Archive for June, 2015

Money Corrupts

Friday, June 19th, 2015

One example of modern day corruption is the estate tax repeal that the republican house recently passed.

I’m working on another post that digs into the whole topic of corruption in more detail, but here’s a quick overview to provide some historical context to this discussion.

The framers of the constitution felt that corruption was the single largest threat to democracy.

If you remember your history, the United States was not the first democracy. That was Athens. But democracy was still a novel idea when the colonies decided that they had to be independent of the King. One of the arguments against democracy was the natural instinct of self-interest. The other argument was that the rich and powerful in Europe had been able to undermine democracy. The livelihoods of so many people depended on the good graces of royalty, for example, that few opposed their rule.

The framers, however, believed that individuals would value liberty so highly that civic virtue would trump self-interest. They were not so naïve, however, as to assume that this willingness to sacrifice for the greater good would continue once those who experienced the revolution passed on. So they regarded anything that would subvert civic virtue, or even have the appearance of self-interest, as corruption.

It’s through that lens that I’d like to look at the repeal of the estate tax. This isn’t to suggest that this is the only example of modern corruption. It’s just an obvious one.

The estate tax charges the wealthiest .2% of American households when they pass on amounts in excess of $5.4M in the case of individuals and $10.9M in the case of couples to their heirs.

This estate tax has been part of the US infrastructure since 1797. Its explicit purpose is to prevent the sort of corruption that the founders associated with a permanent aristocracy. By making it difficult for one generation to share their wealth with another, it discourages the formation of families with enough money to damage civic virtue. Specifically the concern was that our representative democracy could erode to an oligarchy if the government didn’t specifically take steps to prevent the concentration of wealth in the hands of a few. James Madison warned that inequality in property ownership would subvert liberty, either through opposition to wealth (a war of labor against capital) or “by an oligarchy founded on corruption” through which the wealthy dominate political decision-making (a war of capital against labor).

Here are some of the justifications leading Republicans have used for eliminating the estate tax.

House Ways and Means Committee Chairman Paul Ryan, R-Wis. claimed that the estate tax is “absolutely devastating” to family farms, and further he claimed the repeal would remove “an additional layer of taxation” from assets that had already been taxed.

“It sounds to me like there’s a lot of wealth envy in this country,” Rep. Virginia Foxx, R-N.C. The bill abolishing the estate tax, she said, “will draw a line in the sand.”

The facts are that only 120 small businesses and farms (100 of them large farms) were hit by the estate tax in 2013. And for that tiny number affected, there are all sorts of provisions already in place to soften the blow: low valuation rules, delayed tax payments and other breaks and discounts. In fact some have characterized the estate tax and a fine for those who failed to pay their accountant, since careful planning can generally avoid this tax.

Also 55% of the value of estates worth more than $100M, according to Americans for Tax Fairness, are unrealized capital gains that have never been taxed. If the issue were double taxation, there is a much better way of addressing the issue than simply eliminating the estate tax.

Besides the obvious risks of increased concentration of wealth in the hands of a few, there are real budget implications of repealing this tax. The tax will bring in $269B over the next ten years. Republicans are going to say that putting this money back into the hands of the wealthy will increase other tax revenue by causing economic growth, but there are no facts to support this claim. What the data shows is that tax cuts to the rich only reduce the middle class, increase the ranks of the poor, weaken our economy, and increase our debt.

To put this gift to the wealthy in perspective, here are some of the other things that could be done with that amount of money.

  • Making community college free for everyone for ten years cost $60B
  • Making four year college free for all that qualify would cost an additional $15B
  • Plugging the current highway trust fund deficit which would support infrastructure improvement costs $164B over the same time period

If at this point you are asking what does all of this have to do with corruption, the house members who voted for this bill received a combined $56M in campaign contributions during the last election cycle from special interest groups specifically advocating the repeal of this tax.

This may not meet the narrow standard of corruption that the Supreme Court used to justify the Citizen’s United case, but it does justify the fears that our framers had regarding the corrupting influence that money has on our democracy.

Climate Change Infallibility

Tuesday, June 16th, 2015

Here’s how twisted the climate change debate has become.

The Pope feels that he has to weigh in.

His opinion?

Climate change is real.

Climate change is a moral issue because of the damage being done to the poor.

His formal remarks on the subject will be published in an encyclical due later this month. Encyclicals are letters that Popes send to Bishops. The purpose is to instruct the Bishops on the Catholic Church’s position on particular issues. This is serious stuff. It is not an invitation for dialog. It is a statement of how this particular issue is going to be taught by the Bishops going forward. The Pope expects all good Catholics to follow the church’s teachings.

The reaction on this side of the ocean is incredible.

Catholic republican conservative Rick Santorum has built his political career on his religious beliefs. He opposes abortion and same sex marriage. On ISIS, he believes that the US should “bomb them back to the seventh century.” He believes that immigration is contributing to economic problems because immigrants are taking jobs from citizens. As a result, he wants to reduce LEGAL immigration by 25%. He opposes any path to citizenship for illegal immigrants. Finally, he rejects scientific evidence that human behavior is causing climate change. He walks pretty much straight down the right wing conservative Republican political platform while wrapping it all in a mantle of Catholicism.

The problem is that conservative Catholics also believe in papal infallibility. That means that when the Pope speaks on matters concerning faith or morals, it is not only binding for all Catholics, but it is divinely inspired and cannot be wrong.

So this puts Rick Santorum in a difficult spot. Which is more important to him – his religion or his politics? Here’s his response.

I would just say this: The church has gotten it wrong a few times on science, and I think that we probably are better off leaving science to the scientists and focusing on what we’re really good at, which is theology and morality.

Not only does he reject the whole concept of papal infallibility out of hand, but he also questions the Pope’s right to view climate change as a moral issue. Finally he uses the church’s past denial of the scientific evidence supporting a sun-centric planetary system, as evidence that the church isn’t trustworthy when it comes to science. He advises the Catholic Church to leave science to the scientists.

This is the height of hypocrisy. That’s because Santorum’s political position of climate change denial fails to follow his own advice to the Catholic Church. Instead of leaving science to the scientists, Santorum rejects the current scientific consensus regarding the causes of climate change because it conflicts with his RELIGIOUS views.

Here is how Santorum defends calling climate change “a hoax”.

If you leave it to Nature, then Nature will do what Nature does, which is boom and bust

And

We were put on this Earth as creatures of God to have dominion over the Earth, to use it wisely and steward it wisely, but for our benefit not for the Earth’s benefit.

Rick Santorum has no standing in the scientific community. His undergrad degree is in Political Science from Penn State. He got an MBA from Pitt and a JD from Dickenson. Pope Francis, on the other hand, IS a scientist. He has a degree in chemistry and worked as a chemical technician before entering the priesthood. He CAN speak with authority on the science.

He can also speak with authority on the morality of climate change because he is the head of one of the world’s largest religions. He isn’t the first to speak out either. He is one of a long line of Pope’s who have treated climate change as a moral issue.

Environmental protection and the connection between fighting poverty and fighting climate change are important areas for the promotion of integral human development – Pope Benedict XVI

In our day, there is a growing awareness that world peace is threatened … by a lack of due respect for nature – Pope John Paul II

So we have a conservative Republican politician who has so blurred the lines between his political views and his religious views that he can no longer see the difference. He rejects the leader of his church claiming the Pope isn’t qualified to make a scientific judgment because of the church’s opposition to Gallileo – even though the church’s position is motivated by morality. Despite the fact that the Pope himself is a scientist, Santorum dismisses the church’s position as out of step with the scientific community. Then he uses exactly the same Biblical passage that the Catholic Church used to defend itself against the scientific claims of Gallileo, to support his own rejection of the scientific community’s conclusion that human actions are causing climate change.

In other words he tells the church to quit politicizing science and then turns right around to use his own religious beliefs to politicize science.

This raises an obvious question of whether Rick recognizes the Pope as his leader. Here’s what he told a radio interviewer in January.

I mean, it’s sometimes very difficult to listen to the Pope and some of the things he says off the cuff…. I keep coming back to the Pope is the leader of the Catholic Church, and when he speaks as the leader of the Catholic Church, I’ll certainly pay attention. But when he speaks in interviews, he’s giving his own opinions.

Santorum’s rejection of the Pope’s encyclical on climate change is just another example of the hubris of the man. This is a perfect example of the solipsism that appears to infect the right wing conservative movement. There isn’t even the hint of self consciousness in Santorum’s statements even though they are obviously contradictory. That’s because there is only one ideology that he follows – right wing conservatism.

That is his god.

That is his religion.

The fact that he can campaign as a serious candidate only highlights the deep cynicism that pervades the conservative wing of the Republican party.

Fortunately the Bible warned us against these people.

A double minded man is unstable in all his ways James 1:8

Poverty and the Social Safety Net

Sunday, June 7th, 2015

Here’s a quick recap of what we have learned so far.

Conservatives have developed a set of narratives to explain why our best efforts to eradicate poverty have failed. These narratives all revolve around a central core claim that programs which attempt to assist people in need actually perpetuate that need. That’s because, according to this “logic”, aid of any sort reduces the incentive to work. The foundation of this view is that if the poor were willing to work as hard as the middle class they would quickly join the middle class. Lately there has been another twist to this point of view. If the middle class were willing to work as hard as the wealthy, they would be wealthy too. These views are consistent with the conservative moral foundation that hates that possibility that anyone might be able to “cheat” the system.

A recent study by the Pew Research Center for example found that three-quarters of conservatives believe that the poor “have it easy” because of government benefits. Only 1 in 7 believe the poor lead “hard” lives.

We have gone through a very interesting eight years where a lot of these assumptions were tested.

During those eight years the ranks of the poor swelled as many previously middle class people lost their jobs, their homes, and their savings. They were forced to file for unemployment, food stamps, temporary need to dependent families, and many of the other assistance programs that are the target of conservative scorn.

Now we are finally emerging from this long period of economic decline.

If the conservative theories are correct, those who were out of work for a long period of time and receiving benefits, should be demonstrating some dependence because of the corrupting influence of those benefits. We should be able to see evidence of that dependence in a reluctance to return to work.

One example would be the number of people on food stamps. That should remain high even as the unemployment rate goes down.

Guess what?

The number of people filing for food stamps has gone down at pretty much the same rate as unemployment.

The same thing is true regarding the claim that poor women have children in order to support themselves with the meager benefits provided for mothers with dependents. If that actually was a strategy, we would see the birth rate among the poor go up during times of high unemployment. Instead the birth rate among the poor went down, just like it did in the overall economy.

We’ve also seen that the behavioral effects of poverty cross racial lines. As more poor people fell into poverty over the past 8 years, their families disintegrated too. They saw increases in drug use, violence, and crime. They also experienced declining health. While life expectancy among the wealthy has gone up, life expectancy among the poor has gone down.

The real answer is much simpler.

If you want people to demonstrate middle class values, you have to provide them middle class jobs.

If you want to reduce the ranks of the generationally poor, you have to break down the barriers that institutional racism use to literally wall off poor minority communities from prosperity.

Finally, we have to have an honest conversation about the value of a social safety net in preventing people from falling into poverty. The psychological and physical damage they suffer in that condition can make it difficult for them to recover.

Here are just a few examples from a study by the Federal Reserve.

Poverty is an issue for our elderly. 25% of the elderly depend entirely on Social Security benefits. 50% get more than half their income from Social Security. That’s because 30% of the rest of the population have no retirement savings or plan at all. That same percentage of people report that they went without some medical care over the past year because they couldn’t afford it. 25% reported that they or someone else in their immediate family had experienced some degree of financial hardship over the past year. 47% said that they would not be able to handle an unexpected expense of $400 or more.

That’s why those Republican states who have refused to expand Medicaid continue to put their populations of working poor at a terrible risk. They remain literally one medical emergency away from bankruptcy.

Hopefully all of this will be included in the discussions of income inequality that I hope will be part of this election year cycle.

The poor are not to blame for their condition. We are.

We have created a system that makes it very difficult for those who fall into poverty to ever get out.

We keep the working poor on the knife edge of financial collapse.

We keep the black community imprisoned in economic and physical ghettos with an asymmetrical police and legal system that punishes them for not demonstrated middle class values. Then we are shocked when every ten years or so the ghettos explode in violence and frustration.

The data is there.

The changes are obvious.

All that is lacking is the will for conservatives to overcome their bias and have an honest an open discussion about how to address the root causes of poverty rather than simply blame the poor for their condition.