The Man Who Saved AEI

by John J. Miller on June 30, 2009

in Politics

  • SumoMe

January 26, 2009

Christopher DeMuth — thinker, strategist, administrator


The leaders of Washington’s two most important conservative think tanks meet for lunch about once a year. They aren’t close friends, but Chris DeMuth of the American Enterprise Institute and Ed Feulner of the Heritage Foundation share a lot of interests. Sometimes they agree to co-sponsor a project. More often, as Feulner puts it, “we just get together and talk shop.”

During a confab at the Metropolitan Club in the summer of 2007, DeMuth quizzed Feulner about succession plans at Heritage. Feulner, who was then 66, gave an overview of his intentions as DeMuth, who was then 61, listened. Two months later, however, it was the younger man who announced that he would retire from his post. “It never dawned on me that Chris was even thinking about it,” says Feulner.

In his characteristic way, DeMuth had been thinking about it with great care. On New Year’s Day 2009, he stepped down as AEI’s president, a position he had held for 22 years. “My goal never was to be president-for-life,” he says. “We should have an orderly succession, not a succession prompted by a crisis.” That’s characteristic of DeMuth as well: putting the interests of AEI ahead of his own. Of course, it has been difficult to separate the two. A good case can be made that DeMuth is AEI. Without him, the think tank might not even exist anymore. A generation ago, DeMuth saved it from collapse. Since then, AEI has recovered, and today it’s one of the country’s top organizations for making sure that policy ideas have practical consequences. The conservative movement and the nation would be immeasurably poorer if DeMuth had not joined it.

Christopher Clay DeMuth (pronounced “DeMyooth”) was born on the North Shore of Chicago in 1946, within a month of both George W. Bush and Bill Clinton. His grandfather founded DeMuth Steel Products, which manufactured silos and other products for farmers, and his father ran the company for many years. (The company still exists, though it’s no longer in family hands.) Both of his parents were Stevenson Democrats, and the election of JFK energized their son. “I was a political liberal, but completely unformed,” he says. In high school, he excelled at math and science. Advanced Placement credits let him enter Harvard as a sophomore. “For two years, I was an indifferent student,” he says. Then he enrolled in Government 146 and his political formation began in earnest.

The professor who taught Gov 146 was Edward C. Banfield, an urban-affairs expert who was critical of LBJ’s War on Poverty. (His course eventually would evolve into The Unheavenly City, a classic work of social science.) DeMuth found the man and his ideas fascinating. One day, Milton Friedman, who had yet to win his Nobel Prize for economics, lectured the students. DeMuth simply couldn’t get enough of the class or his teacher. “I screwed up my courage and asked to meet with Banfield,” he says. “After a while, he relented and I asked him what I should read.”

Banfield suggested The Unmaking of a Mayor, by William F. Buckley Jr. “I became a serious student and wanted more,” says DeMuth. Then Banfield recommended Memoirs of a Superfluous Man, by Albert Jay Nock, the iconoclastic pre-war libertarian. Next came issues of publications such as Commentary and The Public Interest. DeMuth did everything he could to place himself in Banfield’s orbit. Students weren’t allowed to attend Banfield’s weekly lunches with academic luminaries such as Daniel Patrick Moynihan and James Q. Wilson at the Harvard-MIT Joint Center for Urban Studies, but they needed a busboy, and DeMuth signed up so he could listen in.

DeMuth began to regard himself as a liberal Republican. He gravitated toward the Ripon Society, a centrist GOP think tank. “We disagreed with Barry Goldwater on civil rights,” he says. “I was a pro-civil-rights libertarian who supported Friedman’s negative income tax and wanted to abolish the draft.” After graduation in 1968, he worked on the congressional campaign of James L. Farmer, a black Republican who had co-founded the Congress of Racial Equality. Farmer lost badly but won an appointment to the Nixon administration. So did DeMuth: Moynihan, who was advising the president on urban policy, hired him. “I was 22 years old, riding around in limos and helicopters and going to cabinet meetings,” says DeMuth. “I even had an office in the West Wing.”

For most of two years, he observed the machinery of government. “I had read a lot about it, but then I was face-to-face with programs that were meant to help the poor or the environment and which often did the opposite,” says DeMuth. “This close encounter sealed the deal with my becoming a conservative.”

In 1970 DeMuth was preparing to attend law school at Harvard when he had dinner with the conservative intellectual Irving Kristol and his wife, the historian Gertrude Himmelfarb. DeMuth mentioned his interest in economics, and Kristol suggested that he enroll at the University of Chicago’s law school instead. Classes were just days from starting, but DeMuth learned of an opening. He filled it and promptly fell under the spell of the burgeoning law-and-economics movement. Professors such as Ronald Coase, Richard Posner, and George Stigler were developing the novel idea that laws should be analyzed not only for their capacity to deliver justice but also for their economic effect. “Studying with these guys was a revelation,” says DeMuth.

After earning his degree in 1973, DeMuth worked as a lawyer with Sidley Austin in Chicago and later took an appointment at Harvard’s Kennedy School of Government, where he lectured on regulation. He supported Ronald Reagan’s 1980 presidential campaign and prepared a briefing book for the transition team. The Washington Post tipped him as a candidate to head the Environmental Protection Agency, but ultimately DeMuth wound up as a kind of deregulation czar at the Office of Management and Budget. He left in 1984 to become managing director of Lexecon, a consulting business co-founded by Posner. Two years later, he bought Regulation, a magazine that AEI was publishing, and kept it in print.

Regulation was for sale in part because AEI had fallen on hard times. Founded in 1943, it rose to prominence under the leadership of William J. Baroody Sr. AEI and a few sister groups, such as the Heritage Foundation and the Cato Institute, provided a right-of-center counterweight to the armies of wonks at more established left-of-center organizations such as the Brookings Institution. During the Reagan years, AEI was well positioned to exert itself — perhaps a little too well positioned, because Reagan plucked away many of its best people, such as Robert Bork, Jeane Kirkpatrick, Antonin Scalia, and Murray Weidenbaum. Moreover, Baroody had died in 1980. His son took over, but Bill Baroody Jr. lacked his father’s ability to raise funds and identify promising intellectuals, the two central responsibilities of any think-tank chief. In 1986 he was forced out. AEI was in danger of falling apart.

A headhunting firm approached DeMuth about the job, probably at the urging of Kristol. DeMuth decided to accept the challenge. He drew up a financial plan that slashed a $14 million budget in half and called upon the trustees to invest millions of their own money. He shut down programs and shed staff. He brought Regulation back into the fold, consolidated AEI’s publications (which led to the Cato Institute’s acquisition of Regulation in 1989), and began to lead the think tank out of its morass. “I figured I’d do the job for about three years,” says DeMuth.

Since then, more than two decades have gone by. In that time, DeMuth has earned a reputation as a soft-spoken leader who is a rare blend of scholar and manager. AEI’s fellows have regarded him as a peer who also happens to run an organization with nearly 200 employees and a budget of $30 million. DeMuth has a few hobbies — sometimes he bikes to work from his home in Virginia or goes sculling on the Potomac — but his real passion has been AEI. Under him, the think tank moved from the verge of extinction to the commanding heights of conservative influence. Its current roster of experts includes some of the brightest minds in domestic and foreign policy — Michael Barone, John Bolton, Lynne Cheney, Newt Gingrich, Leon Kass, Michael Novak, and Peter Wallison. The building AEI occupies in downtown Washington, according to John Micklethwait and Adrian Wooldridge in The Right Nation, “contains more conservative brainpower than the average European country.”

DeMuth didn’t just assemble a collection of smart people; he assembled a collection of smart people whose research and opinions shape public policy. “We’re an academic institution with one foot in the political world,” says DeMuth. “Our strategy is to magnify the role of ideas in politics.” Think tanks try to meet this goal in a variety of ways, such as by hosting conferences and publishing monographs. AEI does a lot of both, but its most important function may be simply to hire motivated scholars and give them the freedom to do meaningful work in their areas of expertise, whether it’s reforming Social Security, improving the practice of organ donation, or tracking nukes in Iran.

DeMuth placed a premium on the ability to communicate these ideas to the general public. Nine years ago, for example, AEI scholar Christina Hoff Sommers published The War against Boys, which argued that feminists were wrong to obsess about society’s supposed mistreatment of girls. In fact, the data showed that boys were more likely to drop out of school, less likely to attend college, and so on. “If we continue on our present course, boys will, indeed, be tomorrow’s second sex,” wrote Sommers. Her book scandalized liberal educators who had treated the rambunctious behavior of boys as pathological rather than normal. Since then, however, the problems she cited have become mainstream concerns. “She set forth a controversial proposition that has become the conventional wisdom,” says DeMuth.

Spotting talent like Sommers has probably been DeMuth’s foremost duty. Sometimes it’s easy to do but taking advantage of it requires guts. Charles Murray is widely credited with jump-starting the welfare-reform movement with his 1984 book Losing Ground. When he then began to investigate the connection between class and IQ, however, his employers at the Manhattan Institute grew nervous, especially with respect to what Murray might say about race. In 1990 DeMuth hired Murray and encouraged the work that would become The Bell Curve, a 1994 book co-authored with the late Richard J. Herrnstein. It unleashed the fury of professors and pundits — perhaps no book in recent memory has been more attacked. Yet DeMuth’s confidence in Murray never wavered. “The Bell Curve is one of the greatest publications of social science in the last 50 years and I have no doubt that it will still be read two centuries from now,” he says. “It demonstrated with overwhelming analytic power that human nature is substantially fixed rather than totally flexible, and that challenged a central tenet of liberalism. The book had to be anathematized and destroyed.”

The Left certainly has tried to anathematize and destroy AEI. In 2007, a story in The Guardian, a liberal British newspaper, called the think tank a “lobby group” that offered $10,000 payments to scientists who questioned a U.N. report on global warming — all supposedly at the behest of ExxonMobil, a major source of funds for AEI. The Independent, another British paper, went on to describe the money as a “bribe,” and the Washington Post ran its own breathless article. Four Democratic senators, including John Kerry, immediately wrote to DeMuth: “We would be saddened, should these reports be accurate, by the depths to which some would sink to undermine the scientific consensus that human activity is the major source of global climate change.”

But the reports were false. AEI, which doesn’t lobby, merely had offered honoraria for original research on global warming, in a time-honored method by which think tanks of all political stripes generate scholarship. ExxonMobil’s financial support of AEI was minimal — no corporation provides more than 1 percent of the group’s budget. Moreover, at the time of the dispute, AEI had just published Strategic Options for Bush Administration Climate Policy, a short book by Lee Lane that recommended a carbon tax, which isn’t exactly a part of Big Oil’s political agenda.

These allegations frustrated DeMuth, but they are perhaps best viewed as a testament to his group’s importance. Two of George W. Bush’s greatest successes — tax cuts and the surge in Iraq — might not have been possible without AEI. In the late 1990s, AEI economists Kevin Hassett, Glenn Hubbard, and Lawrence Lindsey built an intellectual case for tax cuts; Hubbard and Lindsey went on to serve at high levels in the Bush administration. “Bush deserves the credit for turning these ideas into a political reality, but AEI was able to exert a kind of hydraulic pressure on policymaking,” says DeMuth.

Then there’s the surge. After the terrorist attacks of 9/11, DeMuth recognized that AEI had a lot of foreign-policy specialists in its corral but few military experts. “We needed to have people here who know what a battalion is,” he says. So he started to hire the likes of Thomas Donnelly and Fred Kagan. As the war in Iraq began to go wrong, they joined Sen. John McCain and others in calling for a massive influx of troops to fight the insurgents. Over four days at the end of 2006, they hosted a planning exercise at AEI, after which Kagan quickly wrote a report and made recommendations.

In The War Within, Bob Woodward writes that when Gen. Peter J. Schoomaker, the Army chief of staff, learned that Keane had briefed Bush on the surge, he blurted out: “When does AEI start trumping the Joint Chiefs of Staff on this stuff?” DeMuth didn’t participate in the AEI planning exercise, but Kagan gives him full credit for making it possible. “This could not have happened at any other think tank in town,” says Kagan. “We did in a weekend what another think tank would take nine months to push through a bureaucracy.”

On January 1, Arthur C. Brooks, an author and political scientist from Syracuse University, took the helm of AEI. DeMuth became one of AEI’s fellows. He plans to write a series of articles and possibly a book — the very things he has spent his career persuading others to do. One of his first tasks will be to develop a paper he presented at Oxford University last May. In it, he expressed his worry that conservatives have lost sight of their limited-government principles. The paper concludes this way:

In these unpromising circumstances, members of the deregulation wing of the conservative movement, and economic conservatives in general, will do one of two things. Some will stay in the arena, looking for opportunities for small, marginal improvements as they adventitiously arise. Others will withdraw to their think tanks, academic departments, journals, and fringe parties, where they will study what has transpired, attempt to construct new arguments, seek new alliances — maybe even propound a bracing new synthesis — and await the call of crisis or counter-revolution.

DeMuth may have withdrawn, but he won’t disappear. “I’m burning with ideas,” he says.

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