, CITY JOURNAL

JAMES PIERESON CHRIS POPE BRIAN RIEDL AARON M. RENN JASON L. RILEY SENIOR FELLOW SENIOR FELLOW SENIOR FELLOW SENIOR FELLOW; SENIOR FELLOW CONTRIBUTING EDITOR, CITY JOURNAL

CHARLES UPTON SAHM PETER SALINS FRED SIEGEL GUY SORMAN HARRY STEIN SENIOR FELLOW SENIOR FELLOW SENIOR FELLOW; CONTRIBUTING EDITOR, CONTRIBUTING EDITOR, CONTRIBUTING EDITOR, CITY JOURNAL CITY JOURNAL CITY JOURNAL

JOHN TIERNEY JACOB L. VIGDOR ADAM WHITE MARCUS A. WINTERS LUIGI ZINGALES CONTRIBUTING EDITOR, ADJUNCT FELLOW CONTRIBUTING EDITOR, SENIOR FELLOW CONTRIBUTING EDITOR, CITY JOURNAL CITY JOURNAL CITY JOURNAL 49 2018 President’s Year-End Update

Benjamin Birney, MI’s new director of technology, is focused on using technology to win hearts and minds. His professional career began in music theater composition and production, and then shifted to technology and law. As the principal in his own legal-services firm, Birney consulted on computer forensics and digital evidence, as well as on information security topics. He brought his diverse skills together to build BroadwayHD into a world-class theater streaming service.

BENJAMIN BIRNEY DIRECTOR, TECHNOLOGY

Raymond Domanico, MI’s new director of education policy, leads our efforts to promote innovation and school safety in both the charter- and district-school sectors. After an earlier stint at MI in the early 1990s, developing an agenda for school choice, Domanico worked with community leaders and educators affiliated with the Industrial Areas Foundation, Metro–NY in New York City to create and support new small public high schools and charter schools. Most recently, he was director of education research

EXPANDS at New York City’s Independent Budget Office.

RAYMOND DOMANICO DIRECTOR, EDUCATION POLICY

The Manhattan Institute’s Social Entrepreneurship Initiative has long honored nonprofit leaders and innovative private organizations that address some of America’s most pressing social problems. With the addition of Annie Dwyer, strategic communications advisor and director of MI’s new Civil Society Fellows Program, MI is reinforcing its support of civil society. After beginning her career at the Mercatus Center at George Mason University, Dwyer served as a communications director in the U.S. House of Representatives, and most recently as the Competitive Enterprise Institute’s vice president of communications.

ANNIE DWYER DIRECTOR, CIVIL SOCIETY FELLOWS PROGRAM

Many criminal-justice reform advocates have been pushing for large-scale de- incarceration and the decriminalization of quality-of-life infractions, often in the name of addressing so-called mass incarceration and broader “systemic bias.” Rafael A. Mangual, recently promoted to fellow in legal policy, will continue researching these issues and the implications for public safety. Mangual’s work has been featured and mentioned in publications including the Wall Street Journal, The Atlantic, New York Post, City Journal, and Philadelphia Inquirer. RAFAEL A. MANGUAL FELLOW & DEPUTY DIRECTOR, LEGAL POLICY

Emily Esfahani Smith, the new editor of MI’s Economics21, is the author of The Power

MANHATTAN INSTITUTE MANHATTAN of Meaning: Finding Fulfillment in a World Obsessed With Happiness (Crown, 2017). Her articles and essays have appeared in such publications as the Wall Street Journal, New York Times, and The Atlantic, among others. Smith is chairwoman of the board of and served as its editor-in-chief as an undergraduate. Before joining MI, she was the managing editor of The New Criterion and of the Hoover Institution journal Defining Ideas. EMILY E. SMITH MANAGING EDITOR, E21

50 IN MEMORIAM

Manhattan Institute pays tribute to several dear friends who recently passed away. Rodney Nichols, who served on the board of trustees, was also a leader in university-level science education and research, serving as vice president and executive vice president of Rockefeller University from 1970 to 1992, and later serving as CEO of the New York Academy of Sciences. Stefan Kanfer wrote on culture for MI’s City Journal for over 20 years, following a literary career that included decades as a resident film and book critic for Time magazine. Acclaimed novelist Tom Wolfe delivered one of MI’s first Walter B. Wriston Lectures, in 1988, and remained a longtime friend, authoring a retrospective piece for the Institute’s 25th anniversary. Jeff Bell, who served as MI’s first president after campaigning as a principled conservative against Bill Bradley for Senate in New Jersey, provided indispensable leadership in our earliest years. And George Yeager, investor and philanthropist, generously supported organizations that defend the foundations of free societies, including MI, where City Journal senior editor Steven Malanga holds the fellowship bearing his name.

RODNEY NICHOLS TOM WOLFE

STEFAN KANFER JEFF BELL GEORGE YEAGER 51 Why Invest in MI? An investment in the Manhattan Institute is a demonstration of belief in the principles and moral ideals that our scholars advance. We do not seek government grants; we depend on the generosity of donors. When you give to MI, your generosity turns intellect into influence.

How to Support MI You can donate to MI via check, wire, or stock transfer, or make a donation online: manhattan-institute.org/donate. If you have questions, please call the MI sponsorship office.

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Membership Supporting the Manhattan Institute can unlock access to various benefits, including invitations to events, a subscription to MI’s City Journal, and MI books. Young professionals who join MI’s Young Leaders Circle ($250) have access to monthly lectures and receptions and receive additional benefits at the Advisory Committee level ($1,000). MBA students and professionals who join MI’s Adam Smith Society have access to a series of benefits depending on level of dues. For questions about membership with MI, Young Leaders Circle, or the Adam Smith Society, please contact MI’s sponsorship office.

Sponsorship Office Manhattan Institute, 52 Vanderbilt Avenue, New York, NY 10017 (212) 599-7000 | [email protected]

Lawrence Mone, President Vanessa Mendoza, Executive Vice President Brian C. Anderson, Editor, City Journal Michael Barreiro, Vice President, Operations Leigh Harrington, Vice President, Communications & Marketing Howard Husock, Vice President, Research & Publications Troy Senik, Vice President, Policy & Programs

52 Manhattan Institute is a 501(c)(3) nonprofit organization. Contributions are tax-deductible to the fullest extent of the law.