Category: Public Policy

CZI LetterOver at Think Christian, I take a look at the Chan Zuckerberg Initiative and derive a lesson from Jesus’ interaction with the rich young man in Mark 10.

A basic lesson we can take from the decision to organize the initiative as an LLC rather than a traditional non-profit corporation is that pursuing social good is possible in a wide variety of institutional forms. A for-profit incorporation doesn’t preclude a main, or even primary, purpose aimed at social good. Just as non-profit status doesn’t by itself guarantee charitable effectiveness, for-profit incorporation doesn’t by itself indicate egoistic or self-centered goals.

Benedict XVI, in his encyclical letter Caritas in veritate, discussed a hope for “hybrid forms of commercial behaviour to emerge, and hence an attentiveness to ways of civilizing the economy. Charity in truth, in this case, requires that shape and structure be given to those types of economic initiative which, without rejecting profit, aim at a higher goal than the mere logic of the exchange of equivalents, of profit as an end in itself.”

There are, in fact, a wide variety of incorporation options available, including the relatively new L3C, a low-profit form of the LLC. As Zuckerberg puts it, the reason to go with an LLC was that it in their judgment it allows the initiative to “pursue our mission by funding non-profit organizations, making private investments and participating in policy debates — in each case with the goal of generating a positive impact in areas of great need. Any net profits from investments will also be used to advance this mission.”

Some have intimated that Chan and Zuckerberg are being hypocritical and self-serving, and that all this is about ultimately making Facebook more powerful. But if you read the original letter, you can see quite clearly what their intent is. Forms of the word “investment” occur 7 times in the letter. Words like “give,” “charity,” and “philanthropy” are either absent or understated. It was the reportage surrounding the announcement that interpreted the initiative primarily as traditional charity, philanthropy, or altruism.

The point here is that true service of others doesn’t need to be entirely disinterested, as if investing or even giving requires simple abdication of responsibility. In fact, the traditional understanding of self-interest as selfish interest in the self is flawed. Self-interest is better understood as comprising the interests of the self, which can be quite narrow or quite broad.

All this is not to say that the substance of the initiative itself is praiseworthy or condemnable. We’ll need to see a lot more than the rough sketches and outlines that are apparent thus far to make anything more than provisional judgments about the prudence of various projects. But looking at the Chan Zuckerberg Initiative from the perspective of the formal decision to incorporate as an LLC, I think we can find a lesson about creative ways of approaching our attempts to civilize the economy.

aeibrookingsreportIn our increasingly polarized society, it’s often difficult  for conservatives and progressives to find common ground. It’s even more rare for policy experts on the left and the right to find proposals that they can jointly agree on. So it’s rather remarkable that just such a diverse group has created a detailed plan for reducing poverty and increasing economic mobility.

With support from the American Enterprise Institute and the Brookings Institution, a group of scholars “worked together for more than a year to review the best available evidence and craft a plan that all believe would be effective.” Despite differences in moral values, they found consensus on three values that all Americans share: opportunity, responsibility, and security.

Next week I’ll be posting some of the individual details and recommendations from the report. But for now I wanted to highlight their twelve broad recommendations:

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Conference Panel for "In Dialogue With Laudato Si'", December 3, 2015

Conference Panel for “In Dialogue With Laudato Si'”, December 3, 2015

Today at the Pontifical University of the Holy Cross in Rome, the Acton Institute has organized a half-day conference called “In Dialogue With Laudato Si’: Can Free Markets Help Us Care For Our Common Home?” in response to Pope Francis’ appeal in Laudato Si’ for “a new dialogue about how we are shaping the future of our planet.” In advance of the conference, Acton Institute President Rev. Robert A. Sirico was a guest on Vatican Radio’s “Vatican Viewpoint” to discuss the nature of free markets, how they can effectively protect the natural environment when allowed to function properly, and how to avoid some of the consumerist pitfalls that have been associated with the market economy in the West.

You can listen to the interview via the audio player below.

debt1Over the past few months there has been a lot of discussion about refugees and resettlement. But not much is said about the logistical problems the refugees have to overcome. For example, how exactly do they get to the United States?

The answer is that they have to travel—and that costs money. For those who can’t afford to cover the cost themselves, the U.S. government issues interest-free loans through the U.S. Refugee Resettlement Program. The loan repayments are due every month, starting six months after they enter the country, and can be spread out over 5-6 years.

As with any debt, though, sometimes people don’t pay what they owe. The government then turns the debt over to a collection agency—which is often a nonprofit group that helps to resettle refugees.

There are currently nine faith-based resettlement agencies that have debt-collection operations. All of them charge the same rate as private-sector debt collectors: 25 percent of all they recoup for the government.

Is it unethical for faith-based groups to collect debts on a group they are dedicated to serve? Some people think so and consider the collections a conflict of interest. As G. Jeffrey Macdonald of Religion News Service writes,
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Blog author: jcarter
Monday, November 30, 2015
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PoorTaxImagine you’re a single mom with one child who receives $19,300 a year in government benefits. A local business offers to hire you full-time at an hourly rate of $15 an hour. At 2,000 hours a year (40 hours for 50 weeks) you would earn $30,000. Should you take the job or stay on the government dole?

The additional $10,700 a year certainly sounds enticing. But because you would lose your benefits and have to pay taxes, your disposable income would be about 31 percent less, around $20,700. By working full-time you’d only earn $1,400 a year more than when you were on welfare. That means you are working full-time to earn an additional 70 cents more an hour than when you were unemployed. Why bother?

That 31 percent is the effective marginal tax rate for low- and moderate-income workers will face, on average, in 2016. The marginal tax rate is the percentage of an additional dollar of earnings that is unavailable to an individual because it is paid in taxes or offset by reduced benefits from government programs. As the Congressional Budget Office points out in a statement of the obvious, that rate affects people’s incentives to work: “In particular, when marginal tax rates are high, people tend to respond to the smaller financial gain from employment by working fewer hours, altering the intensity of their work, or not working at all.”

As Robert VerBruggen notes, that marginal rate remains high well above the poverty line:
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boston-telephone-directory“I am obliged to confess,” wrote William F. Buckley, Jr. in 1963, “that I should sooner live in a society governed by the first two thousand names in the Boston telephone directory than in a society governed by the two thousand people on the faculty of Harvard University.”

A similar sentiment seems to now be shared by a majority of the American people. A recent survey by Pew Research finds that 55 percent of the public believes “ordinary Americans” would do a better job of solving national problems than would our elected leaders. An even greater percentage (57 percent) say they are frustrated with the federal government, while fewer than 1 in 5 (18 percent) say they are basically content.

Despite this frustration, half or more say the federal government is doing a “very good” or “somewhat good” job in 10 of the 13 governmental functions tested in the survey. The areas where the federal government receives the lowest remarks are in managing the nation’s immigration system and helping people get out of poverty. Nearly seven-in-ten (68 percent) say the government does a very or somewhat bad job in managing the immigration system and 61 percent say the government is doing a bad job helping people out of poverty.

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Blog author: jcarter
Thursday, November 19, 2015
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Corruption-bribe-5-x-7_-123rfWhen Americans think of corruption, we tend to think of third world countries where getting anything done often requires bribing local government officials. We tend not to have such problems here; our corruption is more subtle and sophisticated, and often involves state level lawmakers.

For instance, over the past few years there have seen corruption-related charges or convictions of the house or assembly speakers of Alabama (bribery, misuse of campaign funds), Rhode Island (bribery, misuse of campaign funds), South Carolina (misuse of campaign funds), and New York (bribery, fraud, extortion, etc.). The former governor of Virginia was convicted for taking a bribe and the governor of Oregon resigned because of corruption charges.

That’s one of the reasons why states need systems and laws in place that can help prevent and expose corruption. So how are individual states doing in regards to transparency and accountability?
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