Winter 2007



obel laureate Milton Friedman, a senior research fellow at the Hoover Institution since 1977, who died at the age of 94 on November 16, 2006, was remembered across the United States on January 29 during a day of celebration in his honor. The declaration of Milton Friedman Day in California was announced on January 22 by California governor Arnold Schwarzenegger during a memorial service in Friedman’s honor on the Stanford University campus. Also eulogizing Friedman during the service were Hoover Institution director John Raisian; George P. Shultz, Thomas W. and Susan B. Ford Distinguished Fellow; Gary Becker, Rose-Marie and Jack R. Anderson Senior Fellow; Richard Epstein, Peter and Kirsten Bedford Senior Fellow; Eric Hanushek, Paul and Jean Hanna Senior Fellow in Education; Thomas Sowell, Rose and Milton Friedman Senior Fellow

on Public Policy; John Taylor, Bowen H. and Janice Arthur McCoy Senior Fellow; Senior Fellow Michael Boskin; and Senior Fellow (on leave) Edward P. Lazear, who is currently serving as chairman of the P r e s i d e n t ’s Council of Economic Advisers. Other celebrants of the day included the City of San Francisco, the University of Chicago, the Chicago Mercantile Exchange, and the Economist magazine, among others. Also, on January 29 PBS premiered The Power of Choice: The Life and Ideas of Milton Friedman, a documentary on the life and ideas of Friedman. The special was produced for PBS by Free to Choose Media. Friedman, who was awarded the Nobel Memorial Prize in Economic Sciences in 1976, also had the distinction of being the recipient of the Presidential Medal of Freedom and the National Medal of Science, both awarded to him in 1988. continued on page 2



resident George W. Bush presented the Hoover Institution with a National Humanities Medal at the official awards ceremony in the Oval Office on November 9, 2006. Hoover director John Raisian accepted the medal on behalf of the institution. The president was joined by First Lady Laura Bush, Dana Gioia, chairman, National Endowment for the Arts, and Bruce Cole, chairman, National Endowment for the Humanities. “This is a distinct honor for the Hoover Institution and Stanford University,” said Hoover director John Raisian. “We have been honored recently with the awards that were bestowed on Hoover fellows Thomas Sowell and Shelby Steele. To have the medal awarded by the president to the Hoover Institution, as an institution, is a wonderful tribute and a huge source of pride for all of us.” continued on page 4






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continued from page 1 “Today Stanford has lost a great scholar and friend, and our country has lost one of its leading economists,” said Stanford University president John L. Hennessy on hearing of Friedman’s death. “Dr. Friedman’s ability to explain complicated economic theories has had a profound impact beyond the university. We will miss his candor and intelligence, but we are quite certain that his insights will live for generations.” “Milton Friedman was arguably the greatest economist of the 20th century,” said Hoover director John Raisian. “His reach was incredible. Esteemed academic economists lauded his intellectual capacity and leadership of the Chicago School of economics. At the same time, he was a household name among noneconomists. In ordinary life, people knew the name of Milton Friedman as a great economist—it is an amazing tribute to the man. He contributed to the notion that ideas have meaning; no economist could claim that phrase more than he could. “For those of us at Hoover, he was a bellwether in our thinking about political economy,” Raisian added. “We enjoyed his collegiality for nearly 30 years. He was active throughout his lifetime, and his later years were no exception. We will truly miss him. “Our thoughts and condolences are with his wife, Rose Director Friedman, in this time of sorrow,” Raisian said. “Milton and Rose considered themselves ‘two lucky people,’ as their autobiography was titled. Rose was not only a loving spouse but also an intellectual partner. It was a joy to see them in action together. Indeed, the only time I saw Milton pause on an analytic point was when Rose was his interrogator.” A longtime and outspoken proponent of political and economic freedom, Friedman conceived many of the most important innovations in economic theory during the second

California governor Arnold Schwarzenegger, holding a pencil, describes the teachings of Milton Friedman as he spoke during the January 29 memorial service for him. Schwarzenegger told family and friends of the late Nobel laureate that Friedman's use of the pencil and its construction in the illustration of how the economy works in the video for Free to Choose was a remarkable inspiration about economics.

half of the twentieth century. Of those, his landmark work explaining monetary supply and its effect on economic and inflationary shifts garnered him worldwide renown and respect. The influence of Friedman’s work was felt again last year when Edmund Phelps was announced as the 2006 Nobel Prize winner in economics for a theory the two Nobelists developed in the 1960s regarding unemployment and inflation. That theory continues to be used as a practical guide among the world’s major central banks, including the U.S. Federal Reserve. Friedman, who often served as an adviser and sage for many government leaders, played a key role in this nation’s economic policy despite never having formally served in an administration after World War II. He also was known for championing school vouchers, particularly through the foundation he and his wife created, the Milton and Rose D. Friedman Foundation for Educational Choice. continued on page 11

Mitt Romney, far left, who was then governor of Massachusetts, visited the Hoover Institution to meet with fellows on October 21. At right is Hoover Institution director John Raisian; at center is Senior Associate Director Richard Sousa.




eymour Martin Lipset, a renowned political sociologist who was also a senior fellow at the Hoover Institution and a professor of public policy emeritus at George Mason University, died December 31, 2006, in Arlington, Virginia. He was 84. His major work was in the fields of political sociology, trade union organization, social stratification, public opinion, and the sociology of intellectual life. He also wrote extensively about the conditions for democracy in comparative perspective. “Marty Lipset was a scholarly giant in the study of American politics and sociology. We were proud to have had him as part of our fellowship at Hoover over the decades,” said Hoover Institution director John Raisian. “His presence at Stanford, with his keen knowledge of, and research addressing, the development of democracy, politics, and public opinion will be missed.” Among his many publications were The Democratic Century, with Jason M. Lakin, Julian J. Rothbaum Distinguished Lecture series (University of Oklahoma Press, 2004); It Didn’t Happen Here: Why Socialism Failed in the United States, with Gary Marks (W. W. Norton, 2001); American Exceptionalism: A Double-Edged Sword (W. W. Norton, 1996); Continental Divide: The Values and Institutions of the United States and Canada (Routledge, 1990); and, with Earl Raab, Jews and the New American Scene (Harvard University Press, 1996). Lipset, who at the time of his death also was a senior scholar at the Woodrow Wilson International Center for Scholars, received the MacIver Prize for Political Man and the Gunnar Myrdal Prize for The Politics of Unreason. His book The First New Nation was a finalist for the National Book Award. He was also awarded the Townsend Harris Medal from the alumni association of City College of New York, the Margaret Byrd Dawson Medal for Significant Achievement, the Northern Telecom-International Council for Canadian Studies Gold Medal, and the Leon Epstein Prize in Comparative Politics by the American Political Science Association. He received the Marshall Sklare Award for distinction in

Jewish studies. In 1997, he was awarded the Helen Dinerman Prize by the World Association for Public Opinion Research for significant contributions to survey research methodology. From 1975 to 1990, he was the Caroline S. G. Munro Professor of Political Science and Sociology at Stanford University and, earlier, the George D. Markham Professor of Government and Sociology at Harvard University. Lipset had been elected to various honorific societies in the United States and abroad, including the National Academy of Sciences, the American Philosophical Society, the National Academy of Education, and the American Academy of Arts and Sciences, in which he served as vice president for the social sciences. He was the only person to have been president of both the American Sociological Association (1992–93) and the American Political Science Association (1979–80). He also served as the president of the International Society of Political Psychology, the Sociological Research Association, the World Association for Public Opinion Research, and the Society for Comparative Research. Lipset was also active in public affairs on a national level. He had been a director of the United States Institute of Peace, as well as a member of the U.S. Board of Foreign Scholarships, cochair of the Committee for Labor Law Reform, cochair of the Committee for an Effective UNESCO, and consultant to the National Endowment for the Humanities, the National Humanities Institute, the National Endowment for Democracy, and the American Jewish Committee. He had also been president of the American Professors for Peace in the Middle East, chair of the National B’nai B’rith Hillel Commission and the Faculty Advisory Cabinet of the United Jewish Appeal, and cochair of the Executive Committee of the International Center for Peace in the Middle East. Born the son of Russian Jewish immigrants in New York, Lipset graduated in 1943 from the City College of New York. His first wife, Elsie Braun Lipset, died in 1987. Survivors include his wife of 16 years, Sydnee Guyer Lipset of Arlington; three children from his first marriage; and six grandchildren.


grams of policy-oriented research, the Hoover Institution puts its accumulated knowledge to work as a prominent contributor to the world marketplace of ideas defining a free society.” continued from page 1 Joining Hoover as winners of National Humanities Medals Research Fellow Shelby Steele received the medal in 2004, in 2006 are and Thomas Sowell, the Rose and Milton Friedman Senior Fouad Ajami, Middle Eastern studies scholar, Washington, Fellow in Public Policy, received the medal in 2002. District of Columbia The National Endowment for the Humanities notes in its James Buchanan, economist, Fairfax, Virginia release about the award: “The Hoover Institution became Nickolas Davatzes, historian, Wilton, Connecticut Robert Fagles, translator and classicist, Princeton, New Jersey Mary Lefkowitz, classicist, Wellesley, Massachusetts Bernard Lewis, Middle Eastern studies scholar, Princeton, New Jersey Mark Noll, historian of religion, Notre Dame, Indiana Meryle Secrest, biographer, Washington, District of Columbia Kevin Starr, historian, San Francisco, California The National Humanities President George W. Bush and Mrs. Laura Bush stand with the 2006 National Humanities Medal Medal, first awarded in 1989 recipients in the Oval Office on November 9, 2006. From left, they are Mark Noll, historian of religion; as the Charles Frankel Prize, Mary Lefkowitz, classicist; Meryle Secrest, biographer; Bernard Lewis, Middle Eastern scholar; John honors individuals and orRaisian, director of the Hoover Institution; Robert Fagles, translator and classicist; Nickolas Davatzes, historian; Kevin Starr, historian; Fouad Ajami, Middle Eastern studies scholar; James Buchanan, ganizations whose work has economist; and NEH chairman Bruce Cole. White House photo by Paul Morse deepened the nation’s underone of the first and most distinguished academic centers in standing of the humanities, broadened citizens’ engagement the United States dedicated to public policy research. Today, with the humanities, or helped preserve and expand with its world-renowned group of scholars and ongoing pro- America’s access to important humanities resources.


California governor Arnold Schwarzenegger, far right, meets with Hoover Institution director John Raisian, center, and Hoover fellows on November 15. The governor attended a conference on technology on the Stanford University campus that day and took time to visit Hoover.



olitical cartooning has always been fraught with controversy and even danger; today’s cartoonists are not the first to have their work condemned. During World War I, Dutch artist Louis Raemaekers—called the Great Cartoonist of the Great War—was nearly put on trial by his government for his scathing anti-German political cartoons, which it feared would jeopardize Dutch neutrality. The impact of his work was felt around the world. In 1917, President Theodore Roosevelt was quoted as saying, “The cartoons of Louis Raemaekers constitute the most powerful of the honorable contributions made by neutrals to the cause of civilization in the World War.” The Hoover Library and Archives present an exhibition of the political cartoons of Raemaekers through Saturday, May 5, titled Sharply Drawn: The Political Cartoons of Louis Raemaekers: 1914–1941. The exhibit features more than one hundred of Raemaekers’ original works spanning his remarkable career. Restoration of the drawings and preparations for the exhibition were made possible by generous underwriting support from Mrs.

Joanne W. Blokker in memory of her late husband, Johan, and the Mericos Foundation. Notable in his work, said exhibit curator Kyra Bowling, “is the ability of a single image to be accessible and moving enough to evoke reactions across many cultures.” Raemaekers’ early work was of a pastoral nature, but the advent of World War I changed his focus. After observing firsthand the atrocities committed by Germans, Raemaekers turned his attention, and that of the world, to the war through his drawings. Although Raemaekers began his work in Europe, his cartoons were eventually picked up by Hearst newspapers; by October 1917, more than two thousand newspapers on both sides of the Atlantic were printing his drawings on a regular basis. The exhibit is in the Herbert Hoover Memorial Exhibit Pavilion, next to

Hoover Tower, and is free of charge. Pavilion hours are Tuesday through Saturday, 11:00 a.m. to 4:00 p.m. For more information call 650-723-3563.

ducation Next is the most influential journal in education, according to a study released by the Editorial Projects in Education (EPE) Research Center. The study, Influence: A Study of the Factors Shaping Education Policy, was based on an extensive survey of the education field’s opinionelite. Education Next, published quarterly by the Hoover Institution at Stanford University, was the sole journal, peer-reviewed or otherwise, listed among the top-ten information sources in the EPE survey, surpassed only by agencies of the U.S. government, Education Week, the New York Times, the Washington Post, and the nonprofit organization Education Trust. “The other editors and I are very pleased to learn that this young journal, now in its sixth year of publication, has at-


tained such prominence and recognition,” said Paul E. Peterson, editor in chief of Education Next and director of the Program on Education Policy and Governance at Harvard University. “The honor reminds us to keep focused on our central mission, namely, to ‘present the facts as best they can be determined, giving voice (without fear or favor) to worthy research, sound ideas, and responsible arguments.’” EPE’s study also ranked the most influential research in education as well as the most influential individuals. The research on school vouchers conducted by Peterson and his colleagues at Harvard was cited among the thirteen “blockbuster” studies of the past decade. A study of graduation rates by Jay Greene, an Education Next contributing editor, was also listed as one of the top thirteen. The National Assessment of Educational Progress, conducted under the auspices of the U.S. Department of Education, was listed as the most influential research study. Education Next senior editor Chester E. Finn Jr., who also serves as chair of the Hoover Institution’s Koret Task Force continued on page 11




Abraham D. Sofaer George P. Shultz Distinguished Scholar and Senior Fellow International law and diplomacy, international relations, national security affairs, separation of powers, government regulation, international terrorism Legal adviser, U.S. Department of State, 1985–1990; recipient, Distinguished Service Award in 1989, the highest state department award given to a non–civil servant; U.S. district judge in the Southern District of New York, 1979–1985; professor, Columbia University School of Law, 1969–1979; New York state administrative judge, 1975–1976; assistant U.S. Attorney in the Southern District of New York, 1967– 1969; member, U.S. Air Force, 1956–59 Author, War, Foreign Affairs and Constitutional Power: The Origins (Ballinger 1976); coeditor, The Transnational Dimension of Cyber Crime and Terrorism, Hoover National Security Forum series (Hoover Institution Press, 2001) LL.B., New York University School of Law, 1965; B.A., Yeshiva College, 1962; Doctor of Laws, honoris causa, Yeshiva University, 1980 Founding trustee and chairman, National Museum of Jazz in Harlem; member, Board of Koret Foundation; and chairman of the Koret Israel Economic Development Fund tiations possible the United States adopted specific policies, including • Regime acceptance. The U.S. refrained from activities aimed at destroying the Soviet regime it was seeking to influence, while vigorously denouncing its political and moral legitimacy. • Limited linkage. Negotiations on human rights, arms control, regional issues, and bilateral relations were pursued without linkage to Soviet conduct, enabling negotiations to proceed while the United States responded firmly through deeds. • Rhetorical restraint. Reagan vigorously criticized the Soviet system and its behavior, but promised not to “crow” when the Soviets agreed to U.S. proposals, enabling Soviet leaders to avoid being seen as capitulating to U.S. demands.





Q: You are a well-known and respected authority and commentator on the situation in the Middle East. What are your thoughts about the recent report by the Iraq Study Group? A: The Iraq Study Group’s recommendation that the Bush administration drop its preconditions and negotiate with Syria and Iran has been praised as a “no-brainer”—and condemned as an improper effort to reward rogue regimes. Neither reaction is correct. Q: What is a correct reaction? A: Negotiating with enemies can be a useful aspect of effective diplomacy. But successful negotiations with enemies result not from the talks themselves but from the diplomatic strategy that accompanies them. The group’s recommendations deserve support but must be effectively integrated into President Bush’s strategy of ending state-sponsored terror. Q: One of the key questions to emerge postreport is this: Should the United States negotiate with Syria and Iran? What are your thoughts? A: The arguments against negotiating with Syria and Iran were also made against negotiating with the Soviet Union and by some of the same people. Soviet misconduct easily matches that



of Syria or Iran in aggression, oppression, murder, support for terrorist groups, and mendacity. President Reagan challenged Soviet behavior by supporting groups fighting communist intervention, building the military, strengthening NATO, condemning human-rights violations, commencing a missile-defense program, and conveying the message of freedom in every way possible. But he was also prepared to negotiate with the Soviet Union. Q: What would you say is the difference between then and now on this issue? A: [Then U.S. secretary of state] George Shultz supported the efforts to put pressure on the Soviets for their misconduct, but he sought to negotiate with the Soviets in an attempt to increase stability, reduce nuclear weapons, attain freedom for oppressed groups, and enhance understanding. To make nego-

• Self-interest. U.S. negotiating policy was based on convincing the Soviets to act in their own best interests. Q: So much of the issue revolves around the use of diplomacy. What do you think of the ISG’s proposals in this area? A: The Iraq Study Group’s “external” strategy for Iraq contains several elements necessary for successful diplomacy: the need for both incentives and “disincentives”; negotiations “without preconditions”; and negotiations that are “extensive and substantive,” requiring a balancing of interests. The general incentives identified by the group are unlikely, however, to lead to constructive discussions. Although Syria and Iran should realize that preventing a breakdown in Iraq is in their interests, they see great advantages in having the U.S. lose strength and credibility in a costly effort to help a state they are relieved to see powerless. Q: Don’t they know what we expect of them? And if so, what is the point of negotiating unless they are prepared to change their behavior? A: The notion that they will help the U.S. in Iran in order to have “enhanced diplomatic relations” with the U.S. assumes that states will do what they know the U.S. wants simply because Washington will not otherwise talk to them. The pronouncements that accompany this Bush policy exemplify the sort of rhetoric that discourages cooperation. Q: Still there must be an upside for someone or some side in this … A: The incentives proposed for negotiating with Syria are, in fact, concrete and substantial. Syria would benefit economically from a stable Iraq, and getting back the Golan Heights would give President Bashar Assad’s standing a much needed boost. Syria has no deep commitment to Hezbollah or Hamas to prevent it from accepting peace with Israel and increased cooperation in Iraq, Lebanon, and the Palestinian areas, in exchange for the Golan and a constructive role in the area. Q: What other problems do you anticipate in the negotiation with Syria? A: The Iraq Study Group too casually assumes that the U.S. can secure “Syria’s full cooperation with all investigations into political assassinations in Lebanon.” The “full cooperation” of a sovereign state in such situations must be negotiated, rather than made a precondition. Q: And regarding Iran, what do you think? A: The Iraq Study Group is probably right that Iran is unlikely to agree to negotiate with the U.S. to bring stability to Iraq. The distrust between the U.S. and Iran suggests that negotiations between them should commence on limited issues, in a noncontroversial forum. The U.S./Iran Tribunal in The Hague might well work. Iran resents the fact that many of its significant claims against the U.S. remain unresolved after more than 20 years. The U.S. should offer to negotiate these claims on an expedited basis. Q: What would constitute success when considering Iran? A: A successful negotiation will include Iranian demands, such as an end to efforts at regime change. Major change in Iran is in fact more likely to result from normalization and internal activities than from opposition groups seeking to overthrow the regime. But the key measure of the success of any effort to negotiate with Syria or Iran depends on whether we can change the conduct of either. Q: And what should the United States focus on? A: A clear warning that Syria and Iran must end all forms of state-sponsored terrorism, as now required by Security Council resolutions, must be a central element of U.S. negotiating policy, backed with meaningful preparations for action. The power of the U.S. to inflict damage on its enemies remains substantial, despite current difficulties in Iraq. Although it is now difficult to contemplate military action against Syria or Iran, continued sponsorship of terror against other states will eventually provoke the American people, if not the international community, to exercise their right of self-defense through affordable wars of destruction instead of costly nation-building exercises. Q: Who can credibly deliver this message? A: No one can convey this message more effectively than George Bush, who remains determined to prevent a future of state-sponsored terror. He should accept the Iraq Study Group’s sound message on negotiating with enemies but supplement it with the toughness that effective diplomacy demands.

HOOVER INSTITUTION WEBSITES www.hoover.org Comprehensive information about the Institution, its fellows, work, scholarly output, and outreach www.hooverdigest.org Quarterly Hoover Digest available online www.educationnext.org Presents the facts about education reform, gives voice—without fear or favor—to worthy research, sound ideas, and responsible arguments. www.policyreview.org Is the preeminent publication for new and serious thinking and writing about the issues of our day. At this site, find select articles from the current issue as well as an archive of back issues, subscription information, and useful links to other websites. www.chinaleadershipmonitor.org Seeks to inform the American foreign policy community about current trends in China’s leadership politics and in its foreign and domestic policies.

HOOVER INSTITUTION NEWSLETTER The Hoover Institution Newsletter is published quarterly and distributed by the Hoover Institution, Stanford University, Stanford, CA 94305-6010, 650/7230603, fax, 650/725-8611. ©2007 by the Board of Trustees of the Leland Stanford Junior University. Send comments and requests for information to Newsletter Editor Michele M. Horaney, APR, Manager of Public Affairs. Staff: Public Affairs Writer: LaNor Maune, Newsletter Production: Wm Freeman, Stanford Design Group. The Hoover Institution Home Page is on the World Wide Web at www.hoover.org. The Hoover Institution on War, Revolution and Peace, Stanford University, founded in 1919 by Herbert Hoover, is one of the leading centers in the world devoted to interdisciplinary scholarship in domestic and international affairs.






Why We Hold Back.” He believes that the end of white supremacy has challenged those who were freed as a result. Finding freedom a burden and an overwhelming responsibility, conditions he called bad faith, they commit violent acts as a way to compensate. White guilt, he believes, is why Americans do not respond to such attacks. He concluded by warning that “we do not know how to fight this enemy; we are too civilized to defend ourselves.” Discussions of international issues included remarks on the North Korea nuclear weapons program by former secretary of defense William Perry, now a Hoover senior fellow and a professor at Stanford University. Perry recommended that the best course of action is diplomacy but diplomacy backed with force. A. Michael Spence, Hoover senior fellow and former dean of Stanford University’s Graduate School of Business, spoke on “India’s and China’s Economic Influence in the Decades to Come,” saying that he foresees the two countries as continuing to grow and, in turn, having tremendous impact on the world economy. “The Benefits of Growth and the Future of Democracy in Latin America” was the subject of remarks by former president of Peru Alejandro Toledo. Toledo, the first indigenous Peruvian to be democratically elected, served as president of the Republic of Peru from 2001 to 2006. In his remarks, Toledo warned that Latin America is losing patience and that social policies directed at extreme poverty must be developed. John Yoo, professor of law at the University of California at Berkeley, in his discussion of “Presidential Power in Time of Crisis,” noted a correlation between pres-

e are living in dangerous times,” said Niall Ferguson, Hoover senior fellow and Harvard history professor, in his talk “The Next War of the World” at the Hoover Institution Fall 2006 Retreat. Ferguson, who first spoke on his book War of the World (Penguin Press, 2006) at the fall 2005 retreat, returned this year to continue discussing that book’s ideas. In addition to the three threats he outlined in 2005 as the principal reasons for twentiethcentury violence—ethnic disintegration, economic volatility, and the decline of empires—he added a fourth, Eastern resurgence. Noting that these threats have resurfaced, he said that the world is now in a situation similar to that of the lead-up to World War I. Shelby Steele, Hoover research fellow, spoke on “Why the Enemy Fights and Niall Ferguson


Richard D. Lamm

William Perry

Benjamin Wittes

Richard Epstein

A. Michael Spence







idents who are seen as great and those who were most aggressive in assuming their rights under the Constitution. Benjamin Wittes, Washington Post columnist, and Richard Epstein, Hoover senior fellow and University of Chicago law professor, addressed judicial and legal issues in their talks. In Wittes’ remarks, based on his recent book Confirmation Wars: Preserving Independent Courts in Angry Times (Hoover Studies and Rowman & Littlefield, 2006), he acknowledged that ideoShelby Steele logical politics has been part of the judicial nomination process since the time of George Washington but believes it is getting worse. There is a twofold threat to today’s nomination process: Legislators ask nominees questions that they cannot answer and pressure would-be judges to conform to the wills of legislators who cannot agree on what qualifications they should demand of nominees. Epstein’s talk discussed the real dangers of the abuse of power that is inherent in the prosecutions of corporations under John Yoo the aggressive memo prepared in January 2003 by Larry Thompson, the then deputy attorney general, which indicated a tough policy that treated corporations like individual persons. But Epstein warned that the analogy does not hold. The great threat from government is not conviction but simple prosecution, when collateral consequences can put a firm out of business by causing a suspension of its licenses, even if it prevails in the criminal case. Faced with that threat, firms will capitulate to conditions that are far removed from the original offense and David Brooks cede to prosecutors the power to decide whether to keep or fire their own CEOs, which has already happened in a number of cases. “It seems too much to ask for self-restraint by prosecutors,” Epstein said, “so that the only remedy looks to be a sharp truncation in the scope of corporate criminal liability that makes the government’s threat so deadly.” The retreat concluded with a panel discussion of the upcoming elections titled “November 2006 and Beyond: Some Implications of the midterm Elections.” The panel included David Brady, Hoover deputy director and senior fellow; Morris Fiorina, Hoover senior fellow; and former California

governor Pete Wilson, a Hoover distinguished visiting fellow. “If Republicans went back to nominating candidates like Pete Wilson, they would win,” said Fiorina. Fiorina also discussed California Proposition 187, a 1994 ballot initiative designed to deny illegal immigrants services, which voters passed but which was overturned by a federal court. Although some see this measure as rallying Latino voters who have influenced elections since and undermined the Republican Party, Fiorina suggested that this was not as important as the stature of the candidates whom Republicans have nominated. Brady outlined a survey that he, Fiorina, and Douglas Rivers, a Stanford political science professor, conducted on the November 2006 elections. Nationally, Brady said the Democrats would probably regain the House and Republicans would hold the Senate. He didn’t believe that 2006 would be for Democrats what 1994 was for the Republicans. In his remarks, Wilson added that “California is not a hopelessly blue state” and agreed that this is not another 1994. Although Republicans might lose seats in the House, Wilson predicted, the Senate would be 50-50, with Vice President Dick Cheney “chained to the desk.” In addition to the plenary speakers, Hoover fellows conducted conversations on a variety of topics, including Stephen Haber, Hoover senior fellow, on “How Mexico Avoided Turning Left: The 2006 Presidential Election and Its Implications for the Future of Mexico’s Politics and Economy”; Peter Henry, a Stanford University professor and former Hoover national fellow, on “A Quick Tour of the World Economy”; Kenneth Jowitt, Hoover senior fellow, on “Some Important Countries”; Eugene Volokh, University of California at Los Angeles professor, on “In Defense of the Slippery Slope”; Sidney Drell, Hoover senior fellow, and George P. Shultz, Hoover distinguished fellow, on “A Report on the Recent Hoover Conference: ‘Implications of the Reykjavik Summit on Its 20th Anniversary’”; Victor Davis Hanson, Hoover senior fellow, on “Illegal Immigration: The Crisis Deepens”; Michael McFaul, Hoover senior fellow, on “Stopping Iran from Getting the Bomb”; continued on page 10

continued from page 9 John Taylor, Hoover senior fellow, on “Exchange Rate Diplomacy: China, Japan, and the United States”; Michael Boskin, Hoover senior fellow, on “Beyond the Headlines and Political Hyperbole: What’s Really Going On in the American Economy”; Dinesh D’Souza, Hoover research fellow, on “Islamic Fundamentalism, Christian Fundamentalism: Is Religion the Problem?”; Eric Hanushek, Hoover senior fellow, on “Can California’s Schools Be Fixed?”; and Kiron Skinner, Hoover research fellow, on “Turning Points in Ending the Cold War.” The retreat opened with remarks by Richard D. Lamm, former governor of Colorado, at a dinner on October 29. In his remarks, titled “The Ten Commandments of Community,” he asked “What is the social glue that holds America to-

gether?” In his view the glue includes not taking community for granted, great leaders and citizens, freedom, similarities among residents, social order, a planned future, identity, social infrastructure, and civic-minded participation from residents. He concluded his list with a challenge to members of the audience: What did they think should be included? David Brooks, columnist at the New York Times, political commentator, and author, discussed the November 7 election, which was about a week away when he spoke on October 30. Brooks addressed the state of conservatism and the Republican Party in the United States, saying he believes the best hopes lie in organizations such as the Hoover Institution. Centers such as Hoover—not the offices of politicians in Washington—are the places, he said, where solid ideas are developed and where issues such as the influence of Muslim culture, free trade, human capital, and entitlements are fully and honestly explored.



hen a credit card company asks you to fill out an application, do you think about what happens to the information you provide? Like most Americans who have applied for a credit card or conducted some type of financial transaction, whether it’s in person, online, or over the phone, you have probably provided financial and other personal information with little thought to what becomes of it. In his talk “No Place to Hide: Our Emerging Surveillance Society,” Hoover media fellow Robert O’Harrow, a reporter with the Washington Post and author of No Place to Hide: Behind the Scenes of Our Emerging Surveillance Society, discussed how the government is creating a national intelligence infrastructure with the help of private companies as part of homeland security. O’Harrow outlined the rising domestic surveillance trends that he believes will shape society for the rest of our lives. The information provided through countless routine transactions is not kept private but, according to O’Harrow, becomes part of a data bank created by private industry. In addition, companies that collect such information often share it with government, which is one of O’Harrow’s main concerns. Private companies can collect information that the government cannot and are not held accountable. All this has been accomplished, O’Harrow warns, without public debate or oversight by our elected representatives.

The event on Monday, November 6, was sponsored by the William and Barbara Edwards Media Fellow Program of Hoover Institution and the Stanford Alumni Association. The Edwards Media Fellows Program allows print and broadcast media professionals to spend time in residence at the Hoover Institution. More than 100 of the nation’s top journalists have visited the Hoover Institution recently and interacted with Hoover fellows on key public policy issues, including • Paul Kane, Roll Call, November 27–December 1 • Jonathan Kaplan, The Hill, December 4–8 • Markos Kounalakis, the Washington Monthly, December 4–8 • Michael Crowley, New Republic, December 11–15 • David Bosco, Foreign Policy, December 11–15 • James VandeHei, Washington Post, December 11–15 • Arthur Allen, Slate, January 1–5 • Margaret Talbot, New Yorker, January 1–5 • Gregg Easterbrook, New Republic, January 8–12 • David Whitman, U.S. News and World Report, January 8–12 • Patrice Hill, Washington Times, January 15–19 • John Diamond, author, January 15–19 • G. Pascal Zachary, freelance, January 22–26 • Kristen Mack, Houston Chronicle, January 22–26 • Dick Meyer, CBS, January 22–26 • Anthony Depalma, New York Times, January 29– February 2 • Michael Grunwald, Washington Post, January 29– February 2 • Charles Lane, Washington Post, January 29–February 2 • Joel Stein, Los Angeles Times, February 5–9 continued on page 11


continued from page 2 In addition to his position as a senior fellow at the Hoover Institution, Friedman was the Paul Snowden Russell Distinguished Service Professor Emeritus of Economics at the University of Chicago, where he taught from 1946 to 1976, and was a member of the research staff of the National Bureau of Economic Research from 1937 to 1981. He was widely regarded as the leader of the Chicago School of monetary economics, which stresses the importance of the quantity of money as an instrument of government policy and as a determinant of business cycles and inflation. In addition to his scientific work, Friedman wrote extensively on public policy, always with a primary emphasis on the preservation and extension of individual freedom. His most important books in this field were (with his wife, Rose) Capitalism and Freedom (University of Chicago Press, 1962); Bright Promises, Dismal Performance (Thomas Horton and Daughters, 1983), which consists mostly of reprints of columns he wrote for Newsweek from 1966 to 1983; (also with Rose) Free to Choose (Harcourt Brace Jovanovich, 1980), which complemented a ten-part television series of the same name shown on the Public Broadcasting Service (PBS) network in early 1980; and (with Rose) Tyranny of the Status Quo (Harcourt Brace Jovanovich, 1984), which complemented a three-part television series of the same name, shown on PBS in early 1984. He was a member of the President’s Commission on an AllVolunteer Armed Force (his opposition to conscription helped end the draft) and the President’s Commission on White House Fellows; he was also a member of the President’s Eco-

nomic Policy Advisory Board (a group of experts from outside the government named in 1981 by President Ronald Reagan). Friedman was active in public affairs, serving as an informal economic adviser to Senator Barry Goldwater in his unsuccessful campaign for the presidency in 1964, to Richard Nixon in his successful 1968 campaign, to President Nixon subsequently, and to Ronald Reagan in his 1980 campaign. He published numerous books and articles, most notably A Theory of the Consumption Function, The Optimum Quantity of Money and Other Essays, and (with A. J. Schwartz) A Monetary History of the United States, Monetary Statistics of the United States, and Monetary Trends in the United States and the United Kingdom. Friedman served as president of the American Economic Association, the Western Economic Association, and the Mont Pelerin Society. He also was a member of the American Philosophical Society and the National Academy of Sciences. He was awarded honorary degrees by universities in the United States, Japan, Israel, and Guatemala, as well as the Grand Cordon of the First Class Order of the Sacred Treasure by the Japanese government in 1986. Friedman received a B.A. degree in 1932 from Rutgers University, an M.A. in 1933 from the University of Chicago, and a Ph.D. degree in 1946 from Columbia University. Two Lucky People, his and Rose D. Friedman’s memoirs, was published in 1998 by the University of Chicago Press. Milton Friedman was born July 31, 1912, in Brooklyn, N.Y., the fourth and last child and first son of Sarah Ethel (Landau) and Jeno Saul Friedman. He and his wife, Rose Director Friedman, who survives, were married in 1938. He is also survived by their two children, Janet Martel and David Friedman, four grandchildren, and three great-grandchildren.

continued from page 5 on K–12 Education and president of the Thomas B. Fordham Foundation, was named as one of the 20 most influential individuals in education. Microsoft founder Bill Gates held the top spot as the single most influential person in education in the past decade. In a statement, EPE director Christopher Swanson said the study provides “a unique look at the power-brokers in Amer-

ican education who have shaped much of what happens in our nation’s classrooms over the last 10 years. The influence rankings also shed some light on the movers and shakers to watch in the next decade.” Education Next is a scholarly journal published by the Hoover Institution committed to looking at hard facts about school reform. Other sponsoring institutions are the Harvard Program on Education Policy and Governance and the Thomas B. Fordham Foundation.

continued from page 10 • Romesh Ratnesar, Time Magazine, February 5–9 • Philip Terzian, Weekly Standard, February 5–9

• Rebecca Corbett, New York Times, February 12–16 • Stuart Taylor, National Journal, February 12–16 • Ianthe Dugan, Wall Street Journal, February 19–23 • Victor Matus, Weekly Standard, February 19–23 • Bob Davis, Wall Street Journal, February 26–March 2







Societal health as an essential driver of national economic development is clear. Although the details of this relationship may change over the course of economic development in an emerging nation, it can be a critical bar to successful economic progress. If nothing else, governments owe their populations the power and freedom to control their own lives and health. For decades, government-run poverty programs in these countries have floundered until the people themselves took charge. Allowing that sort of creative collaboration between individuals and the private sector would be powerful. And such a collaboration isn’t just for economic development and prosperity; people’s lives depend on it. I Scott W. Atlas, senior fellow, Washington Times, January 24, 2007 California should not, contra Gov. [Arnold] Schwarzenegger, do new regulatory harm; rather it should repeal existing regulations that cause harm—so as to make health insurance even more affordable. There is one other way to deregulate: The California government should allow any Californian to buy health insurance from any willing insurer in the state and be subject to the regulations of that state. That way, people could shop for the degree of paternalism they want. If they want insurance from a state that requires many coverages, they could do so and pay the high premiums that result. If they want bare-bones coverage, they could do so also. The result would surely be that some of the current uninsured would buy insurance. I David R. Henderson, research fellow, Wall Street Journal, January 10, 2007 It would be useful if we stopped pretending or alleging that China’s exchange rate policies are the root cause of our trade deficit. If our savings rate is stubbornly stuck below our investment rate, and if China does allow its currency to revalue over time, then we will simply run a deficit with another collection of countries, and from a domestic point of view, nothing much will have changed. Except that we won’t have this subject to discuss with China anymore. I A. Michael Spence, senior fellow, Wall Street Journal, January 5, 2007 The great mistake Americans made after the civil rights victories of the ‘60s was to allow race to become a government-approved means to power. Here was the incentive to make racism into a faith. And its subsequent life as a faith has destroyed our ability to know the reality of racism in America. Today we live in a terrible ignorance that will no doubt last until we take race out of every aspect of public life—until we learn, as we did with religion, to separate it from the state. I Shelby Steele, research fellow, Los Angeles Times, December 23, 2006 We have an important general lesson to learn. No legal or social innovation should be evaluated on the cheerful assumption that deft government action can excise a single identified imperfection. The nationalization—or regulation—that removes one imperfection is likely to create another of equal or greater magnitude. The wise approach should avoid bold initiatives without a clear warrant for changing the status quo. And none exists for this dramatic revision of the patent system. I Richard A. Epstein, Peter and Kirsten Bedford Senior Fellow, Financial Times, November 7, 2006 [Teacher] unions cannot hold back progress forever. Incentive pay is an idea whose time has come. It is an idea that is so unambiguously superior to the status quo—paying good teachers and mediocre teachers the same—that the need for reform is obvious. We can fine-tune the details of who to do it as fairly and effectively as possible. But the direction we need to be moving in is clear. I Terry M. Moe, senior fellow, Wall Street Journal, October 31, 2006

China Leadership Monitor— www.chinaleadershipmonitor.org I China-Taiwan-United States: “Taiwan: All Politics, All the Time,” by Alan D. Romberg I Military Affairs: “So Crooked They Have to Screw Their Pants On: New Trends in Chinese Military Corruption,” by James Mulvenon

I Party Affairs: “The Problem of Hu Jintao’s Successor,” by Alice Miller Education Next—www.educationnext.org I “Games Charter Opponents Play: How Local School Boards—and Their Allies—Block the Competition,” by Joe Williams continued on page 13

OOO Senior Fellow Larry Diamond discussed findings of the Iraq Study Group on KGO-TV (ABC), San Francisco, on November 29, MSNBC News on November 16, and Day to Day on National Public Radio on November 13. He was an adviser to the panel, which included two Hoover Institution fellows, Senior Fellow William Perry and Distinguished Visiting Fellow Edwin Meese. The Iraq Study Group was also discussed by Senior Fellow Thomas Henriksen on KGO-AM (ABC), San Francisco, on November 12 and Michael McFaul on Fox News Live on November 12. OOO Developments in Iraq also were discussed by Senior Fellow Abraham Sofaer on KGO-TV (ABC) and KGOAM radio (ABC), both San Francisco, on January 15 and on KGO-TV on December 13. Larry Diamond was featured on the topic on KGO-AM radio (ABC) on January 15; Talk of the Nation on National Public Radio on January 11; and CNN Newsroom on Cable News Network on January 10 and December 6; and KCBS-AM (CBS), December 29.






OOO Research Fellow Tod Lindberg was a guest on The Diane Rehm Show a syndicated radio program, on December 8, discussing the situation in Iraq. OOO Research Fellow Abbas Milani discussed the situation in Iraq, Syria, and Iran on KGO-AM radio (ABC), San Francisco, on November 11. Milani is a member of the Iran Democracy Project at Hoover. OOO Proposals by President George W. Bush to establish a library and research center similar to the Hoover Institution were featured on KXXV-TV (ABC) in WacoTemple, Texas, on January 23 and 24; World News with Charles Gibson on ABC on January 23; KABC-TV (ABC) on January 23; and Morning Edition on National Public Radio on January 17. OOO Senior Fellow David Brady was interviewed about the polarization of American politics and the new volume he coedited, Red and Blue Nation? Characteristics and Causes of America’s Polarized Politics, on Morning Edition on National Public Radio on January 22.

On December 6, he appeared on The Today Show on NBC TV; KPIX-TV (CBS), San Francisco; and KCBS –AM (CBS) radio, San Francisco. OOO Richard Epstein, the Peter and Kirsten Bedford Senior Fellow, was featured on C-SPAN on November 17. He was part of a panel discussing executive power in wartime during a televised meeting of the Federalist Society. OOO Senior Fellow Michael McFaul addressed the poisoning of Alexander Litvenenko in London on November 25 on Fox News. McFaul focuses on Russian political development. OOO Research Fellow David Henderson discussed health insurance coverage on The Wall Street Journal This Morning a syndicated radio program, on January 10.

I “Photo Finish: Teacher Certification Doesn’t Guarantee a Winner,” by Thomas Kane, Jonah Rockoff, and Douglas Staiger I “Judging Money: When Courts Decide How to Spend Taxpayer Dollars,” by Josh Dunn and Martha Derthick I “The ‘Crits’ Capture Presidential Power: Top Education Researchers Denounce Scientific Research,” by Nathan Glazer Hoover Digest—www.hooverdigest.org I “Tribute to Milton Friedman,” by a number of authors including George P. Shultz, Gary Becker, David Brooks, William F. Buckley Jr., Niall Ferguson, and John Raisian

I The War on Terror: “Five Years On,” by Victor Davis Hanson I The Middle East: “Solution and Resolution,” by Abraham D. Sofaer I Intelligence: “The Job the FBI Can’t Do,” by Richard A. Posner Policy Review—www.policyreview.org I “Iraq: Last Chance: A Political Settlement before Any Withdrawal,” by Robert Zelnick I “The Scapegoats among Us: Blame-Shifting after 9/11,” by Mary Eberstadt I “Liberal Education, Then and Now: J. S. Mill’s Idea of a University and Our Own,” by Peter Berkowitz












Courting Failure: How School Finance Lawsuits Exploit Judges’ Good Intentions and Harm Our Children Eric A. Hanushek, editor
ISBN: 978-0-8179-4782-8

Perhaps the most significant recent change in policy discussions about school finance has been the introduction of the courts’ making decisions about funding schemes. The focus of the lawsuits has been funding disparities across school districts, which, generally, have led to increased shares of funding. Yet, until recently, virtually no subsequent analysis has investigated whether student outcomes tended to be more equal after spending was equalized. Courting Failure (Education Next Books, Hoover Institution Press, 2006) examines the issues involved in school funding adequacy in light of recent court cases and shows that judicial actions regarding school finance—related to either equity or adequacy—have not had a beneficial effect on student performance. Eric A. Hanushek is the Paul and Jean Hanna Senior Fellow at the Hoover Institution. He serves as a member of the Board of Directors of the National Board for Education Sciences. Charter Schools against the Odds: An Assessment of the Koret Task Force on K–12 Education Paul T. Hill, editor
ISBN: 978-0-8179-4762-0

Charter Schools against the Odds (Education Next Books, Hoover Institution Press, 2006) explains how these policies can be amended to level the playing field and give charter schools—and the children they serve—a fairer chance to succeed. The contributors show how charter schools have coped with the many challenges they face. They also present ideas for policy changes and outline strategies for strengthening this school system. Editor Paul T. Hill is a member of Hoover’s Koret Task Force on K–12 Education and a research professor in the Daniel J. Evans School of Public Affairs and director of the Center on Reinventing Public Education, both at the University of Washington. Red and Blue Nation? Characteristics and Causes of America’s Polarized Politics, Pietro S. Nivola and David W. Brady, editors
ISBN: Cloth, 978-0-8157-6082-5 Paper, 978-0-8157-6083-2

Charter schools—born into a hostile environment—are publicly funded schools operated by independent groups under contract with government agencies that provide a valuable alternative to traditional, bureaucratically operated school districts. But state laws and policies have stacked the deck against them by limiting the number of charter schools allowed in a state, forbidding for-profit firms from holding charters, forcing them to pay rent out of operating funds, and many other ways.

Analysts and pundits increasingly perceive a widening gulf between “red states” and “blue states.” Yet the research to support that perception is scattered and sometimes difficult to parse. America’s polarized politics, it is said, poses fundamental dangers for democratic and accountable government. Heightened partisanship is thought to degrade deliberation in Congress and threaten the integrity of other institutions, from the courts to the media. This important new book, Red and Blue Nation? edited by Pietro S. Nivola and David W. Brady (Brookings Institution Press and Hoover Institution Press, 2007), gets to the bottom of this perplexing issue. This first of two volumes cosponsored by the Brookings Institution and the Hoover Institution carefully considers the extent to which polarized views among political leaders and activists are reflected in the population at large. Pietro S. Nivola is a vice president of the Brookings Institution, where he is the director of Governance Studies. David W. Brady is deputy director and senior fellow at the Hoover Institution; the Bowen H. and Janice Arthur McCoy Professor at the Stanford Graduate School of Business; and professor of political science in Stanford University’s School of Humanities and Sciences.













Ever Wonder Why? And Other Controversial Essays by Thomas Sowell
ISBN: 0-8179-4752-3

Thomas Sowell takes on a range of legal, social, racial, educational, and economic issues—along with “the culture wars”—in Ever Wonder Why? And Other Controversial Essays (Hoover Institution Press, 2006), his latest collection of controversial, always thought-provoking, essays. From “gun control myths” to “mealy mouth media” to “free lunch medicine,” Sowell gets to the heart of the matters we all care about with his characteristically unswerving candor. With Ever Wonder Why?— drawn from the best of his popular syndicated newspaper columns—Sowell takes dead aim at self-righteous and self-important forces in government, media, education, and other areas of society, offering thoughtful perceptions, commonsense insights, and straightforward honesty from one of conservatism’s most articulate voices. Thomas Sowell is the Rose and Milton Friedman Senior Fellow on Public Policy at the Hoover Institution, Stanford University. Among his published works are Basic Economics, Race and Culture, and A Conflict of Visions. He has also published in both academic journals and the popular media including the Wall Street Journal, the New York Times, Forbes, and more than 150 newspapers that carry his nationally syndicated column. Global Financial Warriors: The Untold Story of International Finance in the Post-9/11 World by John Taylor
ISBN: 0-393-06448-4

Former U.S. Treasury undersecretary John B. Taylor, the Bowen H. and Janice Arthur McCoy Senior Fellow at the Hoover Institution, reveals the true extent of the financial battle against terrorism since September 11, 2001, in Global Financial Warriors: The Untold Story of International Finance in the Post-9/11 World (W. W. Norton & Company). This is a boots-on-the ground view of the complex challenges faced by America’s money minders in the wake of the country’s worst-ever terror attack. A consummate pragmatist and a keen observer of political bureaucracy, Taylor writes a roadmap for public servants aiming to serve their country and the world. No matter what the task, no matter how difficult, transparency and accountability are key, as is the leadership skill necessary to turn words and plans into effective, on-theground action. Liberal Reform in an Illiberal Regime: The Creation of Private Property in Russia, 1906–1915 by Stephen F. Williams
ISBN: 978-0-8179-4722-4

Mention of the war on terror usually calls up images of United States’ soldiers fighting in Afghanistan and Iraq, the homeland security apparatus, and armed National Guardsmen stationed at airports and border crossings. But there’s another major front in the war on terror, and its battles are carried out in the largely invisible, high-tech, and interconnected world of global finance.

When the Soviet Union fell in 1991, many speculated about the value of Russia’s historical experience with market-oriented reform. Liberal Reform in an Illiberal Regime (Hoover Institution Press, 2006) tells how, in 1906, on the eve of world war and cataclysmic revolution, the Russian government undertook perhaps the most sweeping “privatization” in history, radically changing the property rights regime faced by 90 million peasants. Stephen F. Williams’ examination of property rights reforms in Russia before the revolution reveals the advantages and pitfalls of that radical transformation toward liberal democracy at the initiative of a government that could not be described as either liberal or democratic. Judge Stephen F. Williams, a Harvard Law School graduate, worked in private practice and then served as an assistant U.S. Attorney for the Southern District of New York in the 1960s. He taught at the University of Colorado School of Law until his appointment in 1986 to the U.S. Court of Appeals for the D.C. Circuit.




ormer Peruvian president Alejandro Toledo has been named a distinguished visiting fellow at the Hoover Institution. The appointment was announced by John Raisian, Hoover director, who added that “it is an honor and privilege to welcome former president Toledo to the Hoover Institution as a distinguished visiting fellow. He is a remarkable person, having risen from a situation of poverty to the leader of Peru. Education was key in his development, including advanced degrees from Stanford. He has accomplished much, both professionally and personally. We will all benefit from his experience and look forward to many interactions with him as he joins the Stanford community.” Toledo served as constitutional president of Peru from July 2001 to July 2006. In addition to his Hoover fellowship, he also is a distinguished fellow in residency at the Center for Advanced Study in the Behavioral Sciences at Stanford. Toledo earned his bachelor’s degree in economics and business administration at the University of San Francisco

in San Francisco, California. He later attended Stanford University, where he obtained two master’s degrees and a P.Q. in the economics of human resources in the School of Education. During his years in academe, Toledo was a visiting scholar at Harvard University and at Waseda University in Tokyo. He has been a full professor at the Graduate School of Business and Administration in Peru. Before becoming president of Peru, Toledo worked for the World Bank, the Interamerican Development Bank in Washington, the United Nations in New York, and the Organisation for Economic Cooperation and Development in Paris. His work now focuses on opening access to quality education for the large indigenous populations in Latin America so that men and women in those regions can also become presidents of their countries, he said.



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