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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Indiana Doesn’t Do New

Residents of Indiana’s urban areas will tell you that one of the more annoying features of Hoosier life is a state government in thrall to rural interests.

Indiana has a significant urban/rural cultural divide. Our legislature–which for years has been gerrymandered in ways that significantly favor rural Republican areas–resents the fact that Indianapolis is the state’s economic driver, and routinely screws us over.

State agencies, for their part,  vary in their approach to the needs  of urban Hoosiers.

Nowhere is the disconnect between state and city more striking than the incomprehension of urban realities displayed by Indiana’s Department of Transportation. I’ve posted previously about the conflict between the city and the state over the latter’s planned repair of the aging interstates that cut through and deface residential and historic districts in the central city.

When I read this recent article from Forbes, I thought about the reluctance of Indiana’s DOT to actually engage with the group of planners, architects and residents who came together to try to explain why elevated highways, interchanges and walls designed for country interstates create huge problems in cities.

The interstate highway system is over 50 years old and many portions of the system need repairs or upgrades. As we debate the future of the interstate highway system in light of advances in smart infrastructure and autonomous and electric vehicles, it’s worth considering whether some portions of the system should be removed, especially urban portions that are underused or harmful to the vitality of cities.

The article recognizes and recounts the many benefits of the Interstate system. Interstates have played an important part in the nation’s economic growth. But as the article notes,

The highway system is great for facilitating travel between metro areas and states and faster travel times are what make the system so valuable. But the system doesn’t need to be in its current form to serve this purpose. Several stretches of highway within cities’ boundaries do little to facilitate inter-state travel and come with a host of negative impacts on the cities that contain them….

Economist Nathaniel Baum-Snow estimates that on average the construction of one interstate highway through a central city caused an 18% drop in that city’s population between 1950 and 1990. The economic explanation is that the highway decreased commuting times, which allowed people to live farther from the city. Furthermore, the decrease in the price of commuting freed up money that could be used on other things, including more space. And since people really value space—think about how the average home size changes with income—this increased the demand for space and led to more suburbaniza­tion and a decline in population density as people consumed more land and built bigger homes.

Population loss wasn’t the only result of highways running through the cores of cities. Entire neighborhoods were razed to make room for highways, destroying homes, businesses, and urban amenities….Highways also became barriers between neighborhoods, cutting people off from job opportunities and retail options. There’s also evidence that air pollution from highways negatively impacts student outcomes in nearby schools.

Highways that bisect cities create barriers that hinder interactions between people on either side. They also take up valuable real estate that could be used for more housing, businesses, or amenities, such as parks, that make cities more appealing places to live and work.

The article’s conclusion, ironically, echos the approach preferred by Indianapolis and rejected by the state’s DOT. (In fairness, DOT did retreat from its original plan to add lanes and huge buttressing walls…)

Several highways running through cities could be removed without adversely affecting the overall system, and removal would clear the way for a new period of urban revitalization. A system of smaller, lower-speed boulevards would still enable travel through city centers without the noise, pollution, and unsightliness of today’s high-speed highways. It’s time to try something new.

And I’m sure some states will actually work with their cities to do that. Indiana, not so much.

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Reviving Real News

The reports of local journalism’s demise are coming fast and furious.

The Guardian recently reported on the emergence of a conservative “news” ecosystem devoted to spreading rightwing propaganda.The article told how one “fake news” source opposed a school referendum in an Illinois town.

The referendum was hotly contested – an organized, enthused Vote Yes campaign was pushing hard for people to back the vote. It looked like the referendum might deliver a yes verdict.

Enter Locality Labs, a shadowy, controversial company that purports to be a local news organization, but is facing increasing criticism as being part of a nationwide rightwing lobbying effort masquerading as journalism.

The company, with two other linked organizations, was responsible for the Hinsdale School News, a print newspaper that was distributed around Hinsdale voters. The paper had the Hinsdale high school district logo, and the look of a journalistic organization. But, as the Hinsdalean reported, the “newspaper” was stuffed full of articles, mostly byline-free, which had a distinct anti-referendum skew….

Locality Labs operates scores of sites across Illinois, Michigan, Maryland and Wisconsin, often sharing content. In Michigan alone, the Lansing State Journal reported, almost 40 sites opened in one fell swoop this fall.

The effectiveness of what is essentially a national “disinformation campaign” is amplified enormously by what columnist Margaret Sullivan has called “The  death knell for local newspapers.”

Local watchdog journalism matters: Just check the front page of the Baltimore Sun, which on Thursday carried a huge headline about the former mayor’s indictment; the Sun — even in its diminished state — broke the story in March that set those wheels in motion.

I could give you dozens of other examples from this year alone. And consider that sex trafficker Jeffrey Epstein might have gotten away with most of his misdeeds if not for local journalism, particularly at the Miami Herald.

But the recent news about the news could hardly be worse. What was terribly worrisome has tumbled into disaster.

Sullivan ticks off the reasons for her dismay: the just-completed Gannett and GateHouse merger, which threatens to further reduce newsrooms throughout the country; the fiscal woes of McClatchy, the sale of the Chicago Tribune–a sale that

“ushers the vultures into Tribune,” said a Nieman Lab analysis by Ken Doctor. The implications of all these developments are stunning, he wrote: “The old world is over, and the new one — one of ghost newspapers, news deserts, and underinformed communities — is headed straight for us.”

Sullivan reminds us that, in the past 15 years, more than 2000 newspapers have simply gone out of business, and of those that are left, far too many are “phantoms” of their former selves.  Yet we still rely on local newspapers to provide original local journalism — in many communities, more than all other news sources combined.

Sullivan then makes an incredibly important point:

One of the worst parts about what has happened is that local news sources are relatively well-trusted. In an era of deep antipathy toward the media, that’s no small thing.

They still are one of the ways that many communities maintain a sense of unity and shared facts.

Losing that should be unthinkable. But as of this moment, it isn’t.

When we lose trusted sources of common information, we become easy prey for the propagandists and the conspiracy theorists.

Sullivan references the still-fledgling efforts of nonprofits and foundations to fill the local news gap. (Students in my Media and Public Policy class have wondered why local “do-gooders” don’t form a nonprofit to purchase and revitalize the pathetic remains of our local paper–something that, unfortunately, is highly unlikely to happen.)

The conventional wisdom among media observers is that there is no longer a viable business model for local newspapers (even those that are entirely on-line)–that the loss of advertising dollars that provided them with once-cushy profit margins, together with the dramatic decline in subscriptions, simply dooms them.

But here’s a “what if” for our “who can you trust?” age.

What if a local news source marketed itself with a twofold promise: that it would staff its newsroom with enough reporters to adequately cover its geographic area, including especially the agencies of local government; and that it would report nothing those reporters had not verified?  The reason we used to trust local newspapers was our confidence that they had actually confirmed the facts they reported. However, they rarely felt the need to point that out. In the era of “fake news,” trustworthiness needs to be an explicit part of marketing campaigns.

I have to believe that a lot of us would gladly pay for real news. And some advertisers might even see the reputational benefit of supporting actual journalism.

After all, someone is paying for the propaganda…

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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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