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The Question Raisers

It's no surprise that the governmental response to the Covid-19 pandemic has attracted the attention of Oakland's feisty Independent Institute and its founder

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It was in signature style that the Independent Institute published a letter in mid-April signed by 151 economists, political scientists and others calling for the suspension of AB 5, the new California law barring companies from hiring many workers as independent contractors.

By prohibiting Californians from embracing flexible employment opportunities such as contract driving or health-care work, the letter argued, the act is penalizing the very people now most in need of assistance during the economic dislocation stemming from measures to combat Covid-19.

"Employment decisions hinge on the costs of distributing risk," the letter said. "While employers are not hiring, gig workers could shoulder myriad tasks that are needed to flatten out the effects of the temporary emergency. It doesn't really matter how great the pay is, how predictable are the hours, nor how generous the benefits may be, if the law prevents a job from existing in the first place.

"AB-5 unintentionally has pushed all of the risks and all of the costs of a vibrant gig economy onto lower- and middle-income individuals, those who would benefit most from flexibility to work around the restrictive policies."

As with so much published by the Oakland-based Independent Institute, a think tank whose fellows commonly champion limited government, the target was another case of government intruding on freedom of choice.

"I think the pandemic has brought into high relief the real fallacy of the idea of the systematic blanket approach to employment in such an erroneous and horrible way that it's really undermined the lives of millions of people just in California," institute president David Theroux said in a subsequent webcast aimed at raising awareness.

Whether the institute's warning succeeds in changing the public perception of the state's crackdown on the gig economy remains to be seen. If anything, California's Attorney General and a coalition of city attorneys subsequently signaled their increased commitment to AB 5 by filing a lawsuit against Uber and Lyft alleging that the companies have illicitly reaped "well into the hundreds of millions of dollars" by avoiding employer contributions to state and local unemployment and social insurance programs for ride-hailing and delivery drivers.

Nevertheless, it's a good bet that the Independent Institute will keep providing commentary on the subject, and many others, as it has done for more than three decades.

"We're in the business of raising questions," offered Theroux, who founded the nonprofit enterprise.

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Other than acknowledging a distrust of centralized government power, Theroux steadfastly resists any attempt to categorize his institute as conservative, liberal or libertarian. Independent Institute fellows indeed challenge orthodoxies across the political spectrum, critiquing militarism for oil one day and people who warn of human-caused climate change the next.

Institute authors have criticized Donald Trump's use of tariffs against China, his economic sanctions against Iran and his initiative to establish a space defense agency. They have questioned military interventions, the war on drugs, immigration restrictions, the death penalty and government bailouts for "too-big-to-fail" businesses. Others have opined against the Affordable Care Act, advocated for school choice via educational savings accounts and argued that Vermont Sen. Bernie Sanders was "morally unfit" to be president because of his embrace of socialism.

Before the pandemic, Theroux met with a reporter at the organization's two-story headquarters in an industrial area near Oakland International Airport. The soft-spoken intellectual dressed formally in a necktie and a blue blazer decked out with a lapel pin of a lighthouse, the institute's brand insignia. The conference table was stacked with Independent Institute books and periodicals, and Theroux held forth on the wide array of political, social, economic, legal, environmental, and foreign policy topics that they addressed.

MEMBERS GET A FREE BOOK:  Development Coordinator Gisselle Godinez - LANCE YAMAMOTO
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  • MEMBERS GET A FREE BOOK: Development Coordinator Gisselle Godinez

There was a now-timely history showing how government opportunistically expands in times of crisis, particularly war, but does not shrink once emergencies have passed; a book about the Third Reich's use of French gun registration records to disarm French citizens, and how gun owners who refused to register their weapons helped the French resistance; and a study of state surveillance and privacy in the United States.

The evidence, said Theroux, shows that free trade, entrepreneurialism and innovation protected by the rule of law produce the best societal results, while "command-and-control" programs that infringe on free choice prove harmful economically, morally and culturally, with unfair enrichment of special interest groups being a consistent result.

With such priorities, it should not surprise that the institute is having a field day with the governmental responses to Covid-19. Its authors have approached the crisis from a variety of angles, championing expanded immigration for healthcare workers, predicting that the response will lead to the closure of 500 to 1,000 colleges and advocating for the use of the drug remdesivir well before the government publicly approved its usage for Covid-19 patients based on an early clinical trial.

Yet institute authors have been largely critical of efforts to respond to Covid-19, as can be surmised by a review of recent headlines, such as "California Gov. Newsom Numb to Workers' Pain," "Government Restrictions Have Gone Too Far," "Governments Can't Plan Economy's Reopening," "Economic Prosperity or Pandemic Protection: Why Not Both?" and "Pandemic Moves University of California to Lower Admission Requirements."

"We don't care who is using the unchecked power," observed Mary Theroux, the institute's senior vice president, and David's wife, speaking before the pandemic emerged. Also elegantly dressed, she delivered trenchant comments about government programs she felt had failed in areas like education and homelessness. "Why is it the case," she asked at one point, "that the more the government spends on homelessness the more homeless there are; the more the government spends on housing the less housing there is?"

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