Category Archives: Public Policy and Governance

Bribes As Economic Development

According to the Indianapolis Business Journal, Indiana lawmakers are considering paying people to move here.

Members of what I still call “The World’s Worst Legislature” (despite a significant amount of competition from places like Florida and Texas) are evidently considering what the IBJ calls “an extensive piece of legislation to restructure the incentive toolkit of the Indiana Economic Development Corp.” One “key” component would create a statewide remote-worker grant program.

Senate Bill 361 has a provision that would require the department to design and implement a program giving remote workers cash incentives for moving to Indiana.

A remote worker would be eligible for a grant of up to $5,000 a year with a maximum of $15,000 over the life of the program. The total grants, which would come from the IEDC, would be capped at $1 million this year and $1.5 million in 2023….

The bill also would allow businesses outside Indiana to apply for IEDC tax credits, if they bring at least 50 remote jobs to Indiana, paying at least 150% of the state’s average hourly wage. That would be about $25.

This interesting use of taxpayer funds is essentially an admission that Indiana isn’t a very attractive place to live–that (at least, outside Indianapolis, the city our legislators love to hate) people need to be bribed to move to the Hoosier State.

A few days ago, in another blog, I noted that Indiana’s Statehouse is filled with legislators who have exactly one policy proposal to offer for any problem you can name: tax cuts. When it comes to economic development, they assure us that the only thing businesses look at when looking  to relocate or expand is a “favorable tax environment.” Believing this, of course, requires a certain imperviousness to that pesky thing called “evidence,” but if there is one thing our GOP super-majority is really, really good at, it’s ignoring evidence.

Which brings me to yet another bit of unwelcome research, sure to be dismissed and ignored.

The Brookings Institution has been examining ways to “rejuvenate” states in the Midwest that have, as we say, “missed the boat.” The report begins by noting that there are currently two Midwests

One Midwest features communities that have diversified and turned an economic corner in today’s urbanized, global knowledge economy. In this Midwest, many of the region’s major metro areas and university towns have found new economic dynamism and relative prosperity.  

In the other Midwest, however, factory towns that have lost anchor employers continue to languish. Most of these small and midsized industrial heartland communities rely on traditional economic development strategies to reinvigorate their economies, including doling out incentives to attract or retain employers or attempting to create a more “business-friendly” environment with lower taxes and labor costs. 

Most of Indiana clearly falls into that second category. But as Brookings reports, there is “compelling new data” telling us that these traditional economic development tools are–if not entirely ineffective–far less effective than investments in quality of life and place.

Research on smaller communities has found that community amenities– recreation opportunities, cultural activities, and especially “excellent services (e.g., good schools, transportation options, including connectivity to urban areas)” significantly exceed so-called “business-friendly” policies in their ability to  contribute to healthy local economies.

Smaller places with a higher quality of life experience both higher employment and population growth than similarly situated communities, including those that rank high by traditional economic competitiveness measures.

Research has confirmed that people are willing to pay higher housing prices and even accept lower wages to live in places that offer a higher quality of life.  

Indiana’s lawmakers will have great difficulty getting their heads around another finding (assuming they would even bother to consult the research); studies, including this one, have shown that businesses are willing to pay higher real estate prices and offer higher wages in order to locate in places with more productive workers. 

More productive workers, of course, are produced by better schools. Not religious indoctrination academies supported by Indiana’s voucher program with monies drained from our struggling public schools, and not schools in which teachers are forbidden to teach accurate history…

The bottom line:

After estimating quality of life (what makes a place attractive to households) and quality of business environment (what makes a place especially productive and attractive to businesses) in communities across the Midwest, we found quality of life matters more for population growth, employment growth, and lower poverty rates than quality of business environment. 

Or, of course, you can just take some of the tax money generated by those low rates and try to bribe people to move to the “hanging on by a thread” areas of Indiana.

Given the pathetic history of Indiana’s General Assembly, I expect they’ll opt for bribery.

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Celebrating Ignorance

I will never understand political “leaders” who actively celebrate ignorance–or those who vote for them.

The lack of  basic civic literacy–which I’ve ranted about for years–is bad enough. The utter cluelessness of people who piously declaim their reverence for life while making it easier for the violent and mentally-ill to acquire and carry firearms is appalling. But nothing–nothing–in my adult lifetime has been as incredible and ignorant as the anti-COVID vaccine “movement.”

A recent essay in the Washington Post echoed my reaction. The essay wasn’t written by a hated “librul,” but by Michael Gerson, an Evangelical Christian refugee from the GOP who served in the administration of George W. Bush. As he said in his introduction

When the future judges our political present, it will stand in appalled, slack-jawed amazement at the willingness of GOP leaders to endanger the lives of their constituents — not just the interests of their constituents, but their lungs and beating hearts — in pursuit of personal power and ideological fantasies.

That observation–the recognition that the GOP officials preaching anti-vaccination nonsense are actually complicit in killing their own partisans–is what I find so incomprehensible. I can’t decide if these people are truly as ignorant as they sound, or if they are playing to what increasingly seems to be a death-wish of their rabid base.

Gerson divides them into three categories.

The first, practiced most vigorously by Florida Gov. Ron DeSantis, uses an ongoing pandemic as a stage for the display of ideological zeal. In this view, the covid-19 crisis — rather than being a story of remarkable but flawed scientists and public health experts deploying the best of science against a vicious microbe — has been an opportunity for the left to impose “authoritarian, arbitrary and seemingly never-ending mandates and restrictions.” Never mind that U.S. public health officials are not part of the left, and are authentically confused about the equation of their advice with ideology.

As Gerson notes, populists like DeSantis are demonstrating that “their MAGA commitments outweigh all common sense, public responsibility and basic humanity.”

The second category is populated by conspiracy theorists (and major twits) like  Rand Paul. These jackasses are playing “crackpot roulette.” They

 depict the most visible representatives of the United States’ covid response as scheming, deceptive deep-state operatives. Any change in emphasis or strategy by scientists — an essential commitment of the scientific method — is viewed as rich opposition research.

Paul talks of jailing Anthony S. Fauci in the midst of our public health crisis on the basis of imaginary claims. But the fundraising appeals to MAGA loyalists that immediately follow such attacks by Paul and others are real. And for a subset of true believers, Paul’s acts of dehumanization provide cover and permission for threats of violence against scientists and their families.

Senator Ron Johnson exemplifies Gerson’s third category of Republican ignorance peddlers. Gerson dubs this category “the practice of strategic ignorance” and he notes that in the case of Johnson —” one of America’s most reliable source of unreliable information” — such ignorance might not be feigned.

He might well believe that gargling with mouthwash call kill the coronavirus, and that thousands of people are regularly dying from vaccine side effects, and that a pandemic that has taken more than 800,000 lives in the United States is “overhyped.”…

Johnson is not only making dangerous statements about the coronavirus. He is using his willingness to cite stupid things as the evidence of his independence from the rule of professionals and experts. He is defining democracy, in the words of Tom Nichols, author of “The Death of Expertise: The Campaign Against Established Knowledge and Why It Matters,” as “unearned respect for unfounded opinions.” Johnson is practicing strategic ignorance.

As Gerson points out, all of these behaviors encourage the development of alternative realities, and make the pursuit of a common good difficult if not impossible. But the damage goes well beyond that–to celebrate ignorance during a pandemic is an invitation to die.

If a significant group of Americans regard the musing of a politician such as Johnson as equal in value to Fauci’s lifelong accumulation of expertise, the basis for rational action is lost. And the result is needless death.

Gerson is an example of the sane Republicans who used to dominate the GOP, partisans whose policy positions were based upon drawing different conclusions from a reality shared with Democrats and Independents, not upon invented “facts,” conspiracies, or a spineless need to assure the party’s increasingly lunatic base that–as Isaac Asimov would have put it–their ignorance is just as good as the hard-won knowledge of those stuck-up elitists.

A country where a significant percentage of people revel in, pander to and/or actively celebrate ignorance is in big trouble–even without a pandemic.

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Games Republicans Play With Taxes

Media sources have begun warning of a “tax nightmare” ahead for April–filing delays and other administrative headaches , delayed refunds and a variety of mistakes likely to make us crazy.

“Things might be more challenging even than what we anticipate — and what we anticipate is very, very challenging,” a Treasury official told Axios, using the phrase “death spiral” to refer to one set of issues.

Why the warning? Why the situation? Funding. Actually, the lack of adequate funding.

The IRS raises the money America needs. According to official reports, the IRS collects 95 cents of every dollar in federal revenue. So you would think that giving the agency the resources to do its job, and do it efficiently and well, would be a high priority.

It isn’t. Instead, the agency is routinely described as being “in crisis.” Its budget has declined by 20% since 2010, while the number of taxpayers has increased by 19%.

The agency relies on software built in the 1960s, and it is facing a big backlog of paper filings including 6.2 million unprocessed 1040 forms.It doesn’t even have scanning technology– humans open the mail and manually enter information into its system.

According to one report, last year the agency answered only 29 million of the 282 million phone calls it received. And although the vast majority of taxpayers got their refunds fairly promptly last year, the agency was depending upon a significant increase in funding
from the Biden administration’s Build Back Better legislation.

Good luck with that.

So–why has Congress gutted the IRS? Pro Publica tells us in the subhead:

An eight-year campaign to slash the agency’s budget has left it understaffed, hamstrung and operating with archaic equipment. The result: billions less to fund the government. That’s good news for corporations and the wealthy.

The article begins with an example of what we are losing–money that must be made up by law-abiding taxpayers. Us.

In the summer of 2008, William Pfeil made a startling discovery: Hundreds of foreign companies that operated in the U.S. weren’t paying U.S. taxes, and his employer, the Internal Revenue Service, had no idea. Under U.S. law, companies that do business in the Gulf of Mexico owe the American government a piece of what they make drilling for oil there or helping those that do. But the vast majority of the foreign companies weren’t paying anything, and taxpaying American companies were upset, arguing that it unfairly allowed the foreign rivals to underbid for contracts.

Pfeil and the IRS started pursuing the non-U.S. entities. Ultimately, he figures he brought in more than $50 million in previously unpaid taxes over the course of about five years. It was an example of how the tax-collecting agency is supposed to work.

But then Congress began regularly reducing the IRS budget. After 43 years with the agency, Pfeil — who had hoped to reach his 50th anniversary — was angry about the “steady decrease in budget and resources” the agency had seen. He retired in 2013 at 68.

Because the cuts have come over an 8-year period, the utter collapse of the agency has escaped widespread notice. But at this point, according to Pro Publica, the bureaucracy is on life support, and America is losing tens of billions in revenue. (ProPublica estimates a toll of at least $18 billion every year, but admits that the true cost could easily run tens of billions of dollars higher.)

Tax obligations expire after 10 years if the IRS doesn’t pursue them. Such expirations were relatively infrequent before the budget cuts began. In 2010, $482 million in tax debts lapsed. By 2017, according to internal IRS collection reports, that figure had risen to $8.3 billion, 17 times as much as in 2010. The IRS’ ability to investigate criminals has atrophied as well.

And who stands to benefit? Need I share the following paragraph?

Corporations and the wealthy are the biggest beneficiaries of the IRS’ decay. Most Americans’ interaction with the IRS is largely automated. But it takes specialized, well-trained personnel to audit a business or a billionaire or to unravel a tax scheme — and those employees are leaving in droves and taking their expertise with them. For the country’s largest corporations, the danger of being hit with a billion-dollar tax bill has greatly diminished. For the rich, who research shows evade taxes the most, the IRS has become less and less of a force to be feared.

There is much, much more at the link, and it is all depressing. The GOP’s constant insistence that all of America’s ills can be solved with tax cuts is dishonest–and stupid–enough. But tax cuts aren’t the only way the party plays tax games to help its donors–and screw over the rest of us.

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Technology Versus Governance

I have a question I’ve been pondering for years. Perhaps one of the people who read this blog can answer it–or at least shed some much-needed light on it.

Here’s the thing: I am constantly coming across news items about technological progress that is incredibly impressive, innovations that promise to solve real problems faced by real humans. Here’s just one recent example:  an effort to bring electricity to almost half of Africa’s 1.3 billion population, which currently lives without it, and not by replicating the way most electricity is generated and transmitted in countries whose populations are almost universally served today.

As the article reports,

The results of fossil-fuel-based, centralized, power-plant strategies of the past 50 years speak for themselves: high levels of pollution and slow rollouts due to high construction and fuel costs. Instead, we need to focus on minigrid-based electricity powered by solar power and batteries, which can provide 24-hour clean energy. And because they are decentralized—with the electricity that each community needs provided by solar farms in the area (optimized through artificial intelligence and Internet of Things technologies) and without long, expensive transmission lines—minigrids are often low-cost and deployable in weeks. Already, Energicity has brought solar-powered electricity to 40,000 people, and our goal for 2022 is to reach 250,000 more, across four countries in West Africa.

You can read more detail at the link.

Reading about new methods of providing clean energy, or new ways to communicate, or new ways to pay for goods and services (many of which are also new) is hardly a unique experience. I see similar reports on an almost daily basis, and they make me applaud the ingenuity and scientific “know-how” of so many of my fellow humans. We’ve come a long way from inventing the ax by attaching a stone to a wooden handle!

Good for us! We’re resourceful creatures!

So why–why–are we unable to apply that ingenuity and intellectual rigor to the mechanisms of communal life–to systems of government?

I don’t hear our retrograde politicians criticizing the folks who invented the iPhone, or developed the Internet. Even our insane anti-vaxxers aren’t pontificating against the discovery of penicillan. They aren’t refusing to board airplanes (at least, not pre-pandemic). They have computers. They drive cars outfitted with the newest features, and  use GPS to get from point A to point B. They talk to Siri and Alexa. I could go on and on.

And they use these things without the dimmest idea of how they work, or “what is in them.”

Our relationship with technology is evidence of respect for talent and expertise. You don’t see the men and women who are creating these new tools boasting that they don’t really  know much about whatever their factories produce;  recruiters aren’t out looking for employees who  have absolutely no prior experience with, or training relevant to whatever widget the factory is producing. The managers of those factories don’t level their most withering critiques at workers who actually know what they are doing.

Only in political life do people consider ignorance of government and the policy process a virtue. Only in political life do we award our support to people who are clearly clueless about the imperatives and mechanics of governance–at least, if we think we’d like to have a beer with them.

Only in political life do ideologues encourage their own followers to reject the products of expertise–most recently, to risk dying rather than take advantage of the knowledge of others if that rejection is thought to advantage the know-nothings who aspire to elective office.

Bottom line: For every genuine innovation in governing, like the “doughnut economy” that is a subject of experimentation in Amsterdam and a few other places, there are literally thousands of innovations in technology. We humans are really good at invention, at subduing our environments, making daily life easier and more interesting. Not only that, most of us applaud those innovations; we consider them evidence of progress.

Why don’t we approach our governing systems that way?

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Inequality Isn’t Just About Money

Believe it or not, despite their sometimes dense arguments and arcane vocabularies, academic papers can be fascinating.

A couple of months ago, at lunch with a former colleague, he referred to a paper that sounded intriguing, and I asked him to send me a link. Given the number of books and papers I tend to amass, I just got to it–and my initial impression was confirmed.

The lead author is Paul K. Piff, a Professor at the University of California at Irvine, and the title of the paper is “Having less, giving more: The influence of social class on prosocial behavior.”

The authors began by sketching out fairly widespread assumptions about folks who occupy a lower social class, which they define in terms of socionomic status. In other words, poor people. They note that poor people have access to fewer resources,  face greater exposure to threat, and experience a reduced sense of personal control, and they observe that, given these life circumstances, many people expect lower class individuals to “engage in less prosocial behavior, prioritizing self-interest over the welfare of others.”

The authors’ researched a related, but different, hypothesis. They investigated whether poorer individuals might “orient to the welfare of others as a means to adapt to their more hostile environments” and they examined evidence to determine whether such an orientation exists and if so, whether it gives rise to greater prosocial behavior. (In the excerpt below, I’ve removed the copious citations.)

Across 4 studies, lower class individuals proved to be more generous (Study 1), charitable (Study 2), trusting (Study 3), and helpful (Study 4) compared with their upper class counterparts. Mediator and moderator data showed that lower class individuals acted in a more prosocial fashion because of a greater commitment to egalitarian values and feelings of compassion.

The degree to which those who enjoy abundant resources should
act altruistically toward others is a contentious issue within moral
frameworks and political philosophies.

In the present research, we examine how social class influences
prosocial behavior. Relative to their upper class counterparts,
lower class individuals have fewer economic resources; fewer educational opportunities; less access to social institutions such as
elite schools, universities, and social clubs;
and subordinate rank in society relative to others.

Moreover, people with lower class backgrounds often face increased stress in their close relationships and violence in their homes. In the face of these life circumstances, lower class individuals might be expected to be more focused on their own welfare, prioritizing their own needs over the needs of others.
An emerging body of research points to an alternative hypoth-
esis: Despite experiencing life stressors on a more chronic basis,
lower class individuals appear to be more engaged with the needs
of others. Relative to their upper class counterparts, lower class
individuals are more dependent on others to achieve their desired
life outcomes, more cognizant of others in their social environ-
ment, and more likely to display other-oriented nonverbal behaviors.

The article proceeds to outline the four studies referenced, and to test their hypothesis by measuring the effect of social class on “core aspects of the construct”– objective
indicators of material resources (i.e., income): and subjective perceptions of social class .

In both correlational and experimental designs, using university, community, and nationwide samples that represented a range of social class backgrounds, controlling for plausible alternative explanations (e.g., reli-
giosity, ethnicity), we explored the effects of social class on
generosity (Study 1), charitable donations (Study 2), trust (Study
3), and helping behavior.

There’s a lengthy explanation of the methodologies employed in each of these studies, and discussions of the findings and implications at the link. But the bottom line was clear: The evidence strongly suggested that social class does shape what the authors call “people’s prosocial tendencies” and that “having less leads to giving more.”

So much for noblesse oblige and the stereotype of the generous rich. Turns out poor folks really aren’t Romney’s “takers”…

Most of the national debate over income inequality and the enormous gap between the financially fortunate and everyone else focuses on the extensive privileges enjoyed by the wealthy,  including the immensely greater influence that monied folks exert on policy–in contrast to  the multiple barriers faced by people whose incomes are barely adequate (or inadequate) to cover life’s necessities.

This paper–and the numerous studies cited by its authors–suggests another reason to be concerned about our present levels of inequality. If we want a kinder, gentler, more compassionate society, populated by citizens who behave in a pro-social manner, pursuing policies that further enrich the already wealthy is definitely not the way to go.

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