Category Archives: Public Policy and Governance

The Real Welfare Queens

America’s most generous welfare system is one in which the rich get richer, and the rest of us pay the bills.

Both Axios and American Progress have reported on the taxes paid–or more accurately, avoided– by members of the Fortune 500. This was at a time when corporate profits were more than healthy, and in the view of many, a time when corporate greed has contributed to the inflation that is eroding wage gains.

The table at the link shows 2021 federal income tax expenses, pre-tax earnings, and effective corporate income tax rates for 19 companies in the Fortune 100. Four of them show a negative tax rate, or zero taxes owed that year and for some, entitlement to a refund.

I’ve pared down the following list to the name of the corporation, its pre-tax earnings after allowable deductions and credits, and the effective tax rate. There are many more companies that fall into this category, but this will give you a (bitter) taste…

Amazon.com Inc.
$35.1 B
6.1%

Exxon Mobil Corp.
$9.3 B
2.8%

AT&T Inc.
$29.6 B
−4.1%

Microsoft Corp.
$33.7 B
9.7%

JPMorgan Chase & Co.
$48.2 B
5.9%

Verizon Communications
$27.2 B
6.9%

Ford Motor Co.
$10 B
1.0%

General Motors Co.
$9.4 B
0.2%

Chevron Corp.
$9.5 B
1.8%

Bank of America Corp.
$30.6 B
3.5%

United Parcel Service
$14 B
9.9%

FedEx Corp.
$4.7 B
4.2%

MetLife Inc.
$4.8 B
1.3%

Charter Communications Inc.
$6 B
−0.2%

Merck & Co. Inc.
$1.9 B
4.0%

American International Group Inc.
$9.8 B
−2.2%

Dow Inc.
$1.5 B
−3.1%

Nike Inc.
$5.6 B
5.9%

A recent Guardian analysis of top corporations’ earnings shows most of them are enjoying significant profit increases while they continue to pass higher costs on to customers. And despite record profits and minimal or even negative taxes generating big refunds, several of these companies–Amazon is notable–are frantically opposing the unionization of their workforces.

If you wonder why the gap between the rich and the rest continues to grow…

A recent article from Time Magazine traced the history and effect of unionization.

Unions became popular in the U.S. starting in the 1930s, with membership rising from just over 10% of the eligible working population in 1936 to about a third by the mid-1950s, according to 2021 research published in the Quarterly Journal of Economics. That remained the case until the mid-1980s, when they fell out of favor, thanks to a culture in which companies refocused on maximizing shareholder value and minimizing worker benefits, as well as a court-backed emphasis on the value of private property and private profit. “Those years turned out to be basically a blip in what otherwise has been not only a very contentious, but many times a very violent interaction between workers and employers in this country,” Devault says of the mid-20th century.

During unions’ heyday in the U.S., however, the income gap between the richest and poorest Americans shrunk considerably. “The only time that the bottom tenth of the population and the top tenth of the population have come closer together has been during those years, when unions were operating in the largest corporations in this country,” Devault says. As unionization declined in the 1970s and 80s, that income gap grew once more. Today, it is at an all-time high since tracking began over 50 years ago, based on Census Bureau data. Research shows that as much as $50 trillion has migrated into the coffers of the top 1% of income earners in the U.S., an upward redistribution of wealth that has squeezed out the middle class.

Business schools are finally recognizing that shareholders aren’t the only stakeholders who matter to the success of a business enterprise. Employee morale is ultimately as important to the bottom line as tax avoidance. For that matter, a prosperous middle class consisting of people with disposable income is critical to sustained business success.

America’s tax system is an abomination. You need not be anti-capitalist to insist that the rich pay their fair share to the country that provides them with the wherewithal to make those fortunes.

I’d be willing to bet that the “captains of industry” who manage those tax-avoiding businesses don’t resent paying the dues charged by fancy country clubs; they know it takes money to maintain glitzy clubhouses and immaculate golf courses. It also takes money to maintain the roads and bridges over which manufacturers ship their goods. It takes money to pay the police and firefighters who provide businesses with security and public safety, and it takes money to compensate the judges and other personnel who administer the legal system all businesses depend upon.

Etcetera.

During one of the 2016 Presidential debates, Trump responded to Hillary Clinton’s charge that he’d played fast and loose with his taxes by sneering that his tax avoidance meant he was smart. Too many executives agree with that sentiment, and they are all wrong.

The truth is, they are the “welfare queens” that they like to disparage.

 

 

 

The Story Of Our Age

Jeffrey Goldberg is the editor of the Atlantic, one of the more credible and informative publications I read, and he recently transmitted an email to subscribers titled “Notes from the Editor-in-Chief.” I am going to take the liberty of quoting large portions of that message, because I entirely agree with him about the nature and extent of the danger we face.

Last week, a Michigan congresswoman whose existence had not yet entered the rest of the country’s consciousness credited Donald Trump with having “caught Osama bin Laden,” among other terrorists. It is difficult to forget that night in 2011 when Barack Obama told the world that, on his orders, a team of Navy commandos had killed the al-Qaeda leader. But Representative Lisa McClain, a first-term member of Congress, showed that, with effort, and with a desire to feed Trump’s delusions and maintain her standing among his supporters, anything is possible.

In ordinary times, McClain’s claim would have been mocked and then forgotten. But because these are not ordinary times—these are times in which citizens of the same country live in entirely different information realities—I put her assertion about bin Laden on a kind of watch list. In six months, I worry, we may learn that a provably false claim made by a single unserious congressional backbencher has spread into MAGA America, a place where Barack Obama is believed to be a Kenyan-born Muslim and Donald Trump is thought to be the victim of a coup.

Disinformation is the story of our age. We see it at work in Russia, whose citizens have been led to believe the lies that Ukraine is an aggressor nation and that the Russian army is winning a war against modern-day Nazis. We see it at work in Europe and the Middle East, where conspiracies about hidden hands and occult forces are adopted by those who, in the words of the historian Walter Russell Mead, lack the ability to “see the world clearly and discern cause and effect relations in complex social settings.” We see it weaponized by authoritarians around the globe, for whom democracy, accountability, and transparency pose mortal threats. And we see it, of course, in our own country, in which tens of millions of voters believe that Joe Biden is an illegitimate president because the man he beat in 2020 specializes in sabotaging reality for personal and political gain. This mass delusion has enormous consequences for the future of democracy. As my colleague Yoni Appelbaum has noted, “Democracy depends on the consent of the losers.” Sophisticated, richly funded, technology-enabled disinformation campaigns are providing losers with other options.

The Atlantic has joined with the Institute of Politics at the University of Chicago, and the two entities staged a conference focusing upon disinformation of all sorts. (The conference is available online.) The Institute of Politics was founded by David Axelrod, who has expressed his opinion that the “future of this country—and of our democratic allies around the world—depends on the ability and willingness of citizens to discern truth from falsehood.”

Goldberg was forthright in admitting to the nature of the challenge disinformation poses for “big-tent” magazines like the Atlantic.  He reiterated his belief that citizens of democracies require  a wide variety of views and opinions, and insisted that

We strive for nonpartisanship at The Atlantic, and we aim to publish independent thinkers and a wide variety of viewpoints. But this most recent period in American history has presented what might be called “both-sides journalism” with serious challenges—challenges that have prevented this magazine from publishing many pro-Trump articles. (After all, our articles must pass through a rigorous fact-checking process.)

Long-term, the emergence of our citizens from the Tower of Babel we currently inhabit will require a co-ordinated effort. My own repeated calls for more and better civics education–leading to greater levels of civic literacy– obviously point to an important part of that effort, but civics education alone cannot address the economic and psychological insecurities that make so many Americans receptive to the lies and hatreds being promoted by would-be autocrats and their enablers.

I don’t know what it would take–what policies could impose at least a minimum of coherence and integrity to the Wild West that is our current information environment without sacrificing the First Amendment– but as Goldberg  and Axelrod clearly understand, figuring that out is obviously job number one.

I’m on vacation without reliable Internet access, but when I get home, I intend to click through and watch that conference….

 

Trading Places

Many, many years ago, I joined a Republican Party that no longer exists. I was attracted to it–despite its longtime extreme-right “fringe”–because its rhetoric and philosophy was mainly that of classical liberalism: limited government, the rule of law, and the social contract.

Limited government, by the way, is not the same thing as small government–classical, 18th Century liberalism stood for limiting the ability of government to intrude into areas of citizens’ lives where government doesn’t belong. Determining where to draw that line has always been subject to debate, of course, and the GOP of my time was, admittedly, too often willing to pass intrusive  laws against “sin,” and resistant to necessary business regulations.

Back then, however, most Republicans took pride in the party’s history: the party of Lincoln had been the anti-slavery party while the Democrats had ruled the South and defended the ownership of some humans by others.

Over the years, America’s two major parties have essentially traded places, and I am only one of the many Republicans who realized that the party had morphed into something that had very little in common with the one we’d originally joined.

I thought about just how complete that switch has become when I read a recent column comparing Jared Polis, the Governor of Colorado, with Ron DeSantis of Florida, by Jennifer Rubin.

Florida Gov. Ron DeSantis (R), a 2024 presidential aspirant, has told cruises how to run their businesses. And he has threatened to raise taxes on Disney in retaliation for speaking out against the hateful “don’t say gay” bill. These are things you might expect from a petty authoritarian such as Hungary’s Viktor Orban or defeated former president Donald Trump, who threatened companies that didn’t kowtow to his administration.

Now, DeSantis wants to go after the board of directors of Twitter. “We’re gonna be looking at ways the state of Florida potentially can be holding these Twitter board of directors accountable for breaching their fiduciary duty,” he bellowed on Tuesday.

In response to DeSantis’ assaults on businesses in his state, Colorado’s Jared Polis tweeted

Florida’s authoritarian socialist attacks on the private sector are driving businesses away. In CO, we don’t meddle in affairs of companies like @Disney or @Twitter. Hey @Disney we’re ready for Mountain Disneyland and @twitter we’re ready for Twitter HQ2, whoever your owners are.

The GOP pooh-bahs who constantly talk about “freedom” clearly don’t understand what freedom is. (Hint: it isn’t “freedom” to refuse a vaccination so that you can infect your neighbors, or “freedom” to pick on people of whom your church disapproves.)

Rubin defines it properly.

Polis also understands how powerful “freedom” can be — freedom to run your company, freedom to raise your child (and seek legitimate medical care for them), freedom to choose not to give birth to a child, freedom for teachers to teach about civil rights without being sued, freedom to cast a ballot in the most convenient way for each voter, freedom to learn math. It’s remarkable how much control the GOP wants to exercise over every aspect of Americans’ lives and the economy.

Indeed, in abandoning classic liberalism (limited government, the rule of law, etc.) in favor of an authoritarian, theocratic model, Republicans have defied an essential feature of democracy. This is what scholar Yascha Mounk describes in the Atlantic as “the recognition that there is a sphere of life in which everybody should be able to do what they like without having to worry about anyone else’s opinion.” Having decided that America’s identity is White, Christian and straight, the MAGA right now spends an extraordinary amount of time and effort stretching the power of government to boss around everyone else.

Classical liberalism limited the role of government to actions necessary to protect citizens from others’ wrongdoing. Government could–and should–prevent businesses from dumping toxic waste in the river or cheating customers; government should prevent the selfish or heedless from harming others.

Barry Goldwater famously said that government didn’t belong in your boardroom or your bedroom (he won an award from PFLAG, the LGBTQ rights organization.) Today’s Republicans are intent upon invading both.

Looking back, I think it’s fair to say that the GOP of my day believed in over-restraining government. (When Nixon established the EPA, it was seen in some quarters as a betrayal of Republicanism.) Today’s version, however, has totally abandoned any respect for freedom, civic equality and the rule of law.

DeSantis, Abbott and their ilk define “freedom” as the right of businesses to support their hateful policies and the right of citizens to obey their dictates.

 

 

Filters And Lies

I know I carp constantly about the degree to which propaganda and conspiracy theories have displaced credible information, with the result that today’s Americans occupy different realities. It’s easy to blame social media for the reach of disinformation and lies–and social media does bear a significant amount of the blame–but research also illuminates the way propaganda has changed in the era of cable news and the Internet.

That research has identified two modern mechanisms for eroding social trust and constructing alternate realities. One –to quote Steve Bannon’s vulgar description–is to “flood the airways with shit.” In other words, to produce mountains of conflicting “news” along with lots of “shiny objects.” The faux “news” confuses; the shiny objects distract. Citizens don’t know what to believe, what parts of the fire hose of information, disinformation, and outright invention they can trust. They either accept a particular storyline (chosen via confirmation bias) or opt out.

But it isn’t simply the fire hose approach that has eroded our common realities. These days, when people get most of their news from partisan sources, all too often they simply don’t get news that is inconsistent with partisan biases.

A recent, widespread report illustrates that technique. As the lede put it, “The problem with Fox ‘News,’ the cable TV channel, isn’t just what it is — it’s also what it isn’t.” It was a fascinating new study in which arch-conservative Fox TV viewers were paid to watch CNN for a month.

The study, titled “The manifold effects of partisan media on viewers’ beliefs and attitudes: A field experiment with Fox News viewers,” was performed by a pair of political scientists: David Broockman, who teaches at UC-Berkeley, and Joshua Kalla, who teaches at Yale.

 According to Broockman and Kalla, when these Fox viewers watched CNN, they heard about all sorts of things Fox wasn’t telling them. They processed that information. They took it in. They became more knowledgeable about what was really going on in the United States.

The individuals who took part in the experiment didn’t change their political leanings or partisan preferences,  but the experience did alter their perceptions of certain key issues and political candidates.

The study authors differentiated between “traditionally emphasized forms of media influence,” like agenda setting and framing, and what they call “partisan coverage filtering”: the choice to selectively report information about selective topics, based on what’s favorable to the network’s partisan side, and ignore everything else.

The article emphasized what the author called the “real problem” with Fox : its viewers aren’t just manipulated and misinformed — they are left ignorant of much of the news covered by more reputable outlets. Fox gives them a lot of “news-like” information, but they don’t learn about things like Jared Kushner getting two billion dollars from Saudi Arabia.

That conclusion reminded me of another research project a couple of years ago. People were asked to identify their primary news sources and then quizzed on things currently in the news. Those who named Fox as their preferred news source knew less than people who didn’t watch any news from any source.

Lest you think that “filtering” of this sort is a tactic exclusive to the Right, when one of the authors of the research study was interviewed on CNN, he noted that CNN, too, filtered its reporting.

CNN’s Brian Stetler interviewed Joshua Kalla, one of the co-authors of the study, and they had the following exchange:

“You call this partisan coverage filtering,” Stelter told Kalla. “And basically, you’re proving what we’ve sensed for a while, which is that Fox viewers are in the dark about bad news for the GOP.”

Kalla confirmed the Fox News coverage model but put a stop to the victory lap: “On the flip side, CNN engages in this partisan coverage filtering as well… For example, during this time, the Abraham Accords were signed, and these were the agreements where Israel, the UAE and Bahrain signed a major peace agreement. And we see that Fox News covered this really major accomplishment about 15 times more than CNN did. So we established both networks are really engaging in this partisan coverage filtering. It’s not about one side, it’s about the media writ large.”

To be fair, CNN is apparently less culpable in this regard than Fox..

America’s ugly politics is obviously attributable to a lot more than the country’s media environment, even if you throw in the very divisive algorithms used by social media. (After all, the KKK didn’t use the Internet.) But it’s hard to avoid the conclusion that both mass media and social media have contributed disproportionately to our loss of a common reality.

As always, the questions are: what policies might make things better? And can we pass those policies once they are identified?

 

From Here To Autocracy

Increasing numbers of Americans are worried about the erosion of democracy. Most of us–this writer included–feel powerless to do much about it; we follow the news, and bemoan what seems like the inexorable drip-drip-drip of melting democratic norms.

One of the most recent drips was the spectacle of GOP incivility and bullying during the Supreme Court confirmation hearings. As I heard the posturing and antics of Cruz, “Miss Lindsey” and others, I couldn’t help recalling Dick Lugar’s explanation of his vote for a Clinton nominee (I no longer recall whether it was Breyer or Ginsberg); although he had  some philosophical differences with the nominee, Lugar said something along the lines of, ” Absent serious and well-founded concerns, a President is entitled to his choice.”

Now, opposition isn’t even grounded in philosophical differences; it is purely partisan–and  manifests itself in ugly and (patently false) “discourse” unworthy of the Senate.

This performative exercise was a taste of what we can expect if the GOP wins control of the Senate. It was just one more “drip” on the road to autocracy.

Some months back, an essay from the Washington Post outlined the “markers” along that road.

Democracy is most likely to break down through a series of incremental actions that cumulatively undermine the electoral process, resulting in a presidential election that produces an outcome clearly at odds with the voters’ will. It is this comparatively quiet but steady subversion, rather than a violent coup or insurrection against a sitting president, that Americans today have to fear most

Five sets of actions fuel this corrosion: limiting participation in elections; controlling election administration; legitimizing and mobilizing social support for methods to obstruct or overturn an election; using political violence to further that end; and politicizing the regular military or National Guard to delegitimize election outcomes.

The essay identified 18 steps to democratic breakdown and indicated how worrisome a threat the authors considered each.

They identified the willingness of the current Supreme Court to validate efforts to restrict voting–and the inability of Congress to pass voting rights protections–is ominous omens, and found state-level efforts to control the administration of elections equally ominous. They described efforts to put officials in place who would be willing to make decisions that subvert election outcomes as one of the most concerning of all actions that contribute to democratic breakdown.

Citizens should also be on the alert for

Governors, state election boards or commissions appoint, or voters elect, chief election officials who are sympathetic to false claims of voter fraud and willing to use their position to undermine confidence in election results, create new voting regulations or interpret election rules to partisan advantage.

We need to keep an eye on the battleground states of Arizona, Nevada, Colorado, Wisconsin, Pennsylvania and Florida, “where Republican candidates who publicly supported partisan audits or other actions to delegitimize the 2020 presidential election are now running for secretary of state or other statewide offices.”

The essay also warned against the “Independent State Legislature doctrine”–a doctrine that would move the country back toward the Articles of Confederation. (It was recently endorsed by creepy Indiana Senator Mike Braun.) That doctrine

interprets the Constitution as enabling legislatures to make final determinations about the outcomes of federal elections. A blueprint for such an effort appears in a memo drafted by attorney John Eastman after the 2020 election to try to convince Vice President Mike Pence that there were legal grounds to overthrow the election results. This would provide social backing for courts ceding power to the states to control elections.

Since the article was focused upon elections, it didn’t explore the multiple other dangers posed by this particular doctrine–including the fact that its adoption would  facilitate elimination of most civil liberty and civil rights protections in states where Republicans control the legislatures.

The essay also wanted readers to be aware of well-funded and organized efforts to draft model laws and file legal briefs that support the engineering of election outcomes; of incidents of overt coordination between law enforcement officers and militia groups; and   politicians voicing support for the use of violence and political intimidation in service of political ends.

Political elites undermine accountability for prior acts of political violence in ways that decrease perception about the costs of future violence. Making statements minimizing the Jan. 6 attack, obstructing efforts to investigate it and failing to punish politicians who supported it would fall into this category, as would punishing those politicians who support investigations.

There’s more. If you want to elevate your blood pressure, click through and read the whole thing.

And do everything in your power to get out the vote–and to protect the mechanisms for counting the votes that are cast.