AEI Does Itself A Disservice With Obvious Lies

AEI Does Itself A Disservice With Obvious Lies

How many Americans think income inequality is our greatest challenge, as President Obama asserts?

According to what, at least until now, has been one of the most respected pro-business research organizations in Washington, the number of Americans holding this view totals just 315.

The figure of 315 comes from James Pethokoukis, a “scholar” at the American Enterprise Institute. It was published Monday without irony or even a hint that it was a poor attempt at humor.

Pethokoukis is a writer with a well-established reputation for pieces that events and the passage of time showed to be wrong in premise, context and specifics.

He began his AEI blog, which National Review Onlinereprinted:

Forget about the 1 percent versus the 99 percent. It’s really more like the 0.000001 percent versus everybody else. A tiny group — mostly comprising the Obama White House, a bunch of Washington Democrats, progressive economists, and the media elite — continues to fixate on income inequality as America’s greatest challenge.

Most everybody else, the 99.999999 percent, sees things differently. Surveys continue to show Americans most worried about jobs and economic growth, not the income gap between the top and bottom.

The idea that only 315 Americans think inequality is our top economic problem will not pass muster even with Fox News.

The latest Fox News poll finds (at page 10) that 12 percent of Americans rank inequality as “the most important economic issue facing the country.”

If you count everyone, using the standard Pethokoukis did, that means 37.8 million of us, not 315. But, hey, Pethokoukis’s unsourced figure is only off by a factor of 120,000. Close enough for AEI, evidently.

And, of course, Pethokoukis cited no source because he just made it up. In that he is like too many on the right in America, who mix fact and fantasy and thus sow confusion on all sorts of issues that degrade our civic debate. (The left and center have people who do this, too, but they are not sponsored by the likes of AEI.)

Two years ago Jonathan Chait deconstructed one particularly egregious piece of nonsense on inequality by Pethokoukis. Chait’s New York magazine piece was titled “Inequality and Bullshit.

Chait drew on the brilliant and hilarious short book by Harry Frankfurt, a retired Princeton philosophy professor, titled On Bullshit. In 7,000 words Frankfurt lays out a theory of commentary that does not rise to outright lying, but bears little connection to truth, which describes Pethokoukis’ writings quite well.

Chait noted that Pethokoukis, in a piece on a new official report on income inequality, “doesn’t directly challenge any of these facts, though he wants his audience to think he does. He cites a bunch of figures that pick away at pieces of the general picture…”

Why should progressives care about the bullshit that AEI spreads when it publishes Pethokoukis?

To improve America so it can be a shining light of what the human spirit can accomplish, our nation needs a thoughtful conservative movement, one that argues for holding on to the tried and true, not just holding on to what is, as some conservatives have always done (see slavery, arguments for its economic necessity).

America needs constructive and serious conservative thinkers because their work will promote public policy debates rooted in facts and reason, as those sons of the Enlightenment, the Founders, intended.

And this, in turn, will foster better-reasoned arguments and more effective policy solutions from those whose vision is of what America can in time become rather than what it is. That is because they will have to address serious critiques, not bull.

In previous columns about a David Brooks column on inequality and National Review’sMark Steyn on climate research, I showed how failure to do basic reporting produced nonsense in both cases and a lawsuit against Steyn and National Review that may doom that publication.

The tolerance for low-grade reporting, or none at all, by writers on the right does not help our democracy endure, but instead tears at its fabric.

Since Pethokoukisian-type bull is not just tolerated, but profitable and voter-energizing, we get politicians, pundits and primetime personalities who consistently spout provable nonsense. This continues even when as time passes and facts emerge from events, their comments are repeatedly shown to be false or misleading and, sometimes, calculated lies (see G.W. Bush, tax cuts will make everyone better off.)

It is one thing when the Fox News channel gives a home to people who either just make it up or distort facts beyond reason.

After all Glenn Beck, who used to work there, and Sean Hannity who still does, say they are not journalists but entertainers, at least when it is convenient to do so. Yet no disclaimer appears on the screen when their style of entertainment is broadcast, just the logo for the Fox News channel, which is among the reasons I mock it as Faux News.

By melding entertainment and news, Rupert Murdoch and his Fox chief, Roger Ailes, grow ever richer, a powerful incentive. Unlike Jon Stewart, they are not upfront about any of it being a joke or, in the case of many Fox broadcasts, a joke on the audience.

But Pethokoukis holds forth at a nonprofit organization that declares itself allied with truth as best as it can be discerned, not profit. He is listed as a “scholar” at the American Enterprise Institute, a nonprofit pro-business research house whose website says it is “dedicated to research and education.”

AEI is a big deal in Washington policy making. Its studies, reports and expert commentary carry weight with both Democrats and Republicans. AEI is treated respectfully and its actual experts are often featured by serious news organizations like PBS, NPR, The New York Times and The Wall Street Journal.

It also has a reputation for the integrity of its numbers. I often find fault with AEI interpretations (and sometimes agree with them), but I always have treated its reports with respect, at least until now.

AEI annual reports disclose only a summary of its finances, which is considered poor practice for public charities, and gives some hint of how a lightweight like Pethokoukis got in at AEI.

The summary shows that AEI took in $44.4 million last year, earning a surplus of $11.2 million after expenses, a remarkable figure given how many public policy nonprofits struggle just to keep the lights on.

AEI’s tax return, available at, shows revenues are growing fast. It took in $38.8 million in 2012 and $34.6 million in 2011.

Pay at AEI is very good. Resident scholar Christopher DeMuth made a base salary of $303,247 in 2012 plus other compensation that brought his total pay to just under $1.5 million – four years after he retired as AEI president.

That makes AEI somewhat like the top 1 percent of individuals, who captured 94.5 percent of the income growth between 2009 — when the Great Recession officially ended — and 2012. During those same years the bottom 90 percent had negative income growth of almost 16 percent.

Those figures show AEI has the resources to hire first-rate talent. The question, then, is why the American Enterprise Institute sullies its good name by calling Pethokoukis a “scholar” and publishing his drivel.

Photo: mSeattle via Flickr

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