Friday, January 17, 2020

War On Philanthropy? No, It's More A War On Gov't Social Services To Justify A Pitiful "Charity" Substitute

In the latest iteration of the Right's boner for "private charity" to replace government social spending, we have as 'exhibit A', the WSJ piece  'The War On Philanthropy' (January 9, p. A17) by Karl Zinsmeister.   Again, as with previous efforts of PR con men, the claim is made that private charitable giving can be an adequate replacement for government social programs, like Medicaid, food stamps and even Social Security.

For example, as recently as 2016 I castigated then House leader Paul Ryan for his statement that it was feasible to "scale down federal assistance in favor of much more charity" -  citing the House of Help City of Hope in D.C. and Catholic Charities in Janesville, Wisconsin.

But as I pointed out (Jan. 11, 2016 post):

"Ryan here is obviously looking  at the fact there are now 40 million on food stamps,  up 53%  from 2008 and 54 million on Medicaid, up 21% over the same interval. But what escapes him is that the amount of charity that would be needed to leave government out of the picture is actually some twenty five times more than the actual volume of charitable giving!

For example, to make charity ends meet and fill the gap in the absence of government assistance, those rich Catholic and other lobbyists in DC would need to give about 14.9% of their income, not the usually cited 7.7% Similarly, all the other alleged generous conservo states would need to at least double up on their giving."


Contrary to Zinsmeister's twaddle, the situation has arguably gotten much worse not better, so private charity is even less able to cover the costs needed for the typical American family to survive.  The Federal Reserve working paper from last year is germane here, indicating the average middle class family does not even have enough reserve cash on hand to cover a $400 emergency.  Meanwhile, too many are bamboozled  by the monthly jobs report numbers, unaware most of those jobs are low pay - or at least not enough to (singly) cover exploding health, housing, food expenses.  I.e. if you work two or three jobs you might, I say might, make it.  (Let's also bear in mind that  average wages have remained stagnant for at least 40 years, factoring in inflation.)

 In Denver, for example, the average monthly rent has now reached $1680 -  way more than most of the current residents can afford.  Many  dwellers in originally low rent apartments are often issued notices they have to leave for "renovations" then are invited back after but with a 50% rent increase- which is way beyond their means.

In some apartments a formal eviction notice isn't needed, only the notice of rent increase, say from $575 /month to $975/month. That amounts to what one enraged resident said is a "quiet movement":   Can Zinsmeister's private charity cover such rent increases, far less the cost now to get a mortgage in Denver? I doubt it. (It is estimated a middle class family now needs a down payment of $68,000 for a typical Denver home just to be able to manage a $969/ month mortgage payment.  And that presumes a job earning at least $90,000- 94,000 a year.)

Compounding this, we learned  yesterday: 

(WSJ, p. A2) that developers are planning to add more rental units (371,000) this year than at any other period since the 1980s.  The problem? Most will be aimed at the wealthy in many major cities.  Why?

"Property developers say the costs associated with land acquisition and construction have become so steep that catering to affluent renters presents the best way to make a profit."

Add to that the fact that "the construction of single family homes for sale is well below historic norms"  and you have an affordable housing problem of epic proportions.   Given the enormous cost of a single family home in most major cities now, it's no surprise that people are caught in a money bind (too costly homes, too costly rentals ) and one which simple charitable donations isn't enough to correct.

The minimal affordable housing stock  nationwide also puts the kibosh on the claim that "an increase in luxury housing might  encourage more economically mobile renters to move up."  But not when such renters are only earning $20.75 /hr. as they are here in the Springs, on average.  So they can barely afford an apartment for $650/month using Section 8 subsidy, far less the $1385 for a regular single bedroom apartment.

Most newcomers to our state, for instance,  have nowhere near the earning power  to afford a single family home in Denver, or the Springs. Add in a family calamity like a child's illness, a bread winner's serious disease or injury, and there is a rather rapid descent into homelessness or at least trying to survive in one of the city's  homeless shelters, e.g.
Michael Lee, 38, looks at a water bottle his daughter Kayah Lee, 6, brought back as her mom, Cristal Olko, 32, and sister, Kemani Lee, 3, look on at theA homeless family crowds into a corner of an Aurora, CO shelter. A food shortage at the shelter meant it had to seek outside assistance

Which truth be told is still preferable to living in a tent near Denver's Lincoln Park - which is now beset by rats.  ('Rats Close Park Near Colorado Capitol', Denver Post, Jan. 16, p. 1A)

Meanwhile, Zinsmeister paints progressives as "opponents of civil society"  - which he conflates with private philanthropy. This is  because "77 million ordinary citizens"  donate "the lion's share" of charitable gifts annually.  But as one alert WSJ letter writer has noted (p. A14, today),  those 77  million ordinary folks donate "mostly after tax dollars".  

 Zinsmeister goes on  in conflationary mode (ibid):

"The lion's share comes from ordinary citizens, 100 million of whom annually donate an average of around $3,000."

Thereby conflating the 100 m givers, mixing the 77 million ordinary folk (like wifey and myself) who donate in after tax dollars, with the 23 million who only pay capital gains tax - then get enormous ordinary income write-offs on their largely self-directed charities.  As the same WSJ letter writer puts it: "They are not only giving  away tax -free appreciated property but are also able to eventually shelter 100 percent of their donation against taxable income, a twofer."

Thus, the rightful jab by the NY Times, NPR etc. that any who invoke that ploy are guilty of an "elite charade", i.e. disguising their merciless taking (in tax breaks, write offs)  by appearing to give back.

As admirable as are the donations of those 77m  "ordinary" citizens  they do not come in concentrated, large amounts - so only have limited impact on large scale problems.  Hence, our  own charitable donations of roughly $250 / month (combined wife & me),  are not the same as the Tulsa, OK billionaires plunking down $30 million at one time to provide low cost housing for the city's  homeless, e.g.
Hence, the latter have vastly more potential  to change lives for the better if they truly wanted to,  but only a select few do.  For example, if they truly wanted to they could invest billions in new antibiotic manufacture to halt the spread of  antibiotic resistant bugs, and the increased incidence of sepsis in hospitals, etc.  See e.g.

A New Year's Resolution For Bill Gates & Co. : D...

And:

https://www.bloomberg.com/news/articles/2019-05-03/antibiotics-aren-t-profitable-enough-for-big-pharma-to-make-more

 This conflationary  error (private philanthropy with 'civil society') entices Zinsmeister to claim that those of us  who actually oppose charity replacing government -state funding"  insist it is "illegitimate" for "civil society groups to compete with the state".    In fact, this is nonsense, as we've always contended private charity - from whatever source-  needs to supplement government -state spending.   Thus, the family that needs food stamps and shelter (shown above) also needs ready access to free kitchens and services in the area provided by private charities.

But one thing you do not do is take away the government support - say in Medicaid, disability benefits and food stamps- and expect charity alone to fill the gaps left in the wake.  

As if to underscore this we now learn that the Trump cabal plans to alter criteria to receive disability benefits ('Tighter Disability Criteria Weighed', WSJ, January 10, p. A3)   The move, and related ones, could toss over 600,000 mainly older workers to the wolves.  Would private charity be able to make up the $30-40 million to avert homelessness, medical catastrophe? (Since the new plan also seeks "more restrictions" for Medicaid benefits.)


Then there is also the looming plan to toss another 600,000 (mainly women and children) off of the SNAP (food stamps) program by April.  Will private charity be able to make up the $50m, say via expanding food kitchens? Again, I doubt it.  Food kitchens in Colorado are already facing bare shelves even before the month runs out.  Many of those needing help came to Colorado in search of better lives but found only debt and paychecks that couldn't cover rent or utilities.

In the words of Kathleen Romig, senior policy analyst at the Center on Budget and Policy Priorities (ibid.):


"The sum total of it just makes it more difficult  for people to meet their needs when they fall on hard times -  really basic needs like food, housing, health care."

Lastly. it should not take a rocket scientist or Mensa level IQ to figure out that private donations are an unstable, variable source of support.  In recessionary periods, for example, contributions tend to crater - as they do when tax law changes are implemented. Say drastically increasing the automatic deduction so that there's essentially no incentive to itemize the charitable deductions. (So donating  becomes a waste of time for many with limited disposable income.)

All of which again reinforces the position of progressives and the left that charity has its rightful place - in a civil society - as a supplement to government assistance and benefits, not a replacement for them.  In addition, what we need to seriously consider now is Dem candidate Andrew Yang's proposal that everyone (especially in the lower economic strata) receive a universal basic income (UBI).

See also:



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