Category Archives: Poverty & income gap

ACLU: Society Guilty, Not Female Prisoners

You find what you look for. When you look for statistical evidence of discrimination and injustice, you will find it.

In a corrections system in which 85% of prisoners are male, for example, the ACLU of Virginia finds evidence of “widespread and discriminatory suffering” imposed upon women. You see, while women constitute only 15% of Virginia prison inmates, their numbers are increasing at a faster rate than those of men — 32% over the past four years, compared to only 4% for men.

Over a 26-year period, the numbers are even more striking. The commonwealth saw a 930% increase in its female inmate population between 1980 to 2016: from 303 women in prison to 3,123.

“It was fairly shocking,” Bill Farrar, strategic communications director for the ACLU of Virginia told the Virginian-Pilot. “People should care about any group that is marginalized or adversely affected by their government in a disparate way.”

What Farrar finds shocking is not that women commit more crimes than they did three decades, which might be construed as a sign of corrosive social breakdown, but that society is incarcerating women who commit the crimes. In a study that prompted the Virginian-Pilot reporting, “Women in the Criminal Justice System: Pathways to Incarceration in Virginia,” the ACLU argues that many of the crimes are relatively minor in nature — “nonviolent crimes related to property, public order or drugs.” And, of course, the women themselves often are victims — of poverty, drug addiction or domestic abuse.

States the report:

Incarcerated women often become engaged with the criminal justice system as a result of attempts to cope with challenging aspects of their lives, such as poverty, unemployment, and physical or mental health struggles — especially those arising from drug addiction and past instances of trauma. …

The over-incarceration of women is a symptom of a complex network of social barriers, economic inequality, reproductive injustice, and racial and sexual discrimination deeply woven into our society.”

The ACLU’s bottom line: Society is guilty, not the women. The proffered solution: more study, more “training” of employees in the criminal justice system, more spending on social programs, more spending on substance-abuse programs, more spending on programs to deal with sexual victimization, elimination of cash bail, increasing the felony threshold to at least $1,500, repeal of the three-strikes-and-you’re-out law, and a host of other measures.

Bacon’s bottom line: A handful of ACLU recommendations might be worth considering, such as raising the felony threshold for property crimes, and steering women into substance-abuse programs as a first-time alternative to jail and prison. But one doesn’t need to frame such initiatives as responses to “widespread discrimination” in order to justify them.

Furthermore, not all women are in prison because of petty crimes. Roughly one in seven offenders in crimes of violence are women. The ACLU “reform” agenda would serve mainly to cast women as victims and hold them less accountable for responsibility for their actions, but do very little to curb anti-social behavior. 

Distracting from the Big Issues at W&L

Lee Chapel at Washington & Lee University

Washington & Lee University is the latest in a growing line of higher-ed institutions to engage in navel gazing and self-flagellation over its historical role in slavery and racial oppression. While honesty and candor in such matters is always called for — it is all too easy to sweep uncomfortable legacies under the rug — W&L’s priorities are largely misplaced. W&L, like other elite institutions, should be examining the role it plays in perpetuating elitism and tax-exempt privilege today. Of course, that would require asking truly uncomfortable questions for the people who benefit from institutional arrangements now, not those who ran the university a century ago.

The Washington Post’s higher-ed writer Susan Svrluga writes today of how President William Dudley has convened a group to “lead us on an examination of how our history — and the ways that we teach, discuss, and represent it — shapes our community.”

The matter is an especially delicate one when the “Lee” in Washington & Lee was none other than Robert E. Lee, who is buried with his family on the campus. Dudley must pursue a delicate balancing act placating both progressive activists in the faculty and student body, who revile Lee and his association with slavery and the Confederacy, and conservative alumni, who revere the general and university president for his personal integrity and role in knitting together a war-torn nation.

The unremitting focus on the past, which is paralleled by similar initiatives at the University of Virginia and other universities, serves the function of distracting attention from how higher education has become a bastion of liberal-progressive privilege today. Indeed, one suspects, that’s the entire point.

Tuition and fees at W&L was $50,170 for the 2017-18 school year — a 10% increase from three years previously. (For point of reference, the Consumer Price Index increased 3.7% over that period.) Room, board and other expenses, which decreased slightly, brought the total to $65,950, according to College Navigator.

Admittedly, that’s the sticker price, and only the wealthiest families pay the full freight. W&L discounts heavily depending on financial need, providing grants and financial aid to 57% of the student body. Here are the figures for average net price by income bracket in 2016-17:

College Navigator calculates average net price by subtracting the average amount of federal, state/local government, or institutional grant or scholarship aid from the total cost of attendance. While W&L does discount tuition for members of the middle class, the net price — $38,000 — is still extremely high for two-income, middle-class families making middle-class salaries amounting to more than $110,000 a year.

While higher-ed institutions like to emphasize that the net price is much lower than the listed price, over the past two years at W&L, the net price increased even more rapidly than the sticker price. Between 2014-15 and 2016-17, the net price increased 17% to $25,029. Unlike Virginia’s public universities, W&L cannot blame cuts in state support for the soaring cost of attendance.

W&L financial statements make a point of informing readers that the tuition charged does not cover the full cost of educating its students. In the 2016-17 school year, that cost was put at $63,000 per student. The previous year, the implicit subsidy was calculated to be slightly more than $13,400 per student per year. That balance was made up largely through the tax-deductible donations of alumni — $22.7 million in 2015-16 — and revenues from W&L’s tax-exempt endowment.

A couple of points are worth making here. First, a $63,000 cost per student sounds extraordinarily high. It may be peanuts compared to the tax-free sums lavished upon the students at elite Ivy League schools, but it is mind-boggling by any other measure. I can’t begin to imagine what kind of costs are baked into that figure, and the financial statements don’t tell us. W&L is not a research university, so there aren’t any hidden subsidies for laboratories, graduate students and super-star research faculty. Perhaps the faculty-student ratio is really low, and students benefit from small class sizes. Perhaps W&L has extravagant administrative overhead. It would be interesting to know.

Second, despite generous financial aid provided for lower-income students, the student body still is overwhelmingly affluent. College Navigator does not provide student household-income data, but it does provide a proxy — average SAT scores, which is closely correlated with income. The average SAT scores for reading and writing are 680 (25th percentile) and 740 (75th percentile). That’s high –a hair higher than the University of Virginia.

Even though W&L adopts an income-redistribution tuition model that sticks it to the middle class, the institution benefits from lavish tax breaks that benefit both an affluent student body and left-leaning professors and administrators. (I don’t know if W&L’s faculty and administrators are more liberal/leftist in their views and teaching than their peers at other institutions, but I feel safe in saying that they are more liberal/leftist than the tax-paying population as a whole.)

As a tax-exempt nonprofit, W&L pays no property taxes, sales taxes, BPOL taxes, machine-and-tool taxes, sales taxes, or corporate income taxes. It’s income (referred to as an “operating surplus”) is nominal, but the other tax breaks are significant. Meanwhile, W&L alumni enjoy tax deductions for the $20 million or so they donate every year to subsidize students’ tuition. And the $1.5 billion W&L endowment, which in 2016-17 had reported an 11.4% compounded rate of return over 10 years, is non-taxable.

I haven’t decided whether the biggest beneficiaries of the system are the privileged students who attend W&L or the privileged employees of an institution that relentlessly increases tuition & fees, benefits from taxpayer subsidies, and obsesses over the historical sins of their forebears. Either way, the question should stimulate a good discussion. And either way, it’s a discussion that we are less likely to have while fixating on century-old issues like slavery and Jim Crow.

More Bureaucracy Won’t Help Virginia Schools

Source: Cranky’s Blog. The gold square represents the City of Richmond; the red squares represent peer districts in Norfolk, Hampton and Newport News.

Among the most dismal of the Standards of Learning (SOL) results released last week by the Virginia Department of Education (VDOE) was that only 72% of 3rd graders had achieved reading proficiency — down 3% from the previous year ans 12% from a decade previously.

The usual suspects will respond to the news with the usual nostrums. Those on the left predictably will say that Virginia needs more money to (take your pick) hire teachers, pay teachers more, hire more counselors, or build newer, shinier school buildings. As an antidote to such thinking, contemplate the scatter graph above compiled by John Butcher on Cranky’s Blog.

In previous posts, Butcher has documented that there is very little correlation between per pupil expenditure and SOL achievement. In today’s post, he explores variations on the same theme, showing that there is minimal correlation on a school-district level between between the teacher-pupil ratio and SOL achievement in either reading or math.

In other scatter graphs, Butcher shows that there is even less correlation — essentially zero — between school size and reading/math SOL proficiency.

From the right side of the philosophical spectrum, as a Richmond Times-Dispatch editorial opines, come calls for more charter schools, more magnet programs, and more publicly and privately funded vouchers. While such alternatives may be appealing as a long-term solution, one has to be realistic that politically they are a non-starter in a state run by a Democratic Party governor and a legislature that likely will turn blue as well. Conservatives and libertarians should continue fighting for school choice, but in the meantime they need to proffer serious analysis of what ails public schools and what can be done to fix them — or at least not make them worse.

If the problem isn’t money, or teacher-pupil ratios, or school size, what is it? I think I’m getting closer to some answers. Let me sketch out my thinking at this point in time.

What really ails Virginia schools. Virginia’s public education system combines a toxic mix of three elements that interact in terribly dysfunctional ways: (1) the sociological reality of a large and growing population of children raised in material poverty, absentee fathers, substance abuse, child abuse and neglect, and other dysfunctions; (2) the spread of politically correct doctrine, manifested most recently in the imposition of “restorative justice” as a means of achieving school discipline; and (3) a push for accountability metrics, of which the SOLs are only one, that pressure school districts, principals, and teachers to game the system in order to show progress where none exists.

This combination is especially poisonous at schools with concentrated poverty. A number of things are going on. Schools are under pressure to reduce the rising rate of absenteeism — both the problem of students skipping school and the problem, among students who do come to school, of skipping class. The educrats seem to understand that it is a farce to claim that high school graduation rates are declining even while absenteeism is increasing. They also understand that students won’t learn (and pass their SOLs) if they don’t enter a classroom.

But the absenteeism-reduction imperative conflicts with the restorative-justice imperative. When kids skip school, there’s usually a reason — they’re bored and/or frustrated.  They are bored and/or frustrated because they don’t understand the material, can’t participate meaningfully in class, and feel set up to fail. They feel all those things because they have been socially promoted to grades beyond their competence, a phenomenon that is itself the product of politically correct thinking.

So, Virginia schools now have more bored/frustrated kids sitting in classrooms. Some just tune out. But others act out, disrupting class. Here’s where the restorative justice approach to school discipline comes in. Schools subject to federal court order to reduce expulsions, suspensions, and other sanctions on the grounds that they disproportionately impact minorities typically have substituted a therapeutic approach. In Henrico County, I understand, teachers are first called upon to “de-escalate” a disruptive situation. If that doesn’t work, teachers are supposed to take the student into the hall and reason with them. If a student must be removed from class, the time can be 20 minutes, no longer. Following these steps consumes a significant percentage of the teacher’s time. (My source estimates that he spends about 25% of his class time dealing with disruptive students, more than ever.) The result is that teachers have less time to teach the majority of students who do want to learn and are willing to behave comport themselves properly…. which leads to lower SOL scores. Of course, as I have frequently observed, the victims of disruptive students are disproportionately minorities themselves.

Can things get worse? Yes, they can. This school year the VDOE is rolling out a new set of accreditation standards, which include a host of new performance processes and metrics. While the goal of establishing objective measures for holding schools accountable is laudable in the abstract, the new processes could mire schools in even more red tape, lead to more gamesmanship and data manipulation, empower those who figure out how to work the new rules and demoralize those who don’t. When placed in impossible situations, teachers, principals and school officials could be even more tempted to engage in ass-covering behavior to avoid sanctions that could hurt their careers. Virginia schools could plunge even deeper into self-deception and denial. That’s not a prediction, just a possible outcome — but one we should be alert to.

Consider yourself forewarned. More bureaucratic rules are rarely the answer to any complex problem.

The Political Economy of Dental Care

The bad teeth guy in the movie “Deliverance”

No sooner has Virginia enacted one vast new entitlement, Medicaid expansion, than the drumbeat begins on the next. No matter how much money government dedicates to health care, food, housing, education, transportation, legal aid, or whatever, there is always someone who is getting the short end of the stick by comparison. Always. And the answer is always the same: Expand entitlements. Always.

The latest case in point is an article in the Virginia Mercury highlighting the deficiencies in dental care experienced by hundreds of thousands of Virginians — a dental gap bigger than void in the bad-teeth guy’s mouth above. No question, the problem is a real one. Dental care costs too much for poor and working-class Virginians to afford, assuming dental care is even available in under-served rural areas. And the consequences of poor dental hygiene can lead to serious medical complications.

What’s the solution? Reports Katie O’Connor:

For years, advocates, such as the Virginia Oral Health Coalition have pushed the state to add a dental benefit for adults. So far, Virginia has expanded dental benefits to pregnant women and children until they turn 20.

As of the start of this year, 17 states offered extensive dental benefits — including preventive and restorative procedures — to their Medicaid populations, according to the Center for Health Care Strategies, a group that advocates for improved health care delivery for low-income Americans.

A benefit, advocates argue, would make a major difference for the 1.2 million adults covered in the state’s Medicaid program.

Creating the entitlement in Virginia would cost between $24.4 to $60.8 million, O’Connor says.

Of course, you’d expect from an alliance representing the dental profession to advocate a new entitlement that creates more business for the dental profession. It should surprise no one that the proffered solution to the problem entails transferring money from taxpayers to dentists.

Here’s a different idea. Expand the supply of dentists and dental technicians. How? Maybe start by reducing the total cost of attendance at the Virginia Commonwealth University School of Dentistry, which now runs about $133,000 to $140,000 per year over four years. Nationally, dentists graduating in 2016 carried on average $261,149 in debt, according to the American Dental Education Association. That number could well be higher in Virginia where the tuition runs considerably higher than the national average.

I don’t know why the VCU dental school is so expensive. I conjecture that the tuition bears little relationship to the cost of actually providing the education, and that someone high in the VCU hierarchy has made the calculation that the university will charge what the market will bear. I further conjecture that the School of Dentistry is a lucrative profit center, which VCU is milking for revenue to subsidize other programs. I may be entirely wrong, but when tuition is higher than almost anywhere else in the country, that’s a proposition worth looking into.

Now, if you entered a profession that took you four years to complete (which means four years of earning no money) and cost you roughly $500,000 in tuition, fees, room, board and expenses, leaving you $260,000 in debt when you graduated, would you want to move to Southwest Virginia where there is a paucity of patients capable of paying charges sufficient to help you retire your loans? No, unless you’re incredibly idealistic and willing to live at the foot of the cross, you’ll move to the suburbs where you can make $150,000 a year and pay off your debts.

Let me venture another hypothesis, which any enterprising reporter could verify or falsify: Given the sky-high cost of tuition, Virginia dentists have exercised their clout through Virginia’s professional licensing system to restrict competition from allied professions, such as dental technicians. I would conjecture that dental technicians, like nurses, are seriously circumscribed in what they can do or the circumstances in which they can practice.

Dental technicians earn about one-fifth of what dentists earn. Yet in my personal experience, dental technicians do 30 or 40 minutes of work cleaning teeth and taking x-rays while my dentist spends about 5 minutes checking things over. I love my dentist — he’s a great guy, and I’ve been using him for 30 years. But I’ve really got to wonder why it costs me $200 a visit when dental technicians are paid (on average) about $35,000 a year or the equivalent (taking benefits into account) of maybe $30 an hour.

I’m betting that (1) dentists exercise a strangle hold on the ability of dental technicians to provide independent teeth cleaning services, and (2)bill for technician’s services at a rate that many would consider obscene. Perhaps such practices, if in fact they occur, are justifiable in areas with no shortage of dental practitioners. But are they justifiable in areas that can’t attract dentists? Would it not be better to provide access to dental technicians to maintain dental hygiene at lower prices and make referrals as needed to dentists to fill cavities and perform other more advanced procedures?

I have no expertise whatsoever in the practice of dentistry, and I fully concede that I may be making some naive statements here. But I am convinced that we need to look differently at the problem. Instead of asking whether we should expand entitlements, perhaps we should be looking at how to expand supply and bring down costs.

Full Conformity Raises $3.6B In First Five Years

Projected State Income Tax Revenue Increases if Virginia Conforms With No Adjustments. Source: Secretary Layne’s Presentation

Assuming the Virginia General Assembly conforms the state’s tax rules to the IRS code as it exists now, adopting intact the recent federal changes, the state will reap an additional $3.6 billion in revenue over the next five years.

Almost $2.5 billion of that will come from personal income taxes, with an additional $1.1 billion collected from business tax returns.  By the sixth year, 2024, the total new state revenue attributed to conformity with the Tax Cuts and Jobs Act of 2017 reaches $950 million per year.

Those figures were revealed Friday by Secretary of Finance Aubrey Layne, having been forecast by a new proprietary revenue model developed for the state by Northern Virginia-based Chainbridge Software LLC.  Layne’s presentation went into detail on the state’s revenue results for the fiscal year just ended, the official revenue forecast for the year that just started, and the federal tax conformity debate.

There are two key assumptions behind those Chainbridge projections.   The first is that the state makes no changes in state tax brackets or rates or state-specific exemptions, all of which could be changed to reduce the impact on individual or business taxpayers.  The second is that taxpayers take full advantage of the new federal rules when the federal benefit exceeds any tax cost at the state level.

While state taxes are projected to grow, federal taxes paid by most of those individuals are projected to decline by far higher amounts.  Aggregate federal income taxes on individual Virginia residents are projected to drop by almost $4 billion for 2018, more than ten times the expected state income growth on the same earnings.   These are projected totals, and to borrow a common disclaimer individual results may vary.

Governor Ralph Northam, who opened the meeting Friday with his own remarks, has proposed taking advantage of the revenue surge to amend Virginia’s Earned Income Tax Credit (EITC) making it refundable, meaning taxpayers who qualify would get any excess credit – more than their state tax liability – given to them as a tax refund.

He used the example of a lower-income family with a state tax liability of $800 and an EITC of $1000.  Right now, Northam said, “Virginia keeps that additional $200.”  Under his proposal “we’re giving that $200 back.”   Critics of the idea would argue the $200 in question is coming from other Virginians as an income transfer payment.

Previous efforts to make the state EITC refundable have been estimated to cost up to $250 million per year.  For tax year 2018, according to Layne’s data, individual taxpayers declaring incomes above $50,000 per year would be paying the state an additional $290 million, only slightly more than the cost of the EITC refunds.

Layne forcefully argued for full state conformity with the federal changes, adopted in early 2019 so the rules can apply to tax year 2018 in full.  If Virginia stands still and does not conform, individual taxpayers will have to deal with as many as 20 major differences between their state and federal returns, and for business filers it is more like 30 provisions which would differ.  For decades Virginia has traditionally conformed fully or almost in full with the Internal Revenue Code.

Passing an emergency conformity bill at the start of the January session, which would need an 80 percent vote, would not preclude a later debate about adjustments Virginia might want to make to rates, brackets, or other provisions.  In statements outside the meeting, but not stressed Friday, many Republican legislators have discussed allowing Virginia taxpayers freedom to itemize deductions on their state returns while taking the standard deduction at the federal level.

The policy combinations are endless, and Layne pledged to work with the legislators who have ideas they want to test with the new revenue projection model.

(Note of apology – earlier versions used the wrong name for Chainbridge Software LLC.)

 

Stay Put, Young Man, Stay Put

Source: Commonwealth Institute for Fiscal Analysis

The Commonwealth Institute for Fiscal Analysis has published a useful reminder of how job and wage growth has bifurcated in Virginia — jobs and wages have increased smartly in Virginia’s major metro areas since the recession but have lagged markedly in non-metro Virginia.

The trends, which reflect the larger urban-rural divide nationally cannot be reversed, notes CI, but they can be ameliorated. “State lawmakers have some specific options on the table that could offer an economic development boost to rural Virginia.”

What do all of those options entail? Tax breaks and rural subsidies targeted to helping lower- and middle-income households. Expanding Medicaid. Eliminating the work requirement for receiving Medicaid. A bigger state Earned Income Tax Credit (EITC). State investment in roads, bridges, and broadband. CI doesn’t advocate showing infrastructure money indiscriminately on localities — investments should be “placed based” reflecting the needs of local communities — but the approach is all about subsidies and wealth transfers.

Virginia already has an entity — the Virginia Tobacco Region Revitalization Commission — that has been helicoptering money all over Southside and Southwestern Virginia for a couple of decades now with little discernible effect. The Institute doesn’t articulate what criteria should be applied for dispensing the cash any differently. 

What CI does says forthrightly is that “asking rural Virginians to move to jobs isn’t a solution.” 

Why not?

Americans throughout their history have been moving to areas of greater opportunity. As Horace Greeley famously proclaimed in the 19th century, “Go west, young man.” In the early 20th century thousands of farmers and immigrants migrated to the Central Appalachian coalfields, and when the coal industry withered, they moved on. African-American sharecroppers migrated from Southern rural areas to greater opportunity in the urbanizing North. In the 1930s, Okies choking on the Dust Bowl moved to California. And so it has gone. But for some reason, CI has ruled out moving from rural areas whose mill-town manufacturing economies have been devastated by globalism and automation.”

I have penned innumerable posts on this blog suggesting strategies on how rural Virginia communities can revitalize themselves by selling access to mountains and the Chesapeake Bay, and investing in the kind of amenities that will attract retirees, nature lovers, resort-goers and small entrepreneurs. Are the Virginia mountains any less picturesque than North Carolina’s? Is Virginia’s portion of the Bay any less beautiful than Maryland’s? Why can’t we replicate the economic  success of western N.C. and Maryland’s Eastern Shore?

But even if Abingdon could become another Blowing Rock and Deltaville another St. Michael’s, there is a limit to how many jobs a tourism/resort/retiree economy can support. If our goal is helping people rather than helping regions, then we should encourage people to move to where the jobs are. The single biggest barrier to moving isn’t the lack of Medicaid or insufficient EITC, it’s the lack of affordable housing in Virginia’s major metros.

If we want to build a society around redistribution and the amelioration of poverty, fine, go with the Commonwealth Institute plan. If we want to build a society around jobs, opportunity, and upward mobility then our focus should be on mobility and affordable housing.

The Social Cost of Domestic Violence

Intimate Partner Violence (IPV) accounts for more than one in seven violent crimes in the United States. Between 16% and 23% of American women experience IPV while pregnant. Social science researchers have suggested that domestic abuse affects not only the mother-to-be but her unborn children, but the social cost of the problem has been difficult to measure.

A new study by three women, two economists and a health policy researcher, have found a way to compare the outcomes of women subjected to assault while pregnant versus those suffering violence up to 10 months after the estimated due date. They estimate the social cost per assault during pregnancy of nearly $42,000, implying a total annual cost to society of more than $4.25 billion.

“We find that prenatal exposure to assault is associated with an increased likelihood of induced labor, which is likely a response of the healthcare system to injuries sustained by pregnant victims of abuse,” write the authors of “Violence While in Utero: The Impact of Assaults During Pregnancy on Birth Outcomes,” a working paper published by the National Bureau of Economic Research.

There’s something in this study for everyone. For law-and-order types, the study shifts the prevalent preoccupation with the injustices of mass incarceration to the victims to crime. In addition to the obvious victims, the women subjected to assault, there are invisible victims: the lower birth-rate babies. Oh, and let’s not forget the general public, which winds up paying the medical bills to treat those  babies.

For social justice warriors, the authors remind us that “violence in utero is an important potential channel for intergenerational transmission of poverty.” Indirect costs come from increased childhood disability, decreased in adult income, increased medical costs associated with adult disability, and reductions in life expectancy. “Our results imply that interventions that can reduce violence against pregnant women can have meaningful consequences not just for the women (and their children), but also for the next generation and society as a whole.”

The authors don’t address the oft-noted observation that the American medical system has higher infant mortality rates than other developed countries. But their research sheds light on that phenomenon. The implication is that the higher incidence of infant mortality represents a failure of the U.S. health care system. But perhaps it really represents a higher rate of domestic violence than in other countries.

Who Are These Guys, and Where Do They Get All Their Money?

Shenandoah Valley Juvenile Center

The report issued by the Northam administration investigating charges of abuse at the Shenandoah Valley Juvenile Center has come under withering criticism by nonprofit groups that filed a lawsuit last year bringing attention to the treatment of unaccompanied immigrant children held there. The Virginia Mercury has the story here.

While I used the Department of Juvenile Justice report as the basis for a blog post yesterday arguing that people were making much ado about a non-scandal, I have to concede that the criticisms of the report are substantive. By substantive, I don’t presume them to be valid. But they are are not frivolous. If I were reporting the story, I would deem them worth probing to see if they were valid.

An interesting sidebar to the controversy is the revelation of the existence of two nonprofit groups that revealed (or, depending upon your viewpoint, concocted) the abuses the first place. One is the Washington, D.C.-based Washington Lawyers Committee for Civil Rights and Urban Affairs. The other is the Henrico County-based disAbility Law Center of Virginia. Both pursue social-justice work. One hews to high standards of transparency; the other does not. 

The Washington Lawyer’s Committee (WLC) is forthright about its commitment to social justice — or at least a leftist perspective on social justice. States the organization’s Guidestar profile: “While we fight discrimination against all people, we recognize the central role that current and historic race discrimination plays in sustaining inequity and recognize the critical importance of identifying, exposing, combating and dismantling the systems that sustain racial oppression.”

The organization reported more than $5 million in revenue in its 2016 990 form, makes the forms accessible on its website, and lists 27 employees on its website. Unlike many nonprofits, the WLC is open about where its money comes from. in 2016 about $3 million came from “contributions and grants,” $830,000 from fund-raising events, and $1.8 million from “legal fees and court awards.”

Most impressively (from a transparency perspective), WLC lists many of its major donors, which include Wiley, Rein & Fielding, a K Street law firm ($414,000); Dentons US LLP, also a K Street Law firm ($173,000), and the Morrison & Foerster Foundation, a San Francisco-based foundation ($215,000); the D.C. Bar Association ($80,000); and Kirkland and Ellis, a Chicago law firm ($153,000), among others. WLC reported another $1.7 million in contributions from unnamed individuals who contributed less than 2% of total revenue.

What emerges is a picture of a well-funded activist group funded mainly by wealthy lawyers, which supplements its income by collecting legal fees and awards from the lawsuits its files. This is not a grassroots organization. It reflects the views of the nation’s liberal legal elite.

In describing what it does, WLC notes a special concern for “people of color, women, children and persons with disabilities [who] are disproportionately forced to live in poverty” (my italics). That may explain the connection with the disAbility Law Center of Virginia. which provides advocacy services across Virginia for people with disabilities.

The disAbilities Law Center is not nearly as transparent. Its 2015 990 form reported $2.9 million in revenue, and its website lists 34 employees. But the nonprofit did not reveal who its major contributors are. More than $2.6 million was classified as “Government grants (contributions),” another $109,000 was described as “National Disability Rights,” $61,000 came from “other attorneys fees,” and $4,000 from settlement fees. The nonprofit reported no revenue from membership dues or fundraising events. As with the WLC, it is safe to say that the disAbilities Law Center is not a grassroots organization, but rather relies upon generous benefactors. I would conjecture that the group’s priorities reflect the preoccupations of liberal elites, but further research is required to document the suspicion.

How does a nonprofit focused on disabilities get mixed up with a center holding illegal unaccompanied-minor immigrants? In its own description, the disAbilities Law Center is part of a “nationwide network of organizations known as ‘Protection and Advocacy systems,’ designed to offer an array of education and legal representation services to people with disabilities and to combat abuse and neglect in both governmentally operated and privately operated facilities.”

The federal government officially recognized the disAbilities Law Center in July 2018 as a group with “authority to monitor conditions and treatment in immigration facilities if those facilities have residents with disabilities.”

So, what does all this mean? The Virginia Mercury was the only media outlet to report today on the follow-up criticism to the report. Reporter Ned Oliver describes the groups as “advocates for the immigrant teens,” never mentioning their social-justice mission or the fact that they are part of a larger constellation of organizations seeking to influence public policy.

Now, this network may be totally benign and above-board. Or it may be part of a larger coalition of nonprofit and advocacy groups intent upon undermining the Trump administration immigration policy by filing lawsuits and generating publicity. I don’t know the truth of the matter. My point here is not to criticize either group, for I have no tangible basis for doing so, but to raise the kind of questions that the media should be asking when they report on the Shenandoah Valley Juvenile Center controversy. If a right-wing legal advocacy group were filing a lawsuit, the ideological orientation of the group surely would be noted in any story. The same rule should apply to liberal-progressive groups and their causes.

Moneysaurus and the Trumpenproletariat

Since the end of World War II, the nonprofit sector has consumed an increasing share of the United States economy. Health care, which is dominated by nonprofit hospitals, now hogs an 18% share. The growth of higher education, an overwhelmingly nonprofit industry, continues to outpace the general economy. Millionaires and billionaires are converting wealth into non-taxable foundations on an unprecedented scale, supporting the proliferation of tax-exempt foundations and nonprofit enterprises.

There are now some 1.6 million nonprofit institutions in the U.S. employing 11.4 million people and comprising the third largest employer in the country after retail and manufacturing, according to the Independent Sector website. In 2016 the PHP Staffing Group reported that employment over the previous 10 years had grown 20%  for non-profits compared to 2% to 3% for the for-profit sector.

Americans typically think of the U.S. economy as divided between the government sector and the private sector. But that view grossly oversimplifies the modern American economy. The nonprofit sector, which comprises 10% of the economy, belongs in category by itself. Nonprofit entities are private in the sense that they are not government organizations. But they behave very differently from for-profit enterprises. Most importantly, they aren’t accountable to the public in the same way that government and corporations are.

Americans have a U.S. Constitution and 50 state constitutions with checks and balances. We hold elections to throw out politicians we don’t like. We have the right to attend public meetings and to petition the government. We have transparency rules governing access to information. We have a fourth estate which, though diminished in size and capacity, views its central mission as acting as a watchdog over government. Governance leaves much to be desired — gerrymandering is a travesty of democracy — but the public is acutely aware of the inadequacies, and people are working to fix them.

We have a different set of mechanisms to hold corporations accountable. Executives of U.S. corporations answer to boards of directors, to equity investors, to bond holders, to banks and other financiers, and, most dramatically, to the marketplace. Unlike failed governments, failed corporations go out of business. Their corporate DNA exits the economic gene pool. Government functions as an additional backstop against corporate abuses against the public health and safety.

To whom do nonprofits answer in exchange for the massive benefit of being exempt from taxes? Nonprofits do have boards of directors (or trustees) but they don’t have investors capable of overthrowing them in a shareholder revolt or otherwise enforcing accountability. Most nonprofit boards are docile; they rubber stamp management’s vision for institutional advancement. While nonprofits aren’t as immune to catastrophic failure as governments are, they don’t pay the same price that corporations do for failure. Indeed, nonprofits with large endowments can be immune to outside pressure. Not that anyone notices. Transparency standards are minimal compared to those for government and publicly traded companies. Billions of dollars of so-called “dark money” slosh through the nonprofit system with almost no oversight and accountability. Except when scandals erupt, the fourth estate considers nonprofit activities of secondary interest. 

The political economy of nonprofits. Nonprofit entities have fundamentally changed the nature of American society, the economy. and the political system. Americans have been astonishingly sanguine about the creation of a new set of winners and losers.

Who are the winners? There are two sets of clear-cut winners — the millionaires and billionaires who get to shelter their wealth, and the nonprofit managerial class that gets to administer it. Insofar as the nonprofit managerial class is comprised of university-educated progressives who prioritize social justice issues, poor people and minorities are intended beneficiaries. However, insofar as the therapeutic ministrations of social-justice minions are counter-productive — a point I have argued repeatedly on this blog — the poor and minorities may be in actuality more victims than beneficiaries.

Whatever may be the case in that particular regard, the priorities of millionaires, billionaires and nonprofit administrators rarely extend to the well-being of working-class and middle-class Americans — especially the alienated, white Trump-voting segment of the electorate whom some have labeled the Trumpenproletariat.

These biases are most clearly visible in the higher education sector. The number one goal of the managerial class at colleges and universities is institutional advancement: building edifices, programs, and bureaucratic empires that maximize the prestige of the institution. In the pursuit of this goal, the managerial class is responsive to two main constituencies: (1) affluent alumni and their offspring (commonly referred to as legacies) whose good will they cultivate for gifts and benefactions, and (2)  lower-income and minority Americans in alignment with the leftist, politically correct value system of academe. The Trumpenproletariat, representing some 40% or so of the nation’s population, has zero influence. Continue reading

Graph of the Day: Virginia’s Declining Fertility Rate

Source: StatChat blog

The number of births in Virginia continues declining, reaching the lowest level in years in 2017 — only 100,248. A decade before, births had numbered 108,884.

Demographers Savannah Quick and Shonel Sen at the Demographics Research Group at the University of Virginia attribute the overall dip in fertility decline to a dramatic decline for 15- to 19-year-olds and 20- to 24-year-olds and a slight increase for 30- to 24-year-olds and 35- to 39-year-olds. In other words, many women are postponing childbirth, not choosing not to have children.

This is a classic good news/bad news story. The good news is that more women are taking control of their fertility in order to pursue education and improve their job prospects before having a child. Modern-day child-raising is an exhausting, all-consuming activity. It is all but impossible for women to hold down a full-time job, raise a child (or children), and continue their education — especially if there’s no father in the picture. The persistence of poverty in a society characterized by abundant avenues for upward mobility is, at its heart, a demographic issue. If lower-income women are having fewer children, fewer children will be raised in poverty.

The bad news is that the United States needs more citizens to enter the workforce and pay payroll taxes to help support a Medicare and Social Security system that is careening toward fiscal insolvency. But incremental changes in fertility are unlikely to make much difference. The Medicare and Social Security trust funds will dissipate before children born today can enter the workforce.