About That “City On A Hill”

Back when Republicans were (mostly) sane–when they cared about good government at least as much as raw power, I worked in the Indianapolis mayoral administration of Bill Hudnut. Bill had his faults, as we all do, but he passionately loved the city and tried to do what was best for all of its inhabitants.

He was also a former Presbyterian minister who often compared America–and to a lesser extent Indianapolis– to “The Shining City on the Hill.” We were to be a beacon, an ideal to which others aspired.

In the absence of a real newspaper, I can’t offer an educated evaluation of today’s Indianapolis, but no one in their right mind thinks today’s United States is a beacon to be emulated. It isn’t simply our massive and embarrassing policy failures (think health care, the environment, criminal justice, race relations, women’s rights and economic justice, for starters…)

It’s the corruption.

As the New York Times has recently–amply, overwhelmingly– documented, our President is a crook. Not that most of us are surprised, given the indictments of his associates, the scandals of his cabinet , and his whole sordid history.

Paul Krugman has responded analytically to the evidence:  

The blockbuster New York Times report on the Trump family’s history of fraud is really about two distinct although linked kinds of fraudulence.

On one side, the family engaged in tax fraud on a huge scale, using a variety of money-laundering techniques to avoid paying what it owed. On the other, the story Donald Trump tells about his life — his depiction of himself as a self-made businessman who made billions starting from humble roots — has always been a lie: Not only did he inherit his wealth, receiving the equivalent of more than $400 million from his father, but Fred Trump bailed his son out after deals went bad.

So, Krugman says, voters who bought Trump’s highly inaccurate version of Donald Trump bought snake-oil. But the bigger, and much more damaging fraud is the story we tell ourselves about America the Meritocracy.

The tale of the Trump money is part of a bigger story. Even among those unhappy at the extent to which we live in an era of soaring inequality and growing concentration of wealth at the top, there has been a tendency to believe that great wealth is, more often than not, earned more or less honestly. It’s only now that the amounts of sheer corruption and lawbreaking that underlie our march toward oligarchy have started to come into focus.

Until recently, my guess is that most economists, even tax experts, would have agreed that tax avoidance by corporations and the wealthy — which is legal — was a big issue, but tax evasion— hiding money from the tax man — was a lesser one. It was obvious that some rich people were exploiting legal if morally dubious loopholes in the tax code, but the prevailing view was that simply defrauding the tax authorities and hence the public wasn’t that widespread in advanced countries.

But this view always rested on shaky foundations. After all, tax evasion, almost by definition, doesn’t show up in official statistics, and the super-wealthy aren’t in the habit of mouthing off about what great tax cheats they are. To get a real picture of how much fraud is going on, you either have to do what The Times did — exhaustively investigate the finances of a particular family — or rely on lucky breaks that reveal what was previously hidden.

We’ve had some of those “lucky breaks,” as Krugman points out. Thanks to the Panama Papers and other leaks, we now know that outright tax evasion by the very wealthy is pervasive. Researchers estimate that the rich pay on average 25 percent less than they owe–enough to pay for the entire food stamp program. And of course, that tax evasion serves to entrench privilege and allows it to be passed on to the heirs of that privilege.

Just like Trump’s daddy did.

Meanwhile, Republicans in Congress have been “systematically defunding the Internal Revenue Service, crippling its ability to investigate tax fraud. We don’t just have government by tax cheats; we have government of tax cheats, for tax cheats.”

It’s not just that the president of the United States is, as veteran tax reporter David Cay Johnston put it, a “financial vampire,” cheating taxpayers the way he has cheated just about everyone else who deals with him.

Beyond that, our trend toward oligarchy — rule by the few — is also looking more and more like kakistocracy — rule by the worst, or at least the most unscrupulous. The corruption isn’t subtle; on the contrary, it’s cruder than almost anyone imagined. It also runs deep, and it has infected our politics, quite literally up to its highest levels.

So much for “the Shining City on the Hill.” America is more like an inner-city neighborhood where kids look up to the rich drug dealer.

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What Is WRONG With These People?

I don’t know why I constantly ask that question–I know what’s wrong with them. They are greedy and unethical, none too bright, and they lack both human empathy and any concept of justice. The better question is why are they this way? (There used to be a theory about punitive toilet training…)

Are you wondering what has set me off this time?

The Hill reports that

The GOP bill to reauthorize the Higher Education Act, introduced by Rep. Virginia Foxx (R-N.C.) on Friday, would eliminate the Public Service Loan Forgiveness program, which erases student debt for those who work for qualifying employers after making payments for 10 years.

The qualifying employers include government organizations and nonprofits, according to the federal student aid website. Those who volunteer for the Peace Corps or AmeriCorps are also eligible.

God forbid we should offer people an incentive to enter into (underpaid) public service! No, we should reserve government positions for people who are able to take advantage of the opportunities–people who can use those positions to line their already-overflowing pockets.

People like Betsy Devos.

The Washington Post reports that DeVos recently awarded her department’s debt-collection contracts to two firms, one of which she had invested in shortly before becoming Secretary of Education.

A company that once had financial ties to Education Secretary Betsy DeVos was one of two firms selected Thursday by the Education Department to help the agency collect overdue student loans. The deal could be worth hundreds of millions of dollars.

Previously, the Department has used as many as seventeen companies to collect overdue student debt. Suddenly, they need just two.

DeVos presumably divested her stake in the successful bidder as a condition of her appointment, but of course, once she leaves, she will be perfectly free to reinvest or engage in other business dealings with a company that now owes her big time.

What makes this “deal” worth hundreds of millions of dollars–and what makes me so livid–is that DeVos is methodically engaging in a process of overturning Obama-era regulations that were–by any measure–efforts to be fair to the students DOE presumably is there to serve.

It was DeVos who proposed eliminating the Public Service Loan provision. It is DeVos who has reversed the Obama Administration’s decision to forgive loan indebtedness from students who were defrauded by predatory for-profit “universities.”

CNBC took a look at some of the DeVos policy changes, noting that terminating the Public Service Loan Forgiveness program would “drastically impact public servants who have made significant financial and career decisions based on PSLF provisions.”

CNBC also reported that

Under the Obama administration, the Department of Education was incentivized to award Federal Student Aid contracts to debt collection companies with the strongest records of helping borrowers and the lowest rates of loan defaults.

One of Education Secretary Betsy DeVos’ first major moves was to revoke this policy, making it more likely for the government to award Federal Student Aid contracts to companies that sell their services for the lowest price. These low-cost collection companies often offer riskier loans and provide less support to individuals trying to navigate the student loan maze.

Betsy DeVos is a poster child for an administration in which absolutely no one has the slightest concept of “the public good”– or, for that matter, ethical governance.

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