An Interview With Eli Lehrer Of The R Street Institute: Part I
I have been avidly following and writing about the “ESG Culture Wars.” I have also been looking to have conversations with thoughtful conservatives in an effort to get behind the ideological rhetoric on both sides to address the underlying substantive issues. I’ve been discussing both with a mutual friend. It was in this context she introduced me to Eli Lehrer, the founder and President of the R Street Institute, a center-right think tank based in Washington, D.C. It bills itself as an organization focused on “Free Markets. Real Solutions.” We had a few conversations, and I found his views very insightful. I asked Eli if he would be willing to do an interview with me and he kindly agreed.
Eccles: Eli, thanks again for taking the time to talk to me. For starters, mind telling me a little bit about your background?
Lehrer: I was born and raised in Chicago and both my parents were decidedly left-wing. I went to a boarding school in Connecticut, Loomis Chaffee, for high school. I wanted to do this in large part because I enjoyed my time at summer camp so much. Being on my own prepared me for college. Loomis was a very good school with good students but, actually, the elite public schools like Stuyvesant in New York City have higher admissions standards. But I found the first few years of college pretty easy since I had already gotten used to studying on my own. It put me ahead of kids who had the same or better peers, teachers, and classes than I did.
Eccles: Where did you go to college and what did you study there?
Lehrer: I went to Cornell. I’ve always had a wide range of interests, so I took classes on virtually everything, from astronomy to industrial labor relations, even restaurant reviewing. I wrote for the student newspaper, edited a science magazine, served a term on the Student Assembly and became Vice President of the geekiest fraternity on campus. It was co-ed and a member of the interfraternity council with the all-male fraternities. We made T-Shirts once that said, “we take the R out of Greek and donate it to needy pirates.” Eventually I settled on Medieval Studies because I enjoyed the way Middle English sounded when read aloud. I thought I was going to pursue a Ph.D. and become an academic medievalist. But life had other plans.
And it was in college where I found myself agreeing more with conservative and libertarian values, particularly related to speech and censorship.
Eccles: How did your left wing parents feel about that?
Lehrer: Let’s just say it led to some interesting conversations at Passover and Thanksgiving…
Eccles: How did you go from reading Middle English at Cornell to co-founding and helping lead a multi-million dollar public policy think tank in Washington, D.C.?
Lehrer: I’ve always loved writing and I worked part-time as a reporter for the Ithaca Journal after I left the student newspaper. Eventually, that led to Karl Zinsmeister (who later became George W. Bush’s domestic policy advisor) seeing my work and giving me an invitation to write for The American Enterprise, a magazine that was then published by the American Enterprise Institute (AEI). I wasn’t sure what I wanted to do. I applied to a few Ph.D programs and got into a few places and actually accepted an offer to begin graduate study at the University of Chicago. But, after that, with Karl’s encouragement, I decided to check out what was going on in Washington, D.C. I interviewed for a bunch of jobs right after I graduated in 1998 and got several offers. This led to me working for Insight Magazine, which was then part of the Washington Times. It closed about 15 years ago, but it produced a lot of alumni much better known than me. Malcolm Gladwell and David Brock are just two.
I then went from Insight to the Heritage Foundation in 1999. I stayed at Heritage until 2001, where I worked with Ed Meese on policing policy, until Karl recruited me to be senior editor of the American Enterprise Magazine at AEI. This was sort of like managing editor of the magazine: I edited pieces, commissioned articles, ran the intern program and, I hope, helped shape it. AEI was a fantastic place to work, and I’ve had something to do with AEI for most of my time in Washington.
Eccles: What was it like working at the Heritage Foundation?
Lehrer: Heritage was a good place to work. I have very warm feelings for both it and AEI. My bosses there, first Adam Meyerson and then Ed Meese, taught me a lot. It was a great, fun group of people—maybe a little too much after-hours drinking in the office sometimes! But we got a lot done. A lot of people I worked with then remain good friends.
Heritage’s commitment to conservatism and ability to inject itself into policy debates has remained consistent, so has the way it has helped start careers. But there have been changes. They’ve launched Heritage Action and become more involved in social issues. They have recently taken a more populist approach which I’d depart from a little on both style and substance. What still remains true is that no other think tank has as wide and deep a base of support as Heritage Foundation and that’s an important fact that nobody can forget.
Eccles: How long did you work at Heritage and what did you do next?
Lehrer: I was at Heritage for three years full-time and then an addition four as an adjunct and then went to AEI as the magazine editor and then from AEI to the private sector as an IT project manager for Unisys. But I quickly decided that I was not interested in managing IT projects as a career and eventually applied and was hired to work for Senator Bill Frist (R-Tenn.) when he was Senate Majority Leader. I wrote speeches and op-eds for him. If you cannot tell, virtually all my jobs were writing intensive.
While I was working for Bill Frist and while I was at Unisys, I pursued a Master’s Degree at Johns Hopkins and picked Emergency Management as my thesis topic. The Federal Emergency Management Agency runs the flood insurance program and studying and writing about that led me to get interested in insurance.
That eventually led me to the Competitive Enterprise Institute (CEI), which had an insurance project they needed someone to run. I wanted back in the think tank world, I had a baby on the way, and being the head of a project was attractive to me.
So this is 2007 and 2008 or so and being at CEI was a very formative experience because it brought me into conversations with environmental groups who wanted to reform flood insurance as much as I did….maybe more. I disagreed with these groups about a lot. But we agreed that the flood insurance program was a bad deal for taxpayers and bad for the environment. As long as we worked on very narrow issues, we were able to succeed. We reduced destructive government regulations that encouraged people to build in areas that were going to flood due to climate change.
I eventually left CEI to join The Heartland Institute. At that time, Heartland had been part of a network of groups working on insurance, and they offered more autonomy than other think tanks did at the time. I was there a little over two years and, overall, it was a good experience.
Eccles: Why did you end up leaving Heartland and co-founding R Street?
Lehrer: This is actually a well-reported piece of history, and it all comes down to billboards. Heartland had decided to run an anti-climate change advertising campaign with Ted Kaczynski, the Unabomber, as one of the faces of it.
I, Ray Lehmann, the then-deputy director of the Center on Finance, Insurance and Real Estate, and other D.C.-affiliated staff (some based in the states) felt that we could not continue to work at the organization because of the campaign, so five of us left and decided to start the R Street Institute. We opened our doors on June 1, 2012. We left on good terms, perhaps surprisingly, and I’m still friendly with a lot of people at Heartland.
We called ourselves the R Street Institute because, if you consider Connecticut Avenue as the “main street” in D.C., and head towards Maryland, the first real residential street, where real life begins, is R Street. Also, frankly, it was a short URL that we could get for $8.00, and we didn’t have a lot of money to start with and the name sounded good.
Eccles: So it is 2012 and you’ve co-founded a think tank in just a few weeks. What did you focus on?
Lehrer: We brought the insurance policy work over from Heartland, which was our first area. At Heartland, we had helped put together a new edition of Green Scissors, a coalition effort that focuses on government spending that is environmentally destructive. That gave me more confidence that I could work across the aisle, so climate change became our second area. It became very clear that climate change was a serious enough problem that it demanded real policy solutions. My work on flood insurance had taught me that alliances were possible without agreeing on everything—or even most things. Pretty soon after R Street started, I wrote an article for the Environmental Law Journal at Duke Law about coalition-building in the insurance and conservation space and that embodies a lot of the lessons I learned.
I think that most of the political left’s plans for dealing with climate change are seriously lacking. They get the problem right and it’s a serious one. But their solutions, in many cases, would make things worse. I don’t find myself agreeing with anything in the Green New Deal, for example. We have a big problem and a huge dose of central planning and greatly increased spending–the very things that tend to paralyze economies–would make us poorer and less able to deal with the most extreme possible outcomes from climate change. So anything like a Green New Deal is a step in the wrong direction.
We can’t ignore the problem just because the solutions proffered are bad. I think policies that are pro-market and narrower would help deal with climate change more than left-of-center policies. It was that view that helped inform the other programs we started to pursue – technology policy, electricity policy, criminal justice, and others.
Eccles: How do you decide what topics to focus on?
Lehrer: Today, we focus on low salience, highly complex issues. That’s another way of saying boring. In the areas where we work, we’re extremely well-known, but we’re extremely careful, especially recently, to stick to the areas where we work. Despite having grown significantly in the past 3-4 years, we work on fewer areas than we did years ago, and we’ve even dropped some of the types of activities we used to do. We recently stopped doing amicus briefs for example. It is a careful balance because we work to educate lawmakers and their staff and drive real impact, and you never know when an opportunity will pop up. But you can’t be all things to all people and playing “me too” in a crowded policy landscape is a disaster.
We work on a variety of issues under technology policy, from defending Section 230 of the 1996 Communications Decency Act (the law that limits the liability of platforms like Facebook for content its users create), to artificial intelligence policy. AI is obviously the flavor of the day, and our stance is to ensure it is not strangled in its cradle. I’m personally skeptical that we’ve seen an enormous sea change in the last few months with the emergence of Large Language models that often seem eerily human. I think it’s akin to the first person running a 4-minute mile. What’s going on now is as much psychological and cultural as it is technical. Google is basically an AI company, and it has been a major force economically and technologically for almost 20 years now.
We’ve worked on energy and environmental policy for years, too. Today, that translates into focusing deeply on ESG. We support the free market and people can read our thoughts on ESG since it touches a number of policy areas. At the end of the day, the market wants to incorporate externalities that have an impact on profit and loss. The government shouldn’t forbid investors and investment managers from using a broad array of information including information about things like climate change impacts and workforce diversity. But this information has to be considered in the context of business—not the context of moral values alone.
Likewise, efforts by government to engage in wholesale divestment from entire sectors is almost always going to be a bad deal for public employee pension plans, bond issues, and other government efforts. Narrowing the types of assets in a portfolio particularly for something like a pension is, over the long run, going to reduce the risk-adjusted rate of return. And this applies to both divestment laws like Maine’s and “anti-boycott” laws like the one in Texas.
We have some of the smartest scholars on environmental policy who understand how governments and the private sector interact, and where the pain points are. Our role is to focus exclusively on public policy and clear up any confusion. Today, rather than find us in the middle of the political shouting matches, we’re thinking deeply on policy surrounding the ESG and have conversations about it. People can also read where we think clarity and consensus are required, and why.
Eccles: My readers know I am fascinated with ESG and how it became part of the political culture wars. What’s your take?
Lehrer: It’s a consequence of a very messy political divorce. If you look at the history of the Republican Party, the consistent theme going back to Lincoln has been a relationship with big business. Honestly, neither the Republican Party nor the Democratic Party has really had a consistent policy platform or base of support. The only consistent thing about either party was the way that Republican candidates were the candidates of big business. Lincoln spoke for the textile and railroad interests against the southern enslaving class which ran family businesses. Eisenhower was the candidate of the automobile industry. And so forth for every candidate. The 2020 election was the first time that big business had a clear preference against a candidate nominated by the Republican party. What we’re seeing right now is a very messy divorce of an extremely long marriage that is going to continue to have significant impacts on American society and culture as a whole.
There will still be big businesses that support the Republican party, but the fact is that on cultural issues, they are going their separate ways and things are continuing to heat up.
ESG landed in the middle of this divorce because a lot of language around ESG sounds left-wing, even when the ends are perfectly justifiable on market and investment grounds that Milton Friedman would have embraced wholeheartedly.
Eccles: One last question. The ESG Culture Wars seem to be forcing people to take sides. What are your funding sources and are your views on ESG having any impact on them?
Lehrer: R Street takes its intellectual independence and credibility incredibly seriously. We have a diverse donor base that includes a wide range of foundations on the left and right, corporations and individuals. In addition, we have a rigorous policy strategy process and other internal guardrails in place to ensure we are always driving the policy agenda—and this is the same when it comes to ESG. Part of why key stakeholders view R Street as so valuable is our ability to stay above the political fray and remain laser-focused on analyzing and explaining ESG policy, including the consequences of passing bad, reactionary legislation that could harm consumers or have unintended consequences on the market.
Eccles: Thanks, Eli, for a most interesting and insightful interview. I’m looking forward to our next one where we’ll focus on the work R Street is doing on AI, Section 230, and elections.