The middle class is shrinking. Those in power have run up enormous debts on public credit while shoveling most of the money into private pockets. The corporations that have benefitted from this borrowing binge, meanwhile, leverage the global trade system to transfer their profits beyond the reach of national governments.

Meanwhile, we have been told lies by Democrats and by Republicans, divided into artificial camps and led into debates that are either irrelevant or so dramatically scripted that we fail to realize every choice leads to the same result: the dismantling of the social framework that defined and sustained the opportunity of the last century. National mobilization of resources has given way to radical individualism under a narrative that, in the wealthiest nation in the world, we must always expect less.

In this tumultuous time, we search for a way forward - a new Square Deal for the American people.

Friday, November 6, 2015

Charitable Giving and Matching Donations

Yesterday, the USO sent us a letter asking if we'd make a donation under a matching-gift program. The idea of a matching gift has always struck me as a little odd.  "I'm willing to give $100 to your organization, but only if someone else will, too.  Otherwise, you get nothing."  What sort of philanthropist thinks that way?

But matching gifts appear from time to time, sensible or not, and that presented me with a dilemma.  The reason that I'm on the USO mailing list is that I already support the USO with a monthly recurring pledge of $10, which I set at the level because it made sense alongside my other charitable activities, and which I made recurring rather than lump-sum because the USO told me (as many charities do) that they need to get money each month to be solvent.  In isolation, that makes sense.

Now, enter the matching gift:
  • If I give $10 a month to the USO, that's $120 a year. 
  • If I throw in an extra $50 under the matching program, that means that I gave $120 + $50 = $170, and the USO got $120 + ($50 x 2) = $220. 
  • If I end my monthly pledge and wait for a matching gift opportunity, I can give $120 and the USO gets $120 x 2 = $240. 
  • Should that opportunity come at a time when I have the extra $50 to spare, the net gift would be $170 x 2 = $340.
That means that, contrary to the entreaties made for sustainment pledges, if I really want to support a charity that periodically offers matching pledges, I should cancel my monthly sustainment contribution and wait for a matching opportunity, so that I can help the charity lay claim to the dollars half-put on the table by whoever the weird semi-philanthropists are who like to fund matching gift opportunities.

I've apparently been costing the organizations I support a lot of extra cash through my commitment and diligence.  It's time to rethink my charitable giving strategy.

Monday, March 9, 2015

The Right to Close a College

A days ago, I wrote about the case of Sweet Briar, the private liberal arts women's college whose Board of Directors unanimously voted to close it down at the end of this summer.  At this point, Sweet Briar alumnae and their supporters have formed a nonprofit organization, retained a law firm, and gathered pledges totaling about $2.1 million aimed at trying to keep the school from closing.

But money cannot save Sweet Briar.  The Board has already voted, the decision is made, and it cannot be reversed except by the Board itself.

Or can it?  Who has the power to close a college?

I'm not referring to a liquidation scenario.  When a college can no longer pay its bills, a court might readily liquidate its holdings and distribute them to creditors in a process similar to commercial bankruptcy liquidation.  That might include orders to disburse endowment funds and other holdings that are otherwise restricted by conditions of their contribution, and the odds are high that at least some creditors will be left receiving only a portion of what they are owned.  C'est la vie -- and such is the business of lending.

But Sweet Briar has debts of about $25 million and an endowment of at least $85 million.  Rather than requiring allocation of inadequate funds to creditors on the basis of precedence, the closure of Sweet Briar will leave substantial surplus money, most of it contributed by private citizens who specifically left it to guarantee the ongoing operation of the school.  Is it proper for a Board of Directors who were chosen to guarantee the ongoing operation of a school to first decide that they don't think it is possible, and then erect legal barriers to ensure that their decision to close the school cannot be challenged by the very people who entrusted them with power to oversee the use of donated money?

Legally, I don't know.  In 1979, Wilson College attempted to close. Alumni made an effort similar to what is being attempted by Saving Sweet Briar, obtained an injunction that prevented the shutdown, and ultimately made the school viable, adoptings the phoenix as a mascot to symbolize resurrection.  But because Wilson College is in Pennsylvania, its case does not set precedent on which Saving Sweet Briar can rely.

Setting law aside, is it morally proper?  Here, I think the answer is clear-cut: no.

Donors pledge and give money to nonprofit organizations for specific reasons. Like shareholders, they appoint Directors to carry out their wishes, but unlike shareholders, they receive no equity and generally cannot get their money back. The Directors are entrusted with power solely to pursue an articulated mission. A nonprofit organization is owned by its mission, which continues despite changes in leadership and in strategy.  Any Director who loses faith can and should resign, but the only case in which a Board should be empowered to dissolve an organization is that its mission has been accomplished.

President Jones and the Board of Directors of Sweet Briar College doubtless studied the financial projections of their school closely, conducted rigorous analysis, and decided on the basis of good evidence that the long-term outlook for the school was questionable. That they did so is admirable, because that was part of their job.  However, in deciding on that basis and without consultation with alumnae that the school should abandon its mission, they overstepped their mandate.

Severance and other regard for the staff is admirable in its way, but Sweet Briar was not established to ensure the livelihood of its employees.  By working to ensure that the people who funded the school cannot reverse their decision, President Jones and the Directors betrayed the trust placed in them.  They were wrong to do what they did.  What remains now is to see whether they had the legal authority under Virginia law to do it anyway.

Friday, March 6, 2015

Saving Sweet Briar

At the end of February, the Board of Directors of Sweet Briar College -- a women's college located in Amherst, Virginia -- voted to close the school at the end of the year.  The decision was announced to shocked students, faculty, staff, and alumnae a few days later.  There was shock and outrage, which the Washington Post described with regards to current students as "almost a collective howl, as hundreds of young women began sobbing all at once."

Within a few hours, Vixen students and graduates began to gather on Facebook to discuss what could be done.  By the end of the day, a core group of alumnae with appropriate professional credentials were working to form Saving Sweet Briar as a 501(c)(3) nonprofit organization.  Three days after the announcement of the closure, they announced the retention of a Richmond law firm with the goal of stopping the closure, and presumably wresting control of Sweet Briar from its current Board.

As this has happened, Sweet Briar alumnae and their friends and families have rallied to pledge money in support of the school.  As of this writing, pledges totaling more than $1.7 million have been raised in less than 72 hours, with over 2000 people signing up to donate money.  The goal of $20 million was set on the basis of covering both projected legal expenses and the anticipated operating shortfall of the school should it remain open for a 2015-16 school year.

Saving Sweet Briar is moving fast because it must move fast.  All current Sweet Briar students need to know quickly whether they can stay or must plan to transfer.  A wide array of schools are stepping up to help them transfer, even though many deadlines have passed, and not doing so could jeopardize their studies in the fall.  For those trying to save Sweet Briar, meanwhile, every student who transfers represents a substantial loss, not only in tuition revenues but also in the campus community.  Too few students and the school becomes non-viable regardless of the success of any legal challenge.

To many observers, the way in which the closure was abruptly announced appears to have been engineered precisely to bring about this outcome, in which efforts to save the school are greatly hampered by transfers and enrollment cancellations, so that the closure is a fait accompli.  More than a few alumnae have jumped to conclusions regarding the motivations of the current Board and leveled emotional accusations of malfeasance, particularly because Sweet Briar has an endowment of approximately $94 million.  Delays in accessing from the Sweet Briar campus network prompted concern that the College was actively censoring the site (which was not the case).

It is not surprising that alumnae and students given so little notice that their alma mater was in financial trouble would react this way.  However, such accusations are almost certainly wrong.  Sweet Briar is facing challenges that most small liberal arts colleges located in rural areas are facing: fewer people wanting to study in rural environments, fewer people wanting to study liberal arts, and fewer people wanting to enroll without substantial financial aid (the "discount rate").  Additionally, as a women's college, Sweet Briar faces the added pressure of fewer young women wanting to study on all-female campuses.

Data provided by Sweet Briar College
Published Here on InsideHigherEd
The endowment has stayed somewhat stable over the past five years, but those five years have been an uninterrupted bull market during which one might reasonably have expected the value to grow.  That it did not demonstrates that the proceeds of fundraising and existing investments have been going to cover operating costs, and it suggests that the school will have to draw more deeply on its endowment principal when the bull market comes to an end (as they all do).  In evaluating the conditions facing Sweet Briar, the  Directors -- all of whom are themselves Sweet Briar alumnae, by the way -- doubtless took all of this into account. 

Does this mean that people working to save Sweet Briar are fools?  No.

Every day, in boardrooms across America, teams of smart people look at objective data and make projections based on their experience and expertise, and they are wrong about as often as they are right.  The mergers of America Online with Time Warner and Hewlett-Packard with Compaq come to mind, but there are thousands of instances in which very smart people equipped with good data were simply wrong. 

Does that mean that the people working to save Sweet Briar will succeed?  Again, no.

Setting aside the matter of their legal challenge, which I will assume for the sake argument is going to succeed and deliver them control of the school (mostly because I have no idea what the jurisprudence on the matter is under Virginia law), anyone who takes over Sweet Briar and attempts to operate it is going to inherit the same challenges that existed before the vote:
  1. More prospective students need to apply.
  2. More accepted applicants need to enroll.
  3. More enrollees need to pay a greater share of tuition or more endowment funds need to cover the higher discount rates to cover enrollment.
A successful campaign to #SaveSweetBriar will result in greater interest in application, but that will not change the other two factors.  Enrollment is partly a function of prestige and partly a function of cost, which together form the value proposition of the school. 

There is reason for optimism.  Simply by announcing the closure, the Directors of Sweet Briar fundamentally changed the equation in two meaningful ways:
  1. Alumnae who may well have been uninterested in donating to their school five days ago are now lining up to pledge support; and
  2. Sweet Briar is receiving considerable publicity around the campaign to save the school.
A successful campaign to keep the school open for 2015-16 would send a strong signal that the Sweet Briar alumnae network is engaged and committed to the success of its school, something that many prospective students take into account when calculating the value propositions of each school they consider attending.  That Sweet Briar is a women's college is in this case an asset to the cause, because the key participants in the campaign are role models.

That would not immediately address the discount rate dilemma, of course.  However, as mentioned previously, discounts are not a standalone dilemma; they exist in relation to endowment funds available to sustain them.  A campaign to raise $20 million by June 30 is not a lightweight undertaking, and it will be possible only if a substantial number of Sweet Briar graduates and their friends decide that Sweet Briar is genuinely worth saving.  That decision is unlikely to be a commitment that lasts for only one year, so it may be possible to underwrite the costs of the College as other changes are put in place.

One thing that Vixens hoping to save their school should not imagine is that the success of this campaign in the near-term means a return to campus life as it existed on March 3, the day before the closure was announced.  Sweet Briar will need to undergo substantial changes to preserve its culture and character as an women's liberal arts campus.  Costs will need to be cut, and serious questions will have to be asked and answered regarding the viability of some programs.  Alumnae will need to be more willing to make unrestricted contributions to the endowment, and that commitment will likely have to last for 20-25 years to build up the reserves necessary to say that Sweet Briar has truly been saved.

It will be difficult.  It will be challenging.  But these are Sweet Briar women.  Anything is possible.


Full Disclosure:  The author is married to a graduate of the Sweet Briar Class of 2001, and owes his marriage and the existence of their four-year old daughter not only to their meeting on campus in 1997, but also to the SBC Alumnae Office forwarding a letter to her in 2003 that led to their getting back in touch the next year.  Sweet Briar is also the sister college of his own alma mater, Hampden-Sydney College, and it is the author's opinion that the disappearance of Sweet Briar poses a substantial threat to the social life and campus culture of Hampden-Sydney.  All analysis and commentary in this article is therefore necessarily biased to some extent by the author's personal interests in Saving Sweet Briar.

Thursday, July 24, 2014

Welcoming the Police State

A few days ago, a police officer put a man named Eric Garner in a chokehold for "resisting arrest."  He was suspected of selling untaxed loose cigarettes, something he had done before.  When an officer told him to put his hands behind his back, he instead spread his arms and said he hadn't done anything wrong.  What followed was so egregious--the man was choked, had trouble breathing, was ignored by medical technicians, and died--that the two officers were taken off duty pending an investigation, and Officer Pantaleo, who actually choked Garner, was required to turn in his gun and badge.

In the days that have passed since, there has been outrage at the actions of the officers.  The outrage is not only for this incident, of course; there are many such cases of police excess that lead to serious injury or death.  NYPD received 1,022 complaints of officers using choke holds between 2009 and 2013.  The officer responsible for Garner's death has been sued twice in the last two years.  Heck, in the week since Garner's death, another video has surfaced of an NYPD officer choking a man and punching him in the face while he is on the ground. 

Investigations are typically done internally, if at all--it is impossible to say in many instances, because an astonishing number of locales exempt the police from requests under free-information laws that apply to other government entities, and police readily ignore such requests in many locales that don't offer exemption--and actual wrongdoing is admitted very, very rarely.  The only reason that this event got such attention is that the event was caught on video, making it hard to deny the events.

Nonetheless, the Internet has been alive with people rallying to defend the actions of the police (as well as reactions from police furious at one of their own being called out; the police union, for instance, called the taking of Pantaleo's badge and gun "completely unwarranted").  From several people on my own list of Facebook friends, I've seen arguments as simple as they are bizarre: the man was huge and obese, so his death was effectively earned.  The man refused to do as he was told, which made him violent.  The man might have been armed, so any force used was appropriate.
It doesn't take imagination to know where these folks would have stood on police actions in Selma.  Their position is that non-violence is violence--that simply refusing to do as one is told deserves a forceful, even fatal, response.

Except when it doesn't.  Not six months ago, many of the people I now see leaping into virtual
exchanges in defense of the police were cheering for hundreds of armed men who took up positions behind highway emplacements with locked and loaded assault rifles and threatened open war on agents of the Bureau of Land Management.  Free State Films portrayed Cliven Bundy as a hero in the propaganda piece "The Last Rancher."  Enforcing grazing rights was touted as a prime example of Federal overreach by people find it perfectly acceptable that police choked a man for temporarily hindering his own arrest on suspicion of selling untaxed loose cigarettes.  (Mr. Bundy continued to receive the backing of people like Sean Hannity even after he asserted that black people in America got less freedom as a result of the abolition of slavery.)

Observe that the primary difference here is that one case involved a rural white man and the other an urban black man, and the cries of outrage over someone "playing the race card" can be heard from the surface of the Moon.1  And indeed, race actually doesn't explain it: it has recently been observed that it is more dangerous to be a black man pulling out a wallet than a white man pulling out a gun, but people also cheered the casual pepper-spraying of affluent white protesters by the campus cops of their own school during the heyday of the Occupy movement.  (And for those who didn't follow that one all the way to its conclusion, the officer who was suspended for his actions got $38,000 in Workers Compensation for "moderate psychiatric distress" caused by people being angry at what he did, 25% more than the students were given for being the recipients of his actions.)

This is how police states really arise, folks.  The government doesn't impose martial law one day with a big parade.  The police just start detaining people, questioning them in secret, and society is solidly divided over whether it's even a problem.  It's a foregone conclusion that any campaign of such nature will not forever be confined to the people you don't like.  Yet the tens of millions of Americans who stockpile weapons and ammunition in near-paranoia of government "tyranny" sit back and nod approvingly whenever the power of the state is brought down like a steel gauntlet on the backs of people whose principle crimes are failure to be cowed by threats and daring to pretend that freedom of assembly has meaning.

What "tyranny" is it that they fear, if not arbitrary assault and arrest by police whose records are irretrievable and whose actions are circularly assumed valid simply because they occurred?

1 I realize that, because sound does not travel through vacuum, it is highly unlikely that any noise could be heard on the surface of the Moon.

Thursday, June 5, 2014

The Curious Case of Bowe Bergdahl

On March 16, 2006 -- at the height of the Iraqi insurgency -- five soldiers of the 101st Airborne Division's 502nd Infantry Regiment went to the home of Abeer Qassim Hamza al-Janabi. 

The five men were part of a six-man team manning the checkpoint.  They left the post with just one soldier remaining on duty, who did not report their absence.  They changed into civilian clothes.  When they arrived at Abeer's home, they separated her from her mother, father, and six-year old sister.  They shot the three family members and gang-raped Abeer, who was either a teenager or in her early 20s. 

When they were finished raping her, they shot her multiple times, poured kerosene on her bullet-riddled body, and set her body on fire.  They then returned to their checkpoint.  The fire alerted neighbors, who brought Iraqi troops to the scene.  The Iraqis alerted the Americans, including one of the soldiers who was responsible for what happened.  The Americans told the Iraqis it was the work of Sunni insurgents.

The U.S. military began investigating the matter on July 4, after the soldier who had stayed behind at the checkpoint told a friend about the murder and that friend revealed it during a counselling session.  Ultimately, all five men were convicted and given lengthy jail sentences -- but that came in August 2007, more than a year later.

I was outraged when the details of what happened were made public.  I was outraged when the perpetrators were brought back to the United States instead of being tried by a court-martial convened in Iraq.  I was outraged when they were sentenced to jail more than a year later, rather than being hanged in plain view so that the Iraqis could see we had dealt with the matter.

On June 16, 2006, a 101st Airborne checkpoint was overrun, and two soldiers were killed.  A group called the Mujahideen Shura Council released a video of the soldiers' bodies and claimed it was retribution for Abeer's rape and murder.  Further killings followed, including the downing of an Apache gunship, and all were attributed to Abeer's rape and murder.  The rape and murder of Abeer and her family drove a country already in turmoil into a frenzy, feeding the insurgency that was already costing American blood and treasure.  The long delay in bringing charges and holding a trial fed the sense that Americans who would shoot Iraqis on suspicion held themselves as being outside the scope of justice. 

The actions of these soldiers directly fueled the entire Iraqi insurgency and affected many American lives.   And for all of that, there was very, very little attention paid to the monstrous actions of these men by anyone I know.  I was the only one talking about it on Facebook.  News coverage was limited; political reaction was muted.  Several people responding to news articles chalked it up to "war is hell," as if this were somehow a military action rather than a crime.  No one was even interested in these troops' having abandoned their checkpoint and exposed other soldiers to greater risk.  It just wasn't interesting to anyone I encountered.

Fast forward to June 2014.  The nation is ablaze over the matter of the negotiated release of one Bowe Bergdahl, a soldier who is believed to have walked away from his unit while out in the field in Afghanistan.  Bergdahl's absence did not endanger anyone; there are claims that soldiers may have died looking for him, but if they did, they were searching for him because he was missing, not because he was a deserter.  He apparently had wandered off before (and come back), and early reports that he left a letter saying he was deserting are not backed up by investigative records.  After being captured by the Taliban, Bergdahl also attempted to escape twice over the course of the five years that he was held by the Haqqani network in Pakistan.  (The second time, he made it to a border village...where the inhabitants turned him back over to the Haqqanis.)

SGT Bergdahl's freedom has now been secured.  There are questions regarding the manner in which the Obama administration traded the release of five Taliban prisoners held at Guantanamo for the release.  The questions, however, relate to a matter of public law: President Obama is obligated by law to tell Congress about any release of inmates from Guantanamo 30 days prior to the event, which he did not do, and which his administration has asserted he need not because of a signing statement he added to the bill when it became law in which he claimed "flexibility" on that provision. 

We need to look at the notion that the President can sign a bill into law (rather than vetoing it) while effectively exempting his administration from following that law.  We needed to look at it when President Bush used such a statement to exempt his administration from a law restricting use of torture.  Unfortunately, only Congress can hold the President to account.  When Bush began using his signing statements to expand executive power, Congress was controlled by his fellow Republicans, who tragically chose to put their being Republicans ahead of their being American legislators.  Their blatant lack of principle was a missed opportunity to rein in the executive branch. 

GOP success in stirring up the less astute among their supporters since 2008 to claim that virtually everything President Obama does is an affront deserving impeachment has exacerbated the problem: today, Republicans denounce everything Obama does as a crime.  Democrats have used that fact not only to rally their own less astute members but also to bolster the support of those in their ranks who are more informed and engaged.  Many people can see that the use of signing statements to exempt an administration from the law represents a threat to our republic, one that is frankly probably deserving of an impeachment trial.  That isn't going to happen, though, because Democrats are now content to put their own party affiliation ahead of being American legislators -- and they do so precisely because they know that, for Republicans, this is not about principle at all, and just about politics for the next election cycle.  No one in the Capitol is actually looking out for the long-term interest of the American people.

There's a little bit of discussion about all of this, of course.  It's a big deal, after all.  But there's not nearly as much discussion about the issue of Constitutional separation of powers as there is about SGT Bergdahl.  Among people who couldn't be bothered to care when five soldiers abandoned their checkpoint to execute a girl's family and gang-rape her before setting her corpse on fire, there's an absolute hysteria around the possibility that Bergdahl no longer believed in the Afghan War.  People on Facebook are saying that he is a traitor, that he should be executed, that he should have been left with the Taliban to rot and die.

Military people generally aren't saying this, mind you.  Even several of the soldiers from his unit who do think he deserted are content to see him investigated on those charges, while General McChrystal -- who previously held command in Afghanistan and doesn't generally agree with President Obama on anything -- said that “We don’t leave Americans behind. That’s unequivocal.”

Politicians, meanwhile, can't spin it fast enough.  Republican Congressmen who initially tweeted "welcome home" messages deleted those tweets, and Senator John McCain is doing his best to explain why he told CNN in February that the administration should seriously consider an exchange but now says it was absolutely the wrong thing to do.  On the propaganda circuit, Bill O'Reilly repeatedly announced the Bergdahl's father "looked like a Muslim."

I understand why all of this is playing out the way it is.  It's June of 2014; there is an election only four short months away, and elections are all that we really care about in this country (though the party machines do their best to pretend it's all about substance). 

But we didn't care at all when five soldiers abandoned their checkpoint, shot a girl's family, gang-raped her, sprayed her with bullets, and set her body on fire with kerosene.  We just didn't care.  And now all of this outrage and vitriol for SGT Bergdahl being freed from captivity after five years?

It's so blatantly a political ploy that even CNN can see it.

Are the rest of us really, truly all that stupid?

Thursday, March 6, 2014

Society's Train Wreck

Our national media is presently focused on the story of one Rachel Canning, who left her parents' home at 18 after refusing to break up with a boyfriend her parents had concluded was a bad influence and numerous conflicts over broken curfews, underage drinking, refusal to do chores, and other household infractions.

Rachel Canning
Were that all that happened, the tale of this 18-year old student still in her senior year at $12,700-a-year Morris Catholic High School would not even have gotten a mention. Young adults--and let us be clear about this: under American law, adulthood begins at 18, all of the protestations of people in their 40s and 50s to the contrary--often leave home when they find that their paths diverge from the paths that their parents want for them. Some partings go well, others poorly, and the outcomes of those decisions, like all decisions, may not be fully realized for many years. C'est la vie; c'est la liberté.

But Ms. Canning did not simply leave. She did not turn her back on what her parents have given her and chart her own course. Quite the opposite: she liked the course her parents had charted and financed for her so much that she went to court, filing a suit to insist that her parents, whose rules she flouted and whose home she had left, should still be responsible for paying her school tuition, room, board, transportation, and other expenses, and should be obligated to provide on her behalf money that they had previously earmarked for her college education, all while she continued to do whatever she liked.

This is a social train wreck, and it was entirely predictable. 

For decades, we have pulled our society in opposing directions with regards to the treatment of people relative to the society in which they live, and we have done so particularly with young people. American culutral norms have become consistently more accommodating of what young people want for themselves at the expense of what their parents or the broader society want for them, particularly on matters regarding sex, traditionally one of the defining characteristics of adulthood.

In American society, boys and girls are regarded as sexually autonomous when they reach a non-adult age of consent, and, while we have enacted very harsh penalties for any legal adult having a sexual relationship with a child below that age, we regard sexual behavior between children who are both below the age to be innocuous, making sexuality appropriate effectively as early as children choose to define themselves as sexually active. Because of our marketing and peer pressure, this definition can occur very early, and it has been exploited in too many instances to supply a ready population of underage prostitutes, sometimes kept in line by underage pimps. We also allow children virtually unfettered access to abortion to avoid interference in our student-to-worker production pipeline.

At the same time that we are busy granting children absolute sexual autonomy, however, we are also extending the umbrella of childhood far beyond its legally established boundary of 18 years. People who are 18, 21, or even in their late 20s are increasingly referred to as "kids," and society has accepted a shift under which young adult responsibility is questioned or even dismissed. Consumption of alcohol is not permitted until three years after reaching adulthood, and young adults who leave high school and marry, get jobs, or become soldiers--courses that in earlier generations collectively accounted for nearly all young adults--are today denounced as "too young" to make their own decisions.

That brings us back to Rachel Canning. At 18, she is a legal adult. She has asserted her independence by taking a firm stand that she will date whomever she wants, stay out as late as she wants, and (though it is not a liberty afforded her under our law for another three years), drink if she chooses to do so. Well and good for her. But Ms. Canning is not in court to demand that her independence be recognized. Instead, she is suing for a declaration of non-emancipation, asking a judge to establish that she is very much a dependent of her parents, unable to provide for herself and entitled to financial support up to and including the payment of expenses for her to attend the college of her preference. She claims for herself rights that we do not bestow to society as a whole--most people cannot afford college without taxpayer assistance--and does so with a straight face.

Ms. Canning has made other allegations--that her father was "inappropriately affectionate" and saw their relationship as "not one of a daughter, but more than that," that her mother emotionally abused her by calling her "fat"--, but we can safely dismiss those claims: Ms. Canning has filed no criminal complaints. She is using these sudden "revelations" in a misguided attempt to win public support, but the New Jersey Division of Child Protection already investigated her complaints and reported that Ms. Canning was merely "spoiled."

But she herself does not see this.  While she goes ahead with this lawsuit, underwritten by the cash reserves of the wealthy family of a friend with whom she is staying and levied against her own wealthy family, Ms. Canning not only fails to appreciate that she has put her face and her name out for the national media as someone no sane employer would ever, ever consider hiring but sees herself as entitled to do as she likes, exercising all of the privileges adulthood accords while absolved of the responsibility that adulthood demands.

No one meant for us to get here. No doubt, should a loophole in the law somehow be found such that Ms. Canning were to actually get what she is seeking, we will come together as a broad community of adults--remember, only people 18 and older can vote--to change those laws in every city, every state, and for the entire nation. Heck, I could see an enterprising politican seizing on this moment to push an amendment to the U.S. Constitution.

But we did end up here, and our ability to slap a patch on the hole we found should not make us blind to the problem we are facing. If we are going to promote a progressive, inclusive society that can deliver on the promises of the twenty-first century, there must be a hard line dividing the protection of childhood and the combination of privileges and responsibilities that define adulthood.

Thursday, February 20, 2014

Trading wages for jobs is a dead end.

In a prior post, I pointed out that calling the people who control businesses "job creators" is largely incorrect, and that it is ordinary people like you and me who are the job creators of the economy.  Today, with all of the furor surrounding the CBO report on potential impacts of raising the minimum wage, I think that the subject bears additional discussion.
Most of the jobs that get created in a business are created because the customers of the business demand additional services.  The cost of such jobs is borne directly by what they produce for the business.  Far from making a sacrifice in hiring such a person, the business owner is profiting from the arrangement.  The people we call “job creators” get the credit for having the forethought to take our money in exchange for things we want.

To be sure, business owners are not necessarily irrelevant to the process.  Entrepreneurs start businesses because they either see existing unmet demand or believe that they can create demand.  In doing that, they are setting the stage for the creation of jobs, and that—if not precisely the same thing as creating jobs—is an important part of the process. 

Not all business owners, however, are entrepreneurs.  Many large companies, in particular, are run by a professional class of executives.  These people flit from one company to another, aided and abetted by the boards of directors they populate with their friends and predecessors.  Sometimes, they grow revenues at the companies that they run, but their true value (to the extent that there is any) comes from improving profitability by reducing cost.  The single biggest cost that can be cut in most companies is labor, and that is where executives shine: they eliminate jobs, inflate share prices for the moment, and pay themselves bonuses for their brilliance. 

When things go south, and that always do, the executives are “fired” under terms that most workers would regard as payment of more bonuses, and they move through the revolving doors to their next companies, whose directors scoop them up to benefit from their “experience”—or, if the political climate is right, they are invited to express their patriotism and head government agencies.

But sometimes, business owners do create jobs.  When a small-business owner realizes one day that he or she needs someone to do the books and hires a bookkeeper, that business owner has created a job.  That job was created, however, not because of supply but because of demand—the demand that the business owner had for a bookkeeper, the same sort of demand that causes you or I to hire a babysitter or a maid service.  We either need or want the services of others in order to make our lives work (or work more easily). 

A person will obtain at any cost the services that he or she needs, because that is what it means to “need” something.  When it comes to the services that a person wants, it is certainly true that the cost of satisfying a whim plays a role.  The business owner is no different from the ordinary individual in this regard, but it is self-evident that a business owner will shy away from hiring someone he or she would like to have, but does not need to have, if that person costs more than the business owner can justify spending.  That behavior, which is normal and obvious, is what drives the reduction in jobs associated with a rise in the minimum wage.

But here’s the thing: everyone who is unemployed depends on the generosity of others (whether the others be individuals or the general public), and anyone who works for wages that are too low to provide self-sufficiency is left in the same position.  When the public embraces policies like a non-indexed minimum wage that is too low to support a person or a family, what the public is actually doing is subsidizing business owners’ ability to indulge their whims by shifting the true cost of having servants onto the public expense.  That is what happens when someone working full time is nonetheless earning so little as to qualify for supplemental nutrition (“food stamps”) and other income-based benefits: we are all paying for some business owner to have the ego trip of an employee whose services are not self-sufficient to the business (in which case the hiring would occur regardless of wage) but whose services are desirable to the person making the hiring decision.  Trading wages for jobs is a dead end.

We spend far too much time jockeying for the privilege of being servants to the folks who have bought up our democracy, and the dirty little secret is that we don’t have to do that, because, conspiracy theories aside, we actually do have the power to change our public policy.  The reason that the wealthy devote so much effort to buying off the people we put into power is that our votes actually do get counted—for now.  We have every right, and indeed have the obligation, to use that power to bring about changes that are in the public interest.

Don’t buy into the “controversy” over the minimum wage.  A dozen developed nations that have indexed minimum wages, heavily unionized labor, strong environmental protections, and every other boogeyman that the “job creators” tell you will “kill jobs” also have higher employment than we have in America, comparable standards of living, and measurably greater degrees of happiness.  The only controversy over whether it makes sense to trade 500,000 publically subsidized servants to the wealthy for a million people being lifted out of poverty (and off of subsidies) is the notion that We The People have the power to set policy in our own interest despite the preferences of the self-proclaimed optimates of our nation. 

To the people at the top, that is very controversial indeed.

Thursday, December 12, 2013

Wages are a Moral Issue

Earlier in the day, I posted an observation that one can quickly estimate the annual salary equivalent of a wage by knowing that each $5 per hour is approximately equal to $10,000 per year in income for a full-time worker.  (Actually, knowing that $1 per hour equals approximately $2000 per year is arguably better, since it allows greater precision.  But I digress.)

The ability to equate hourly wages to annual salary has long interested me, because very few people seem to be able to do it.  I have known more than a few people who live in the D.C. metropolitan area with me who say that living on $60,000 is basically impossible, yet these same people will casually dismiss calls for a higher minimum wage with self-assurance than $8 an hour is "plenty."  If they had my handy formula, they would know that $8 an hour equates to less than $20,000 per year, or less than one-third of an amount on which they consider it impossible to live.  I assume that they do not know my formula.

In any event, having posted this handy formula and a brief comment to the effect of what I just said above, I saw as my first reply a comment that, "If there's a problem with minimum age, let congress fix it. Stop blaming the employer who is within his right to pay whatever."

This argument is seriously flawed.

It is correct that an employer is free and able to pay any wage that meets or exceeds the minimums established by law.  With that claim, I take no issue.  However, the idea that I or anyone else should not blame that person for doing so -- that I relinquish my own moral authority and judgment because of that person's legal rights -- flies in the face of individual liberty and social judgment, two things that have a long history in the United States.

This idea that things that people are allowed to do by law must be embraced as morally and socially acceptable is one that has been creeping into our society over at least the last forty years.  It began as a liberal concept -- indeed, it is foundational to liberalism, and represents a distinction between the liberal ideal and that of the progressives who came earlier -- and was denounced by conservatives.  Yet just as today's liberals find themselves talking in terms that assume market capitalism, so too do today's conservatives find themselves embracing the liberal worldview that, if someone may do something, it is therefore proper that he or she do it.
The business owner has the right to pay his wages; I have the right to denounce those wages.  His action is a form of speech; mine is also speech.  He may do as he likes, but he may not do so without consequence.  Should I gather large numbers of like-minded people who choose to exercise their individual liberty to denounce the business owner, perhaps boycotting his or her business as a form of protest, then this, too, is our freedom of speech.  Nothing can be more American.

Certainly, Congress can change the minimum wage.  It should, too: either the minimum wage should be raised and indexed to inflation, removing it from the dangling promises of Democrats and the Republicans whose business masters hope to gradually return workers to the status of serfs, or it should be abolished.  Why the diametrically opposed choice?  It's actually not so far apart. 

Indexed, the minimum wage guarantees a living wage; we do that for retirees, and they aren't even producing value, so it's bizarre that we don't do it for the productive people of society.  Without indexing, however, the minimum wage serves as a validation stamp that says, "I'm doing what society expects of me."  Even an altruistic person can hardly be blamed for thinking that paying a few dollars above the minimum wage is generous, when that same person, were there no minimum wage to serve as a goal post, would independently determine what a living wage is and then be as generous as he or she might choose in addition to that minimum.  Put another way, were there no minimum wage to be a benchmark, it would not occur to most business owners that paying a non-living wage was possible, nor would workers assume that it was fair.

That brings me back to my Facebook discussion.  Wages are a moral issue.  The minimum wage clouds that fact by making them seem like a regulatory concept, but paying someone wages on which he or she cannot support even him or herself -- wages whose deficits are made up by taxpayer-funded social services -- is a moral failing. We need to stop fawning over the so-called "job creators" and call them out for their bad behavior.

Monday, November 25, 2013

We are the Job Creators

Over the last several years, we have heard a great deal about "job creators," a Republican euphemism that takes the place of "the rich."  It is not surprising that the GOP has gone to great lengths to redefine the language used in discussions about taxes and spending: typical non-rich Americans have little regard for "the rich," but we do like "job creators," because we like "jobs."

Do you remember the Simpsons clip in which a future President Lisa promotes her planned tax increase as a "refund adjustment?"  Same idea, and it has worked before.  Remember all that talk about how we needed to "strengthen" Social Security, paired with discussions about higher retirement ages and lower benefits?  Or "strengthening" Medicare by transforming it into a voucher program?  These semantic games get played because they work.  "Job creators" is just the latest in a long line of gaming semantics.

What you may not realize is that many people -- perhaps including you -- are job creators.  Unlike the rich, who we assume create jobs simply because their money is going to some investment that we assume is putting people to work, many of us create jobs directly.  The reason that we may not think about it is that our creation is fractional, which is to say that any one of us does not create a whole job but rather some portion of a job that, when collected with other portions, provides full-time employment.

This first occurred to me in the context of child care.  There are many large child care centers, but many people arrange for child care through small, in-home providers.  Such providers, who are licensed and subject to state and local regulations, typically can have up to five children in their care at any given time.  The cost for one child might be $200 per week, which is too little to qualify for full-time employment, so enrolling a single child does not employ the provider.  Five children, on the other hand, deliver to the provider a total of $1000 weekly revenue, which, after subtracting expenses and taking into account tax benefits, delivers a weekly wage to the provider that is well above $15 an hour.  The parents of these children, by pooling their resources in a manner that is not coordinated or centrally planned, create a full-time job supported by their own earnings.

This phenomenon happens all over our economy, with maids and shoe-repairmen, carpenters and plumbers, and a whole host of other self-employed careers.  There is no central company paying these people; they are paying themselves out of the money they get directly from their customers, and we are their customers.  We create their jobs.

The distinction might seem minor until one stops to consider that it is this sort of job that actually underpins our economy.  "Employment" in the W-2 sense is actually a lesser form of market economy than 1099 contracting.  Our efforts are the driving force of capitalism, the engine of true business creation.  Those "job creators" we are told to venerate?  They are the ones buying up established businesses long after our involvement built them, and orchestrating layoffs and wage reductions to boost profitability for themselves.

To be sure, there is nothing particularly wrong with being rich.  So long as private property exists and people are free to spend or save as they choose, it would be foolish to begrudge those who build for themselves even vast fortunes.  But do not fall for the line that we owe the rich our livelihoods, or our respect as a class action.  Wealth is a side-effect, and far too often, those who have it in twenty-first century America were either born to it or obtained it through a series of manipulations orchestrated by a detached, minimally useful managerial class that has usurped the mantle of capitalism to cloak economically unproductive profiteering.

Cheer or jeer the rich as you like.  When you look for the "job creators," look in the mirror.

Saturday, June 29, 2013

Are zombie movies a sign that progressive ideals are coming back?

Each generation gravitates towards a particular apocalypse because it captures what we really fear.  The popularity of zombies suggests that we may be working back towards a realization that our outcomes are better when we work together - which is different from trusting the government to handle it.

I just got back from seeing World War Z. 

The movie bears little resemblance to the book; its primary message might be paraphrased as "Gerry Lang loves his family."  He sets out to save the world, not because he feels inclined to do so, but because he is told in no uncertain terms that, if he does not, he and they will be put on a helicopter and dumped back in overrun Philadelphia to fend for themselves.

That, I concede, is not a particularly progressive message.

Keep in mind, however, that "progressive" is not merely a synonym for "liberal."  America's progressive era goes back to the start of the twentieth century, and I think it's safe to say that it was over by the start of the Reagan administration in 1980.

I make the point not to confuse "progressive" with "liberal" because, while the latter is primarily concerned with individuals -- a trait that it shares with conservatism, even though its preferred way for catering to individuals is through government programs while conservatism prefers to deregulate and let the powerful dominate the world -- progressivism is focused on the good of society.  Many progressive achievements, from the Food and Drug Administration to Social Security to Medicare, were established as government programs, but so were the means to pay for them: both the FICA tax and the income tax were established under progressive administrations. 

Additionally, progressives sought to leverage the market through limited intervention, accepting that it could deliver wealth but looking for ways to ensure a meritocracy; "trustbusting" and increasing true competition were hallmarks of the progressive era.

Skeptical readers should not be surprised by these claims.  Consider what was happening at the dawn of the twentieth century.  Wealth was heavily concentrated.  Life was very hard.  And against that backdrop, there was a drumbeat for something profoundly different.  Many who took to the streets called for the seizure of power, by force if necessary, and the nationalization of industries.  The progressive argument was a counterpoint to this perspective, an argument that capitalism could be improved rather than abolished. 

The progressives were certainly opposed to the conservative robber-barons, but the outcome of that fight was no surprise.  They were also the opponents of the socialists -- and that fight was not so easily predictable.

In contrast to today's liberal views, which generally focus on what one should be given or deserves, progressives tended to focus on what was earned.  They argued first and foremost for a level playing field.  Within that argument, they looked for what could be done together to make people in general better off.  They did not shy away from imposing regulations or taxes, but they just as likely imposed them on themselves (like FICA and the income tax) as they did on "the rich." 

They also abandoned ideas that did not work, something that today's liberals seem to have a very difficult time doing.  From looking at programs like Head Start, one can derive that liberals believe that a failed program is "better than nothing," where progressives would more likely have viewed a failed program as a diversion of resources that could have been used to make a successful program.  (They generally did not have to address the conservative perspective that the goal itself was unworthy; fear of socialism kept that attitude in greater check back then.)

AMC's The Walking Dead
This "we're all in it together" attitude, more focused on outcomes than approaches, and not
particularly given to belief in the government but very much about belief in ourselves as a society, is what I see reflected in today's zombie movies and television shows.  The government, clearly, cannot protect us -- but things hardly go well for the gun-toting individualist who thinks he's going to wait it out in his apartment or on his farm.  The zombies themselves are, in effect, individualistic, betraying those around them for their immediate and personal desire for flesh, and they do not tire or lose interest.  The loner runs out of bullets, out of food, or out of time, and he or she is finished. 

But the group goes on.  Facing hardship, facing losses, they pull together, back from the brink.  They keep moving.  Despite it all, they find a way.

That we see this message played out time and again in zombie movies is significant because the zombie movie for this generation is what the nuclear-war movies were for the last generation, an unlikely but peripherally believable path to the end of the world.  We are being told that the end of the world is the result of individual desire, and that the ultimate folly is to believe in individual strength.  Judging by the ticket sales and the ratings, it is a message that we find favorable.

Again, we should perhaps not be surprised.  American politics is a pendulum, swinging left and right.  In recent decades, we have encountered perhaps the worst of both worlds, deregulation at the hands of a generation who were the last to enjoy the full spectrum of progressive achievements and who kept pulling the ladder up behind them so that those who came after could not follow them to prosperity, combined with a rampant drive towards individualized values.  As a result, we are more segregated according to ideals and incomes today than we were by the laws that existed before the Civil Rights marches.

There is a lot wrong with our society, and younger people are chafing at the news from their elders that they can expect neither living wages nor healthcare but must be expected, under a mountain of crippling debt, to toil away indefinitely so that those who dismantled their opportunities in exchange for short-term gains can be taken care of "in their golden years."  (Perhaps we are also starting to wonder why, if pension plans "just don't work," the same math would be expected to deliver suitable earnings in the form of a 401(k) plan?)

Really, it's almost as if we are being overrun by a wave of zombies, each representing a different focus and chomping its teeth while chanting "Me! Me! Me!"  But the movies and shows show us the way out. 

Give it a try.  Are you angry that the Supreme Court struck down a central provision of the Voting Rights Act because you're worried that voter ID laws will disenfranchise minorities?  Forget about the ruling and organize an ID drive in your town or city.  Everyone needs an ID anyway, and, if you start now, you can help a lot of people get them before the next election.

Upset that American Express just got a ruling that will make it virtually impossible to take credit card companies to court instead of relying on the arbitration mechanisms that those same companies already control?  Forget about the ruling and move away from using their cards; don't be bought so cheaply by "rewards" that are really paid for using your own money anyway (in the form of interest).  Live within your means whenever possible, and look to bank loans and peer-to-peer lending for special purpose borrowing.  When you have to justify why you need the money, you'll find you don't need it as often anyway.

We really are all in this together, and we really can do things by working with each other.  We just need to do it.