Public Policy and Governance – Page 201

The More We Learn, The Less We Like

The GOP tax bill has cleared another hurdle, and appears to have momentum–there are even reports suggesting it will be voted on today. Those of us hoping that at least two or three Senate Republicans might put the interests of the country above those of their party are likely to discover that those principled Republicans don’t exist.

Every time I discover something new about this abominable bill, it gets worse. So far, I’ve come across no redeeming features of this obscene and economically destructive proposal.

The latest “discovery” comes courtesy of Dispatches from the Culture Wars.

Republicans love to tell us that if the government would just stop providing a social safety net, churches and charities would step in and everything would get better. But a study of the new Republican tax “reform” bill says it will reduce charitable giving by up to $24 billion a year.

It’s hard to tell whether this nasty little surprise was intentional–I rather doubt it, since the entire bill displays incredible ignorance of how the economy really works. (If anyone supporting this giveaway to the rich really believes it will create either jobs or prosperity, that would be the ultimate triumph of hope over experience.)

As any economist or tax lawyer will affirm, many–perhaps most– of the provisions in the IRS Code work a lot like the balloons used by the guys making them into animals at fairs and festivals–squeeze here, and it gets bigger there. As the referenced study found,

Even though the House version of the Tax Cuts and Jobs Act (TCJA) preserves the charitable income tax deduction, other income tax provisions of the bill could reduce charitable giving by between $12 billion and $20 billion in 2018, based on new estimates from the Tax Policy Center. A second provision—repeal of the estate tax—could reduce giving by another $4 billion in the longer run.

By nearly doubling the standard deduction and either repealing or scaling back most itemized deductions, the House version of the TCJA would substantially reduce the number of taxpayers who elect to itemize. TPC estimates that fewer than 13 million taxpayers would itemize deductions in 2018 under the House version of the TCJA, down from more than 46 million under current law.

It would be lovely if everyone making a charitable contribution was motivated purely by concern for whatever cause their dollars are supporting. (If you do believe that, I have some swampland in Florida to sell you…) Even generous givers, however, are conscious of the tax incentives involved. When the effective cost of a donation is less, it’s easy to give more. This tax bill reduces that incentive by increasing the after-tax cost of giving by about 8 percent.

This troubling result is less obvious from the face of the bill than several of the other consequences that have been highlighted: the 1.4 trillion added to the deficit, severe automatic cuts to Medicare, making graduate school unaffordable by taxing tuition supports as income (or, for that matter, making all college educations less affordable by removing the deduction for interest on student debt.) It goes on and on.

We are living with an American government that reserves its favors for the “haves” while doing steadily less for the “least among us.” The people getting the short end of the stick are going to depend to an even greater extent upon the charitable organizations that are already stretched well beyond their capacities– organizations that are demonstrably unable to fill the considerable gap between what poor families need to survive and what they earn.

It’s going to get very ugly.

On the other hand, you will still be able to deduct the expenses for your corporate jet….

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Rawls And Masson Are Right

Doug Masson can always be counted upon for thoughtful observations about policy proposals, whether those are at the state or federal level. In a recent post, he took a look at the GOP’s tax bill, and made a point that is often missed–or misunderstood.

After criticizing Orrin Hatch’s nonsensical justification for a provision that would widen the gap between the rich and poor, Masson writes

I always get grief from my conservative friends when I say stuff like this, but reducing wealth disparities in the country isn’t just a matter of bleeding-heart, feel-good liberal mumbo jumbo like fairness and equality. Concentration of large amounts of wealth in a few hands distorts markets and democratic processes. The system can tolerate — even thrives under — certain amounts of inequality. It creates incentives that fuel the economy. But, beyond a certain point, things start to break down.

The most common defense of Masson’s position–a defense that is entirely accurate, albeit incomplete–is historical. Most countries that have experienced persistent large-scale inequalities have eventually been destabilized by revolt or revolution. This country is already seeing signs of citizen unrest; continued Congressional theft from the poor in order to bestow even more goodies on the rich will be met with anger and resistance, and it won’t be pretty.

Economists also support Masson’s thesis. They point out (as I’ve done several times on this site) that 70% of American economic activity is dependent upon consumption, and when large numbers of Americans have little or no disposable income with which to consume–when they are barely able to afford necessities–the economy can’t grow. When demand is weak, employers don’t increase production–which means they don’t create new jobs.

Those practical arguments are persuasive, but we shouldn’t ignore the fairness argument, because it goes to the heart of what makes a just society.

John Rawls was the pre-eminent political philosopher of the 20th Century, and his book Justice as Fairness established a framework within which political philosophers still argue. Rawls believed that all social primary goods–by which he meant liberty and opportunity, income and wealth, and what he termed “the bases of self-respect”–should be distributed equally, unless an unequal distribution of any or all of these is to the advantage of the least favored.

Inequality, in other words, can be justified, but only if that inequality is necessary to the improvement of the lives of the least fortunate.

When Masson writes “The system can tolerate — even thrives under — certain amounts of inequality. It creates incentives that fuel the economy. But, beyond a certain point, things start to break down,” I read that as another way of making Rawls’ point.

When markets work–when we have genuine capitalism, not the corporatism that characterizes the United States today–they usually meet Rawls’ criteria. Invent that better mousetrap, and everyone’s mouse-catching is improved. The money earned by the inventor provides an incentive to other ambitious folks, prompting them to invent something else that will improve life for many people, including poor people. A rising tide really does lift all the boats–we just have to be careful to define what constitutes a “rising tide.”

The fact that our mousetrap inventor has more money than someone else is thus a permissible inequality, because he has earned it in a way that improves–in some way, to some extent– the lives of the less fortunate.

This definition of justifiable inequality doesn’t reflect the inequities in today’s America. As Masson points out, money acquired isn’t necessarily the same thing as money earned; there’s a difference between that inventor/entrepreneur and those whose wealth was inherited or acquired as a reward for “gaming the system” or helping others to do so. Bigly.

Our gilded age inequality fails all three tests: history, economics and fairness.

We need to fix it.

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Weaponizing Speech

A couple of weeks ago, I came across a provocative article by Tim Wu, a media historian who teaches at Columbia University, titled “Did Twitter Kill the First Amendment?” He began with the question:

You need not be a media historian to notice that we live in a golden age of press harassment, domestic propaganda and coercive efforts to control political debate. The Trump White House repeatedly seeks to discredit the press, threatens to strip broadcasters of their licenses and calls for the firing of journalists and football players for speaking their minds. A foreign government tries to hack our elections, and journalists and public speakers are regularly attacked by vicious, online troll armies whose aim is to silence opponents.

In this age of “new” censorship and blunt manipulation of political speech, where is the First Amendment?

Where, indeed? As Wu notes, the First Amendment was written for a different set of problems in a very different world, and much of the jurisprudence it has spawned deals with issues far removed from the ones that bedevil us today.

As my students are all too often surprised to learn, the Bill of Rights protects us against government misbehavior–in the case of our right to free speech, the First Amendment prohibits government censorship. For the most part, in this age of Facebook and Twitter and other social media, the censors come from the private sector–or in some cases, from governments other than our own, through various internet platforms.

The Russian government was among the first to recognize that speech itself could be used as a tool of suppression and control. The agents of its “web brigade,” often called the “troll army,” disseminate pro-government news, generate false stories and coordinate swarm attacks on critics of the government. The Chinese government has perfected “reverse censorship,” whereby disfavored speech is drowned out by “floods” of distraction or pro-government sentiment. As the journalist Peter Pomerantsev writes, these techniques employ information “in weaponized terms, as a tool to confuse, blackmail, demoralize, subvert and paralyze.”

It’s really difficult for most Americans to get our heads around this new form of warfare. We understand many of the negative effects of our fragmented and polarized media environment, the ability to live in an information bubble, to “choose our news”–and we recognize the role social media plays in constructing and reinforcing that bubble. It’s harder to visualize how Russia’s infiltration of Facebook and Twitter might have influenced our election.

Wu wants law enforcement to do more to protect journalists from cyber-bullying and threats of violence. And he wants Congress to step in to regulate social media (lots of luck with that in this anti-regulatory age.) For example, he says much too little is being done to protect American politics from foreign attack.

The Russian efforts to use Facebook, YouTube and other social media to influence American politics should compel Congress to act. Social media has as much impact as broadcasting on elections, yet unlike broadcasting it is unregulated and has proved easy to manipulate. At a minimum, new rules should bar social media companies from accepting money for political advertising by foreign governments or their agents. And more aggressive anti-bot laws are needed to fight impersonation of humans for propaganda purposes.

When Trump’s White House uses Twitter to encourage people to punish Trump’s critics — Wu cites the President’s demand that the N.F.L., on pain of tax penalties, censor players — “it is wielding state power to punish disfavored speech. There is precedent for such abuses to be challenged in court.”

It is hard to argue with Wu’s conclusion that

no defensible free-speech tradition accepts harassment and threats as speech, treats foreign propaganda campaigns as legitimate debate or thinks that social-media bots ought to enjoy constitutional protection. A robust and unfiltered debate is one thing; corruption of debate itself is another.

The challenge will be to craft legislation that addresses these unprecedented issues effectively–without inadvertently limiting the protections of the First Amendment.

We have some time to think about this, because the current occupants of both the White House and the Congress are highly unlikely to act. In the meantime, Twitter is the weapon and tweets are the “incoming.”

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If It’s Mental Illness…

I always hesitate before blogging about guns, knowing that posting any opinion other than “yes, you have a constitutional right to pack heat whenever or wherever you want, and it doesn’t matter how many times you’ve beaten your wife” will generate howls of opprobrium and hysterical accusations that I want to disarm everyone.

But still.

The Orange Menace in the Oval Office is on record–well, on twitter–saying that America doesn’t have a gun problem, that what we do have is a mental health problem.

There are, of course, multiple available rebuttals to that statement. We might point out that other countries with similar percentages of mentally-ill citizens but fewer guns have dramatically fewer incidents of gun violence. We might point out that allowing civilians to own lethal assault weapons developed for warfare is evidence of a different sort of mental illness. We might point out that the Second Amendment doesn’t require a failure to differentiate between a hunting rifle and an AK-15.

Even if we ignore those arguments, we’re left with a question that our Tweeter-in-Chief conveniently ignored: if mass shootings are attributable to failures of our efforts to keep firearms out of the hands of the mentally ill, why did he eliminate Obama’s restrictions on gun ownership for people with mental illness? (We do know the answer to that: Trump’s obsessive hatred of Obama and his fixation on erasing any and all measures attributable to his predecessor.)

As NBC reported in February,

President Donald Trump quietly signed a bill into law Tuesday rolling back an Obama-era regulation that made it harder for people with mental illnesses to purchase a gun.

The rule, which was finalized in December, added people receiving Social Security checks for mental illnesses and people deemed unfit to handle their own financial affairs to the national background check database.

Had the rule fully taken effect, the Obama administration predicted it would have added about 75,000 names to that database.

President Barack Obama recommended the now-nullified regulation in a 2013 memo following the mass shooting at Sandy Hook Elementary School, which left 20 first graders and six others dead. The measure sought to block some people with severe mental health problems from buying guns.

The GOP-led House and Senate obediently passed the bill nullifying the Obama-era measure, and officials of the NRA “applauded” the action.

Of course they did.

Sen. Chris Murphy, D-Conn., a leading gun control advocate in Congress, called out Republicans over the move.

“Republicans always say we don’t need new gun laws, we just need to enforce the laws already on the books. But the bill signed into law today undermines enforcement of existing laws that Congress passed to make sure the background check system had complete information,” he said in an emailed statement.

So, welcome to the U.S. of A… On this Thanksgiving Day, feel free to express your gratitude for a country where any raving lunatic can legally buy a gun, and the twittering lunatic in the White House can launch nuclear weapons.

American exceptionalism, baby!

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Meanwhile, At The FCC….

Unlike many–most?–of Trump’s appointees, FCC Chairman Ajit Pai appears to know what he’s doing and how to do it. And that’s a big problem.

He’s already rolled back what The Street calls a “pillar of U.S. media ownership restrictions.

“Owners of local television stations will be permitted to buy a local radio station or newspaper in the same market after the Federal Communications Commissions on Thursday, Nov. 16, voted to lift the ban on cross-ownership that had stood since 1975. The agency, which has been fast eliminating restrictions long opposed by TV station companies, also eliminated a ban on two TV stations in the same market from entering into joint sales agreements to sell advertising.

The restrictions being lifted were intended to prevent any one political perspective from dominating a given media market. Here in Indianapolis, where right wing Sinclair is proposing purchase that will allow it to dominate the radio market, this new permissiveness is likely to facilitate a market blanketed with Fox-like, right wing propaganda.

FCC Chairman Ajit Pai, a Republican who orchestrated the changes, said the bans and other restrictions were no longer relevant given the advent of online news sources and the shrinking circulations of most local newspapers. The two Democrats on the five-person commission, echoing other critics, countered that Pai understated the importance and impact that local media sources continue to have despite the rise of Facebook Inc. and other social media platforms.

The damage this change will inflict pales, however, in comparison to Pai’s most cherished goal–the elimination of net neutrality rules.

As Time Magazine and a number of other news outlets have reported,

Federal Communications Commission Chairman Ajit Pai on Tuesday followed through on his pledge to repeal 2015 regulations designed to ensure that internet service providers treat all online content and apps equally, setting up a showdown with consumer groups and internet companies who fear the move will stifle competition and innovation.

The current rules, known as net neutrality, impose utility-style regulation on ISPs such as Comcast, AT&T and Verizon to prevent them from favoring their own digital services over those of their rivals.

Pai says he wants the FCC to stop “micromanaging” the Internet. What he calls micromanaging is what we used to call “regulating,” and although it is certainly possible to point to examples of excessive regulation, there was–and is–a reason for establishing “rules of the road.” The reasons for net neutrality rules are especially compelling.

As the Internet Association, a group composed of major internet companies such as Google and Amazon, put it,

“Consumers have little choice in their ISP, and service providers should not be allowed to use this gatekeeper position at the point of connection to discriminate against websites and apps.”

The group is fighting the change. So are many other organizations concerned with consumer rights.

Consumers Union predicted a repeal of net neutrality would allow ISPs to raise their prices and give preferential treatment to certain sites and apps.

“Strong net neutrality rules are vital to consumers’ everyday lives and essential to preserving the internet as we know it today — an open marketplace where websites large and small compete on equal terms and where information and ideas move freely,” said Jonathan Schwantes, the advocacy group’s senior policy counsel.

Two of the FCC’s five voting commissioners signaled they will oppose Pai’s plan.

Commissioner Jessica Rosenworcel derided Pai’s plan as “ridiculous and offensive to the millions of Americans who use the internet every day.”

Commissioner Mignon L. Clyburn skewered Pai’s proposals as “a giveaway to the nation’s largest communications companies, at the expense of consumers and innovation.”

Before being named to the FCC, Pai was an executive at Verizon. I’m sure that’s an irrelevant factoid.(cough, cough).

The last time net neutrality was attacked, John Oliver delivered such an effective argument against the change that the switchboards at the FCC were overwhelmed; his diatribe was said to have prompted some 150,000 calls. Scheduling the vote for the week after Thanksgiving is a rather transparent effort to avoid that sort of public outrage, an effort to change the rule while people are otherwise occupied.

Let’s not allow that strategy to work. I encourage everyone to click through, watch Oliver’s explanation of what’s at stake–and then call the FCC.

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