US-Canada

WARNING: This site deals only with the corporate corruption of science, and makes no inference about the motives or activities of individuals involved.
    There are many reasons why individuals become embroiled in corporate corruption activities - from political zealotry to over-enthusiastic activism; from gullibility to greed.
    Please read the OVERVIEW carefully, and make up your own mind.

OPINION ONLY

The career of Richard Vedder illustrates how a right-wing libertarian economist from the backwoods of Ohio could flourish in the Republican-aligned, corporate-funded pseudo-academic environment of mainstream USA in the 1980s and 1990s.

His obsessions were clearly ideologically-based and he became a favorite source of pre-determined economic pap for a number of corporate-funded organizations like the Cato, Heritage, Independent Institute, National Chamber Foundation, and the notorious American Legislative Exchange Council (ALEC). Vedder and his associate Lowell Gallaway became masters at recycling studies done for one industry or think-tank, and selling them to another with some cosmetic changes.

The source of his academic prestige, professional promotion, and subsidiary income were obviously derived from many industries and corporations — not just tobacco — but he made a substantial part of his income from cigarette promotion, and clearly had no conscience about supporting an industry which globally kills a few million of their customers each year.

Vedder was an enthusiast for the research funding and prestige provided by ideologically-slanted lobby-organisations, including think-tanks and policy-purveyors like the American Legislative Exchange Council (ALEC) which provided a front for political junkets, and a cosy watering hole for politicians and those seeking to buy influence. SourceWatch identifies ALEC as:

... a corporate bill mill. It is not just a lobby or a front group; it is much more powerful than that.

Through ALEC, the larger corporations and industry lobbyists hand State Legislators their wishlists of legislative changes which are designed to benefit their bottom line.

Corporations fund almost all of ALEC's operations. They pay for a seat on ALEC task forces where corporate lobbyists and special interest reps vote with elected officials to approve "model" bills.

Vedder was, and still is also an enthusiastic associate at the Independent Institute, American Enterprise Institute, the Mackinac Center and Alexis de Tocqueville Institution — all of which worked on commission for the tobacco and other industries with poisoning and polluting problems.

However the only direct evidence we have of Vedder's corporate-support activities come from the tobacco archives — which have 382 documents which carry his name. He was clearly the leader of a small pack of economist which operated out of the Ohio University who were willing to provide propaganda for any industry which paid. [including Professors Lowell Gallaway and David Klingaman]

Richard Vedder became recruited into a network of academic economists secretly working for the tobacco industry through the Tobacco Institute in mid or late 1984. The formal network was set up at about this time by James Savarese (both through his own company and Ogilvy & Mather PR) and Professor Robert Tollison of George Mason University (GMU) — both of whom had worked for the tobacco industry for a number of years.

Tollison and Savarese joined forces to act as contractors and cut-outs, using the Center for the Study of Public Choice at GMU, which supplied the adminstration staff. They recruited ultra-libertarian economics professors at the major state universities through the Public Choice Society and various regional economics societies.

The problem is not that these scientists were ultra-libertarians, and that many of them were Tea-Party disciples of Ayn Rand, Frederick Hayek and/or Ludwig von Misen.

The problem is that these academics

• exploited their trusted position as a teacher at universities to promote dubious corporate view-points contrary to the public good, and that they:
• hid their corporate links from the university administration and staff, and from the public which ultimately paid their salary.
• exploited the public trust in universities and their reputation for independent research, for their own financial benefit.
• allowed the tobacco industry to preview, edit and alter the reports they wrote specifically as industry propaganda (in defiance of scientific ethics).
• wrote op-ed articles which were planted on their local newspaper — misleading both the editors and the readers alike,
• maintained a claim of being 'independent academic/scientists' when writing to politicians or giving evidence at hearings, etc. after being coached by tobacco lawyers.
• generally acting secretly as tobacco industry lobbyists on a cash-for-services-rendered basis.

They were not paid retainers or salaries, but were erratically commissioned to perform specified functions (usually for $1000 to $3000 per project) when the tobacco industry came under attack. Some earned much more — often in the $20-40,000 range — for producing 'independent research' which was customised to produce the desired results.

Payments were never made directly from the tobacco industry to the economists. Commissions were all carefully laundered through Savarese's company or Tollison's GMU operations — and so the economist (wrongly) assumed this would provide deniability if ever challenged over selling out their academic credibility to the merchants of death.

Some key documents

• Professor of Economics, Ohio University, Athens. He appears to have recruited both Lowell E Gallaway and David Klingaman from Ohio University to the cash-for-comments network.

Buckey Institute for Public Policy Solutions

Vedder's group also established (in 1994-95) their own think-tank, the Buckeye Institute for Public Policy Solutions.. There are 101 documents in the tobacco archives which refer to this organisation.     The 1995 Philip Morris regional report from Columbus Ohio records numerous 'donations' made to Ohio organisations including $10,000 to the Buckeye Institute for 'Policy'. and in the 1996 Budget year they provided two further donations of $2,500 each to the Buckeye Center in Dayton "To provide renewed general support for this public policy organization whose mission is to offer market-based solutions to issues effecting all Ohioans in the areas of regulation, education, state spending and taxation the environment and others." [The Tobacco Institute also gave the Buckeye Institute a grant of $1000 a year, which probably means that RJ Reynolds also gave them a regular donation.]

• A comprehensive search of the tobacco archives reveals 455 documents with variations on the name "Richard Vedder"

1962: BA in Economics, Northwestern University

1965: Ph.D. in economics from the University of Illinois followed by teaching stints at University of Colorado, Claremont Men's College, and MARA Institute of Technology.

1979 August: The first Ohio Tobacco Festival was held Aug. 27-29 in Ripley, Ohio, home of the only tobacco auction warehouses in the Buckeye State. All of the tobacco companies generously funded this festival, but RJ Reynolds gave the most. This was the centerpiece of their "Pride in Tobacco" project.

1983 Oct 30: An editorial in the Rocky Mountain News "Are the critics right about Colorado's taxes?" probably triggered the Tobacco Institute's initial interest in him (They had three copies):

A good place to begin is with the evidence that low or moderate taxes (moderate in Colorado's case) spur prosperity. The proof for this is growing, at home and abroad.

    According to Richard K. Vedder, writing in the Journal of Contemporary Studies,

"A systematic comparison between taxation levels and economic growth rates in the various states shows a striking inverse correlation between growth and taxation...."

The correlation holds, he says, even when such attractions as climate, labor attitudes and energy costs are considered.

1985 Jan 31: Hurst Marshall has distributed this Tobacco Institute list of economists from the cash-for-comments network. It has been organise by State, and includes the names of Congressmen they wish to influence.

Attached for your information are the names of economists who have been identified by PR to assist TI on the federal cigarette excise tax issue.

These people are also available to testify at the state level.

    If you feel that this type of witness can be of assistance to you on state cigarette tax issues, please contact Fred Panzer for details and arrangements.

    Please notify your lobbyists as to the availability of these people. At the same time, you may wish to ask them for their ideas or suggestions for other economists within their states.

OHIO (Rep. Gradison, Rep. Pease)
  •   Professor Richard Vedder
      Ohio University, Athens, OH

1985 Feb 7: Judy Wiedemeier of the Tobacco Institute is writing to the regional lobbyists.

Attached for your information, are the names of economists who have been identified by our Public Relation department to assist T.I. on the federal cigarette excise tax issue. These people are also available to testify at the state level.

    If you feel this type of witness can be of assistance to you, please contact me for details and arrangements. If you have any ideas or suggestions for other economists within your state, please let me know, as we are always expanding our resources.

OHIO (Rep. Gradison, Rep. Pease).

    Professor Richard Vedder
Ohio Universi ty Athens, OH

1985 Feb 21: Roger Mozingo of the Tobacco Institute is sending his state directors a list of resources available to fight against excise taxes in their states. Richard Vedder heads their state list of available economic witnesses for Ohio.

1985 Mar: Tobacco Institute document "Federal Markets" on the likely allies the industry has acquired to oppose the earmarking of cigarette excises for healthcare. It also includes a record of their successful activities in each state

Market: OHIO
Positive Actions by Local Allies:
Academics: Professor Richard Vedder (Ohio University) wrote an op-ed article on tax reform that appeared in the Cincinnati Enquirer in April (newspaper in home district of Ways & Means Member Gradison). Copies were sent to Gradison and Ways & Means Member Pease.

See page 4
See Success List

• K Celese Gaspari (Uni of Vermont) — a cash-for-comment economist
• David N Laband (Uni of Maryland) — a cash-for-comment economist
• Fred McChesney (Emory Uni) — a cash-for-comment economist
• Dean Tipps — nominally a union official — actually Citizens for Tax Justice lobbyist
• Allen M Parkman (Uni of New Mexico) — a cash-for-comment economist
• Richard Vedder (Ohio Uni) — a cash-for-comment economist
• Roger Faith (Arkansas State Uni) — a cash-for-comment economist
• Lee Alston (Williams college) — a cash-for-comment economist
• William Hunter (Marquette Uni) — a cash-for-comment economist
• Dennis Logue (Dartmouth College) — a cash-for-comment economist
• William Shughart (George Mason Uni) — a cash-for-comment economist
• Harold Hochman (City Uni of New York) — a cash-for-comment economist
• David Wilhelm (Citizens for Tax Justice) — think-tank lobbyist
• Joseph Jadlow (Oklahoma State Uni) — a cash-for-comment economist
• Robert Ekelund (Auburn Uni) — a cash-for-comment economist
• Thomas Borcherding (Claremont Grad. School) — a cash-for-comment economist

1985 June 6: James Savarase & Associates has submitted its bill to Peter Sparber at the Tobacco Institute. The billing shows that some economists were paid via Robert Tollison, and that an Emory University Symposium had been held with Congressman [Wyche] Fowler.

• Robert D. Tollison (includes services of four economists and expenses) Completion of 40 States' Economist List.  .  .  .  .  .  .  .  .  . $6.055
  
  
• Emory University Symposium with Congressman Fowler (Robert Tollison and Fred McChesney + $1,500 to Emory Law School)     $10,006
  
  
• Public Choice Society Session.  .  .  .  .  .  .  .  .  .  . Total $17,326
  • Robert Tollison ($6863),
  • William Shughart ($2908),
  • Fred McChesney ($2748),
  • Thomas Borcherding ($3033)
  • Dwight Lee (DRL Inc) ($1773)
  
  
  
• Op-ed Project Professional Fees and Expenses.  .  .  .  . Total $23,346
  • Robert Tollison (also laundering payment to four economists) — $15,346
  • A James Heins, Richard Vedder, Todd Sandler, Ryan Amacher, Joseph Jadlow, Henry Butler, RN Ekelund, Fred McChesney — (each $1000)

                        TOTAL was for $56.733.81

1985 Aug 29: Vedder and three other cash-for-comments economists features in this "matte service" distribution. These 'mattes' were sent in high-quality form ready for smaller newspapers to use them directly without needing to typeset.

1985 Dec 12: Annual Report of the Tobacco Institute's Public Relations division lists him in its general spiel explaining its activities over the previous year:

We believe that the active and creative use of experts — our scientists in particular — gives us an edge. But without question, public smoking is our toughest challenge.

    A close second is taxation. In 1985, most of our resources in this area were focused on the federal situation.

    That being the case, we concentrated almost exclusively on the home districts and offices of the 56 members of the House Ways and Means and Senate Finance Committees.

    We identified and utilized economists from universities in 48 of those districts. Some testified at the four federal tax hearings in which had interest. Others participated in academic symposia attended by Congressional staffers. Others communicated directly with their Congressmen.

    And 34 of them wrote op-ed articles on the need to consider excises as part of tax reform. Many of these articles appeared in the principal newspaper in the targeted districts which have, by our estimation, a total circulation of nearly 4 million.

    The economists were of great help. [SNIP]

Professor Richard Vedder (Ohio University) wrote an op-ed article on tax reform that appeared in the Cincinnati Enauirer in April (newspaper in home district of Ways & Means Member Gradison). Copies were sent to Gradison and Ways & Means Member Pease

1986: This is the Tollison/Saverese network list for 1986. It has 64 names, but it still doesn't cover all 50 States. Some States have two or three network members, so newspapers [and sometimes Congressmen] need to be specified for each member to ensure there is no accidental duplication.

    Telephone numbers (office and home) are often included in case an urgent op-ed or ordinance hearing is needed. These are grouped by State:

OHIO
Professor Mark Toma
    Department of Economics, Miami University ,Oxford, Ohio 45056, 513-529-2836

Professor Richard Vedder
    Department of Economics, Ohio University, Athens, OH 45701, 614-593-2037

1986 Jan: The Tobacco Institute's Public Relations Resource Catalogue for their Regional Directors, lists documents, booklets, article, posters and people who can help them fight local public smoking ordinances and threats to raise the excise taxes on cigarettes.

    It provides a long list of economists who are willing to speak at hearings, write letters to the editor, or create op-eds for the newspapers to counter any threat to public smoking or possible increase in excise taxes.

    The Tobacco Institute offered their Regional Directors the C/Vs of all of these economists, and said

"Requests for economists should be made ASAP. Allow at least one week. PR approval needed."

• Professor Richard Vedder
  Department of Economics, Ohio University, Athens, OH

Public Smoking/Witness: Local economists are available on two-weeks notice to provide economic testimony on the public smoking issue. Those economists who have testified or prepared op-ed pieces on the economic effects of public smoking are marked accordingly. The others may be briefed on the potential cost to government of implementing smoking restrictions.

Tax witness: [He will] "explain why excise taxes are regressive and unfair to consumers and unsuitable and unreliable as a means to increase the federal revenue."

    Those economists who have testified or prepared op-ed pieces on the economic effects of public smoking are marked accordingly. The others may be briefed on the potential cost to government of implementing smoking restrictions.

1986 Mar 13: Savarese writes to Fred Panzer at the Tobacco Institute about the "Chase Study/Op-eds."

[They are promoting pseudo-economic-impact studies on the effects of smoking bans, which have been done in specific cities for the Tobacco Institute by Chase Econometrics]

    He is listing the various regional projects and their stage of development by network economists:

• The St Louis article has been approved and submitted to the St Louis Despatch.
• The Baltimore article has been approved, but not yet submitted.
• John Militello's Philadelphia article is awaiting approval
• Richard Wagner's Miami article is being discussed.
• Four new articles are enclosed
  • Chicago (by Henry Butler)
  • (Another by Butler) for either Dallas or Houston
  • New York (by Michael Crew)
  • Atlanta (by Dwight Lee)
• In writing stages are articles for
  • Los Angeles (by Thomas Borsherding)
  • Cleveland (by Richard Vedder)

1986 May: A bundle of 72 pages of information is being circulated by the Tobacco Institute to its Regional Directors. The data is predominantly on the tobacco-industry beat-up known as Sick Building Syndrome and on the general problems of Indoor Air Quality [all down-playing the effects of smoking in confined spaces]

    Section 1 is headed

List of sources. Local and national experts you can call for quotes or background information. It promotes the services of three specialist lobbyists

• Lewis Solmon - an academic who discounts problems of workplace smoking
• Al Vogel - who claims to be an expert in public attitudes to smoking
• Mike Forscey, a labor lawyer/lobbyist who helped the tobacco industry keep the union movement on-side.

1986 July 9: The network economists have been given the job of writing a letter to the General Services Administration (GSA) which supervises all US federal government buildings, objecting to their new no-smoking policy, but on economic grounds. The idea is to force the GSA to seek Congressional approval since the laws give them approval to impose internal regulations, provided the costs don't exceed $100 million.

    The economists, therefore are all to say that the total cost of the policy, including the costs of NO SMOKING signs, will be more than $100 million (the legislated tipping point), and therefore require Congressional oversight.

    Vedder manages to get Lowell Gallaway, David Klingaman and Jan Palmer to also sign the letter.

[Gallaway and Klingaman also worked for the tobacco industry]


[The other network economists also wrote letters. The idea here was to challenge the bureaucrat's decision by exposing them to Congressional attack from the industry's political friends if they defied 'expert' opinion.]

1986 Jul 21: Sam Chilcote of the Tobacco Institute writes to the members of the Executive Committee detailing their successes in generating objections to the proposed GSA [Government Services Administration] anti-smoking bans.

    They have persuaded the American Federation of Government Employees (AFGE) to help having the rules amended, and have turned out their friends and associated companies to generate letters of objection.

Included among the comments received by GSA thus far are thousands generated as a result of contact with TAN [Tobacco Action Network] activists, other tobacco family organizations, key coalitions, organized labor and economists.

    The State Activities Division's alert of key contacts in the field, as well as TAN activists, has generated at least 3,100 letters of opposition. These are letters for which copies have been sent to division headquarters; there are no doubt many others.

    Among member companies, all have asked their employees to write letters of opposition. In addition, RJ Reynolds reports its phone bank efforts to reach Washington, DC, residents, may have resulted in up to 3,700 opposition letters. Reynolds also sought letters from respondents to an earlier mailing on the federal excise tax issue. Philip Morris initiated a program designed to generate up to 10,000 mailgrams to GSA by the comment deadline.

• 8th July — Arthur T Denzau, Washington University, St Louis, Mo
• 3rd July — Barry W Poulson, University of Colorado, Boulder
• 10th July — Thomas E Borcherding, Claremont College/Graduate School, California
• 7th July — William F Shughart II, Center for the Study of Popular Choice, George Mason University, Washington DC
• Undated — (joint) Cecil E Bohanon, James E McClure, Stephan F Gohmann, Clarence R Deitsch, Lee C Spector — all PhDs in economics at Ball State University, Muscie, Ind.
• 7th July — John F Militello, Wharton School, University of Pennsylvania,
• 7th July — Jean J Boddewyn, Baruch College, The City University of New York [Advertising lecturer]
• 5th July — Morgan Reynolds, Texas A&M University
• 8th July — Cliff P Dobitz, North Dakota State University
• 8th July — William C Mitchell, University of Oregon
• 11th July — Arthur C Mead, Economist, Newport RI
• 10th July — D Allen Dalton, Boise State University, Idaho
• 10th July — Henry N Butler, George Mason Univeristy
• 10th July — (joint) S Charles Maurice, Leonardo Auernheimer, Niccie L McKay, John R Hanson II, Lynn Gillette, Gregory Delemeester at Texas A&M University
• 9th July — (joint) Robert B Ekelund, Richard Ault, David Saurman, John Jackson, RG Hebert, JK Watson, Mark Thonton, at Auburn University, Alabama
• 9th July — (joint) Richard K Vedder, Lowell E Gallaway, Jan Palmer, David Klingaman at Ohio University

1986 Oct 3: A Tobacco Institute report on the economists network, lists the Congressmen they are expected to influence, and the economist's various academic specialities.

    This early list is probably the most detailed of all. A later section of this 43 page document also runs through the 28 main states giving the names and details of witnesses willing to speak to legislators on Taxes (almost exclusively economists), and those available as witnesses for the tobacco industry on Public Smoking issues (economists and a range of others)

OHIO, (Rep. Gradison, Rep. Pease)

[Economist:] Professor Richard Vedder, Ohio University, Athens, Ohio , 614-594-6601
[Speciality:] Econ. history; labor markets; public policy; wage productivity relationships in U. S. history.

[Witness List / Materials available / Media Relations]

Tax Witnesses:	Materials available
Richard Vedder	Ohio data card "Excise Taxes: The Fairness Issue" "More Taxes on Tobacco...." Earmarking topic sheet Letter writing brochure.
Public Smoking Witnesses:	Materials available
Al Vogel (productivity) Steve Schlossberg (labor implications) Lew Solmon (economics) Bob Klotz (enforcement)	Voter survey Economic survey Labor assistance Response Analysis summaries Public Smoking topic sheet "Some Considerations" workplace kits "In Defeense of Smokers" reprint "The Other Side of the Smoking Controversy" reprint Letter writing brochure Advertising.
Media Relations:
Contacts are in place in Cincinnati, Cleveland, Columbus, Dayton, Toledo and Youngstown. Contact Bill Toohey for assistance.

1986 Oct 3: The State Directors for the Tobacco Institute have been reviewing all economics network witnesses in their territories, and culling those who are not actively participating. The Washington DC office is now circulating to its State Directors a list of the economists available who...

"...have been identified in several states by J. Savarese as available and hopefully capable to testify in our behalf, or aid in our defense against proposed state of local legislation, from an economic aspect.

OHIO (Rep. Gradison, Rep. Pease)
Professor Richard Vedder
    Ohio University, Athens, Ohio, 614-594-6601
    [Specializing in] Econ. history; labor markets; public policy; wage productivity relationships in US history

1986 Dec 8: Sam Chilcote is summing up the Tobacco Institute's activities in fighting the Packwood Tax Plan which attempted to impose special excise taxes on tobacco, alcohol and fuel (in the oil crisis years).

Senator Robert Packwood was working behind the scenes for President Reagan who needed to cut the mounting government deficit without breaking his promise to reduce income taxes for the wealthy. Packwood saw excise taxes as the most likely source of new income, and wanted to make these taxes and tarffs non-deducatable for federal income tax purposes to increase the overall revenue generated.

    Naturally the tobacco industry turned out its soldiers to fight the Packwood proposals. The document bundle (219 pages) includes:

• Pages 2 to 34: A major study done for the TI by Policy Economics Group
• Pages 35 to 50: Another major study commissioned from DeSeve Economics for the Coalition Against Regressive Taxation (CART) [funded by tobacco to act as a front]
• Pages 51 to 57: A couple of papers done for Covington & Burling
• Pages 58 to 100: A long document which has deliberately NOT included the name of the organization which produced it within the document itself. (But done by deSeve Economics Associates Inc).
• Pages 101 to 129 : A paper on the "Burden of Tobacco Taxes on Selected Demographic Groups"
• Pages 130 to 144: Some booklet trying to rabble-rouse the Hispanic and Black communities and make them believe Packwood is attacking them racially.
• Page 145 to 177: A Citizens for Tax Justice 'poll' on attitudes. and Coalition Against Regressive Taxation document
• From Page 178 on: many of the op-eds they have had published in newspapers by the cash-for-comment academic economists,

See pages 210 to 219 of the bundle which have multiple Letters-to-editor/commentary from 17 cash-for-comments economists — William Hunter, Dennis Logue, William Shugart, Harold Hochman. David Wilhelm, Joseph Jadlow, Robert Ekelund, Thomas Borcherding, K Celeste Gaspari, David Laband, Fred McChesney, Dean Tipps, Allen Parkman, Richard Vedder, Roger Faith, Lee Alson, and William Hunter,
      They had obviously managed to plant these multiple-author pieces on a number of newspapers.

1986 Dec 11: James Savarese sends Fred Panzer at the Tobacco Institute a summary of the activities of his network of economists. This is effectively the beginning of the main cash-for-comments economists network.

Dear Fred,
    I have attached a list of all the economists we have used along with the projects they have worked on in behalf of the Tobacco Institute.

Ohio [ Region III ]

Professor Richard Vedder

Department of Economics, Ohio University, Athens, Ohio 45701, 614-594-6601

Services rendered:
• original excise tax op-ed

1987: [Source: a June 1988 Editorial "Keep the pledge"]. Vedder and Galloway had determined that any increases in taxion automatically increased government spending — which pandered to the popular idea that most of government expenditure was frivolous.

Raising taxes has a severe negative impact on the economy.

    A 1987 study by Ohio University economists Richard Vedder and Lowell Gallaway and senior policy analyst Christopher Frenze of the Joint Economic committeee shows how this works.

    They found overwhelming evidence that a $1 increase in taxes led to a $1.55 increase in spending.They also found that raising taxes has a severe negative impact on the economy.

    They found a $30 billion tax Increase would draw S300 billion away from the nation's asset base, absorbing a whole year's capital growth.

1987 Jan 6: and 12 Jim Savarese advises the Tobacco Institute that some economists were no longer working for his network. However Vedder is still being listed as their main Ohio economist-for-hire.

In order to keep this project straight with respect to the economists, we were specifically assigned to go back to all 42 names on the original list to check to see if the economists were still interested in working for us, still in the same state, and available to meet with representatives from state activities.

    We have 34 who fit this criteria and have been contacted. The list is attached. The states that we once had that are currently missing are Arizona, Maryland, Massachusetts, Nebraska, New Jersey, Vermont, West Virginia, and Wyoming.

    The attached invoice covers the project of re-contacting the original 42 economists and coming up with the present 34 people.

The primary purpose of this contact is to determine if a given economist is capable of testifying effectively before a legislative body.

    They have been informed that someone from TI will be in contact with them.

    We request that an initial contact be made by telephone immediately. Please let me know when this initial contact has been made. Personal meetings should be arranged and completed no later than May 1, 1987.

1987 Jan 6: Savarese is charging the Tobacco Institute $3,200 to update the cash-for-comments economists list (with Vedder still active)

1987 Feb 6: James Savarese has finalised his list of compliant economists, and sends them to Susan Stuntz at the Tobacco Institute. It lists all the familiar cash-for-comment economists

Old faithfuls:
Lee Anderson, Terry Anderson, Dom Armentano, Cecil Bohanon, Thomas Borcherding, Henry Butler, JR Clark, John David, Allan Dalton, Arthur Denzau, Clifford Dobitz, Robert Ekelund, David Gay, Anne Harper-Fender, Dennis Hein, John Howe, Wm Hunter, Joe Jadlow, Michael Kurth, Suuner LaCroix, Dwight Lee, C Matt Lindsay, Dennis Logue, Chuck Mason [Masen], Charles Maurice, Fred McChesney, Robert McMahon, Arthur Mead, Wm Mitchell, Allen Parkman, Wm Peterson, Thomas Pogue, Barry Poulson, Raymond Raab, Simon Rottenberg, Mark Schmitz, Richard Vedder, Richard Wagner

Greg Niehaus, Mario Rizzo, Roger Riefler, and Boon Yoon.]

1987 Apr 6: Tax Notes article "House Budget Committee Approves $18 Billion Tax Increase":

Republican opposition to tax increases was clearly evident during an April 1 meeting of the House Republican Study Committee (RSC).

    [Reagan Administration's] OMB Director Miller and a number of conservative economists appeared before the panel ostensibly to review the tax proposals that have been proposed by House Speaker Jim Wright, D-Tex.

• Robert Tollison, George Mason Uni. [network economist]
• Richard Vedder, Ohio State [network economist]
• Alan Reynolds of Polynomics [Hudson & Alexis de Tocqueville.]
• Paul Craig Roberts, Georgetown Uni [TI consultant]
• Richard W Rahn, US Chamber of Commerce. [coalition economist]

1987 Apr 29: Vedder-Galloway's inversion of tax-vs-spending relationship has caught on with the lobbyists and some libertarian journalists. [Source: A Warren Brookes article June 1990]

Various studies show that since World War II every dollar of legislated higher taxes has been matched by from $1.28 to $1.58 in higher spending. The latter figure was developed in a 1987 study by Ohio University economists Richard Vedder and Lowell Galloway with Joint Economic Committee senior policy analyst Christopher Frenze.

    They found no support for "the conventional hypothesis that higher taxes are associated with lower deficits." Instead they found strong evidence that "increases in taxes, other things being equal, are associated with higher deficits... A $l increase in taxes, other factors held constant, is estimated to lead to a 58-cent increase in the deficit, meaning a $1.58 increase in spending."

1987 Apr 29: A draft copy of "Federal Tax Increases and Budget Deficit (1947-86): Some Empirical Evidence" Prepared for the use of Republican Members of the Joint Economic Committe by Richard Vedder, Lowell Gallaway and Christoper Frenze" has found its way into the Tobacco Institute files.

The alternative hypothesis springs from a "public choice" perspective on government. The public choice approach applies economic reasoning to political decision-making. It dispenses with the conventional presumption that public officials necessarily act on superior motives or knowledge.

    With the distinctions between the bases of private and public decision-making erased, microeconomic theory can be extended into the anlaysis of public policy.

1987 May 5: Cotton Mather ('Matt') Lindsay of Clemson University has written an article "Excise Taxes: Facist Finance" which is being circulated at the Tobacco Institute. He has discovered through his extensive research that:

it is difficult to achieve vertical equity [equal burden on everyone] through excise taxes because the amount of the tax paid depends on purchases rather than income.

    Breweries and tobacco companies write checks to the government for the excise taxes on beer and cigarettes, but here economists agree; these companies pass these taxes on to consumers. One's share of the burden of the revenues raised by these taxes depends on how much beer one drinks and how much one smokes.

    The unfairness of these excises is manifest; it is not merely another economists' debating point. The tobacco excise tax, for example, is the most regressive tax in the federal system. It is paid only by smokers who are today predominantly lower-middle income earners, lower income working women and blue collar workers.

Some have argued that these taxes are appropriate because the funds can be earmarked for expenditures like Medicare, environmental protection and even public employee pensions. Why beer drinkers and cigarette smokers ought to pay more for such things is far from clear, however. To the extent that these activities shorten life, they relieve the burdens of Medicare and pension funds by removing potential claimants from the eligibility roles.

[This is the so-called "death benefits" argument — which makes the primary assumption that you live in order to raise the GDP, rather than to benefit your family and your nation.]

    Viewed from another perspective, smokers and beer drinkers not only bear a disproportionate share of taxes because they pay excises on these commodities, but they get less for their money, too. Because they live a shorter life span, they collect less in retirement benefits and receive fewer Medicare benefits.

    This may be fine for Mussolini, but it is antithetical to tax principles in a free and open society.

Professor Richard Vedder:
"No: Conflict minimises effectiveness."

1987 May 22: Bill Trisler sent his evaluation of economic witnesses for Region III to George Minshew at the Tobacco Institute.

OHIO
Professor Richard Vedder, Department of Economics Ohio University, Athens, Ohio

    Council has recommended that I not contact this person due to the fact that he has a tremendous amount of conflict with leadership of the Ohio General Assembly.

No — Conflict minimises effectiveness

1987 Aug 10: Tax News carries a "Congressional Roundup" column:

CBO Study Refutes Causal Link Between Increased Taxes and Higher Spending.

Contrary to Republican claims, increases in Federal taxes historically have not led to increased Federal spending, according to a Congressional Budget Office (CBO) study released August 11 by House Budget Committee Chairman William Gray, D-Pa.

    According to a Gray press release, the study refutes conservatives' claims that for every dollar in increased taxes, Federal spending has risen by $1.58.

    The press release says that the conservative claim is based upon a paper by Richard Vedder and Lowell Gallaway of Ohio State University and Christopher Frenze of the minority staff of the Joint Economic Committee that examined taxation and spending patterns from 1947 to 1986.

    According to the CBO report, that study "provides no persuasive evidence in favor of the tax-and-spend hypothesis." Indeed, CBO contends that the Vedder study built its statistical model on the assumption of a causal relationship between tax increases and higher spending.

    Gray, who requested the study, criticized Republicans for what he called a "misleading exercise."

"In trying to show that Congress in the past has used tax increases to justify additional Federal spending, the Republicans have provided current proof to Mark Twain's observation that there are three kinds of lies — lies, damned lies, and statistics," Gray said

1988 Feb 8: The Tobacco Institute to its Regional VPs and Directors.

Attached is an updated list of The Institute's cadre of excise tax economists. These economists are available for testimony, one-on-one meetings with legislators, writing letters and op-ed pieces in the states in which they teach, as well as in any state you deem appropriate.

1988 Mar 31: Robert Tollison and Richard Wagner have been writing a Tobacco Institute-funded book "Smoking and the State: Social Costs, Rent Seeking and Public Policy"

    Vedder is on Savarese's extensive list of the network economists who are being paid to write 'book reviews' which promote the book. His targetted paper is the Cleveland Plain Dealer.

1988 June: /E Excise Tax Letter-Writing Fact Sheet. This is a list of points that the Tobacco Institute wanted the economists to include in their op-ed articles.

• Excise taxes are regressive
• Excise taxes are fundamentally inequitable
• Excise taxes are an unfair burden on minorities
• Government data demonstrates the unfairness of excise taxes.
• Excise taxes are arbitrary
• Excise taxes are hidden taxes
• Excise taxes are an unfair burden on businesses
• Excise taxes are bad economic policy
• Excise taxes are historically controversial.

• pages of data so that the economists got their facts right,
• a series of quotes that could be incorporated into the article.
• pages of State-by-State data including the number of jobs that the Tobacco Institute estimated would be lost by higher cigarette excises
• lost revenues for each State, due, it was claimed, to cross-state bootlegging and smuggling.
• a list of Congressmen to be contacted in every region.
• Tollison's C/V

1989 Jan 11: The Tobacco Institute's Scientific Consultancy Activity 1988-89
This is an 80 page mixed bag of files dumped together [Well worth perusing]. The first document is from 1990 [ordered in reverse]

• Pages 3 to 23 begin with Witness Appearances in 1988 and 1989 involving both "Indoor Air Quality experts" who work for the Tobacco Institute, and three economists [Bob Tollison, Richard Wagner and Dwight Lee]
• Pages 24 to 31 Labor IAQ Presentations in 1988 and 1989 which involves key figures in the labor movement and a few "IAQ experts."
• Pages 32 to 39 IAQ/ETS conferences attended by tobacco industry disinformation experts in 1988 and 1989
• Pages 40 to 41 Academic and Unaffiliated Scientfic Witnesses
• Pages 43 to 53 Smokers Rights Legislation in various states.
• See page 54: Tobacco Institute "Confidential" memo on "Tax Hearing Readiness" which is their battle plan to counter earmaking of cigarette excise taxes to fund health programs. It lists a large number of organizations and a few congressmen who can be relied on to help. It also has both primary and secondary lists of economists from Tollison's "cash-for-comments" network willing to give testimony.

  Economists: [Primary]

  • Bill Orzechowski, Tobacco Institute
  • Robert Tollison, George Mason University
  • Richard Wagner, George Mason University
  • Dwight Lee, University of Georgia, Athens
  • Michael Davis, Southern Methodist University
  • Gary Anderson, California State at Northridge
  • William Prendergast (resource: Prendergast/Solmon papers)
  • Other Network economists [see Secondary attached list below]

  "Due by mid-year is a book examining earmarking and "user fees" from a public choice perspective. The treatise will contain 8-10 chapters written by respected economists, including, Henri LePage and Nobel laureate James Buchanan."

  The Tobacco Institute's list of cash-for-comments professors and senior academics who were available to write op-eds and give evidence at Congressional hearings, etc. had grown extensively.

  OHIO
  
  Prof Mark Toma, Miami University, Oxford
  
  Prof Richard Vedder, Ohio Univ.

[TI budget papers show that each op-ed now earned the economists $3,000. Presentations to conferences earned them $5,000. Savarese was paid $70 to $100,000 pa for this project, and Ogilvy & Mather $250,000.] See page 5

1989 April 18: Susan Stuntz (Issues Manager) at the Tobacco Institute memos her boss Sam Chilcote. She is sending him material previously used for a two-day "Gerry Long" presentation. He wants to use it in a shorter one-day (unspecified) briefing session.

[Gerald H Long was the CEO of RJ Reynolds who in 1988 had just taken over as Chairman of the Tobacco Institute's Executive committeee and wanted to make changes.]

Economists' Network 64 Strong [is] Targeted to Congressional Tax Writing committeees [and utilizing the] Production of Op-Eds on Federal Tax Policy.
[List of economists]

1989 Dec 14: Jim Savarese is listing the economists taking part in their new Excise Tax Op-Ed project.

I have also listed the newspapers we plan to target and a package of the materials we are sending to the economists.

    We should start getting drafts of the op-eds around the first of the year.

1990: Vedder is now also working for the Cato Institute's Fiscal Policy Studies Program. He is attacking "The Tax-and-Spend Congress"

Cato will provide, for the first time, theoretical and empirical support for the proposition. The papers will be published in stages and will later be released as a book. Richard Vedder, an Ohio University economist whose pioneering and widely cited study showing that each dollar of new taxes leads to $1.58 in new spending, will collaborate with Moore as will other experts.

MEDIA TOURS BY CONSULTANTS
In place of "Truth Squad" media tours. Jack Peterson, Dave Weeks and Larry Holcomb have been conducting interviews on the publication of the report from the [Philip Morris devised and controlled] ETS Symposium held at McGill University.

THIRD PARTY AND ALLIED ACTIVITIES
Editorials written by economists Richard K. Vedder of Ohio University, Dominick Armentano of the University of Hartford, and J.R. Clark of the University of Tennessee, appeared.

    These editorials, opposing excise taxes and discussing "user fees," appeared in the Cleveland Plain Dealer, the New Haven Register, the Memphis Commercial Appeal, the Jackson Sun, the Kingsport Times, the Paris Post-Intelligencer, and the Weakley County Press.

1990 Jan: A Tobacco Institute report by Carol Hyrcaj lists under "Highlights":

In January, we implemented an op-editorial program focusing on the current excise tax/"user fee" discussion. The effort involves 20 economists affiliated with universities in select congressional districts. Eleven articles have been written thus far. Following review, the authors will seek placement of the pieces in local newspapers. An op-ed by Richard Vedder has been published already in the Cleveland Plain Dealer.

    Six consulting economists prepared and sent letters to various administration officials last month, rebutting arguments that excise taxes are "user fees." Recipients of the letters are said to be considering labelling tobacco taxes as "user fees" so that an increase would not violate President Bush's "no new tax" pledge.

See clipping

1990 Jan 23: Richard Vedder has had an Excise Tax/"user fee" op-ed published in the Plain Dealer.

    See newsclipping "No New Taxes: The worst resort for an economy that's slipping." He is pre-emptively attacking President George Bush on his "No new taxes" pledge who is expected to solve the enormous deficit left by President Reagan by introducing higher cigarette taxes.

Congress wants to take money out of the pockets of smokers, drinkers and boaters [sic] of modest means to give themselves a raise and keep the federal bureaucracy happy.

    Such a move is bad public policy and bad economics, and is inconsistent with the president's vision of a kinder and gentler America. In 1990, we the people should rise up and join in Bush's 1988 triumphal refrain: "No new taxes."

1990 May: A list of the main activities of the dozens of academic and scientific lobbyists working for the Tobacco Institute, togethr with their activities over the last year.

    This records that Vedder has written an op-ed for the Tobacco Institute, and is now available for consultation

Richard Vedder
Professor of Economics
Ohio University
      1/90 — Excise Tax/"user fee" op-ed published in Plain Dealer

1990 May: Robert Ragland the Chief Tax Counsel and the National Chamber Foundation were reported as helping the Tobacco Institute by:

• Testimony to Senate Finance Committee on tax policy
• Distributed one-pager based on Senate Finance testimony to Members of Congress, the media and other interests

See page 20

1990 May: This is a list of the newspapers designated to certain economists on the network. They are to attempt to plant anpther op-ed article on "Excise Taxes" on their local newspapers.

OHIO
Richard Vedder, Ohio Univ.

1990 May 7: The Tobacco Institute's "1991 Tax and Social Cost Plans" have sections on

• "Social Costs" Hearings Readiness (preparation for fielding witnesses at Congressional hearings.) They list here the arguments

  What TI and Its Allies Must Cover

  1. "Social cost" arguments used to justify excise tax increases, smoking restrictions and ad bans are not valid.
  2. Independent economists state that "social cost" calculations used by anti-smokers do not withstand credible economic scrutiny.
  3. There is no convincing economic evidence that smokers impose costs on society. Any supposed costs are "private costs" and are borne by the smoker.
  4. Other industries are vulnerable to social cost attacks. A "slippery slope" may exist as anti-smokers, using "social costs" arguments, seek legislation restricting smoking or increasing taxes. These efforts may signal lawmakers to regulate other products as well.

• "Tax" Hearing Readiness (as above, but for excise tax increases, State and Federal)

  What TI and Its Allies Must Cover

  1. Excise taxes are regressive and take away tax reform for low- and middle-income Americans. As a percentage of income, low income families pay as much as 27 times more in federal excises than high-income families.
  2. Cigarette excise taxes are discriminatory. They fall disproportionately on Blacks, Hispanics and other minorities.
  3. Excise taxes are unfair. Tobacco consumers are forced to pay more than others for government services benefitting everyone. Why should smokers pay more for national defense than nonsmokers?

• List of cash-for-comment network economists in each State.

OHIO
Professor Mark Toma
Department of Economics, Miami University
Oxford, Ohio 45056 513-529-2836

Professor Richard Vedder
Department of Economics, Ohio University
Athens, OH 45701 614-593-2037

1990 May 31: Ronald Utt at the National Chamber Foundation [a subsidiary lobby operation of the US Chambers of Commerce] writes to Carol Hrycaj, the main Issues Analyst at the Tobacco Institute (who now looks after the economists network).They are now collaborating on a couple of projects

Dear Carol:
Just a quick note to bring you up to date on a couple of NCF projects that I know are of interest to you. With the excise tax debate heating up in Washington, we have modified our excise tax research program in an effort to increase our influence on the deliberations.

    The first part will be an overview study of the issue by Professor Richard Vedder of Ohio University. Prof. Vedder excels in producing high quality, hard-hitting analysis that is appropriate for a general audience of educated laymen. He has promised us a first draft by June 8th, which should allow us to get the final version to the target audience [Congressional members] within two weeks.

    The second part of the excise tax program will be an expanded and more sophisticated version of Vedder's paper, including some original research.

    On the other issue, the publication of the Journal of Regulation and Social Costs is slipping because of delays in receiving first drafts from authors. Only two are in, and the remainder are promised within the next two weeks. This is not unexpected given the prominence of the authors, their many other commitments, and the tight deadline I originally asked them to meet. I will keep you posted on the progress and I appreciate your patience and support as we work to get this project up and running.

1990 June: /E Excise Tax Letter-Writing Fact Sheet. This is a list of points that the Tobacco Institute wanted the economists to include in their op-ed articles.

• Excise taxes are regressive
• Excise taxes are fundamentally inequitable
• Excise taxes are an unfair burden on minorities
• Government data demonstrates the unfairness of excise taxes.
• Excise taxes are arbitrary
• Excise taxes are hidden taxes
• Excise taxes are an unfair burden on businesses
• Excise taxes are bad economic policy
• Excise taxes are historically controversial.

• pages of data so that the economists got their facts right,
• a series of quotes that could be incorporated into the article.
• pages of State-by-State data including the number of jobs that the Tobacco Institute estimated would be lost by higher cigarette excises
• lost revenues for each State, due, it was claimed, to cross-state bootlegging and smuggling.
• a list of Congressmen to be contacted in every region.
• Tollison's C/V

1990 June 4: The Vedder/Galloway inverted tax/spend thesis has now taken hold with prominent newspaper columnist Warren Brookes who writes a whole article based on the idea for the Washington Times (probably funded by the Tobacco Institute, who paid Brookes as an occasional consultant)

"Why taxes make the deficit soar"

1990 June 30: /E Carol Hryjac's report on Excise Tax operations for the Tobacco Institute describes their many projects with David Senter and the American Agriculture Movement (AAM) media tours, and the Coalition of Labor Union Women (CLUW), the AFL-CIO and other union.agricultural-associated activities:

The League of Rural Voters (LRV) has requested Institute support to produce a general informational brochure. The publication will highlight issues of concern to LRV, including fair tax policy.

    We reviewed and commented on the first draft of the National Chamber Foundation's (NCF) "working paper" on excise taxes. The document, prepared by economist Richard Vedder, attacks the use of excise taxes on several grounds, including regressivity and economic inefficiency. We expect a second draft in July.

1990 July 31: /E Report on Excise Taxes operations for the Tobacco Institute describes their many projects with:

• Consumer Tax Alliance's anti-excise tax ads aired in 15 states, beginning while Members were in their districts over the Independence Day recess.
        Preliminary results of the pre- and post-testing of the ads were consistent with the January 1990 testing: When educated that it is the consumer who pays excises, opposition to the tax increases. Meanwhile, CTA continued to increase its membership.
        The CTA is planning its next phase of activity to carry its fair tax message directly to lawmakers and the general public. A four-week media tour by CTA Executive Director David Wilhelm is tentatively scheduled to begin mid-August. The plan includes covering 10 states in which the ads aired.
• Another media tour program, involving three consulting economists, is under consideration. This effort would seek to reach Republican members of Congress and to reinforce anti-tax messages in August during the Congressional recess.
• The David Senter/AAM media activites included a press conference with Willie Nelson and an appearance on Fox Morning News with Nelson acompanied by AAM representatives.
• Citizens for Tax Justice (CTJ) released an analysis of the impact of federal, state and local excise taxes on consumers, comparing the tax rate changes over the last decade on gasoline, cigarettes, beer and telephone service in the 50 states and the District of Columbia.
• The Economic Policy Institute (EPI) prepared and distributed to Members, the media and other interests a response to the recent Congressional Budget Office study, "Federal Taxation of Tobacco, Alcoholic Beverages and Motor Fuels." The EPI policy memorandum rebuts the CBO's methodology (analysis of expenditures rather than income)
• The Coalition on Human Needs' (CHN) "open letter" to the budget negotiators appeared as an ad in the Washington Post. The letter, signed by more than 100 CHN affiliates, states that "revenues should be raised in a progressive manner based on ability to pay."
• The National Chamber Foundation (NCF) prepared a white paper, "Excise Taxes in the American Fiscal System," by economist Richard Vedder. Vedder examined the utility and efficiency of excise taxes and concludes that "new excises are unwarranted on almost every possible economic and policy basis." In late July, the paper was distributed to budget negotiators; it will be forwarded to the media and other policy interests in August.

1990 July 31: The National Chamber Foundation press release (untitled) which says:

Tax revenue will increase the deficit and not decrease it according to a report issued today by the National Chamber Foundation, the tax and public policy research affiliate of the Chamber of Commerce of the United States.

    The NCF report, entitled Excise Taxes in the American Fiscal System notes that every new tax dollar will increase the federal deficit by seventy-two cents. According to NCF Chief Tax Counsel, Robert Ragland, Congress has spent $1.72 for every new tax dollar collected since 1947.

    According to Ragland; "if history is any guide, Congress will spend every penny of a $25 billion tax increas now under consideration plus another seventy-two cents." As a result, new spending will total $43 billion - for a contribution to the deficit of $18 billion. This is hardly a step forward.

    The NCF study was prepared by Ohio University economists Richard Vedder and Lowell Gallaway who note that the bulk of any excise tax increase will fall on those least able to shoulder the burden - working women, minorities, the middle class, the elderly, and those on a fixed income.

    Vedder and Gallaway note that "American excise taxes are viciously regressive... burdening lower income Americans far more than upper income Americans." Also, excise tax increases are indefensible as deterrents to behaviors such as smoking and drinking.

    The study notes that smokers and drinkers accommodate increased taxes by reducing their consumption of other products thus spreading the harmful impact of tax increases across the economy.

1990 Aug: This long document has media tour records [being conducted by Fleishman-Hillard] for the cash-for-comments

• economists network
• ventilation network members (mainly HBI)
• biological scientists network,
• academic lawyers nework
• labor network and
• advertising academics network

Richard Vedder
Professor of Economics, Ohio University

1/90 Excise Tax/"user fee" op-ed published in Plain Dealer

1990 Aug: The Tobacco Institute's Public Affairs Management Plan Report. They have enlisted the

• Consumer Tax Alliance ["considering a media tour program involving three economists"],
• American Agricultural Movement [also writing op-eds for country newspapers - planning a media tour also]
• AFL-CIO [the TI had two lobbyists on the executive]
• Economic Policy Institute, [Aligned with tobacco because they opposed all value-added taxes]
• Citizens for Tax Justice [Ex-Dir Robert McIntyre lobbied for the TI]
• The Coalition on Human Needs [Ex-Dir Susan Rees lobbied for the TI],
• National Chamber Foundation.

The National Chamber Foundation (NCF) prepared a white paper, "Excise Taxes in the American Fiscal System," by economist Richard Vedder. Vedder examined the utility and efficiency of excise taxes and concludes that "new excises are unwarranted on almost every possible economic and policy basis." In late July, the paper was distributed to budget negotiators; it will be forwarded to the media and other policy interests in August.

1990 Aug: Vedder and Gallaway have concluded a study done for the National Chamber Foundation (with Tobacco Institute involvement) on the adverse impacts of excise taxes.

1990 Aug 3: Sam Chilcote at the Tobacco Institute has advised the Members of the Executive committeee of plans to develop a celebrity speakers program using academics and other expert consultants. There are offer the speakers both money and personal promotion:

[W]hile it is clear that there are a number of individuals who can and are speaking out on our issues independent of The Institute, there also is much more that could be done. There are, for example, opportunities to develop higher profiles for those individuals with whom we enjoy an existing relationship, and to increase within the media an awareness of their availability.

    There also are a number of individuals who have been identified who do not currently have a relationship with the industry, but whose views appear to be compatible with our own. Should the Executive committeee decide that it wants to proceed with an expansion of our speakers' program, these individuals would be contacted to determine their interest in our issues.

    The addition of new speakers to our program will be expensive. Most of these individuals command substantial consulting fees; media and other activity will require a new commitment of funds, although an exact amount cannot be determined until candidates have been approached.

• Authors, newscasters and newspaper columnists
• Well-known politicians, political aides, White House staffers, State authorities, agency administrators, etc
• Heads of various coalition groups (American Advertising Federation. etc)
• Cash-for-comments legal and business academics from Savarese's network list.
• Cash-for-comments 'risk assessment' academics and promoter.
• Cash-for-comment experts in indoor air pollution and ventilation systems.
• Cash-for-comment academic economists + some likely allies:

  • BRUCE L. BENSON, professor of economics, Florida State University and board member, James Madison Institute, a Tallahassee think tank.
  • DWIGHT R. LEE, professor of economics, holder of the Ramsey Chair of Private Enterprise, University of Georgia
  • JAMES C. MILLER, Citizens for a Sound Economy Foundation, Washington; former director of OMB
  • WALTER E. WILLIAMS, professor of economics, George Mason
        University, Fairfax, Va.
  • BOB TOLLISON, George Mason University, Center for the Study of Public Choice

• Some more minor network academics, together with their recent achievements.

Richard Vedder
Professor of Economies
Ohio University

1/90 Excise Tax/"user fee" op-ed published in Plain Dealer

1990 Sep: The National Chamber Foundation report "New excise taxes not needed, study shows" is the newsletter headline.

The NCF Report, Excise Taxes in the American Fiscal System, notes that for every new tax dollar collected since 1947, Congress has spent that dollar plus an additiona1 72 cents.

    The study maintains the $25 billion to be gained in excise taxes will result in Congress spending $43 billion, thus contributing $18 billion to the federal deficit.

    Ohio University economists Richard Vedder and Lowell Gallaway, who prepared the study, noted excise taxes fail to act as deterrents to the behavior of smokers and drinkers, who tend to accommodate increased taxes by reducing the consumption of other products.

1990 Sep 6: The National Center for Policy Analysis which was run by cash-for-comment economist Richard Stroup (Koch Brothers funded in Dallas) has printed a Policy Backgrounder "Do We need New Taxes?" which utilizes the Vedder/Gallaway's inverted tax-spend argument.

1990 Oct: /E Tobacco Institute document. It lists the services that academics and secret consultants have provided to the tobacco industry during 1989 and 1990 — both as witnesses and as authors of articles and letters.

• Pages 2 - 9     Advertising: lawyers and advertising administrators
• Pages 10 - 30 Science and Public Policy on ETS/IAQ
• Pages 31 - 39  Taxation
  This gives the dates of each of the services, and any 'Current Projects' they may be working on:

Richard Vedder
    Professor of Economics, Ohio University

• 1/90 Excise Tax/"user fee" op-ed published in Plain Dealer

See page 32-5

[TI budget papers show that each op-ed still earned the economists $3,000. Presentations to conferences earned them $5,000. Savarese was paid $70,000 to $100,000 pa for this project, and Ogilvy & Mather $250,000.]

See page 5

1991: A list of useful consultants and witnesses held in the B&W files, carried many entries which show lists of past activities for the Tobacco Institute, which were effectively credentials showing that they could be trusted.

Richard Vedder
Professor of Economics, Ohio IIniversity
  •   1/90 Excise Tax/"user fee" op-ed published in Plain Dealer

1991 Jan: /E Tobacco Institute draft plan for 1991 with emphasis on "Taxes." These are the economist-related paragraphs:

Objective
To discourage reliance on consumer excise taxes on cigarettes to meet social and economic objectives by demonstrating that excise taxes are regressive and inconsistent with fair taxation.

Goals and Tactics:

• Commission two op-ed articles in 1991 from consulting economists. As articles are published, provide to other Institute decisions for promotion and submission to appropriate policy makers.
• Conduct at least 10 presentations by consulting economists on the excise tax issue before national, regional and state tax policy conferences.
• Continue to utilize consulting economists for testimony and briefings. Expand appearances to include presentations to business clubs and the business press. Conduct media refresher courses for public speaking appearance and delivery of testimony.
• Utilize the consulting economists for an op-ed program that addresses the national earmarking issue and state specific earmarking issues. As articles are published, provide to other Institute divisions and promote to appropriate public policymakers. Use field staff network to support distribution efforts.

1991 Jan 8: Savarese has sent the current list of network economists to Carol Hyrcaj at the Tobacco Institute. It contains three new names, but otherwise is essentially the same as the old lists.

    ALABAMA, Robert B. Ekelund, Jr., Auburn University
    ARIZONA, William J. Boyes, Arizona State University
    ARKANSAS, David E. R. Gay, University of Arkansas
    CALIFORNIA, Gary Anderson, California State at Northridge
                Roger Arnold, California State Univ. - San Marcos
    COLORADO, Barry Poulson, University of Colorado
    CONNECTICUT, Dominick Armentano, University of Hartford
    DELAWARE, Burton Abrams, University of Delaware
    FLORIDA, Bruce Benson, Florida State University
    GEORGIA, Dwight R. Lee, University of Georgia
    IDAHO, Allan Dalton, Boise State University
    ILLINOIS, James Heins, University of Illinois
    INDIANA, Cecil Bohanon, Ball state University
    IOWA, Todd Sandler, Iowa State University
    KANSAS, Michael Babcock, Kansas State University
    KENTUCKY, Brian Goff, Western Kentucky University
    LOUISIANA, Michael Kurth, McNeese State University
    MAINE, Robert McMahon, University of Southern Maine
    MASSACHUSETTS, David Tuerck, Suffolk University
    MISSISSIPPI, Bill Shughart, University of Mississippi
    MISSOURI, Joe A Bell, Southwest Missouri State University
                Thomas I. Wyrick, Southwest Missouri State University
    MONTANA, Terry L. Anderson, Montana State University
    NEBRASKA, Dee Martin, University of Nebraska
    NEVADA, John Dobra, University of Nevada Reno
    NEW HAMPSHIRE, Dennis Logue, Dartmouth College
    NEW MEXICO, Allen Parkman, University of New Mexico
    NORTH DAKOTA, Cliff Dobitz, North Dakota State University
    OHIO, Richard Vedder, Ohio University
    OKLAHOMA, Joseph Jadlow, Oklahoma State University
    OREGON, William Mitchell, University of Oregon
    PENNSYLVANIA, Ann Harper-Fender, Gettysburg College
    RHODE ISLAHD, Arthur Mead, Universityof Rhode Island
    SOUTH CAROLINA, Ryan Amacher, Clemson University
    SOUTH DEKOTA, Dennis lain, Augustana College
    TENNESSEE, JR Clark, The University of Tennessee at Martin
    TEXAS, S Charles Maurice, Texas ASM University
                Michael Davis, Southern Methodist University
    VIRGINIA, Richard B Wagner, George Mason University
    WASHINGTON, Richard D. Zerbe, Jr., University of Washington

1991 March: Gallaway, Vedder, Karl Peterjohn, and Joseph Bast (of the Heartland Institute) prepared a "Doing More with Less: 14-point plan for Addressing Ohio's Budget Crisis". It was published by the Heartland Institute.

    It promotes a cut-off in funding for higher education, a freeze on university expansion, reduced subsidies for advanced degree programs, and permission for these institutions to charge whatever tuition rates they feel necessary.

1991 Aug 26: The American Legislative Exchange Council (ALEX), the notorious junket and bribery channel to State legislators, was about to run "Issue Seminars" for its corporate sponsors at its annual meeting in Seattle featuring every dubious lobbyist in the Republican's Greek chorus book:

Among the issue seminars will be:

• "Empowerment: The Next Civil Rights Agenda," with Clint Bollick, Executive Director of the Landmark Center for Civil Rights, and Robert Woodson, Director of the National Center for Neighborhood Enterprise;
• "Canadian Health Care in America: Prescription for Disaster," with Michael Billet, President of HeartBeat Windsor, Ed Neuschler Director of Policy Studies with the Health Insurance Association of America, and Gary Robbins, President of Fiscal Associates, Inc.;
• "Environmental Issues for the 1990's" featuring syndicated columnist Warren Brookes;
• "Economics 101: State Tax Policy and Economic Growth," with William Niskanen, Chairman of the Cato Institute, and Dr Richard Vedder, Professor of Economics at Ohio University; and
• "The Litigation Explosion," with Walter Olson, Senior Fellow at the Manhattan Institute.

Other seminars will deal with such issues as energy policy, trade and international competitiveness, transportation and privatization, and labor issues

1991 Oct 30: Vedder, Gallaway and Christopher Frenze have prepared an update of their old study, now named "Taxes and Deficits: New Evidence (The $1.59 Study)" for Republican Congressmen, Richard Armey and Senator William Roth of the Joint Economic Committee.

    This is a rehash of their 1987 Study to prove that an increase in taxation just results in more government spending... rather than deficit reduction. They promote this as an insatiable economic consequence of taxation, rather than a political decision of the Reagan and Bush Administrations.

The findings are better understood by use of a simple cost-benefit theoretical framework of fiscal behavior developed by Dwight Lee of the University of Georgia and Richard Vedder of Ohio University, that draws on the laws of demand and supply.

Richard Vedder and Lowell Gallaway are both Distinguished Professors of Economics and Faculty Associates of the Contemporary History Institute of Ohio University.

Christopher Frenze is a Republican staff economist with the Joint Economic Committee of Congress.

The support of the Earhart Foundation for Professor Vedder was instrumental in developing some of the findings.

We find promising young men and women that we think would be ideal, not only from an intellectual but also from a character point of view, to be teachers and academic leaders in the future. And when we so identify them, we recommend them to the Earhart Foundation. They provide grants, and we continue to mentor these students as they go through graduate school.

1992 Feb: /E Richard Vedder, Lowell Gallaway and David Klingaman, all economics professors at Ohio University joine forces in writing a study "The Economic Impact of Excise and Sales Taxation in Ohio".

    Since these are all active members of the cash-for-comments network, naturally the example they use for their study is that of cigarettes being bootlegged across the boarders since they say the tax in Ohio is too high.

    This was reported as "The study by three Ohio University economists found increasing the cigarette tax would cause the loss of S263 mlllfon in retail sales and about 2.000 jobs. http://legacy.library.ucsf.edu/tid/plb93b00/pdf

1992 March: Vedder and Galloway are also writing booklets for the National Chamber Foundation [with Tobacco Institute involvement].

Excise Tases in the American Fiscal System (Richard Vedder and Lowell Gallaway, Free)

1992 May: Vedder is making speeches at the American Legislative Exchange Council (ALEC) Congressional lobbyist functions.

1992 June 23: Cincinnati Post article mainly on Richard Vedder and Lowell Gllaway: "Study: sin tax a drain" reports

Hamilton County would be the biggest loser in Ohio — $85 millon in retail sales and 500 to 600 jobs — if the Legislature incressses cigarette taxes, aceording to a study.

    A 12-cent increase in Ohio cigarette taxes, from 18 cents to 30 cents a pack would increase Cincinnatian's trips across the Ohio River to buy Kentucky's much cheaper (3 cents state tax) cigarettes, the study found.

    The study by three Ohio University economists found increasing the cigarette tax would cause the loss of S263 million in retail sales and about 2,000 jobs in Ohio's 27 border counties [because of cross-border bootlegging].

    As Ohio's largest border county, Hamilton County's share of those figures would be about $63 million and 500 to 600 jobs, said Richard Vedder, professor of economics at Ohio University, Athens. Vedder has done several studies of the impact of tax on economic growth.

    The Ohio Oniverslty study was commissioned by Border Ohio Business Coalition Against Taxes [BOBCAT], a group of grocery and convenience store owners, beer and wine wholesalers and tobacco interests concerned about excise taxes and the possibility of cross-border smuggling.

1992 July 15: Jim Savarese replies to the Marty Gleason's (Tobacco Institute) query about Vedder's bootlegging article and his knowledge of this moonlighting work for BOBCAT, saying:

Regarding the attached article from the Cincinnati Post, I talked to Richard Vedder. He said his study was done for BOBCAT but that BOBCAT is not 100% sponsored by PM [Philip Morris].

    I have requested a copy of the study and will be glad to give you a copy when it comes. Vedder also said that the study was quoted extensively before the legislature.

1992 Sept 3: An article in the Investors Business Daily "The Forgotten Public At Large: Tax Dollars Go Increasingly To Target Groups" quotes Vedder

According to the Tax Foundation, the average American family — with an income of $55,000 — pays some $16.000 a year in federal taxes, almost twice what that family will pay for food and healthcare.

    "It's a rare family that is getting that much in benefits from the federal government," said Ohio University economist Richard Vedder. "Many working middle-class taxpayers justifiably suspect that most of their federal tax dollars are not being spent in ways that provide any significant benefits to them."

    The groups receiving the lion's share of federal tax dollars make up a minority of the total population. The elderly, the poor, farmers and veterans represent only about one-third of the total population.

    "If you don't fit into one of these groups, you likely cannot point to any federal program from which you.derive direct benefits," said Scott Hodge, budget analyst for the Heritage Foundation in Washington.

1992 Dec 16: ALEC advises the Tobacco Institute of a coming event in Olympia.

The speakers for this event are Wendell Cox and Dr Richard Vedder, both of whom are nationally known and whose biographies are enclosed. A reception will follow immediately in the lobby adjacent to Hearing Room A.

Wendell Cox is an internationally recognized expert in competitive contracting and public expenditure policy. He serves as a Senior Policy Analyst to the American Legislative Exchange Council and is Principal of Wendell Cox Consultancy, where he has completed projects on three continents. He was a three-term appointee to the Los Angeles County Transportation Commission, and is the co-author of Moving America Competitiveiy: A State Legislator's Guide to the Privatization of Public Transponation.

[One of the men responsible for the destruction of LA's public transport network on behalf of General Motors.]

Dr Richard K. Vedder is Distinguished Professor of Economics, Ohio University. An economic historian, he has authored or co-edited six books or monographs on historical themes or public policy issues. His newest book, with Lowell Gallaway, due out in 1992, is entitled Out Of Work: Unemployment and Government in Twentieth Century America. Dr Vedder has published numerous articles in both academic journals and major daily newspapers.

1993 Jan 7: Mike Padden was both a Republican State Representative for Washington and the State's Chairman of the American Legislative Exchange Council (ALEC) which put him in the key lobbying position in the State Assembley, One third of the legislators were members of ALEC.

    They had, as speakers for an ALEC event organised with the House Hearing Rooms, Wendell Cox and Dr Richart Vedder. Bill and Celia Fritz who ran the local state Tobacco Institute operations out of Seattle, were invited.

    Public Affairs Associates which faxed this copy through to the Washington DC Tobacco Institute was the name of their firm, not that of a State branch of the APRA.

---

At about this time the Ohio slot for a network economist was passed back from Vedder to his associate David Klingaman.

---

---

1993 July: ALEC Annual report lists Richard Vedder as an "Advisor to ALEC's Tax & Fiscal Policy Task Force. His work for them had established that taxes were destroying the US economy.

Based on the analysis of Dr Richard Vedder's work in the "Economic Impact of Government Spending," published by the National Center for Policy Analysis, the total cost to the nation of excess spending by state and local governments was more than $353 billion by 1990 — an average loss of more than $1,400 for every man, woman and child in the US.

---

1993 Aug: The 1992 Annual Report of the American Legislative Exchange Council (ALEC) says that

Based on the analysis of Dr Richard Vedder's (an advisor to ALEC's Tax & Fiscal Policy Task Force) work in the "Economic Impact of Government Spending," published by the National Center for Policy Analysis, the total cost to the nation of excess spending by state and local governments was more than $353 billion by 1990 -an average loss of more than $1,400 for every man, woman and child in the U.S.

---

1994–95: Vedder, Gallaway and other Ohio University economists establish their own think-tank, the Buckeye Center for Public Policy in Dayton.
Philip Morris gave them two grants of $2,500 + $2,500 [$5,000 overall] because they are

"To provide renewed general support for this public policy organization whose mission is to offer market-based solutions to issues affecting all Ohians in the areas of regulation, education, state spending and taxation, the environment and others. "

See page 23

[The Buckeye Center is listed as a resource with the Heartland Institute in 1995]

---

1994 March 16: A group of academic economists including almost all the members of the Tobacco Institute's cash-for-comments network sent an "An Open Letter to President Clinton on Healthcare Reform." This had been organised by David J Theroux, the founder and operator of the Independent Institute apparently with the assistance of an academic network member, Simon Rottenberg. [The institute was well-funded by the tobacco industry]. They say:

In The Open Letter to President Clinton, 565 economists and 76 other scholars from all 50 states and the District of Columbia state their firm opposition to any form of direct and indirect price controls in any healthcare program.

    Rationing Health Care: The New Threat of Price Controls, by Simon Rottenberg and David J. Theroux

    They use the old straw-man scare techniques of the sky-falling.

In countries that have imposed these types of regulations, patients face delays of months and years for surgery, government bureaucrats decide treatment options instead of doctors or patients, and innovations in medical techniques and pharmaceuticals are dramatically reduced.

Which, as anyone who has lived in England, Canada, Australia, etc. knows, is pure rubbish.

    Along with Vedder and his associates, also on this list of signatories were a number of think-tank lobbyists [including most of the Hoover Institute] and others who worked for the tobacco industry, and the Research Director of the Independent Institute, Robert Higgs, who was also a fill-in network economist.

---

1994 April 16: Donald Lambro, a columnist with the Washington Times (who also did work for the tobacco companies) wrote a sky-is-falling column, "Catastrophe seen in wake of Clinton health care plan."

In a report to be released Tuesday by the American Legislative Exchange Council, economists Richard Vedder and Lowell Gallaway made a state-by-state analysis of the impact of the health care reform plan on jobs and personal incomes among the 50 states.

    The job losses would result "from the increased labor costs expected under the Clinton plan" under which all businesses would be required to provide health care coverage for their employes. "The higher labor costs that will result will make hiring workers at any given wage rate less attractive than at present," they said. "This will lead to reduced hiring and also to reduced wages."

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1994 July: The newsletter of the American Legislative Exchange Council (ALEC) claims:

Another component of the ALEC campaign has been the study "Concealed Cost: The Real Impact of the Administration's Health Care Plan on the Economy", prepared by Dr Richard Vedder and Dr Lowell Galloway of Ohio University. The study was the first to measure the negative economic impact of the Administration's employer-mandate on a state-by-statc basis.

    According to the study, over a million jobs would be losl nationally from increased labor costs. American workers would lose over $93 billion in reduced wages, and local governments would have a net added fiscal burden of $8 billion.

    In April, a national release of the study was done in conjunction with state legislators, Congressmen and Governors, who held news conferences or released the study to the media in all 50 states. Hundreds of articles and op-eds have cited the study since its release. Most recently Concealed Costs was recognized by Senator Don Nickles (R-OK) and Congressman Dick Armey (R-TX), who released the study to all the Republican members in Congress. along with a dear colleague letter, urging them to take note of the startling findings.

    U.S. Senator Phil Gramm (R-TX) cited ALEC's Concealed Costs study as his main source in extensively published editorials used to educate the constituents in his district. On June 21. Concealed Costs was again highlighted by the Joint Economic Committee as one of the top ten most revealing analyses of the negative impact of the employer mandate on the states. Over a dozen U.S. Congressmen, indudingNewt Gingrich (R-GA), Jim Saxon (RNJ), Dick Armey (R-TX), Jim Ramstad (R-MN) and Chris Cox (R-CA), released the JEC's findings at a press conference on Capitol Hill.

---

1994 June: (Summer) The ALEC newsletter "Media Clips" reports on the Vedder/Gallaway attack on President Clinton's health care reform plans. The sky was about to fall.

The Clinton health care reform plan would result in the loss of more than 1 million jobs and more than $100 billion in personal income by 1998, according to a new study for an organization of state legislators.

    Prepared by two Ohio University economists, the study concludes that "there will be severe economic consequences for Americans if the administration's plan is adopted, that will result in unemployment, wage reductions and loss of revenue for state and local governments."

    "For the American people, these consequences will result in significant job losses (in excess of one million nationally), and reduced compensation for those individuals who maintain their employment/' the study says.

    "The annual cost to Americans in terms of lost income is estimated to exceed $112 billion a year by 1998" it says. "Assuming the program continues on a permanent basis, we estimate that the present value of reduced income and jobs over the next 25 years will exceed $2 trillion "

    In a report to be released Tuesday by the American Legislative Exchange Council, economists Richard Vedder and Lowell Gallaway made a state-by-state analysis of the impact of the health care reform plan on jobs and personal incomes among the 50 states.

    The job losses would result "from the increased labor costs expected under the Clinton plan" under which all businesses would be required to provide health care coverage for their employes.

[These doom-saying claims were repeated in many newspaper editorials]

---

1994 July 11: JE Berthoud [National Taxpayers Association and Alexis de Tocqueville Institution], who also worked for tobacco, wrote "Economic Consequences of Medicaid Legislation" for the Commonwealth Foundation of Virginia, using the Vedder/Gallaway ALEC study. [This illustrates how much leverage the tobacco industry could get off its well-funded influence over economists and lobby-groups.]

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1994 July 30: A Florida 'Tax Cap" Committee was kicking off a petition. It quotes

Richard Vedder, Professor of Economics at Ohio University, in a report for The James Madison Institute, cautions that "taxes crowd out private-sector activity. Since, dollar for dollar, private sector activity is more productive than public-sector activity, economic growth will tend to occur where taxes are.kept low."

[Was there any right-wing front organisation he didn't work for?]

---

1994 Aug: See the full outline of his involvement in creating the fake Alexis de Tocqueville ETS/EPA report written by S Fred Singer and Kent Jeffreys, secretly for the Tobacco Institute.

---

1994 Aug 11: The Alexis de Tocqueville Institute has produced the report by S Fred Singer of SEPP via Philip Morris's own PR-firm APCO, for the tobacco industry and other industries in a small coalition.

    This was a well-funded, and well-camoflagued attack on the health activist concerns about Environmental Tobacco Smoke (ETS). Singer and his associates hid the tobacco-funding behind pseudo-concerns about the potential problems raised by the Environmental Protection Agency (EPA) over radon, pesticides and the SuperFund toxic chemicals in the environment. He says:

" Science, Economics, and Environmental Policy: A Critical Examination" is an evaluation of the data, statistical analyses, and underlying scientific theories that underlie the Envirorunental Protection Agency's (EPA) policy decisions on environmental tobacco smoke, radon, pesticides and hazardous clean-up under the Superfund law.

    With the total costs of environmental regulations estimated to be $150 billion annually — or $1,500 per U.S. household — it is extremely important that environmental decisions be based on sound scientific analyses of potential risks to public health and the environment, and that the costs of environmental regulation be weighed against the benefits. [Note the lack of conculsions that it was even more important for American industry to clean up its act and stop polluting!]

    But as Dr John Graham of the Harvard Center on Risk Analysis notes, "While it may seem obvious that EPA should use good science, students of the Agency have documented that the Agency's leadership, when preoccupied with public fears and legal pressures, has sometimes allowed good science to be neglected."

[Of course, no one mentioned that John Graham and his Harvard Center for Risk Analysis were also tobacco industry-funded lobbyists.]

    The aim of this report was to group together a number of different environmental threats (which most Republicans had been convinced were fallacious), create a giant scarecrow, then classify them jointly as examples of the EPA's strawman health concerns. This, they held, was evidence of the radical political agenda of the EPA and of the crusades of other anti-smoking, anti-polluting zealots.

    The Advisory Panel for this operation comprised Robert Tollison, Richard Wagner, Dwight Lee, Gary Anderson, Mark Thornton, Robert Ekelund, Jeffrey Clark, and Richard Vedder — all from the cash-for-comments economists network — as well as a few other tobacco industry consultants and well-known lobbyists.

---

This report market a turning-point in the tobacco industry's fight-back operations. Philip Morris had just successfully established The Advancement of Sound Science Coalition (TASSC). Steve Milloy at TASSC had the job of labelling any anti-tobacco study results as 'junk-science' and APCO who secretly ran TASSC, had extended the reach of this new 'junk-science' operation to embrace mutual-help relationships with the major poisoning and polluting industries which were becoming embroiled in the problems of climate change.

    This was one of the tobacco industry's contributions to the 'anti-science' movement which was intended to counter both anti-smoking and climate change research.

---

---

---

In the late months of 1994 Lowell Gallaway was admitted as a formal member of the Tobacco Institute's cash-for-comments network — taking over some of the lobbying work in Ohio from his close associate, Richard Vedder.

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1995: The Manhattan Institute's Review of Programs reports on different activities including

Communications Program
Objective: To help bring about an informed citizenry through the dissemination of ideas, research findings and news of effective policies.

History: 1980 to 1994: More than 600 Manhattan Forums have been held, attended by thousands of journalists and opinion leaders. Speakers have included:
  • Authors: James Q. Wilson, Myron Magnet, Richard Cornuelle, Melvyn Krauss, Rudiger Dornbusch, Thomas Patterson, Richard Vedder, Peter Salins, William Tucker;
  • Deputy Mayor: Ninfa Segarra;
  • School Chancellors: Ramon Cortines and Joseph Fernandez;
  • Mayors: Rudolph Giuliani, Bret Schundler, Stephen Goldsmith, Edward Rendell;
  • Political Leaders: Andrew Stein, Herman Badillo.

[The Manhattan Institute was well-funded by the tobacco and other industries.]

---

1995 Feb 7: Vedder is now writing 'Forum' pieces for the Columbus Dispatch.

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1995 May 5: ALEC's FYI newsletter reports that the Clinton
    Administration's was floating a proposal for a minimum wage of $4.80
    per hour. However Vedder and Gallaway had proof that a minimum wage would destroy the US economy.

The fact is that raising the minimum wage reduces the demand for labor, and as a result destroys jobs.

    Research by Richard Vedder and Lowell Galloway of Ohio University indicates that more than 800,000 jobs were created in the six months before the 1990 federal minimum wage increase. while in the six months following, 352,000 jobs were destroyed,

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1995 June 25: Vedder is writing in the Forum op-ed section of the Columbus Dispatch on "Constitutional amendment would protect Ohio's long-suffering taxpayers." which permits a minority in the State House or General Assembly to block tax bills — "a move deliberately designed to make it harder to increase taxes." With his tongue firmly in his cheek, he writes:

Democracy is simply not working as it should in Ohio. Lobbyists control government. Special interest groups are able to redistribute income from the many to the few. Our pockets are being picked by public employees wanting rises, welfare beneficiaries wanting more money, schools demanding funds, bureaucrats wanting bigger budgets and so forth."

His super-majority solution — that rule by an organised minority is preferable to democracy — is mind-blowing in its hypocrisy when it come from a dedicated tobacco industry lobbyist complaining about the influence of "lobbyists and special interest groups".
His tag line on the article is that he is a

'distinguished professor of economics at Ohio University and chairman of the advisory board of the Ohio affiliate of the National Taxpayer's Union.

This clipping doesn't deal with tobacco problems, but simply with the State budget — he sees the Republican governor as a 'liberal' big spender.

See page 10

    Also note that [Page 16] Both Richard Vedder and Lowell Gallaway are said to be "senior policy analysts with the Buckey Center for Public Policy Solutions, a Dayton-based, non-profit, non-partisan education and research organization of Ohio professors and scholars."

---

1995 Sept 8: [In 1996 The Heartland Institute's Policy Fax] A paper from the Buckeye Institute, authored by David Swindell "Sports Stadiums Can Be Privately Financed."

Alternatives to public funds. Ohio is out of step with other states and cities, which have moved away from public financing, and toward private financing, of sports stadiums. Miami, Boston, Minneapolis, St. Louis, and Milwaukee all have built facilities with minimal public funds. If significant private financing is not available, taxpayers and policymakers should take that as a sign that the sports facility is not a good investment.

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1995 Nov: The Cato Institute is writing in praise of a Gallaway and Vedder's article, "Cracked Foundation: Repeal the Davis-Bacon Act" (a minimum-wage bill) which appeared in a monograph for the Center for the Study of American Business (Washington University, St Louis) The article says:

"While minimum wage laws such as Davis-Bacon increase unemployment for all groups and raise costs of production, the negative impact of this legislation has fallen disproportionately on individuals subject to discrimination.

    Davis-Bacon has subsidized prejudicial behavior that is inconsistent with a color-blind society that ensures equal opportuniiy for all regardless of race, gender, or national origin."

[Presumably they are not in favor of minimum-wage laws. What was their opinion about slavery?]

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1996: Vedder is now a research fellow with the far right-wing think-tank, the Independent Institute along with fellow cash-for-comment network economists, William Shughart, Robert Higgs, William Mitchell, and Lowell Gallaway.

Research Fellow Richard Vedder (Ohio U.) testified before the Kemp Tax Reform Commission (7/12), and analyzed US fiscal problems on"NewsTalkTV,"and in TheWall Street Journal(11/14) and The Detroit News and Free Press (11/19).

    OUT OF WORK, his book with Lowell Gallaway (Ohio U.),was acclaimed in several articles by AP columnist John Cardiff ,and recommended in Philanthropy (Fall '95). Gallaway and Vedder are now writing a book on immigration for the Institute.

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1996 Sep 18: A Special Report by ALEC reveals that...

Task Force Approves Flat Tax Model Legislation

At ALEC's 23rd Annual Meeting in Newport, the Tax and Fiscal Policy Task Force passed the Flat Tax Act model bill, which establishes a single, flat rate on personal and business income.

[Vedder was a special advisor and convener of this task force.]

The report goes on to quote from...

... a study by Dr Richard Vedder of Ohio University for the Joint Economic Committee reports that flat taxes are significantly more favorable to economic growth than progressive taxes. A key finding: from 1965 to 1993, relatively low-tax states grew nearly one-third faster than high-tax states.

[For some reason, the regressive nature of flat taxes doesn't concern Vedder as did the regressivity of cigarette excises!]

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1996–97: /E The Buckeye Center for Public Policy, has been renamed the Buckeye Institute for Public Policy Solutions.

    See this list of Columbus and Ohio organisations in 1997 which Philip Morris and its subsidiaries Kraft, Millers Brewery, etc. have put together for lobbying purposes — including a listing of all the organisations which have received company grants/donations. It also lists employee number — which suggests their main arguments were over the potential loss of business to the state.

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1996 Feb: The Independent (Newsletter of the Independent Institute) reported on one of their conferences "Detaxing America" with many cash-for-comments economists, like Dwight Lee, Bruce Benson, Thomas DiLorenzo and other in the anti-tax think-tank business.

In a session chaired by Alan Reynolds (National Commission on Economic Growth & Tax Refom ), Paula Gant and Robert Ekelund (Auburn U.) explained that federal alcohol tax hikes in 1991 fell more on wine than on beer and liquor, leading to more drunk driving fatalities.

Gary Anderson (California State U., Northridge) explained that prohibition often results in more revenue for politicians and bureaucrats, more employees and more graft. Conventional wisdom further holds that selectively taxing some products will hardly reduce purchases, but Richard Vedder (Ohio U.) showed that in the case of smoking, consumers cross state lines to buy cheaper cigarettes, hindering the tax collectors' goal.

    Another report in the same newsletter says:

Research Fellow Richard Vedder (Ohio U.) testified before the Kemp Tax Reform Commission (7/12), and analyzed US fiscal problems on " NewsTalk TV,"and in op-eds in The Wall Street Journal (11/14) and The Detroit News and Free Press (11/19).

    OUT OF WORK, his book with Lowell Gallaway (Ohio U.),was acclaimed in several articles by AP columnist John Cardiff, and recommended in Philanthropy (Fall '95).

    Gallaway and Vedder are now writing a book on immigration for the Institute.

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1996 Mar: The newsletter of the Independent Institute reportst that:

Research Fellow Richard Vedder (Ohio U.) testified before the Kemp Tax Reform Commission (7/12), and analyzed US fiscal problems on "NewsTalkTV," and in The Wall Street Journal (11/14) and The Detroit News and Free Press (11/19).

Out Of Work, his book with Lowell Gallaway (Ohio U.), was acclaimed in several articles by AP columnist John Cardiff, and recommended in Philanthropy (Fall '95). Gallaway and Vedder are now writing a book on immigration for the Institute.

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1996 May 13: ALEC is promoting Vedder and Gallaway's Buckey Institute. It now has

David M. Zimov is a policy analyst with The Buckeye Institute for Public Policy Solutions, a nonprofit, nonpartisan research and education organization. He is also an adjunct professor of political science at Northern Kentucky University.

However he is writing about Ohio schools, not Kentucky.

Ohio should drop its inefficient school financial controls, and give the educators closest to our children the full responsibility for running our schools.

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1997: The Independent Institute has published a book edited by William Shughart "Taxing Choices". It carries articles created by a number of network economists and some of the tobacco industry's other secret consultants.

    Vedder's contribution is a chapter: "Bordering on Chaos: Fiscal Federalism and Excise Taxes"

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1997 April: /E The Atlas Foundation publication is promoting papers by the Vedder/Gallaway group:

The Buckeye Institute for Public Policy Solutions (Dayton, OH) published Policy Note, "Voucher Programs Serve Low Achieving Public School Students," and Perspective on Current Issues, "Restrained State Spending Holds Key to Economic Growth."

    The Atlas Economic Research Foundation recently donated 250 copies of Indianapolis Mayor Stephen Goldsmith's book The Twenty First Century City: Resurrecting Urban America to The Buckeye Institute (Dayton, OH),

[Why do I get the feeling this might be just a Republican/libertarian front operation?]

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1997 April 28: The Citizens for a Sound Economy [later called "FreedomWorks"] has reported to its sponsors (including Philip Morris) on a study it has commissioned

Are taxpayers getting their money's worth with Medicaid?
Citizens for a Sound Economy (C5E) Foundation commissioned this analysis to answer this question. And in too many instances, the answer is a clear and resounding "no."

    This analysis was prepared by CSE Foundation Adjunct Scholars Richard Vedder and Lowell Gallaway, distinguished professors of economics at Ohio University, and Robert Lawson, assistant professor of economics at Capital University. Each state's approach to Medicaid is summarized. Each is evaluated and ranked on a set of six criteria. And each state was assigned an overall grade.

    Philip Morris files carry a one-page Executive Summary of "50 State Medicaid Report Card: An analysis of performance from the taxpayer perspective" by Gallaway and Vedder (both Ohio University) and Robert Lawson (Capital University)

    It graded the States on how well they were using Medicaid funds. It also suggests that many middle-class were now getting Medicaid, and that the burden was increasing. In general, it is an attack on Medicaid.

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1997 Jul 22: Local regional director for Philip Morris wants to increase efforts from just tobacco lobbyist Peter O'Grady ($50,000) by adding another at $35,000 pa. Campaign contributions are not permitted in Ohio, but the company is giving:

• $1000 to BOBCAT (which is the PM-controlled CART [anti-excise tax] operation)
• $1000 to the Buckeye Institute,
• $1000 to the Ohio Taxpayer's Institute

All three of these are closely associated with Richard Vedder.

    There is also $5,000 allocated for "Special Projects: Local coalition building" which is probably a euphemism for political bribery.

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1998: Richard Vedder has written a report attacking cigarette excise taxes using the tobacco industry line that these price increased boost inter-state smuggling: "Bordering on Chaos: The Cross-Border Impact of Cigarette Taxation.". He mentions the earlier Vedder/Klingham/Gallaway study on cigarette smuggling in Ohio, but fails to mention that these reports were customised to fit the commissioned-requirements of the Tobacco Institute.

    The draft (and TI 'edited') version is at Page 478 of this 626 page package.

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1998 April 14: The National Tax Limitation Committee in California was using Vedders name, along with Milton Friedman, John Sununu and Newt Gingrich, as supporters of their seminars, in a request for donations.

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1998 Aug 15: The Florida "Press Journal" carried an article "Government assaults success" by cash-for-comments economist DT Armentano which attacks the McCain tobacco bill and the FDA.

    The list of activities of the other economists shows that the network continued to be operated by the Tobacco Institute itself (under Walter Woodson, and Lance Morgan - both Public Affairs division). [However Savarese is still in the picture.] The op-eds are now being rejected by many newspapers, who are no longer willing to publish tobacco industry propaganda.

And, since legally discovered tobacco documents had already begun to appear on-line, the Tobacco Institute has carefully deleted the names of the Professor of Economics who wrote each op-ed piece.

Vedder is listed under the heading

OHIO, Ohio University
DECLINED: The Plain Dealer.

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1999 Sep 23: Public Policy Grants made by Philip Morris to its friendly think-tanks includes information about the Heritage Foundation — which receives $50,000 a year. The Heartland Institute (as distinct from the Foundation) has requested additional support..

Because Heartland does many things that benefit Philip Morris' bottom line, things that no other organization does, I hope you will consider boosting your general operating support this year to $30,000 and once again reserve a Gold Table for an additional $5,000.

    Unlike any other free-market think tank. Heartland's primary audience is the nation's 7,500 state elected officials. We reach them more often, and generate from them more requests for research, than any other think tank in the country.

    Heartland works with ALEC and the State Policy Network to support conservative and freemarket think tanks around the country. Heartland does as much as either of these organizations to support the state-based think tank movement.

    Heartland has devoted considerable attention to defending tobacco (and other industries) from what I view as being an unjust campaign of public demonization and legal harassment. We're an important voice defending smokers and their freedom to use a still-legal product.

    We are also revamping our Web site to bring together into one place all the material on tobacco — the policy study, op-eds, PoIicyFax documents, and Heartlander essays — and identify it as the "Smoker's Lounge" on the homepage. And we have discussed producing an Instant Expert Guide to Tobacco Litigation and reproducing an analysis done of the effect of a federal lawsuit against the tobacco industry on the level of payments states can expect to receive. Both of these projects are likely to come about in the coming months (though the latter only if it is still timely).

    The Heartland Institute lists Philip Morris as a "Platinum Sponsor' (more than $40,000 pa — but with Roy Marden on its Board) while RJ Reynolds and the Charles G Koch Charitable Foundation only get credited as "Silver Sponsors" (up to $20,000 pa)

Cash-for-comment network economists on the Board of Advisors of the Heartland Institute include:

• Prof. Joe A Bell, Southwest issouri State Uni.
• Prof. Peter Boettke, New York Uni
• Prof. Cecil Bohanon, Ball State Uni.
• Prof. Charles Breeden, Marquette Uni.
• Prof. Lowell Gallaway, Ohio Uni
• Prof. William J Hunter, Marquette Uni
• Prof. Richard Vedder, Ohio Uni
• Prof. Walter Williams, George Mason Uni.
• Prof. Thomas Wyrich, Southwest Missouri State Uni.

On this list there are an even larger number of non-network economists who work for the tobacco industry on personal contract basis.

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2002 Feb 2: He is a keynote Speaker at a "Crisis in State Spending Academy" in Phoenix Arizona. He seems to be available to make speeches whenever the sky begins to fall anywhere in the USA.

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2004 Jun: Vedder's book Going Broke by Degree: Why College Costs Too Much He criticized rising tuition costs and proposed moving state universities toward free market competition and privatization.

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2006 Dec: A Vedder and Cox book The Wal-Mart Revolution says that criticisms of Wal-Mart Stores, Inc. are factually unfounded. He argued that Walmart workers are paid fairly given their skill and experience, and stated that they also receive side benefits such as health insurance that is fairly similar to competing firms. He wrote that communities with new Walmart stores actually have more total employment and higher incomes develop as a result.

    The Independence Institute lists a number of his economic articles on Wal-Mart, which suggests that they were also generous sponsors.

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2008: He appears to have had something like a Paulian conversion following the Global Financial Crisis.

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2012 Jan 28: He is at Ohio University, and is also running the Center for College Affordability and Productivity, which is a think-tank based in Washington DC. He appears to be also involved in Mackinac Center for Public Policy, and an Adjunct Scholar at the American Enterprise Institute.

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Independent Institute

The Independent Institute, which is itself a component of the Atlas Group of ultra-free-market think tanks with links to the Alexis de Tocqueville Institute [all heavily dependent on commissioned corporate funding] appears to have taken over the role of administrator of the Tobacco Institute's cash-for-comments network at the end of the 1990s.     Their research director and journal editor, Robert Higgs, was already a member of the network. Tobacco funding continued to flow to the Independent Institute which appears to have taken on the role of 'warehousing' these academic supporters to insulate them from discovery. The Institute acquired the bulk of the cabal of cash-for-comments economists who were still operating, and some who had been retired: Senior Fellows Bruce L Benson, Florida State Robert Higgs, Independent Institute William Shugart, Utah State Richard Vedder, Ohio University Research Fellows Burton Abrams, Uni of Delaware Gary Anderson, California State at Northridge Dominick Armentano, Uni of Hartford Peter Boettke, George Mason Uni Thomas DiLorenzo, Loyola College, Maryland Robert Ekelund, Auburn Uni Lowell E Gallaway, Ohio Uni Randall Holcombe, Florida State Dwight Lee, Southern Methodist Uni Cotton 'Matt' Lindsay, Clemson Uni Fred McChesney, Northwestern Uni Mark Pauly, Uni of Pennsylvania Richard Stroup, Montana State Mark Thornton, Ludwig von Mises Institute Richard Wagner, George Mason Uni Bruce Yandle, Clemson Uni Also dozens of other academics and writers who provided independent contract services to the tobacco industry — like Richard Epstein, John Goodman, Peter Huber, Paul Craig Roberts, Paul Rubin, Peter Samuel, S Fred Singer. Russell Sobel, etc.

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2022 Mar: Vedder and fellow economist Stephen Moore wrote in the Wall Street Journal editorial page in March 2011 that every new dollar of new taxes leads to more than one dollar of new spending according to their research.

    Thus, they found evidence in favor of the "Feed the Beast" theory, which posits that increasing taxes for the purported purpose of balancing the budget only leads to the government spending this cash on useless pursuits.

CONTRIBUTORS:sjc2 hrh2 SHHS