Category Archives: Uncategorized

Connecting the Dots

It’s time to say goodby and good riddance to the month of April–the “cruelest” month, presumably because federal taxes are due. And let’s face it, no one likes taxes.

And every year,  the avalanche of anti-tax articles is predictable as April showers.

Over at The New Republic, Jonathan Cohn makes an important point: people resent paying taxes when they don’t see what that money is buying. I’ve made that same argument in the local context, and it is actually easier to see what our local money buys: police and fire protection, garbage collection, parks, schools and the like. Those local public goods are more visible than the goods our federal taxes purchase.

That payroll tax taken out of everybody’s check? It’s buying you Medicare and Social Security, which means a more secure retirement free of crippling medical bills. Your federal income tax? Its effects are a lot more diffuse. But chances are pretty good that you’ve already used some infrastructure today—whether it was a road or railway you took to work, or maybe the information technology connections you’re using to read this article. Federal, state, and local taxes helped pay for that. Is your water and air clean? Are you safe from threats, domestic and foreign? Then you’re getting something valuable from the Environment Protection Agency, the Federal Bureau of Investigation, and the Department of Defense. Your tax dollars paid for those, too.

Sometimes, of course, your tax dollars pay for supports and services you won’t use. And you might resent that. But even taxes that pay for someone else’s benefits can benefit you. Why does the U.S. not have the massive underclass that characterizes many third-world countries—or the incipient danger of violent upheaval that accompanies it? The safety net your taxes purchased, tattered as it is, buys a degree of social harmony, too.

We can legitimately argue about lawmakers’ priorities. We can–and should–monitor government at all levels to insure that its operations are businesslike and efficient. We can debate whether government should do some things at all.

But while we are griping and doing everything we can to reduce our bills, we should take note of Cohn’s admonition, and remember that our tax dollars buy a lot of things that most of us agree–however grudgingly– make our lives safer and better. Things we would miss.

In the private sector, we acknowledge the truth of the old adage: you get what you pay for. Somehow, we ignore that homely truth when it comes to taxes.

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Back Home in Whose Indiana?

Two articles have come across my laptop screen in the past week that reminded me of the old observation that what you see depends on where you sit.

Morton Marcus’ “Eye on the Pie” column stuck basically to statistics, sharing data that suggests our state is not faring well economically. Private sector jobs remain stubbornly below pre-recession levels, despite growth in population; and although wages are up, they aren’t up enough to have kept pace with inflation, so real wages (buying power) actually declined in all but five metropolitan areas.

The result is that the average Hoosier has $30 less a week than she had six years ago.

The job picture is similarly uneven.  Elkhart-Goshen has lost 8.8% or 10,600 jobs; Michigan City-LaPorte is off 4,400 jobs, or 11.2%.

In the Northwest Indiana Times, Rick James focused on the contrast between Indiana lawmakers’ solicitude for business and our abysmal social safety record.  Indiana is 45th among the states in infant mortality–more babies die here before their first birthday than in 44 other states. Public school teachers have been under relentless attack for deficiencies in our education system, despite the fact that our problems are systemic, complex and frequently exacerbated by clueless ideologues at the statehouse.

As James notes,

“Pence can boast about the business climate. He can also talk about the $2 billion the state has in the bank while babies are dying, roads are crumbling and schools are cutting staff and programs because of lack of funding. That, my friends, is Honest to Goodness Indiana.”

The evidence demonstrates rather forcefully that being a low-tax, “right to work” state has failed to create jobs or contribute to prosperity. To the contrary, our obsession with tax-cutting has degraded the quality of life that–according to research–is what actually attracts new businesses and residents.

Meanwhile, our political spin-doctors continue their “happy talk.”

I don’t know what state the administration flacks who issue those glowing media releases live in, but the rest of us would sure appreciate getting directions to that Indiana.

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File Under “Be Careful What You Wish For”

All eyes are on the lawsuit Hobby Lobby has pending in the U.S. Supreme Court, and most of the commentary revolves around the question of a corporation’s right to disregard a law of general application if that law offends its “sincerely held” religious sensibilities.

The threshold issue is whether a corporation can have religious sensibilities, sincere or otherwise. And hidden in plain sight in that question is an enormous threat to American business. In short, if Hobby Lobby prevails, it is likely to be at the expense of limited liability–which is the whole purpose of incorporation.

As one amicus brief noted,

The essence of a corporation is its “separateness” from its shareholders. It is a distinct legal entity, with its own rights and obligations, different from the rights and obligations of its shareholders. This Court has repeatedly recognized this separateness.

Shareholders rely on the corporation’s separate existence to shield them from personal liability. When they voluntarily choose to incorporate a business, shareholders cannot then decide to ignore, either directly or indirectly, the distinct legal existence of the corporation when it serves their personal interests.

The brief goes on to point out that it is this very “separateness” between shareholders and the corporation that they own that promotes investment, innovation, job generation, and the orderly conduct of business.

Think about it. How likely would you be to buy stock in a company if you thereby ran the risk of being found personally liable for improper or negligent corporate behavior?

Several commentators have noted that Hobby Lobby is effectively asking for the best of both worlds.  Its owners want to benefit from the protection against personal liability, but they don’t want to recognize that the corporation is an artificial entity not entitled to personal individual rights.

Hobby Lobby and Conestoga argue that they should be exempt from federal law because of the religious values of their controlling shareholders, while seeking to maintain the benefits of corporate separateness for all other purposes. These corporations have benefited from their separateness in countless ways and their shareholders have been insulated from actual and potential corporate liabilities since inception. Yet now they ask this Court to disregard that separateness in connection with a government regulation applicable solely to the corporate entity.

If the Court rules in favor of Hobby Lobby–if it finds that a corporation can assert a religious right to discriminate–it will be the beginning of the end of limited liability and corporate immunity for shareholders.

It’s tempting to say “it would serve them right,” but the truth is, such a result would be a body blow to business and the American economy.

There’s a reason the business community has stayed out of this litigation.

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The Power of Propaganda

A former student recently sent me a fascinating article from the LA Times. Titled “The Cultural Production of Ignorance,” it centered on the work of Robert Proctor, a Stanford Professor who teaches the history of science. Proctor studies intentional efforts to sow disinformation, especially about science.

The tobacco industry pioneered this sort of propaganda; when science demonstrated the link between smoking and various diseases, Big Tobacco’s tactic (outlined in a Brown and Williamson memo) was not to attack the evidence outright. Instead, they chose to “sow doubt and establish a controversy.”

Sound familiar? It should; the same approach is used by vaccine opponents, climate change deniers and those who reject evolution, among others. The tactic is a staple of Fox News (Proctor says that he “watches Fox News all the time.”)

Ironically, in the “information society” we inhabit, it has become easier to propagate ignorance. As issues become more complicated, they also become easier to confuse. And in the place of accuracy–what used to be called “the journalism of verification”–today’s media has substituted “balance.” Rather than objectivity, we get “both” sides of issues that may actually have six “sides” or only one. In place of real reporting, we get stenography–“he said, she said.”

This is an ideal environment for liars and propagandists.

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About that “Culture of Dependency”

There’s been a lot of discussion about Paul Ryan’s racially-tinged dismissal of inner-city poverty as evidence of a cultural deficit. As Timothy Egan’s recent column in the New York Times reminds us, there’s a particular irony in Ryan’s appropriation of an argument that used to be mounted against his own Irish forebears.

“We have this tailspin of culture, in our inner cities in particular, of men not working and just generations of men not even thinking about working or learning the value and the culture of work.” In other words, these people are bred poor and lazy.

Where have I heard that before? Ah, yes — 19th-century England. The Irish national character, Trevelyan confided to a fellow aristocrat, was “defective.” The hungry millions were “a selfish, perverse, and turbulent” people, said the man in charge of relieving their plight.

You never hear Ryan make character judgments about generations of wealthy who live off their inheritance, or farmers who get paid not to grow anything. Nor, for that matter, does he target plutocrats like Romney who might be lulled into not taking risks because they pay an absurdly low tax rate simply by moving money around. Dependency is all one-way.

We humans evidently have a deep-seated need to distinguish the virtuous “us” from the undeserving “them.” As Egan demonstrates, however, the identity of “us” and “them” is anything but static. Many upstanding Americans can trace their roots back to a once-despised “them.”

Accordingly, a bit of humility might be in order.

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