American Enterprise Institute facts for kids
 
AEI's headquarters near DuPont Circle in Washington, D.C.
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| Abbreviation | AEI |
|---|---|
| Formation | 1938 |
| Type | Public policy think tank |
| Headquarters | Washington, D.C. |
| Location |
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President
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Robert Doar |
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Revenue (2020)
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$43.5 million |
| Expenses (2020) | $47.8 million |
The American Enterprise Institute (AEI) is a special kind of research group called a think tank. It's located in Washington, D.C., and focuses on ideas that are generally "center-right" in politics. This means they often support ideas like less government involvement and more freedom for businesses.
AEI studies many important topics. These include how the government works, politics, how money and economies function, and social well-being. It is an independent group that doesn't aim to make a profit. Most of its money comes from donations by foundations, companies, and individuals.
The organization started in 1938. It supports conservative and neoconservative ideas but does not back specific political candidates. AEI believes in private businesses, limited government (meaning the government has less control), and democratic capitalism (where people have economic freedom and a say in their government).
Some of AEI's ideas have caused discussion. For example, their suggestions for the Iraq War, their thoughts on the financial crisis of 2007–2008, and their views on energy and the environment. For over 20 years, they have questioned the main scientific opinion on climate change.
AEI is guided by a group of 28 trustees. About 185 experts work with AEI, sharing their research and ideas. Arthur C. Brooks was the president from 2009 to 2019, and Robert Doar took over after him.
Contents
Exploring AEI's History
AEI has a long and interesting history, changing over the years to become the organization it is today.
How AEI Began (1938–1954)
AEI started as the American Enterprise Association (AEA) in 1938. A group of business leaders from New York, led by Lewis H. Brown, founded it. These founders came from big companies like Bristol-Myers, Chrysler, and Eli Lilly.
In 1943, AEA moved its main offices to Washington, D.C. This was during World War II, when the U.S. Congress was becoming much more powerful. AEA was against the "New Deal" programs of the time. They wanted to promote "classical liberalism" ideas, which meant supporting a government that had less control.
In 1944, AEA created an Economic Advisory Board. This board helped make sure their research was of high quality. Over time, this group included famous economists and social scientists like Milton Friedman. AEA's early work involved writing reports for Congress about new laws. This helped them build relationships with important people like Gerald Ford.
After Lewis Brown passed away in 1951, AEA struggled for a bit. But in 1952, a new group of young leaders decided to bring it back. In 1954, William J. Baroody Sr. became a key leader, helping to restart the organization.
The Baroody Years (1954–1980)
William J. Baroody Sr. was a very important leader for AEI for many years. He worked to get more money for AEA so it could grow beyond just business leaders. During the 1950s and 1960s, AEA's work became more focused. They published detailed studies, called monographs, by experts like James M. Buchanan.
In 1962, AEA changed its name to the American Enterprise Institute for Public Policy Research (AEI). This was to make sure people didn't confuse it with a group that just helped businesses influence politicians. In 1964, Baroody and some of his staff helped Barry Goldwater in his presidential campaign. Because of this, the IRS (the U.S. tax agency) investigated AEI. After this, AEI tried to avoid looking like it was taking sides in politics.
Baroody also brought in full-time researchers. In 1977, former President Gerald Ford joined AEI as a "distinguished fellow." He brought many officials from his time in the White House with him, including Robert Bork and Antonin Scalia. Ford also started the AEI World Forum, a major event for discussions.
Baroody worked to bring in "neoconservatives." These were people who had supported government programs in the past but now felt they weren't working. They also included people who were strong against the Soviet Union during the Cold War. He brought in important thinkers like Jeane Kirkpatrick and Irving Kristol. Kirkpatrick's writings at AEI caught the attention of Ronald Reagan, and she later became the U.S. Ambassador to the United Nations. AEI also became a place for "supply-side economics" experts, who believed that lowering taxes could help the economy grow. By 1980, AEI had grown a lot, with a much bigger budget and more staff.
Changes and Challenges (1980–1986)
William J. Baroody Sr. retired in 1978, and his son, William J. Baroody Jr., became the new president. Baroody Sr. passed away in 1980, just before Ronald Reagan became president.
During the Reagan administration, many AEI staff members went to work for the government. But this, along with fast growth and problems with managing research, became very expensive. Some groups that funded AEI felt it was becoming too moderate. In 1986, two big foundations stopped funding AEI, almost causing it to go bankrupt. The board of trustees fired Baroody Jr. After a short time with an interim president, AEI hired Christopher DeMuth in December 1986. He would lead the organization for 22 years.
DeMuth's Leadership (1986–2008)
When Christopher DeMuth became president, AEI was facing serious money problems. During the presidencies of George H. W. Bush and Bill Clinton, AEI's income grew significantly. DeMuth brought in many new scholars, including John R. Bolton, Dick Cheney, and Ayaan Hirsi Ali. During his time, the organization moved further to the political right.
AEI became very closely connected to the George W. Bush administration. More than 20 AEI staff members worked in the Bush administration, and President Bush himself spoke at AEI three times. He even joked that he admired AEI because he was "consistently borrowing some of your best people."
Many government leaders also visited AEI. AEI and some of its staff, like Michael Ledeen and Richard Perle, became known for their ideas leading up to the Iraq War. President George W. Bush used an AEI dinner in 2003 to talk about making Iraq a democracy. This was meant to inspire other countries in the Middle East. Later, in 2006–07, AEI experts helped create the plan for the "surge" of troops in Iraq.
Arthur C. Brooks's Era (2008–2019)
When Christopher DeMuth retired at the end of 2008, AEI had 185 staff members and a budget of over $31 million. Arthur C. Brooks became the new president in 2009, during a time of economic difficulty. Brooks wanted AEI to be more active in responding to the policies of the Barack Obama administration. In 2018, Brooks announced he would leave his role in July 2019.
Why a Scholar Left AEI
On March 25, 2010, David Frum, a scholar at AEI, announced that his job had ended. News reports suggested he was "forced out" because of a blog post he wrote called "Waterloo." In this post, he criticized the Republican Party for not working with Democrats on the Affordable Care Act. Frum felt his party's refusal to compromise led to a big defeat.
After leaving, Frum explained that AEI President Arthur Brooks had liked his article. He said he was asked to leave because of "hard times." Brooks offered Frum a chance to write for AEI without a salary, but Frum said no. Later, Frum suggested that pressure from donors might have led to his departure. He said, "AEI represents the best of the conservative world... But the elite isn't leading anymore... I think Arthur [Brooks] took no pleasure in this. I think he was embarrassed."
Robert Doar's Leadership (2019–Present)
In January 2019, Robert Doar was chosen to be AEI's 12th president. He took over from Arthur Brooks on July 1, 2019. In October 2023, Doar led a group from AEI to visit Taiwan. They met with President Tsai Ing-wen to discuss important issues.
Who Works at AEI?
AEI has many important people working there. Its main leaders include Robert Doar, Danielle Pletka, Yuval Levin, Michael R. Strain, and Ryan Streeter.
AEI also has a Council of Academic Advisers. This group includes well-known experts like Eugene Fama and Robert P. George. This council helps choose the yearly winner of the Irving Kristol Award, which honors important thinkers.
AEI was very influential during the George W. Bush administration. More than 20 staff members worked in the Bush government or on special committees. These included Dick Cheney, John R. Bolton, and Paul Wolfowitz.
AEI's Board of Directors
AEI is overseen by a board of directors, led by Daniel A. D'Aniello. Many notable people serve on this board, including:
- Cliff Asness, a hedge fund manager.
- Dick Cheney, former U.S. vice president.
- Pete Coors, a leader at Molson Coors Brewing Company.
- Harlan Crow, chairman of Crow Holdings.
- Dick DeVos, president of Windquest Group.
- Harvey Golub, retired chairman of American Express Company.
- Bruce Kovner, chairman of Caxton Alternative Associates.
- Kevin Rollins, former president and CEO of Dell.
- Edward B. Rust Jr., chairman and CEO of State Farm.
- Mel Sembler, chairman emeritus of Sembler Company.
AEI's Political Views and Influence
AEI is often seen as a "right-leaning" group, similar to how the Brookings Institution is seen as "left-leaning." However, these two groups have often worked together. From 1998 to 2008, they ran a joint center for studying government rules. In 2006, they started a project together to improve elections. In 2015, they even wrote a report together on how to reduce poverty.
AEI is the most well-known think tank connected to American "neoconservatism." This applies to both ideas about the U.S. and international policies. Irving Kristol, who is considered one of the founders of neoconservatism, was a senior scholar at AEI. The institute even gives an award in his honor. Many important neoconservatives, like Jeane Kirkpatrick, spent much of their careers at AEI. Paul Ryan has called AEI "one of the beachheads of the modern conservative movement."
According to a 2011 report, AEI was ranked among the top think tanks worldwide and in the United States. As of 2019, AEI also has the most YouTube subscribers among groups that support free markets.
What AEI Researches
AEI divides its research into seven main areas. These include studies on economic policy, foreign and defense policy, health care, politics and public opinion, social and cultural issues, education, and poverty. AEI shares its research at conferences, in academic journals, on its website, and by giving advice to government groups.
Economic Policy Studies
Studying economic policy was the original focus of AEI, and it remains a core part of their work. AEI aims to understand how free economies work, how to make them stronger, and how to fix problems. Michael R. Strain leads the economic policy studies at AEI.
Early in the 21st century, AEI experts pushed for a more conservative way to help the economy during a downturn, including big tax cuts. AEI supported President Bush's tax cuts in 2002. They believed these cuts helped save the economy from a recession.
The 2007–2008 Financial Crisis
As the financial crisis of 2007–2008 happened, The Wall Street Journal said that AEI's predictions about certain housing companies had come true. In the late 1990s, companies like Fannie Mae and Freddie Mac made it easier to get mortgages, which put taxpayers at risk. Peter J. Wallison warned that if these companies failed, taxpayers would have to pay. He suggested that these companies should either be fully private or forced to become private.
Wallison continued to criticize these companies. In August 2008, after Fannie Mae and Freddie Mac needed government help, Wallison suggested ways to deal with them, including making them fully private. The next month, these companies were put under federal control. As the housing crisis continued, AEI held conferences with experts like Desmond Lachman and Nouriel Roubini.
However, the idea that AEI accurately predicted the financial crisis is debated. In her book Dark Money, journalist Jane Mayer wrote that AEI helped create a different story about the crisis. This story, which claimed that government programs for low-income home buyers caused the collapse, did not hold up to close examination. Studies from Harvard University and the U.S. Government Accountability Office did not support AEI's conclusions. Critics say AEI tried to shift the blame from the financial industry to the government and consumers. This was done to keep promoting the idea that free markets don't need rules.
Tax and Money Policies
Kevin Hassett and Alan D. Viard are AEI's main experts on tax policy. They study topics like how income is shared, tax rates, and how companies are taxed internationally. They also look at how taxes affect investments and savings. Hassett has helped edit several books on tax reform.
Viard edited a book about lessons learned from the Bush administration's tax policies. AEI also publishes working papers on economic issues. One paper by Hassett and Mathur about how wages react to corporate taxes was mentioned in The Economist. Figures from another paper by Hassett and Brill about maximizing corporate income tax revenue were cited by The Wall Street Journal.
Energy and Environmental Policies
AEI's work on climate change has been a topic of discussion. Some AEI staff have questioned the Intergovernmental Panel on Climate Change (IPCC), which is the international group that studies climate change caused by humans. AEI says it wants to create environmental policies that protect nature, but also democratic systems and human freedom.
Historian Naomi Oreskes notes that this idea became popular in the 1980s when some conservatives became "anti-environmental." Companies claimed to support free-market ideas and individual rights by pushing for fewer rules. To do this, some companies funded think tanks like AEI. These groups would try to create doubt about scientific findings and spread misinformation. They argued that environmental dangers were not proven.
When the Kyoto Protocol, an international agreement on climate change, was being discussed in 1997, AEI was hesitant for the U.S. to join. In a 2007 essay, AEI authors said the U.S. should be careful about joining an international system for trading carbon emissions. They argued that meeting the Kyoto goals would be a huge and unrealistic task for the U.S. They also said that Kyoto rules would affect not only government policies but also private businesses by giving the government more control over investments. AEI staff said that signing the treaty would lead to a "dilution of sovereignty," meaning the U.S. would lose some of its independence.
In February 2007, news outlets reported that AEI had offered scientists money to question a report from the IPCC. This offer was criticized as a form of bribery. The letters claimed the IPCC was "resistant to reasonable criticism" and asked for essays that "thoughtfully explore the limitations of climate model outputs." In 2016, The Guardian reported that AEI received $1.6 million from ExxonMobil. It also noted that a former ExxonMobil CEO was a vice-chairman on AEI's board. This story was repeated by Newsweek, but was disputed by The Wall Street Journal. The editorial stated that "AEI doesn't lobby, didn't offer money to scientists to question global warming, and the money it did pay for climate research didn't come from Exxon."
AEI has suggested a "carbon tax" as an alternative to other climate policies. A carbon tax is a tax on the amount of CO2 released when using energy. AEI staff believe this would be a better way to reduce emissions. They argue that most economists agree a carbon tax would be superior. Other AEI staff have supported similar ideas.
Former scholar Steven Hayward has said that efforts to reduce global warming are "based on exaggerations and conjecture rather than science." He also said that even though leading scientific journals often support environmental ideas, studies that challenge common beliefs are still published. Another former AEI scholar, Kenneth Green, called efforts to control greenhouse gases "silly." He even praised Michael Crichton's novel State of Fear for teaching millions of readers about climate science.
Christopher DeMuth, a former AEI president, agreed that the Earth has warmed. However, he said it's "not clear why this happened." He also claimed that the IPCC has ignored many scientists who question the impact of greenhouse gases on global temperatures. Fellow James Glassman also disagrees with the main scientific opinion on climate change. He has written many articles criticizing climate science. He supported Senator Jim Inhofe's view that "global warming is 'the greatest hoax ever perpetrated on the American people.'"
Foreign and Defense Policy Studies
AEI's researchers in foreign and defense policy focus on how to best promote freedom and American interests around the world. AEI staff often support a strong U.S. approach to threats. These threats include the Soviet Union during the Cold War, Saddam Hussein's Iraq, China, North Korea, Iran, and terrorist groups. AEI staff also promote closer ties between the U.S. and countries they see as allies, like Israel, Taiwan, India, and the United Kingdom.
AEI supports Israel. In 2015, they gave Israeli Prime Minister Benjamin Netanyahu their 'Irving Kristol Award'.
AEI's foreign and defense policy department is often linked to neoconservatism, especially by its critics. Important neoconservatives in foreign policy at AEI include Richard Perle and Paul Wolfowitz. John R. Bolton, often called a neoconservative, says he is not one. He focuses mainly on American interests, not on promoting democracy.
U.S. National Security and Defense
In late 2006, the situation in Iraq was getting worse. The Iraq Study Group suggested pulling out U.S. troops slowly. AEI's Iraq Planning Group, led by Frederick W. Kagan, published a report called Choosing Victory: A Plan for Success in Iraq. This report called for a new strategy. It suggested focusing on securing neighborhoods and protecting people. It also recommended sending more troops and focusing on rebuilding and creating jobs.
While the report was being written, Kagan and General Jack Keane were giving advice to President Bush and Vice President Cheney. Some military leaders were upset that AEI's ideas seemed to be more important than the advice from the Joint Chiefs of Staff. Kagan, Keane, and Senators John McCain and Joseph Lieberman presented the plan at an AEI event in January 2007. President Bush announced the change of strategy on January 10. Kagan wrote three more reports to track the progress of the surge.
AEI's defense policy researchers also study the size and structure of the U.S. military. They also look at military partnerships with allies, like through NATO.
Studies on Different Regions
AEI's Asian studies cover topics like the rise of China, Taiwan's security, Japan's military changes, the threat of nuclear North Korea, and how alliances in Asia affect the U.S. AEI has published many reports on Asia.
AEI's Europe program used to be part of the New Atlantic Initiative. This was led by Radek Sikorski before he returned to Polish politics. Leon Aron's work is central to AEI's program on Russia. AEI staff often see Russia as a challenge for Western countries.
Mark Falcoff, now retired, used to be AEI's expert on Latin America. He focused on countries like Panama and Cuba. He warned that Cuba would face difficulties after Fidel Castro's rule or if the U.S. trade ban was lifted. Roger Noriega at AEI focuses on Venezuela, Brazil, and relations across the Americas.
AEI has always paid a lot of attention to the Middle East. This was especially true through the work of former scholars Ledeen and Muravchik. Danielle Pletka also focuses on the Middle East. In 2009, AEI started the Critical Threats Project. This project aims to highlight global challenges, especially from Iran and al Qaeda.
International Organizations and Development
For several years, AEI and the Federalist Society worked together on NGOWatch. This project looked at how transparent and accountable groups like the United Nations and other international organizations were. NGOWatch later became part of Global Governance Watch. AEI scholars who focus on international organizations include John R. Bolton, a former U.S. ambassador to the United Nations.
AEI's research on economic development goes back to the institute's early days. Since 2001, AEI has hosted the Henry Wendt Lecture in International Development. Nicholas Eberstadt studies demographics, population growth, and human capital development.
Paul Wolfowitz, a former president of the World Bank, researches development policy in Africa. Roger Bate focuses his research on health issues in developing countries. These include malaria, HIV/AIDS, and fake medicines.
Health Policy Studies
AEI scholars have been researching health policy since the institute's early days. For many years, Robert B. Helms led the health department. AEI has long focused on topics like national health insurance, Medicare, Medicaid, new medicines, health care competition, and controlling costs.
AEI has published many books on health policy since the 1970s. Since 2003, AEI has published the Health Policy Outlook series. This series covers new developments in U.S. and international health policy. AEI also published "A Better Prescription," which outlined their ideal plan for health care reform. This report emphasized giving money and control to consumers. It also supported a market-based health care system. They believe this approach relies on financial incentives rather than central control. They also recognize that one plan won't work for everyone in a diverse country like the U.S.
In 2009, AEI researchers actively looked at the Obama administration's health care proposals. Paul Ryan, a key Republican leader in the House, spoke at an AEI conference. He talked about five important parts of health reform.
AEI scholars have long argued against the tax break for employer-sponsored health insurance. They believe it distorts insurance markets and limits consumer choices. In the 2008 U.S. presidential election, John McCain supported this idea, while Barack Obama did not. However, in 2009, some members of the Obama administration suggested that removing this tax break was possible.
Roger Bate's work includes international health policy. He focuses on medicine quality, HIV/AIDS, malaria, and global health organizations. In 2008, Dora Akunyili, Nigeria's top drug safety official, spoke at an AEI event. This event was held when Bate's book Making a Killing was launched.
Legal and Constitutional Studies
The AEI Legal Center for the Public Interest handles all legal and constitutional research at AEI. This center was formed in 2007. Legal studies have a long history at AEI. The institute was a leader in the "law and economics" movement in the 1970s and 1980s. Robert Bork published The Antitrust Paradox with AEI's help. Other legal experts who have done research at AEI include Walter Berns and Antonin Scalia.
The AEI Legal Center hosts an annual lecture series. Past speakers have included Supreme Court Justice Stephen Breyer, former President George H. W. Bush, and Margaret Thatcher.
Ted Frank, the director of the AEI Legal Center, focuses on legal liability and tort reform (changes to laws about lawsuits for harm). Michael S. Greve focuses on constitutional law and federalism (the division of power between federal and state governments). Greve is a well-known figure in the conservative legal world.
Social and Cultural Studies
AEI's social and cultural studies program began in the 1970s. At that time, William J. Baroody Sr. realized how important philosophy and culture were to economics and politics. He invited social and religious thinkers like Irving Kristol and Michael Novak to work at AEI. Since then, AEI has supported research on many topics. These include education, religion, race and gender, and social welfare.
AEI has hosted the Bradley Lecture Series since 1989. This series aims to improve discussions in Washington by exploring the ideas behind current issues. Famous speakers in this series have included Kristol, Novak, Allan Bloom, David Brooks, Lynne Cheney, Niall Ferguson, Francis Fukuyama, Samuel P. Huntington, Charles Murray, and Fareed Zakaria.
Education
Education policy studies at AEI are led by Frederick M. Hess. He has written and edited many books based on major conferences held at AEI. These books cover topics like urban school reform, school choice, the No Child Left Behind Act, teacher qualifications, and student loans.
Hess also helps lead AEI's Future of American Education Project. This group includes important figures like Washington, D.C. schools chancellor Michelle Rhee. Hess works closely with Rhee, and she has spoken at AEI many times. Hess also coauthored Diplomas and Dropouts, a report on university graduation rates that was widely discussed in 2009. This report and other education projects received support from the Bill & Melinda Gates Foundation.
AEI is often seen as supporting school vouchers (money given to parents to use for private school tuition). However, Hess has also criticized them. He believes that efforts to bring market ideas to education have not always worked as expected. He argues that while "choice" is important for students, the real progress comes from improving the quality of schools themselves.
How AEI is Funded
In the 1980s, about 60% of AEI's money came from organizations like the Lilly Endowment and the Smith Richardson Foundation. The rest came from large companies such as Exxon and J.C. Penney.
For the fiscal year ending June 2015, AEI's income was over $84 million, with expenses of over $38 million. In 2014, the American Institute of Philanthropy, a group that rates charities, gave AEI an "A−" grade.
As of 2005, AEI had received $960,000 from ExxonMobil. In 2010, AEI received a $2.5 million grant from the Donors Capital Fund. A 2013 study found that AEI received $86.7 million between 2003 and 2010.
See also
- List of American Enterprise Institute scholars and fellows
- Francis Boyer Award
- Irving Kristol Award
