Category Archives: Public Policy and Governance

Charities Take A Hit

Yesterday was “giving Tuesday,” and inboxes everywhere were inundated with solicitations, prompting me to consider America’ charitable landscape.

I had recently come across a July, 2019 article published by Marketwatch (not exactly a Marxist publication), reporting the effects of the Republican tax bill on charitable giving. The lede tells the story:

New data on Americans’ tax returns adds to the growing body of evidence that charities are taking a hit as a result of Trump’s overhaul of the tax system.

Taxpayers have itemized $54 billion less in charitable contributions so far this tax season compared to the previous year, according to new IRS stats.

The tax act–signed by Trump in December of 2017– doubled the standard deduction. (As most readers of this blog are aware, the standard deduction is the amount taxpayers can  subtract from taxable income to reduce their tax bill, without having to itemize.) Taxpayers can still choose to itemize, but there’s less incentive to do that. Nonprofit scholars predicted at the time that a higher standard deduction would lead to fewer taxpayers itemizing, and that, in turn, would lead to fewer people making charitable donations in order to get a deduction.

Of course, the lack of reported donations doesn’t necessarily mean a lack of actual donations; it is highly likely that people accustomed to giving smaller amounts, or contributing to favorite causes, have continued doing so despite the lack of a tax incentive.

Studies do suggest, however, that charitable giving has taken a not-insubstantial hit. (1.7% doesn’t sound like much, but when the numbers are this big, it represents a significant chunk of change.)

Charities took in an estimated $427.71 billion overall in 2018. When adjusted for inflation, the figure represented a 1.7% decline in overall giving, according to Giving USA, an annual report on philanthropy released last month. The Giving USA estimates are made before final tax data is available, and its estimates are revised and updated as final tax return information about itemized deductions made by individuals, corporations, and estates becomes available.

The data on which the article is based is only for a part of the first year following the passage of the new tax law, and the long-term effects remain to be seen. But the dollar amount of private-sector support for charities is only one element of a charitable landscape that gets far less attention than the dollars involved.

For example, stories about charitable donations rarely point out that, in the United States, we depend upon nonprofit and charitable organizations to address what economists call “government failure.” (We learn about “market failure” in Econ 101. Less attention is paid to the concept of “government failure.”) In other words, Americans expect charity to respond to a number of social needs which in other countries are met by government programs.

A lot of what U.S. tax law considers “needs” sufficient to justify a tax exempt status are appropriately left to the private sector, but to the extent such needs are real and pressing and widely seen as collective responsibilities, a reduction in charitable giving can cause significant hardship.

Muddying the waters even further is the lack of a bright line between genuinely charitable organizations and profit-making ventures sufficiently “on the line” that they are able to obtain a 501 c 3. Is the hospital that pays its chief executive 400,000+ a year simply distributing what would otherwise be profit as salaries? Are donations to the school’s Little League team truly charitable contributions? What about the gift shop or car wash run by the church?

How elastic is our definition of “charity”?

One of these days (clearly not in my lifetime), American lawmakers are going to have to clarify some things: what are the social welfare services that government must provide? What privately-sponsored endeavors are truly charitable, and deserving of tax-exempt status, and which don’t justify the incentive?

Answering those questions is obviously less critical than ridding ourselves of the loopholes/subsidies that allow businesses like Amazon to avoid paying any tax at all on huge profits–but that doesn’t mean they are unimportant.

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Pardons And Predatory Loans–A Day In Trumpland

Like a broken record, I keep coming back to one question: what can his supporters be thinking? 

In just one November week, the President of the United States pardoned three war criminals and endorsed a measure facilitating predatory payday loans. A report in Talking Points Memo has details of both.

President Trump’s pardons: “Sheriff Joe” Arpaio. Michael Behenna. And this week, three convicted or accused murderers: Army 1st Lt. Clint Lorance and Maj. Mathew Golsteyn, both of whom Trump pardoned, and Navy SEAL Eddie Gallagher, who Trump granted clemency.

Gallagher, the best-known of the trio, was acquitted of charges that he murdered an teenage Islamic State captive. But he was convicted of posing with the boy’s body. And his own SEALs testified against him, including SEAL Dylan Dille, who testified that he witnessed Gallagher shoot innocent people with a sniper rifle. Another SEAL under Gallagher’s charge testified, “I shot more warning shots to save civilians from Eddie than I ever did at ISIS.”

 “I stuck up for three great warriors against the deep state,” Trump said Tuesday. In this case, that apparently means the Defense secretary, the (fired) Navy secretary and military prosecutors.

If Secretary of the Navy Richard Spencer, who was forced out over his strong denunciation of the pardons, is a member of the “deep state,” then we need more deep state operatives.

In his letter to Defense Secretary Mark Esper, Spencer criticized Trump for interfering on Gallagher’s behalf.

“…I no longer share the same understanding as the Commander in Chief who appointed me, in regards to the key principle of good order and discipline,” he wrote. “I cannot in good conscience obey an order that I believe violates the sacred oath I took in the presence of my family, my flag and my faith to support and defend the Constitution of the United States.”

Among the multitude of concepts that elude our Moron In Chief is the fact that his pardons endanger American troops. If we do not obey the rules of “good order and discipline,” our antagonists will feel no compunction to treat American prisoners humanely. You can visit Lawfare for a perceptive discussion of the other damage these pardons do.

Allowing lenders to profit from imposing outrageous interest rates on those least able to pay them may not be as monumentally evil as encouraging war crimes, but it is appalling nonetheless.

Want to make payday loans in states where it’s outlawed? Rent a bank! Laws governing interest rates on predatory loans vary widely from state to state. Predatory lenders hate that. They want to be able to charge 120% APR in Colorado just like they do in, say, Wisconsin. How do they do that now? They use the bank in Wisconsin to process a high-interest loan that, in all other respects, was effectively carried out through a storefront in Denver. Yes, this really happened, and yes, the Trump administration has taken the banks’ side in the ongoing legal battle.

A 2015 court decision has hampered this effort somewhat for predatory lenders, but the FDIC and the Comptroller of the Currency want to change that, announcing a proposal that would actively promote the practice.

FDIC Chair Jelena McWilliams “is doing the bidding of loan sharks who have a decades-long history of trying to get around state consumer protection rules,” Americans for Financial Reform spokesperson Carter Dougherty observed. “And now a federal regulator is helping them do it.”

These two actions weren’t the only measures the administration took that week to unravel safeguards and undermine the rule of law, but even if they were–even if they stood alone–how do Trump’s supporters defend them? What sort of people continue to wear their MAGA hats, and proclaim that Trump was “chosen by God” and “a better President than Lincoln?”

The only answer I can come up with is: people who believe in a God who wants White Christian men to dominate others, and people who still resent Lincoln for freeing the slaves. (They were, after all, black people.)

I always knew there were some people who held these views. What is heartbreaking is that there are so many of them.

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An Epistemic Crisis

Epistemology is the study of knowledge, justification, and the rationality of belief. Epistemic may not be a word we commonly use, but I think it was entirely appropriate in this Vox headline: “With Impeachment, America’s Epistemic Crisis has Arrived.”

The Vox article focuses on what it calls a “stress test,” and considers whether the right can shield itself from “plain facts in plain sight.”

Unlike Mueller’s report, the story behind the impeachment case is relatively simple: Congress approved military aid for Ukraine, but Trump withheld it as part of a sustained campaign to pressure Ukraine into launching an investigation of his political rival Joe Biden’s family. There’s a record of him doing it. There are multiple credible witnesses to the phone call and larger campaign. Several Trump allies and administration officials have admitted to it on camera. Trump himself admitted to it on the White House lawn.

It’s just very, very obvious that he did it. It’s very obvious he and his associates don’t think there’s anything wrong with it. And it’s very obvious there is something wrong with it. Holding US foreign policy hostage to personal political favors is straightforward abuse of power, precisely the sort of thing the Founders had in mind when they wrote impeachment into the Constitution.

It’s a clearly impeachable pattern of action, documented and attested to by multiple witnesses, confessed to multiple times, in violation of longstanding political precedent and a moral consensus that was, until 2016, universal. Compared to Mueller, that is a much more difficult test of the right’s ability to obscure, distract, and polarize.

The article asks the question that all sane, “reality-based” Americans have been asking ourselves: Can the right-wing propaganda machine successfully keep the right-wing base believing an alternate reality–at least long enough to get through the next election?

Earlier in 2017, I told the story of Donald Trump and the rise of tribal epistemology. Epistemology is the branch of philosophy that has to do with knowing and coming to know things — what counts as true, what counts as evidence, how we accumulate knowledge, and the like. It’s where you find schools of thought like skepticism (we can’t truly know anything) and realism (the universe contains observer-independent facts we can come to know).

Tribal epistemology, as I see it, is when tribalism comes to systematically subordinate epistemological principles.

When tribal interests overwhelm standards of evidence and internal coherence,  what is seen as “good for our tribe” becomes the primary determinant of what is true. Who is “part of our tribe” becomes the test of who to trust.

A decades-long effort on the right has resulted in a parallel set of institutions meant to encourage tribal epistemology. They mimic the form of mainstream media, think tanks, and the academy, but without the restraint of transpartisan principles. They are designed to advance the interests of the right, to tell stories and produce facts that support the tribe. That is the ultimate goal; the rhetoric and formalisms of critical thinking are retrofit around it.

It began with talk radio and Fox, but grew into an entire ecosystem that is constantly working to shape the worldview of its white suburban/rural audiences, who are being primed for what the author calls “a forever war with The Libs, who are always just on the verge of destroying America.”

The article is lengthy and well worth reading in its entirety, but the following paragraphs graphically describe what that “epistemic crisis” will look like over the next year:

This is the story of American politics: a narrowly divided nation, with raw numbers on the side of the rising demographics in the left coalition but intensity and outsized political power on the side of the right coalition. Put in more practical terms, the right still has the votes and the cohesion to prevent a Senate impeachment conviction.

On the downslope of a fading, unpopular coalition is not a great place for Republicans to be. It doesn’t augur well for their post-2020 health as a party. But it is enough to get them through the next election, which is about as far ahead as they look these days.

All they need to do is to keep that close partisan split frozen in place. Above all, they need to ensure that nothing breaks through to the masses in the mushy middle, who are mostly disengaged from politics. They need to make sure no clear consensus forms, nothing that might find its way into pop culture, the way the entire nation eventually focused its attention on Nixon’s impeachment.

It’s a kind of magic trick they’re going to try to pull off in full view.

If it succeeds, reality and America both lose.

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“Meanwhile”–Mike Pence Version

While we are transfixed by the latest “shiny object”–the latest betrayal of long-time allies, the emergence of emails documenting the White Nationalism of the White House, Trump’s approval of war crimes, the daily evidence that our President is quite insane, and of course the Impeachment hearings–the current administration stays busy behind the scenes destroying both democratic norms and constitutional barriers.

I have previously posted about a number of these assaults–generally, they are being led by the unqualified and ethically compromised individuals currently ensconced in cabinet and other administrative positions. Recent reporting, however, locates one such offensive in the White House itself: efforts by wannabe theocrat Mike Pence to further erode the First Amendment’s separation of church and state.

As ProPublica reports

Last November, a top Trump appointee at the U.S. Agency for International Development wrote a candid email to colleagues about pressure from the White House to reroute Middle East aid to religious minorities, particularly Christian groups.

“Sometimes this decision will be made for us by the White House (see… Iraq! And, increasingly, Syria),” said Hallam Ferguson, a senior official in USAID’s Middle East bureau, in an email seen by ProPublica. “We need to stay ahead of this curve everywhere lest our interventions be dictated to us.”

The email underscored what had become a stark reality under the Trump White House. Decisions about U.S. aid are often no longer being governed by career professionals applying a rigorous review of applicants and their capabilities. Over the last two years, political pressure, particularly from the office of Vice President Mike Pence, had seeped into aid deliberations and convinced key decision-makers that unless they fell in line, their jobs could be at stake.

Some five months before this email was sent, Ferguson’s former boss had been fired. The action followed a communication from Pence’s chief of staff, in which recipients were told that Pence was “displeased” with USAID’s work in Iraq, especially the agency’s decision to turn down Christian groups for aid.

The administration’s efforts to influence USAID funding worried professionals within the agency. Not only did it risk violating First Amendment prohibitions on favoring one religion over another, but there were practical concerns: if the U.S. was perceived as favoring Christians, that perception could–indeed, it probably would– worsen Iraq’s sectarian divides.

USAID regulations state that awards “must be free from political interference or even the appearance of such interference and must be made on the basis of merit, not on the basis of the religious affiliation of a recipient organization, or lack thereof.”

Despite the clear language of the regulations, USAID recently announced two grants to Iraqi organizations that had previously been rejected. According to the Pro Publica article, political appointees, rather than professionals charged with making these determinations, “significantly impacted” the awards.

Typically, such appointees have little to no involvement in USAID grants, to avoid perceptions of undue political influence on procurement.

One of the groups selected for the newest awards has no full-time paid staff, no experience with government grants and a financial tie that would typically raise questions in an intense competition for limited funds. The second organization received its first USAID direct grant after extensive public comments by its leader and allies highlighting what they described as a lack of U.S. assistance to Christians. The two groups — a charity that primarily serves Christian Iraqis and a Catholic university — were not originally listed as front-runners, according to a document seen by ProPublica.

The remainder of the lengthy article documents the measures taken by the administration–especially Pence’s office–to change the criteria by which funds would be awarded in order to benefit Christian organizations. It also reports on Pence’s “pushback” to warnings that favoritism to Christian organizations would run afoul of both the First Amendment and agency regulations.

Just more evidence that while we are transfixed by Trump’s bizarre behaviors and ungrammatical tweets, lobbyists are running federal agencies for the benefit of their former clients, faux Christians are undermining the Constitution and distorting foreign policy, the entire administration is undermining the rule of law…

And today’s GOP is fiercely defending all of it.

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Air We Shouldn’t Breathe, Water We Shouldn’t Drink

Yesterday, I posted about the shorter-and-longer term consequences of Trump’s assault on various policies and norms. I noted in passing that the next administration–assuming it is Democratic (if it isn’t, the America we grew up in is gone)–will need to reinstate numerous environmental safeguards before it can address the critical threat posed by climate change.

Paul Krugman has laid out the dimensions of the Trump administration’s assault on basic environmental protections. Here’s his lede:

Given what we’ve seen in the impeachment hearings so far, there is literally no crime, no abuse of power, that would induce Republicans to turn on President Trump. So if you’re waiting for some dramatic political turn, don’t hold your breath.

On second thought, however, maybe you should hold your breath. For air quality has deteriorated significantly over the past few years — a deterioration that has already cost thousands of American lives. And if Trump remains in power, the air will get much worse, and the death toll rise dramatically, in the years ahead.

Krugman clarifies that, in referring to air pollution, he isn’t talking about the greenhouse gases driving climate change. He is addressing the issue of pollutants with a much more immediate effect. That includes, as he points out,  “fine particulate matter,” the small particles that make the air hazy.  Those particulates pose a significant health hazard, because they penetrate deep into the respiratory tract.

The good news until a few years ago was that thanks to environmental regulation the concentration of fine particulates was in fairly rapid decline. The bad news is that since 2016 this kind of pollution has been on the rise again, reversing around a fifth of the gains since 2009.

That may not seem like a big problem, but estimates are that even this relatively small rise  led to almost 10,000 extra deaths last year.

If deaths don’t concern you (!), perhaps the economic cost of rising pollution will. A study Krugman cites puts it at $89 billion a year. As he notes, even in an economy as large as America’s, $89 billion is a pretty big number.

And things are poised to get much worse. The Trump administration is working on new rules that would effectively prevent the Environmental Protection Agency from making use of much of the scientific evidence on adverse health effects of pollution. This would cripple environmental regulation, almost surely leading to sharply worsening air and water quality over time….

Why is this happening? As many observers have pointed out, failing to act on climate change, although it’s an indefensible crime against humanity, is also in some ways understandable. Greenhouse gas emissions are invisible, and the harm they do is global and very long-term, making denialism relatively easy.

Particulates, however, are visible, and the harm they do is both relatively localized and fairly quick. So you might have thought that the fight against dirty air would have widespread, bipartisan support. Indeed, modern environmental protection began under none other than Richard Nixon, and retired E.P.A. officials I’ve talked to describe the Nixon era as a golden age.

Krugman says the GOP has become the party of pollution.

Why? Follow the money. There’s huge variation among industries in how much environmental damage they do per dollar of production. And the super-polluting industries have basically put all their chips on the Republicans. In 2016, for example, coal mining gave 97 percent of its political contributions to Republican candidates and causes. And polluters are getting what they paid for….If Trump doesn’t succeed in destroying our democracy (a big if), his most damaging legacy will be the vast environmental destruction he leaves behind.

Krugman’s column centered on air quality; recent EPA rollbacks pose an equally serious threat to the nation’s water supply.

How corrupt do you have to be to value your bottom line over the health of your children and grandchildren?

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