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America Class Gender Race

Unstrange bedfellows

While it may be counting chickens before they’re hatched, this election seems to be slipping from the tiny fingers of Donald J. Trump. America, you did it! It was the bare minimum required of a democracy hopeful of its continuance, but you did it.

The GOP has already begun its quadrennial public mortification and, in true Republican form, they don’t have a clue. George Will figures this will be accomplished in a single sentence, “Perhaps it is imprudent to nominate a venomous charlatan.” This has been expressed more concisely elsewhere. You can find half a dozen fresh columns by conservative pundits each week insisting that The Donald has damaged the brand and, crucially, that he was never a real Republican any way and could we please just move on from this whole ugly episode. I see that point. I really do. The Republicans I know have no use for the misogyny, religious persecution, racism or protectionism of the Trump campaign. Their shtick is small government, local solutions, free markets, etc., etc.. They opposed Trump every step of the way and are a fine example of putting principle above Party. Bravo, #NeverTrumpers!

The point of this post is not to rub salt in their wounds. The traditional fiscal conservatives are entitled to their wrong opinions on taxing and spending. They don’t have to take credit for Trump any more than I have to take credit for everything said by the anti-natalists at NARAL. But, in my opinion, Republicans have put far too little thought into how they got here. Is it merely a coincidence that the free market advocates and the racists ended up in the same party? It is, after all, a genuinely impressive trick to win the votes of lower-class whites while advancing a host of policies that would take money from their pockets. Are Republicans just that good?

The key to understanding the big, peculiar circus that is the GOP is the concept that inspires the most eye-rolling from them. The connection between the “where’s the fence!” wing and the “taxation is theft!” wing of the GOP is … privilege. More accurately, it’s the willful or accidental ignorance of inherited privilege in the United States circa 2016. In order for the GOP to exorcise these demons, they’re going to have to first understand, then acknowledge the existence of, privilege and their relationship to it.

What privilege is not

We almost need a new word for this phenomenon. Modern conservatives have so shut themselves off from understanding the concept of privilege that they can’t speak of it sans sarcasm.

“Sorry guys. Gotta go. My white privilege job needs my attention.”

“With all this male privilege I’m enjoying, people just throw money at me.”

(It’s long been established that conservatives are abysmally losing the contest for comedic superiority. Low expectations are key here.)

I wish it didn’t have to happen, but let me say what’s been said thousands of times before: White privilege does not mean you didn’t work for the things you have. The rewards, financial and other, that you receive, are undeniably correlated with the effort you put in. Congratulations!

What we mean when we say that you enjoy “privilege” is that this correlation between effort/character and wealth is not perfect. And, some of the additional variation can be accounted for by your race/gender/religion/parentage/etc.. That’s it. You work hard. But some people who work just as hard as you receives less because they have different parents. Is that so hard to imagine?

We’ve explained this in a hundred different ways. The playing field is not level. Some people are born on 3rd base. There are comics. And object lessons. And a personal address to a lost Yalie. The resources are out there.

White privilege also does not mean that no woman or Black person has ever succeeded. That’s not how a statistical correlation works. At the upper end of the bell curve for all races/genders, we’ll find highly talented, motivated and lucky people who succeed. But that does not mean that one population does not enjoy an unearned advantage. Obama and Oprah do not mean racial privilege is over.

Why privilege is the glue

Privilege is the glue that holds together the Brooks Brothers wing and the patriotic jumpsuit wing of the GOP. The fiscal laissez-faire conservatives want to shrink government since it takes money from deserving makers and redistributes it to unworthy takers. But this only works if you think possessing wealth is highly correlated with deserving wealth. As you become aware of the myriad ways society and its institutions give incremental advantages to (for example) white men born into wealth and put obstacles in the path of lower-class Latinas, this argument becomes a lot less compelling. The weaker you believe that correlation between wealth and character to be, the less you’re concerned about taxing rich people to pay for programs for poor people. Wealthy Republicans believe this correlation is strong and taxes are, therefore, immoral.

The Trump wing of the party has a different privilege problem. They have a hard time coming to grips with their historically-conferred advantages. As astutely observed by Michael Kimmel, Trump is drawing support from the aggrieved entitlement of non-college educated white men and women. These are men and women who pine for the world of their parents and grandparents when a job in the factory got you a house, health care and a retirement. But this set up was always made possible by the presence and effort of both a domestic and an international underclass. Discrimination in employment, housing and education has bolstered the incomes and suppressed the rents of white people for decades. As that discrimination is eliminated, white people find it hard to build the life their parents had with only their high school diploma.

Even leaving aside state-side discrimination, the lives of Americans have been subsidized by the accident of their birth in the United States. The expansions of free trade has reduced that subsidy as well, to the benefit of the international lower class. But even if the knocking down of trade barriers benefits both rich and poor countries on the whole, there are individual victims within those countries. These disenfranchised Trump supporters see this as giving away the jobs to which they are entitled.

It’s not incorrect for this group to recognize themselves as victims of globalization. What’s incorrect is thinking the system has suddenly become unfair because you have to compete with Mexicans on a level field. The system has suddenly become fair and the real problem, that a modern economy does not support low skilled workers at American wages, was previously masked by tariffs. In effect, the US government has been picking winners and losers for decades now. Once it stopped, non-college workers discovered that the market made them the losers in this game.

Unfortunately, the GOP is the wrong place for economic losers. In the Republican Party, those who can’t support themselves have deficient character. So the GOP has to hide from it’s non-college voters the fact that they’re victims of the market. They’ve paraded various scapegoats during the Obama Presidency, but Trump’s genius was to latch on to a scapegoat with a long tradition in Republican states–the brown people.

The college-educated Republican elite are perfectly willing to paint this Republican underclass as victims of a system propping up minorities at their expense. They don’t believe in privilege either and, without white racial resentment, their political future is bleak. But the gig is up. I know right now we liberals are supposed to be sheepishly apologizing and examining our own unfortunate prejudices. But when I contemplate this country long term I believe privilege denialism is near its end. Every day, the racist and misogynist machinations of the system are more apparent. And when that glue that holds this twisted Republican coalition together dissolves, a new day dawns.

Categories
Class Economics Education Elections Health Care Taxation

More questions for 11-year-old Peggy Noonan

Peggy Noonan took pen in hand on the pages of the Wall Street Journal to tell us we should think like 11-year-olds in combating Ebola and impose a travel ban. Peggy doesn’t trust people with degrees in public health or medicine. People with degree in law and business should know how to combat infectious diseases.

That got me thinking about what other policy decisions we could leave up to children. If you have an 11-year-old, please give them this brief survey and mail it to Ms. Noonan.

1. What should we do with foreigners brought here as children?
a. criminalize and shun them (but tax them)
b. hug them

2. Which of these parties do you think will best represent Americans?
a.
Republican-house-committee-chairs

 

 

 

 

 

b.

Dem-committee-chairs

 

 

 

 

 

 

 

3. Do you think giving housing, food, and medical care to poor families:
a. Makes them get less done; or
b. Helps them get more done

4. What should we do with children whose parents don’t provide health insurance?
a. Give them health insurance
b. Not give them health insurance

5. To reduce gun violence does America need
a. More guns
b. Fewer guns

5. Our country has a lot of debt. What shall we do to pay it off?
a. Tax the wealthiest people
b. Take it from old people’s retirement

6. Which is worse?
a. Secretly selling weapons to a militant dictatorship (Iran); or
b. Asking for too much paperwork from charities with “Tea Party” in their name

7. Which do you think is the best use of our money?
a. Bombs
b. Schools

Today’s GOP manages to capture all of the ignorance of children without any of their compassion.

Categories
Class Taxation

Inversions and Rick Santorum

There’s been a recent rise in a tax-saving gimmick called “inversions.” An inversion is the purchase of a small international company by a large US-based company in order to transfer profits to another country with lower corporate taxes. After buying a smaller company based in a low-tax country, the large US-based company transfers patent ownership to, or borrows money from the smaller firm. Interest payments to the smaller company can be deducted from US-based income and interest received in a low-tax country is taxed at a lower rate. In the case of patents, the off-shore company can collect lucrative patent royalties while being taxed at a lower rate. The result of both is a lower overall tax rate for the company. It’s these kinds of strategies that allow large corporations like Boeing and GE to pay almost no taxes.

This is not a new phenomenon, but has stepped up in recent weeks with familiar companies like AbbVie and Walgreens contemplating such a move. So, the question is, why the sudden interest? Thisweekinstupid’s answer is that there’s a downside to hiding profits over seas. In order to pay those profits to share-holders as dividends, you have to bring that money back to the United States and in doing so, it will be taxed at US rates. This is why companies such as Apple and Google are accumulating large piles of cash in subsidiaries based in Ireland or the Cayman Islands. But what good does that cash do these companies? The answer is, not much. Periodically, you hear shareholders grumbling about these inaccessible profits, and calls for companies to “repatriate” the capital, pay the taxes, and give shareholders a dividend. So far, the companies have resisted. The critical question is why.

One possible answer is Republican electoral success. Companies are hoping that Republicans will, at some point, declare a tax discount or even a “holiday” for repatriated capital–that at some point in the future, Republicans will manage to shove through Congress, a law that (temporarily, probably) allows capital brought back to the US to be taxed at some lower rate. The last time this happened was in 2004. At that time, the argument was that this capital trapped in other countries could be used to revitalize the US economy. Yes, it not fair, we told ourselves, but if it’ll get American working again, we’ll do it. And so, we allowed foreign cash brought back to the United States to be taxed at just 5.75%, rather than the 35% corporate rate that the time.  The Congressional Research Service studied the effects of that policy and concluded that companies that repatriated capital did not hire more, did not devote more funds to research and development, but did give larger salaries and bonuses to CEOs and other high level executives. Even the conservative Heritage Foundation has dubbed that experiment a failure. And yet, in 2014, here’s Mitch McConnell calling for a “one-time” tax holiday to pay for highway repairs.

Now, ThisWeekInStupid is not stupid. We know that both parties are almost wholly-owned subsidiaries of corporations. But history seems to suggest that it’s most often Republicans who favor lower tax rates or tax holidays. Last election cycle, Rick Santorum mentioned this all around the country as part of his economic plan. There was a vast, untapped reservoir of money, he said, that could be channeled back into the US economy if we’d allow, just this once, another tax holiday. In recent years, the justification for an “extraordinary” measure like Santorum’s proposal has largely disappeared, but lower tax rates for corporations has been on the Republican agenda since Barry Goldwater and before.

It’s not accident that inversion mania coincides with improving Republican fortunes. The New York Times now gives the Republicans a 60% probability of controlling the Senate after the 2014 elections. With a 2016 Presidential election right around the corner, if you were a multinational corporation, now might be the time to start stockpiling your tax free profits in off-shore subsidiaries.

Now, perhaps paradoxically, ThisWeekInStupid is in favor of replacing our current system with very small corporate tax rates with dividends and capital gains taxed as ordinary income. This makes taxation of company profits more progressive since the dividends and capital gains of billionaires could be taxed at a higher rate than your granddad’s IRA or your family’s 10,000 nest egg. This would, of course, allow multinationals to avoid the taxes they would have paid under the current system unchanged. But, perhaps it’s best to reform the broken system in one swift stroke and let the capital flow to unhindered to where it’s most needed.

The key, in our opinion, is to avoid “extraordinary” measures. If it were made clear to companies and their stockholders that the same system will be in place for 30 years, you might see the boost in repatriation that McConnell and Santorum hope to create.

Categories
Class Education Gender Race

Check My Privilege? What privilege?

As a former college Republican myself, I had great sympathy for Tal Fortgang, Princeton student conservative, Fox News guest, and author of Why I’ll Never Apologize for My White, Male Privilege. I could hear myself saying some of those same things. And I ached with embarrassment. And so for his good and for mine, I’m posting

An open letter to Tal Fortgang and to my 19-year-old self:

Dear privileged white dudes,

You’re angry. I can tell. You’re frustrated that the world won’t hear you like you think it should. Your sincere and rational arguments aren’t reverenced as they should be. And I know where you’re coming from. I remember hearing exposition of social inequality as a indictment of myself and a devaluation of my talent and effort. Right now, in your darker moments, you think sometimes the brown kids get all the breaks. They get all the scholarships, right? You feel under-appreciated and unfairly passed over for accolades and criticized for oppression to which you’re not party.

I’m here to tell you I’ve been there and that there’s a third way to approach race, class and gender from your perspective.

First, it’s important to establish some facts.

Number 1. You’re a lucky guy. Miraculously lucky. Much of your luck is actually the result of the sweat of people who love you. Your grandfathers and grandmothers fought and worked and were beaten and went hungry and without medical care, to build your life. Your parents saved with admirable gusto, then mortgaged their future to pay for your place at the table. They worked nights and weekends for bosses that abused them to feed brats (you!) that sassed them then borrowed the car and wrecked it. Their gift to you could be measured in literal years taken off of their lives. And they did it all with pleasure because they loved you. And before there was you, they loved the vision of you. But all of those things, you didn’t earn.

Number 2. You’re a hard worker yourself. No one should devalue the fact that you studied and worked and practiced and prayed while others of your high school friends partied and slacked off. It would have been nice to spend some time in home economics or consumer math. Instead, you dragged your feet to Mr. McCarthy’s calculus class where you’d surely get a solid hour’s worth of homework. But you went every day (except that one day you skipped school to go to Wild Waves). Well done.

Number 3. You’re (temporarily) stupid. It’s not your fault. What makes you stupid is all the things you haven’t seen. In particular, some of the things you haven’t seen are the things your grandparents have. Like people assuming you’re lazy or irresponsible or criminal because you’re poor or speak with an accent. Or being judged first by the shape of your body. Or having no idea how to fill out a FAFSA.

But you won’t always be stupid. You’re quite close right now to a lot of wisdom. Expressing gratitude to your parents is an important foundation. Right now, you still feel like an extension of your parents’ family. Your successes are their successes and their efforts feel a little like your efforts. Denying yourself the advantages they worked to give you would be denying it to them as well. But as you get older you’ll meet very deserving, talented and hard-working people who weren’t given the things you were given. And soon, God willing, it will occur to you that, while someone certainly earned your privilege, it wasn’t you, or at least not primarily you.

And at that moment, you may even realize that while your effort was significant, doors have opened for you your whole life because people expect to be led by someone your color and gender. Principals, professors and bosses see in you an echo of themselves. When you assert yourself, it’s interpreted as a young man growing into the leader he was meant to be. It’s not that way for everyone. And that’s before even considering what your parents gave you individually. Is a minority scholarship any different than the tuition grant you got from the Get Tal To Move Out of the Basement Foundation?

So, as someone who’s been where you’re standing, here’s my unsolicited advice to you:

Listen more. That doesn’t mean you stop expressing your thoughts. But your instinct is to speak a little too often. Maybe only speak the cleverest half of the things you instinctively would. Spend the rest of the time listening to other perspectives and trying to imagine what it would be like living someone else’s life.

Do speak. But as you do so remember that the perspective of privilege has been heard. It’s been heard and codified–canonized even–in laws and textbooks and even in scriptures. That perspective is as valuable as any other but, in particular when the topic is social inequality, you may be the one speaking from a position of ignorance. Asking sincere questions is almost always welcome.

Stop hearing personal criticism. Living as a white man in a system that advantages white men does not make you bad. Refusing to acknowledge it does…a little. Often when we discuss social justice, we’re talking about things that happen at institutional levels. You don’t have to be a misogynist, or even a man, to be a part of a system (a company, a university) that disadvantages women. So, instead of assuming you’re forever relegated to play the villain in this narrative, hear an invitation to be part of the solution.

The next time you hear “Check your privilege,” hear it in your grandfather’s voice. Are there times when he might reprimand you for ingratitude? Would he relate better to you or to the person on the opposite end of your argument? Would he give you less credit than you give yourself? When you refuse to acknowledge what he’s given you, you disrespect him.

You’re a good person.You don’t harbor ill will toward others. Once you gain a little knowledge, you’ll be a great help to the world and a happier person yourself.

Your sincere ally,

HeyStupid