Think tanks wrap-up

WASHINGTON, May 13 (UPI) -- The UPI think tank wrap-up is a daily digest covering opinion pieces, reactions to recent news events and position statements released by various think tanks. This is the first of several wrap-ups for May 13. Contents: Wal-Mart feminist class action suit; FCC and internet regulation; U.S. should withdraw from NATO for Europe's own good.

The Pacific Research Institute

(PRI promotes individual freedom and personal responsibility as the cornerstones of a civil society, best achieved through a free-market economy, limited government, and private initiative. PRI researches and analyzes critical issues facing California and the nation, and crafts strategies for policy reform.)

No-class action against Wal-Mart

SAN FRANCISCO -- Feminists have developed a habit of showcasing what is wrong with their movement. Consider, for example, the crusade against Wal-Mart.

Founded by Sam Walton of Bentonville, Arkansas, in 1962, Wal-Mart has become the world's largest private employer, with nearly 1 million employees and 3,400 stores. While that growth has been good for the company, its employees, and consumers, Wal-Mart now looms large in the demonology of feminists.

The charge is that Wal-Mart discriminates against women in both pay and promotion, and it promotes a corporate culture that seeks to keep women in their place. This is not a shout-show segment but a lawsuit, which if approved as a class-action suit, would be the largest such action on record. It seeks back pay and punitive damages for all women who worked at Wal-Mart since December 1998.

April 28 declarations in the case included complaints of pay inequities, denied promotions, lunch meetings held at a Hooters restaurant, and purported statements by various male Wal-Mart employees that the role of the man is to be the breadwinner.

Wal-Mart spokesmen say that scattered statements by employees do not amount to a corporate policy of sex discrimination. They say in 90 percent of their stores, women's pay is substantially the same as men's and that they promoted the same percentage of women that applied for management positions.

The case follows the tired feminist stereotypes of women as victims, men as villains, and large corporations as inherently evil. It is driven by the notion that if there is a disparity in pay or a disparity in the number of women in management, then it must be the result of discrimination and must be rectified by court action or the federal government. This brand of feminism believes that women and men are undifferentiated commodities, and it does not allow that women might not want to apply for management positions in the same percentage as men.

It bears repeating that statistical disparities are the rule, rather than the exception. Expecting the workplace to conform to politically correct gender and ethnic quotas is to ignore personal differences, effort, and, of course, choice. Observers of the Wal-Mart case should heed the Watergate rule of "follow the money."

Wal-Mart is an obvious deep-pockets target. That is why militant attorneys are suing the retailer, and not some local department store. It is a pattern similar to the case in which a New York man charged that McDonalds, not some mom-and-pop burger joint or grocery store, made him fat. The attorneys are adopting the strategy of Willie Sutton, who explained that he robbed banks because "that's where the money is."

The most vocal critics of Wal-Mart are women from South Carolina, Florida and Indiana. The suit, however, was filed in San Francisco, which makes perfect sense. The corporate shakedown requires careful judge shopping. Power, along with money, is also in play.

Besides its size and success, Wal-Mart has also committed the sin of being a non-union operation. Unions have plummeted from 30 percent of the workforce in the 1950s to less than 13 percent today. Only in the public sector are unions growing. Union bosses, overwhelmingly male and very highly paid, know that organizing Wal-Mart would boost a moribund movement.

Last September, the National Organization for Women named Wal-Mart its "National Merchant of Shame" over labor issues. It does seem rather strange, however, that if Wal-Mart is such a bastion of oppression that so many women still choose to work and shop there. Women represent 66 percent of Wal-Mart's hourly workforce and 80 percent of department mangers.

Perhaps many women choose to work at Wal-Mart because it offers profit-sharing and bonus programs, both despised by unions. Wal-Mart also contributes to a 401(K), up to 2 percent of pay, even if the employee does not contribute.

There will be a hearing in the Wal-Mart case on July 25. Even without a ruling, the case shows that the liberal branch of feminism is losing on the battlefield of ideas, so it is now shifting its campaign to the courts.

(Sally C. Pipes is the president and CEO of the Pacific Research Institute.)

The Competitive Enterprise Institute

(CEI is a conservative, free-market think tank that supports principles of free enterprise and limited government, opposes government regulation, and actively engages in public policy debate.)

C:\Spin -- Discriminating taste: the latest battle to regulate the internet

by James Gattuso

WASHINGTON -- It's hardly news anymore when the Internet is threatened with federal regulation. Every day it seems someone hatches a plan to regulate this or that aspect of the Web. So it's not surprising that another such idea is being floated to the FCC. What is mildly startling is that the plan is pushed not by out-of-touch bureaucrats but by major parts of the tech sector itself.

Last year, a coalition of tech firms and associations -- ranging from Amazon.com to Yahoo to Disney -- sent a letter urging the FCC to "assure that consumers and other Internet users continue to enjoy the unfettered ability to reach lawful content and services." Their fear is that broadband providers would discriminate against certain types of content and uses of broadband, hindering the development of the Internet.

Parades of horribles have been marched forward in this debate -- what if a cable firm excludes certain Web sites? What if they pick favored applications?

It probably wasn't hard to rile up the tech sector in favor of this effort. Despite its anti-regulatory image, techies have never much cared for network owners, thinking of the cable and telephone networks pretty much the same way early mammals thought of the dinosaurs. But these firms should know better -- especially since many have been on the receiving end of regulatory attacks.

Much of the cyber-discrimination they warn of is imaginatively theoretical. No network owner has blocked out msn.com, for instance, nor is likely to. Even if they were monopolies, network owners wouldn't generally profit by reducing the value their customers get from the service. Further, they aren't monopolies. If a service were unreasonably discriminated against by a cable firm, telcos would likely take the disgruntled customers into their DSL fold.

There is, however, some "discrimination" that does occur. Many cable firms, for instance, have rules against using cable modem service in certain ways. Reselling bandwidth or acting as an ISP is typically barred, and some bar operating a virtual private network. But, there are legitimate business purposes for these rules.

Cable modem service is shared -- overuse by my neighbor reduces the speed at which my connection works. And there's also price discrimination -- providers charge more to businesses than residential users. That may be unfair, but such market segmentation occurs almost everywhere in industries with low marginal costs -- from airlines to software.

A third category of "discrimination" is promotion and tie-ins. What if a network provider offers special treatment to a content provider for a fee or an equity investment? The special treatment could be a faster connection, or a special promotion such as a pop up ad.

Critics say such favoritism is against the Internet ethos. But it clearly wouldn't be anything new to business world. It is, to say the least, surprising to see Disney and Microsoft rail against the dangers of cross-promotions. In many cases, especially when large-scale, risky investments are at stake, they may be essential.

Now, none of this proves there aren't non-legitimate types of discrimination that network providers, left to their evil devices, would impose. So why not a general rule by the FCC against discrimination? The simple answer is because whatever the hypothetical potential for market abuse, the potential for regulatory abuse is greater.

One can imagine how market rivals would twist and turn such rules to thwart competitors. The FCC has long allowed itself to be used for such purposes; it shouldn't do so again.

(James Gattuso is a research fellow at the Heritage Foundation.)

The Cato Institute

NATO: an economic case for American withdrawal

by Marian L. Tupy

WASHINGTON -- From a military perspective, the case for American withdrawal from NATO seems to have already been made. A number of commentators, including George Will and the British historian Paul Johnson, have pointed out that NATO is an anachronism rendered helpless by distrust and infighting.

But there are also compelling economic grounds for American withdrawal. Simply, the American security guarantee perpetuates the continuation of the European welfare states and thus encourages economic sclerosis across the European continent. Thus NATO is not only useless, it's harmful.

The collapse of the Soviet Union saw Western military budgets shrink. According to the Center for Strategic and International Studies, between 1990 and 1999 the defense expenditure of all European NATO members decreased from 3 percent to 2.3 percent of GNP. American military spending fell from 5.3 percent to 3.1 percent of GNP over the same period.

But spending as a proportion of GNP does not give an accurate picture of the underlying spending disparities. During the 1990s, the U.S. economy grew at a much quicker rate than the major economies of the European Union. Between 1992 and 2001, for example, the German economy grew by 1.45 percent per annum, on average, and the French economy by 1.88 percent. At the same time, the United States experienced an average growth of 3.46 percent per annum.

As a result, despite the "decline" in military spending, U.S. military spending actually went up from $277 billion in 1995 to $283 billion in 1999. By contrast, the defense spending of all European members of NATO put together declined from $183 to $174 billion during that same period.

The terrorist threat provided the impetus for an increase in American military spending to $380 billion in 2003. President Bush used the 2002 NATO summit to urge the Europeans to increase their military spending from the current 150 billion euros per annum. Only a month later, the German government actually slashed its spending by ordering fewer military transport aircraft and air-to-air missiles than originally planned.

The technological gap between the United States and Europe in reconnaissance, communication, high-tech-weapons and mobility is thus bound to widen. According to Richard Perle, former chairman of the Defense Policy Board, the European militaries have "atrophied to the point of virtual irrelevance."

Yet there is no use complaining about European complacency. The Europeans behave in a rational manner. As long as the United States guarantees their security through NATO, the Europeans lack the incentive to invest more in their defense. Instead, they can use the money they save to preserve their inefficient welfare states. Even so, the budgets of some European states are stretched to the breaking point.

According to the European Union Commission, the European economy is expected to grow only 1 percent in 2003. Because of a possible contraction of the European economy in the first quarter of 2003, that estimate may have to be adjusted downward. As a result of economic slowdown, a number of European countries, including Germany and France, have now breached the European "growth and stability pact" that limits their annual budget deficits to 3 percent of GDP.

French President Jacques Chirac's insinuation that France's economic problems may have been caused by the American war against Saddam Hussein is a preposterous attempt to shift blame. In fact, France and Germany are beset by deep structural problems, including rigid labor markets, restrictive regulations, hurtful environment and safety standards, high taxes and large, unfunded pension liabilities.

But neither Germany's Schroeder nor France's Chirac exhibit the leadership qualities necessary to pull their countries out of economic malaise. The two built their careers on populism. They do not possess the reformist zeal exhibited by Margaret Thatcher in Great Britain in the 1980s. They are thus relegated to tinkering with the margins of their welfare states. The longer those trivial changes continue, the further will the European states fall behind the United States.

An American withdrawal from the European security guarantee would galvanize serious economic reform. Instead of remaining defenseless, the European states would find it necessary to raise more revenue by cutting the size of the welfare state and increasing their economic growth.

A vibrant Europe with a strong economy and a credible military force could then contribute to making the world more prosperous -- and safe. Whether that will happen is up to Washington.

(Marian L. Tupy is assistant director of the Project on Global Economic Liberty at the Cato Institute.)