In this issue, the rise of the wealthy 'super citizen', why funders should avoid big bets, leaning toward unequal societies and a look at trumponomics.
In the New Republic, Lovia Gyarkye looks at David Callahan's new book, "The Givers: Money, Power, and Philanthropy in a New Gilded Age":
The pattern that emerges in cities across America, from New York to Houston, is that wealthy donors are funding a range of projects in partnership with the government, often without public input. As a result, “philanthropists become more deeply enmeshed in the machinery of civic life,” jeopardizing the participation of others. The people wind up with little control over what billionaires decide to do with their tax dollars. This pattern extends the “generosity” of political donors, who have been unleashed since the Citizens United ruling in 2010. In a chapter titled “Advocates,” Callahan examines the bipartisan embrace of dark money. On the right, Art Pope of North Carolina used his funds to push the “bathroom bill” and stricter voter ID laws. On the left, Tim Gill, a millionaire software developer, backed LGBT causes including the fight for marriage equality...
Despite the issue’s complexity, Callahan advocates for real solutions. In the final chapter, he offers some ideas for reform: Donors should be required to disclose where they are making grants, the IRS should define and enforce the parameters for which organizations receive tax-exemption, and stronger watchdogs should be put in place for charitable organizations. He also advocates for what he calls “mindful philanthropists.” “Some of the donors I’ve spoken with,” he writes, “have given remarkably little thought to the obvious question of how their influence squares with America’s egalitarian values.”
In the New York Times Sunday Review, researchers look at creative ways to get wealthy people to donate:
In one experiment, we teamed up with a poverty-relief organization called the Life You Can Save. For three months, we manipulated the messages that appeared on its website to emphasize either common goals (“Let’s Save a Life Together”) or individual achievement (“You = Life-Saver”). We tracked the behavior of 185 website visitors whose annual income ranged from less than $10,000 to more than $2.5 million. When wealthier people — those with incomes higher than $90,000 — were greeted by the message that framed charitable giving as an opportunity for individual achievement, they were significantly more likely to click “Donate Today” than when they encountered the message that stressed common goals...
By suggesting that charities might cater to wealthier people’s conception of themselves, our research may seem to miss the moral point of charity. But as the behavioral scientist Christopher Bryan has said, “We’re often so focused on getting people to do the right thing for what we think is the right reason, we forget we just need to get them to do the right thing.”
In the Stanford Social Innovation Review, the Hewlett Foundation's Larry Kramer says funders should avoid "big bets" and make a commitment to steadfast relationships:
Social problems are bred and live inside obdurate systems of clashing interests; both causes and solutions alike depend on people, with all the unpredictability and confounding behavior they entail. Progress is slow, not from lack of imagination or willingness to take chances or to invest enough money, but because the problems are just plain hard.
The sort of philanthropy required to make progress on challenges like these is very nearly the opposite of that being pushed by big bet enthusiasts. It takes money, to be sure. But it also takes time and patience—a great deal of both, in fact—and a commitment of human as much as financial resources. It takes willingness to learn from others and to develop real partnerships with grantees, while hearing from (and listening to) intended beneficiaries.
In this podcast with Heron's Dana Bezerra, a look at the foundation's work to expand and refine thinking on social performance tracking for companies via a net contribution framework:
In the Guardian, Christina Starmans, Mark Sheskin and Paul Bloom look at why people may prefer unequal societies:
It follows, then, that if one believes that (a) people in the real world exhibit variation in effort, ability, moral deservingness and so on, and (b) a fair system takes these considerations into account, then a preference for fairness will dictate that one should prefer unequal outcomes in actual societies.
Tom Tyler uses a related argument to explain why there is not a stronger degree of public outrage in the face of economic inequality. He argues that Americans regard the American market system to be a fair procedure for wealth allocation, and, accordingly, believe strongly in the possibility of social mobility. On this view, then, people’s discontent about the current social situation will be better predicted by their beliefs about the unfairness of wealth allocation than by their beliefs about inequality.
In the National Review, Alexander discusses frustration at both ends of the wealth spectrum and examines where inequality is pulling at social cohesion:
Once we understand the causes of increasing frustration at both the top and bottom of the economic ladder, the deeply destabilizing political consequences of widening economic gaps become clearer. Where underlying inequality expands we can see the development of increasingly intense grievances at both ends of the spectrum: Those at the bottom feeling less and less competitive in important areas, while those at the top feel increasingly resentful about the proportion of tax coming from them and insist that those below start paying more. If the bidding-power gap grows wide enough it is possible to imagine the system crumbling through a combination of frustration, illiberal measures, populist demagoguery, repression, and stagnation — the sorts of cycles that Latin American countries, with the highest inequality levels in the world, go through regularly.
Over at the Atlantic, Maura Ewing examines California's financially punitive system of traffic fines that may overburden the poor:
Losing the right to drive in December upended Latrice Harry’s life. She’d been pulled over by police six months before, and after failing to pay an initial ticket—she says she got it for not being able to quickly find proof of insurance among her belongings—the debt kept accumulating. By her telling, a series of errors in the local court—being told she couldn’t protest the ticket immediately, delays in its processing, all notices being sent to a very old address—added up to a $1,400 penalty and the suspension of her license.
Without it, she lost her job. Harry, a 55-year-old black woman from Vallejo, California, worked for $1,900 a month as an in-home care provider for three elderly clients, whom she drove to doctor’s appointments and on errands. The loss of reliable transportation also limited her contact with her children, including a son still recovering from a near-fatal motorcycle accident and living some 45 minutes away. “I started having anxiety, depression,” Harry said. “I didn’t know what way to turn.”..Proponents of reform argue that issuing steep fines and fees for minor infractions isn’t good fiscal policy, beyond what they see as inherent ethical concerns. Last year, Californians owed the state $9.7 billion in traffic debt.
In the Guardian, Claire Provost looks at what private security has to do with inequality:
The universal declaration of human rights states that “everyone has the right to life, liberty and security of person”, and that “no one shall be arbitrarily deprived of his property”. Governments are required to work progressively towards realising these rights.
But when private security enables the rich and even the middle class to bypass the state, this can intensify a country’s inequalities. Regarding the expansion of private security in Latin America, the UN Development Programme has warned: “This phenomenon further increases inequality, as social groups have different capacities to deal with crime.”
The Flint's water crisis is still ongoing and residents are being threatened with liens for unpad water bills.
You might be interested in this transcript of an Economist interview with Donald Trump on his economic policy. In a separate piece, the magazine looks at what the find the contradiction at the heart of Trump's policies:
Viewing the trade deficit as cheap borrowing exposes the tension at the heart of Trumponomics. If they are to do without the foreign capital they currently import, thus closing the trade deficit, Americans must save more. Yet rather than squirrelling away its money, Mr Trump wants the private sector to go on a spending-and-investment spree, spurred on by deficit-financed tax cuts. “We have to prime the pump,” he says, quite the Keynesian.
Vox's Matthew Yglesias looks proposed tax cuts and argues that for that price you could cut child poverty in half. Over at the New York Post, Kyle Smith discusses another book that examines what is going on in the white working class that may be of interest. Similarly in the Atlantic, Emma Green also looks at what drove voter choice in the last election--economic or cultural anxiety:
54 percent of white working-class Americans said investing in college education is a risky gamble, including 61 percent of white working-class men. White working-class voters who held this belief were almost twice as likely as their peers to support Trump. “The enduring narrative of the American dream is that if you study and get a college education and work hard, you can get ahead,” said Robert P. Jones, the CEO of PRRI. “The survey shows that many white working-class Americans, especially men, no longer see that path available to them. … It is this sense of economic fatalism, more than just economic hardship, that was the decisive factor in support for Trump among white working-class voters.”
Another factor in the economic debate is immigration. Over at Propublica, Michael Graebell looks at whether low-wage industries can survive without immigration:
Trump’s efforts to make good on those promises could substantially disrupt the companies that provide America’s food, build its homes, and supply workers to clean hotels and office buildings and unload shipping containers for retail stores.
Just as technology firms and hospitals have come to rely on high-skilled immigrants secured through visa programs, low-wage industries depend heavily on migrants from the world’s hotspots, secured through refugee programs as well as other means. That reliance has prompted some of the nation’s meatpackers to fear that under Trump the global marketplace may shut down, resulting in labor shortages that, they say, will drive up prices and reduce food supplies.
You might also be interested in this profile of Becca Heller and her crusade to provide pro bono legal services for immigrants stuck the U.S. border.