March 2019 – Page 5 – Sheila Kennedy

The Vouchers Scam

A recent state report and a blistering–and entirely correct–blog post from Doug Masson pretty much destroy the myth that Indiana’s school vouchers do anything for poor children, or were really intended for use by children “trapped” in failing schools.

The 2018-19 voucher report from Indiana’s Department of Education includes the information that there are over 1,300 households receiving vouchers that have incomes over $100,000. That means those households are in the top twenty percent of Hoosiers by income.

It’s impossible to read the report without concluding that Indiana’s voucher program was purposely constructed to evade the constitutional prohibition against government support for religion–designed to allow taxpayer dollars to be diverted from the state’s public schools and used to promote religious education. (Nearly all of the participating private schools are religious.)

Indiana’s voucher program costs taxpayers $161.4 million and disproportionately serves white children, many of whom are clearly not “escaping failing schools” because–despite lawmakers’ original promises– they never attended public school.

As Doug Masson wrote, after reading the report:

This reinforces my view that the real intention of voucher supporters was and is: 1) hurt teacher’s unions; 2) subsidize religious education; and 3) redirect public education money to friends and well-wishers of voucher supporters. Also, a reminder: vouchers do not improve educational outcomes. I get so worked up about this because the traditional public school is an important part of what ties a community together — part of what turns a collection of individuals into a community. And community feels a little tough to come by these days. We shouldn’t be actively eroding it.

Vouchers have now been around long enough to allow for a fair amount of academic research, and–as Doug points out–that research has pretty thoroughly rebutted the assumption that sending children to private religious schools would lead to improvement in classroom performance. At best, students post academic results that are the same as those of their peers who attend public schools, and in several studies, academic outcomes were actually worse.

What vouchers have done successfully is re-segregate student bodies, and there is some emerging evidence that avoiding racial integration was the real motive for a number of proponents. For others–notably, former Indiana Governor Mike Pence and Secretary of Education Betsy DeVos–the voucher program was a way to prop up the declining finances of Christian religious schools.

If they could also destroy the teachers’ unions, well, that was just icing on the cake.

For those looking to avoid integration or working to “bring children to Jesus” with our tax dollars, the rhetoric about giving poor families “choice” was a marketing ploy. (I do think it is interesting that conservatives who are such rabid proponents of individual choice when it comes to schooling and health care are so horrified at the prospect that pregnant women might also want to exercise it…)

The Department of Education’s report should be a wake-up call for Indiana’s lawmakers, but then, this is gerrymandered Indiana, where rural voters call the shots….and those elected to safe seats in the General Assembly feel free to prioritize their ideologies over the will of the voters.

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More About Economic Systems

A comment posted to yesterday’s blog noted that I had not defined capitalism. Fair point.

The following description is from my last book, Talking Politics? What You Need To Know Before Opening Your Mouth, in which I included the following descriptions/comparison of capitalism and socialism.

Capitalism is defined as an economic and political system in which a country’s trade and industry are controlled by private owners for profit. It is characterized by free markets, where the prices of goods and services are determined by supply and demand, rather than set by government. Economists often define the ideal of free trade as a transaction between a willing buyer and a willing seller, both of whom are in possession of all information relevant to that transaction.

Understanding the importance of free trade to capitalism is important, because it defines the proper role of government in a capitalist system—as an “umpire” or referee, ensuring that everyone plays by the rules. For example, Teddy Roosevelt reminded us that monopolies distort markets; if one company can dominate a market, that company can dictate prices and other terms with the result that those transactions will no longer be truly voluntary. If Manufacturer A can avoid the cost of disposing of the waste produced by his factory, by dumping it into the nearest river, he will be able to compete unfairly with Manufacturer B, who is following the rules governing proper waste disposal. If Chicken Farmer A is able to control his costs and gain market share by failing to keep his coops clean and his chickens free of disease, unwary consumers will become ill. Most economists agree that in order for markets to operate properly, government must act as an “umpire,” assuring a level playing field.

This need for government is a response to what economists call “market failure.” There are three situations in which Adam Smith’s “invisible hand” doesn’t work: when monopolies or corrupt practices replace competition; when so-called “externalities” like pollution harm people who aren’t party to the transaction (who are neither buyer nor seller); and when there are “information asymmetries,” that is, when buyers don’t have access to information they need to bargain in their own interest. Since markets don’t have built-in mechanisms for dealing with these situations, most economists argue that regulation is needed.

Economists and others often disagree about the need for particular regulations, but most do agree that an absence of all regulatory activity undermines capitalism. Unregulated markets can lead to a different system, sometimes called corporatism. In corporatist systems, government regulations favoring powerful corporate interests are the result of lobbying by corporate and monied special interests that stand to benefit from them. You might think of it as a football game where one side has paid the umpire to make calls favorable to that team.

Socialism is the collective provision of goods and services. The decision whether to pay for certain services collectively rather than leaving their production and consumption to the free market can be based upon a number of factors. First, there are some goods that free markets cannot or will not produce. Economists call them public goods, and define them as both “non-excludable” –meaning that individuals who haven’t paid for them cannot be effectively kept from using them—and “non-rivalrous,” meaning that use by one person does not reduce the availability of that good to others. Examples of public goods include fresh air, knowledge, lighthouses, national defense, flood control systems and street lighting. If we are to have these goods, they must be supplied by the whole society, usually through government, and paid for with tax dollars.

Not all goods and services that we provide collectively are public goods. Policymakers have often based decisions to socialize services on other considerations: we socialize police and fire protection because doing so is generally more efficient and cost-effective, and because most of us believe that limiting such services only to people who can afford to pay for them would be immoral. We socialize garbage collection in more densely populated urban areas in order to enhance the livability of our cities and to prevent disease transmission.

Getting the “mix” right between goods that we provide collectively and those we leave to the free market is important, because too much socialism hampers economic health. Just as unrestrained capitalism can become corporatism, socializing the provision of goods that the market can supply reduces innovation and incentives to produce. During the 20th Century, many countries experimented with efforts to socialize major areas of their economies, and even implement socialism’s extreme, communism, with uniformly poor results. Not only did economic productivity suffer, so did political freedom. (When governments have too much control over the means of production and distribution, they can easily become authoritarian.)

Virtually all countries today have mixed economies. The challenge is getting the right balance between socialized and free market provision of goods and services.

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Labels Versus Definitions

Yesterday morning, I was on the treadmill listening to “Morning Joe.” Scarborough was interviewing the Governor of Colorado, John Hickenlooper, who is one of the thousands of Democrats running for President. (Okay, maybe thousands is an exaggeration…) Hickenlooper was a successful entrepreneur before becoming Mayor of Denver and then Governor, and Scarborough asked him if he considered himself a capitalist.

When Hickenlooper responded that he didn’t like labels–that he focused on solving problems–both Joe and one of his panelists repeatedly pressed Hickenlooper on the issue, since they both said– falling neatly into a semantic trap being set by Republicans–the Democratic Party is split between good old American capitalism and a “socialist” flank.

I wish Hickenlooper had been more artful in his response. He might have pointed out that all western democracies are what we call “mixed” economies. (He did note that Social Security was originally opposed for being “socialist,” which of course it is.) We need capitalism in those areas of the economy where it clearly works well, and state-sponsored systems in areas where markets fail.

He also might have made the point that Elizabeth Warren has repeatedly made: as a capitalist, she wants to rescue capitalism by reinstating the regulatory rules that mandate the level playing field that is essential if markets are to work. (As I have noted in previous posts, America no longer has a genuine market system–capitalism has devolved into corporatism.)

In our highly polarized politics today, words like Socialism, Fascism and Communism are used more as insults than descriptions. So let me offer a few definitions.

Socialism may be the least precise of these terms. It is generally applied to mixed economies where the social safety net is much broader and the tax burden is correspondingly higher than in the U.S.—Scandinavian countries are an example.

Communism begins with the belief that equality is defined by equal results; this is summed up in the well-known adage “From each according to his ability; to each according to his needs.” All property is owned communally, by everyone (hence the term “communism”). In practice, this meant that all property was owned by the government, ostensibly on behalf of the people. In theory, communism erases all class distinctions, and wealth is redistributed so that everyone gets the same share. In practice, the government controls the means of production and most individual decisions are made by the state. Since the quality and quantity of work is divorced from reward, there is less incentive to innovate or produce, and ultimately, countries that have tried to create a communist system have collapsed (the USSR) or moved toward a more mixed economy (China).

When pundits take to the fainting couch over leftists who call themselves Democratic Socialists, they are (intentionally?) confusing socialism with communism. That doesn’t necessarily mean that we shouldn’t analyze and debate proposals to “socialize” added areas of the economy–but that analysis ought to rest on accurate definitions of the terms being used.

What about the other end of the political spectrum?

Fascism is sometimes called “national Socialism,” but it differs significantly from socialism. The most striking aspect of fascist systems is the elevation of the nation—a fervent nationalism is central to fascist philosophy. There is a union between business and the state; although there is nominally private property, government controls business decisions. Fascist regimes tend to be focused upon a (glorious) past, and to uphold traditional class structures and gender roles as necessary to maintain the social order.

Three elements commonly identified with Fascism are 1) a national identity fused with racial/ethnic identity and concepts of racial superiority; 2) rejection of civil liberties and democracy in favor of authoritarian government; and 3) aggressive militarism. (Sound familiar?)

If Hickenlooper’s appearance on Morning Joe is any indication, Americans are in for two years of empty posturing over economic terminology bullshit.

Maybe I can just hide under my bed until 2020 is over…..

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Crime And Punishment II

As if we needed added confirmation of the concerns raised in yesterday’s post, a very thoughtful opinion piece from the New York Times set out the reasons why “going back to normal” (a hope shared by Representative Cummings in the Michael Cohen hearing) isn’t what we should want.

At the end of his eloquent remarks concluding a hearing where the president was accused of multiple crimes by his former attorney, Representative Elijah Cummings, the Oversight Committee chairman, pined for a return to a pre-Trump America. “We have got to get back to normal,” he said.

But Normal America produced Donald Trump, fueled his cult of personality and created the conditions for him to rise to the height of political power. If anything, Michael Cohen’s testimony was a devastating indictment of decisions that Normal America made over the past few decades that produced President Trump in 2016.

The essay challenges readers to consider the implications of facts that are currently known: Paul Manafort, a man guilty of tax evasion and bank fraud, was tapped to lead a presidential campaign. Michael Cohen, who committed tax fraud and bank fraud became deputy finance chairman of the Republican National Committee, a post he held until June 2018.

The author attributes that situation–the elevation of out-and-out crooks to positions of authority and prestige–to the stunning decline in prosecutions of white-collar crimes.

Then there’s the president himself, Exhibit A of what happens when a country spends decades treating crimes by the poor as felonies and crimes by the powerful as misdemeanors.

At the start of Mr. Trump’s career, he and his father were charged with discriminating against African-Americans in their apartment rentals. Father and son settled with the government and admitted no wrongdoing.

Later in life, Mr. Trump’s casino was charged with money launderingand got off with a fine. Just after Mr. Trump was elected, his cardboard castle of a university that bore his name settled a class-action lawsuit brought by from former students.

It took a shoe-leather investigation by The Washington Post to prompt authorities to assess that the Trump Foundation, founded in 1987, was being used as the family A.T.M. The New York State attorney general charged the foundation with “improper and extensive political activity, repeated and willful self-dealing transactions, and failure to follow basic fiduciary obligations or to implement even elementary corporate formalities required by law.” Imagine if the foundation had been scrutinized years before Mr. Trump ran for president.

According to the author, more than 60 percent of federal criminal prosecutions last year were in cases related to immigration. But while the feds were pursuing crimes committed by undocumented immigrants, there were fewer resources available to investigate and prosecute other types of crimes, and the number of such prosecutions is accordingly, as he writes, “way down.”

When the Internal Revenue Service’s Criminal Investigation Division gets stuck with the same number of special agents it had 50 years ago, lots of tax cheating is going to go undetected and unpunished.

No equal justice indeed. As the author says, “Normal America” gave white-collar criminals parking tickets, and sent SWAT teams after drug dealers. If that was America’s “normal,” we certainly shouldn’t return to it. It was that “normal” that allowed a racist con man and cheat (with absolutely no compensating qualities) to aspire to–and win–the Presidency.

We have to do better.

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Crime And Punishment

I read the more credible left and right-wing Internet sites with a grain (or cup) of salt, knowing that they may begin with factually-accurate information, but that they will spin that information to make their points. Inevitably imperfect aspects of human society are typically treated as examples of pervasively evil intentions: Democrats are “socialists” who want to deprive you of your liberty and property; Republican businesspeople are “right-wing plutocrats” working night and day to worsen inequality.

It would be refreshing to read “this aspect of society isn’t working very well, and we should probably pay attention to it” rather than “this is the tip of the rotten iceberg and we need armed revolution.”

But a recent post originally from Daily Kos struck me as basically accurate.

In sentencing documents, the special counsel’s office referred to Paul Manafort’s crimes as both “bold” and “brazen.” The word they didn’t use was “overlooked,” but that’s also absolutely true. Manafort is heading to federal prison for the rest of his life on a list of felonies a mile long—but if a special prosecutor had not been appointed, he would, at this moment, be getting fitted for a new vest made from some endangered species.

Manafort and his partner Rick Gates committed multiple felonies over a span of decades. They weren’t sly about it. They weren’t particularly cautious or clever or even competent in their efforts to cover up illegal lobbying, money laundering, and tax fraud. They just never expected to get caught because guys like them never do. The same is true of Roger Stone, who was another of Manafort’s partners at the lobbying firm charmingly known as the “Torturer’s Lobby” for its willingness to help out brutal dictators and even-more-brutal would-be dictators.

As the post went on to note, the appointment of a Special Prosecutor has uncovered criminal behaviors that probably would not have been prosecuted but for that appointment, beginning with Donald Trump. (Trump’s history of money laundering hasn’t exactly been a secret). That includes Michael Cohen and Michael Flynn and Erik Prince, among others.

The real revelation of the investigations into Trump and his foreign connections isn’t even that the man occupying the White House is a crook, and the man who ran the Republican convention three times and acted as an adviser to a half-dozen presidents is a crook, and so is his partner, and so is his partner, and so are they all. The real revelation is that it took a special counsel to see any of these men face serious prosecution no matter what they did, or how often they did it, or how “bold” their crimes might be.

Stripped of the somewhat florid language (and the unstated but implied accusation that all rich people and their “fixers” fall into the same category), the post makes a valid point: the rule of law is not equally applied.

What Trump knows, and what should be the most sobering discovery to emerge from the entire investigation, is that, barring the extraordinary circumstances of a special counsel or someone with similar authority, men like him will not face justice for crimes. And in fact, they will go on lying, cheating, stealing, with impunity.

If we are honest, we know that the criminal justice system doesn’t treat rich and poor people–or white and black people–equally. David Cole’s eye-opening book, No Equal Justice, was published in 1999, and little has changed since then.

The problem isn’t simply the unfairness of a justice system that applies different standards to different groups. The problem is that–as evidence of the disparity becomes more obvious–respect for law declines. Precipitously.

The most basic premise of the rule of law is that the rules apply to everyone; that “similarly-situated” citizens have the same rights and duties, and are subject to the same legal constraints. And “similarly-situated” in this context does not refer to finances or skin color.

When government winks at privileged persons’ misdeeds while punishing similar–or lesser– behaviors by less fortunate citizens, there is no justice and no rule of law. And that’s a problem that deserves some florid prose.

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