The Wealth of Presidents

I got this from Chris Blattman’s blog. If you’re interested in Majority World poverty and development, he’s an engaging and very interesting source. Check it out.

The net worth of all 43 U.S. presidents collectively – from Washington to Obama – totals $2.7 billion.

…The net worth of individual African presidents from banditry: Abacha (Nigeria), $5 billion; al-Bashir (Sudan), $7 bn; Babangida (Nigeria), $8 bn; Mobutu (Zaire, now Congo DR), over $10 bn; Mubarak (Egypt), over $40 bn; Khaddafi (Libya), over $60 bn.

According to Nigeria’s former president, Olusegun Obasanjo, corrupt African leaders have stolen at least $140 billion from their people in the decades since independence

 

As If We Really Believed

Sylvia and John Ronsvalle publish meticulous, hand-crafted annual reports on the state of church giving. They study charitable giving statistics, and follow denominational reports assiduously. Their latest report is over 200 pages, full of charts and graphs. It makes for depressing reading.

Here’s the bottom line: church members give less than ever, as a percentage of income. The trend has been downward since 1968, when church members gave, on average, 3.11% of their income to charitable causes. The latest data, for 2009, shows they gave 2.38%.

If you take seriously Jesus’ words that where your treasure is, there will your heart be also, those numbers hurt.

The worst news, according to the Ronsvalles, is the decline in what they call “benevolences.” Benevolences are the part of the church budget that goes to help people outside the church—missions, whether foreign or local, whether oriented toward preaching or economic aid. “Benevolences,” measured as a percentage of income, is half what it used to be–.34% versus .66% in 1968.

The situation seems bleak for all churches, regardless of theology or tradition.

The Ronsvalles see a retreat from engagement with the world, and a lack of seriousness. As a spur to the imagination, this year’s report includes information about the 16 countries making “no progress” in reducing under-5 child deaths—a major Millennium Development Goal. Of these 16 countries, ten are majority Christian, with an average of 85% self-identified Christians. Why don’t American Christians get serious in helping those countries reduce their child mortality? The Ronsvalles’ very rough estimates suggest it could be done quite easily.

“It seems appropriate,” the Ronsvalles write, “to empower Christians living in the U.S. in the 21st century to produce fruit in keeping with their professed faith…. Current church structures have broad communication and delivery channels that could be used to lead toward mobilization of church members to help the least. To date, however, the leadership has not organized to strengthen and encourage Christians to act on their potential for helping the least at the same level they would if they really believed they were helping Jesus himself.” [p. 142]

A Liberal and Conservative Mash-up

David Brooks has a good column in today’s NYT on the way social breakdowns—in marriage and family and education—interact with global economic change. He shares the story of a young woman who, though tough and hard-working, loses out on a good education because of her family problems and an early pregnancy. She’s stuck, unable to advance because she doesn’t have the education she needs. Raising a child alone holds her back. Taxing the rich won’t help her; neither will cutting taxes on the rich and deregulating the economy. Both Democratic and Republican policy prescriptions seem to miss her situation, and to miss the American economy and its actual issues.

Brooks says we need bold action to strengthen families and support education, so that the whole population—not just an educated elite—can compete in a globalized economy. He says we also need a revamped, lean tax-and-regulatory system so that business can compete globally. “This agenda is libertarian in the capitalist sector and activist in the human capital sector.”

Two caveats. First, taxes aren’t about punishment, but about allocating resources. We’ve cut taxes for the rich so that they pay at the lowest rates in modern history. Nudging that back a bit isn’t the second coming of Robespierre. It can help provide some of those family and educational supports that people need. The money has to come from somewhere.

And second, it’s not clear that American business is in trouble because of excessive taxes and regulation. There are problems, certainly, but right now we’re digging out of a hole enabled by under-regulation. “Libertarian in the capitalist sector” sometimes produces disaster—just as often, I would say, as does “activism in the human capital sector.” Deregulation and simplification of taxes have to be done right—and there are plenty of capitalist forces, throwing lots of bribes in Washington, who want to bend the rules in their favor.

That said, I agree with the thrust of Brooks’ piece. I doubt the government is ever very good at industrial policy, advancing “green jobs” or whatever. I want the government to set the rules—including a carbon tax—and let the forces of capitalism find the preferred way.

The government is really the only way, however, to provide good social services including education for the less-than-elite. This is not just do-gooding; it helps bring economic opportunity to people who will work hard and play by the rules. This too has to be done right. But when it is, that is good for us all.

Thomas Jefferson, the Original Tea Partier

I admit it’s a stretch. Attempts to claim the Founding Fathers for some modern position are always dubious. Nevertheless, in reading American Sphinx, Joseph Ellis’ biography of Thomas Jefferson, I saw it clearly: Jefferson was the original Tea Partier.

Like today’s Tea Partiers, Jefferson loved grand words like “liberty” and “democracy,” but only gave himself and his allies credit for understanding them. Like the Tea Partiers, he saw those who differed from him (John Adams, Alexander Hamilton, and even George Washington) as scoundrels eager to sell out the American people. Most of all, like the Tea Partiers he hated federal taxes and feared the federal government’s power. Jefferson was the original “small government” man.

He despised the American Constitution. His difference on this point with the Tea Party is ironic. Jefferson had been in Paris when the Constitution was written. He regarded it as a betrayal of the American Revolution because it strengthened the federal government. Those who had remained in America knew that a “states’ rights government” didn’t work—that’s why they wrote a new constitution, to bring the states into a single union. Jefferson never understood this. I’m not sure Tea Partiers do either—they wouldn’t heap reverence on the Constitution if they grasped its fundamental goal of restricting states’ rights.

Jefferson became President in 1800, after a very nasty campaign. He found himself in an anomalous position: head of a government he didn’t believe in. Ellis writes that his driving ambition was to downsize government, and he largely succeeded. By stopping expenditures on the military and eliminating taxation on ordinary citizens, he managed to make the federal government all but invisible. He stopped investment in roads and canals and cut staff in all departments.  He strove hard to eliminate the national debt, and at first seemed likely to succeed,

Freed from taxes and regulation, the economy thrived.

Jefferson was wildly popular in his first term, not so much in his second term. When Britain and France went back to war, it turned out that “small government” had made American shipping vulnerable. Jefferson had all but disbanded the Navy, so British and French vessels could kidnap American merchant sailors and appropriate cargo at will. Jefferson countered by closing down all trade. It was a bad miscalculation. The embargo was massively disregarded, and federal agents who tried to enforce it became “big government” very quickly. (Consider the parallel to today’s border patrols and “war on drugs.”) When the economy tanked, Jefferson lost his popularity very quickly. It’s amazing how Americans will turn against a president who presides over an economic downturn.

America’s experience with Jefferson’s Tea Party suggests that real events tend to confound ideology from whichever side. Tea-party government can work, to a point—it’s certainly not the end of life as we know it. Jefferson’s first term confirmed that. But no formula for governing works well under all conditions. Small government is great, except when it isn’t so great—as it wasn’t in Jefferson’s second term.

Our current political polarization, in which both sides think they have all the answers, their opponents are villains, and the fate of the nation depends on winning the next election, sheds much more heat than light.

Annals of Government Regulation

Or, Have I heard this before?

Surely there never was such fragile china-ware as that of which the [manufacturers] of Coketown were made. Handle them never so lightly, and they fell to pieces with such ease that you might suspect them of having been flawed before. They were ruined, when they were required to send laboring children to school; they were ruined, when inspectors were appointed to look into their works; they were ruined, when such inspectors considered it doubtful whether they were quite justified in chopping people up with their machinery; they were utterly undone, when it was hinted that perhaps they need not always make quite so much smoke. … Whenever a Coketowner felt he was ill-used—that is to say, whenever he was not left entirely alone, and it was proposed to hold him accountable for the consequences of any of his acts—he was sure to come out with the awful menace, that he would “sooner pitch his property into the Atlantic.” This had terrified the Home Secretary within an inch of his life, on several occasions.

However, the Coketowners were so patriotic after all, that they never had pitched their property into the Atlantic yet, but, on the contrary, had been kind enough to take mighty good care of it. So there it was, in the haze yonder; and it increased and multiplied.

–from Hard Times, by Charles Dickens, 1854

The Fate of the Middle Class

The latest Atlantic Magazine has a very informative article on the demise of the middle class in America. (“Can the Middle Class Be Saved?” by Don Peck.) Recently I’ve read lots of statistics about how the rich are getting richer and the rest of us declining, but this analysis is a lot broader and deeper. The trends are linked not only to income but to marriage and divorce rates, to cohabitation, and (very strongly) to education levels.

(I’ve written about this before, here, and in other postings.)

The Atlantic article is long, but well worth your time. The issues are probed deeply. The prescriptions are not so convincing, unfortunately.

Here are a few quotations:

“Since 1993, more than half of the nation’s income growth has been captured by the top 1 percent of earners, and the gains have grown larger over time: from 2002 to 2007, out of every three dollars of national income growth, the top 1 percent of earners captured two. Nearly 2 million people started college in 2002—1,630 of them at Harvard—but among them only Mark Zuckerberg is worth more than $10 billion today; the rise of the super-elite is not a product of educational differences.”

“”By the 2000s, the percentage [of moderately educated couples, with a high school diploma but no college degree] in ‘very happy marriages’—identical to that of college graduates in the 1970s—was also nearing that of high-school dropouts. Between 2006 and 2008, among moderately educated women, 44 percent of all births occurred outside marriage, not far off the rate (54 percent) among high-school dropouts; among college-educated women, that proportion was just 6 percent.”

“Thirty-nine percent of children born to parents in the top fifth of earners stayed in that same bracket as adults. Likewise, 42 percent of those whose parents were in the bottom fifth remained there themselves. Only 6 percent reached the top fifth; rags-to-riches stories were extremely rare.”

Who Can We Blame?

At the moment, it looks like the US government is going to shoot its economy in the stomach next week. The best we can hope for, it seems, is some kind of face-saving maneuver. The worst? Another recession, or even a depression. It’s hard to see any good coming out of this debt debacle. How did we get here? Who can we blame?

It pains me to say it, but President Obama has to bear responsibility. He waited until the very last moment to propose a way to settle our deficit problems. By taking a cautious “you go first” approach he opened the door to this game of chicken. It’s always risky to take the lead, and nobody can guarantee that you will succeed, but the alternative…. Well, how do you like the alternative?

The Republicans get a heaping share of blame. They invented this game of chicken, thinking they could leverage some kind of deficit-cutting action. But they proved incapable of accepting a compromise, any compromise. As David Brooks wrote a few weeks ago, they aren’t behaving like a normal political party that seeks to govern. They are behaving like a splinter faction that wants to kick the big boys in the shin. They don’t seem to accept that they are the big boys.

Truthfully, though, we the people deserve most of the blame. We have been extremely willing to buy sound bites and applause lines. We have proven allergic to any kind of shared sacrifice.  A good many of us have been willing to believe utter nonsense if it suits our mood.

I’ve been reading Ron Chernow’s biography of Washington while watching the HBO series on John Adams. Together they serve as a refresher course on American history. The founding fathers were very aware of how experimental and fragile was the republic they founded. They often wondered whether the nation—both leaders and common people—would prove worthy of the independence they had won. And indeed, by the time Washington was in his second term, the polarization and vituperation and silly conspiratorial thinking had reached dangerous levels. Only Washington’s reputation, and a prosperous economy, and some bold and fortunate leadership (Hamilton’s in particular, establishing a viable economy) kept the country together.

We don’t have anything comparable today—no unimpeachable reputations, no prosperity, no strong leadership. We do have 200 years of success, which can breed confidence. It can also breed over-confidence. We need to get serious about politics. It’s not a game.

What does “serious” mean?

It means listening to other views and seeking common ground.

It means not demonizing those who disagree with you.

It means going deeper in complicated subjects, and rejecting simplistic formulations.

It means seeking solutions to problems like health care and ballooning deficits and illegal immigration, not just declaiming about the failings of others.

It means accepting compromise.

It means accepting blame.

Innovation

Malcolm Gladwell has an interesting article in the latest New Yorker. (Here is the abstract, but you have to subscribe to get the whole thing.) He relates the story of how Steve Jobs “stole” the ideas for the Macintosh from the Xerox research lab. The classic version is that Xerox had invented this amazing personal computer with the first mouse and the first graphical user interface, but they didn’t understand what they had. Jobs took their ideas, commercialized them, and made a gazillion dollars.

Then Gladwell goes to work, showing that it’s not quite so simple. In the first place, the culture and circumstances of different companies (or countries, or rock and roll bands, examples of which Gladwell adds to good effect) mean that they can only innovate in their own ways. Xerox was research heaven—the engineers were constrained to come up with great ideas, which they did. Apple was constrained to bring ideas to market at a cost consumers could afford—which they did. In a sense, they were both specialists that needed each other.

Then Gladwell takes it one step further, telling the story of Gary Starkweather, a highly innovative East Coast Xerox engineer who got completely frustrated by his company’s lack of interest in his ideas about how to print things straight from a digital image. It wasn’t until he met the Palo Alto Xerox engineers who had this amazing computer that anybody in Xerox could see a point in his research. The Palo Alto engineers were interested because they wanted to be able to print out things their computer could do. The result of this collaboration was the laser printer.

Xerox couldn’t figure out what to do with their great computer—Steve Jobs could do that—but they could figure out how to develop and sell a printer to go with it, because their company was in the printing business. They made tons of money doing so.

Gladwell quotes Nathan Myhrvold, a former Microsoft exec: “Innovation is an unruly thing. There will be some ideas that don’t get caught in your cup. But that’s not what the game is about. The game is what you catch, not what you spill.”

Which reminds me of something I posted a couple of years ago “Is innovation like a fine gem, which must be carefully hoarded? Or is innovation like the Mississippi River, flowing by with such abundance that you can dip a cup any time you like and never know the difference?”

People’s Revolt in Uganda

You may recall that a few weeks ago I wrote wondering why the People’s Revolts of Egypt, Tunisia and elsewhere in North Africa and the Middle East haven’t spread to Africa. If you’re looking for dysfunctional government, after all, Africa offers a cornucopia of choice. My friend Wachira, a Kenya, answered with some of his observations.

Now he’s sent me this link to a long article in The East African with news of an outbreak of popular protest in Uganda. Uganda, as you may know, has seen its President Yoweri Museveni grow increasingly totalitarian in recent years. Now a failed opposition candidate, Kizza Besigye, has managed to resurrect protest. The analysis in this article by Andrew Mwenda is quite interesting. It notes that most African protests have been around elections; thus the protestors  come across as power-hungry politicians, sore losers, and often tribalists. But when the protests are over some neutral subject–in this case, government mismanagement of the economy–they can galvanize much wider support. Besigye has organized “Walk to Work” campaigns, which combine protests over the high price of gasoline (and transport) with the mobilization of large crowds on foot–a development that makes the government extremely nervous. It’s a brilliant tactic, putting the government in the awkward spot of trying to prevent people from walking to work, rather than trying to break up a political rally.

Cutting the Deficit

I’m never going to be a policy wonk, but I find that if I squint and tilt my head a little to the side, I blur a lot of distracting appendages and can make out the main shape of the budget problem. The distractions are things like NPR and Planned Parenthood. The main shape is the bloated form of health care—Medicare and Medicaid—that promises to keep growing forever. If you can’t get health care costs under control, you have no hope of balancing the budget.

If you have ever had the slightest involvement with health care, you know there is money to be saved. For example, a resident working in a major county hospital tells me that because the authorization process for certain tests takes so long that the patient would be dead before they got the okay, residents sometimes admit patients to the hospital who don’t need to be there. It’s horribly expensive (and comes out of your pocket) but it’s the only way to get the tests. Anybody working in the guts of the health care system can tell similar stories. There’s tons of waste and abuse. But the system has a lot of built-in resistance to change. And it’s easy to demagogue proposals for change. (Death panels, anyone? Rationing health care?)

Obamacare took a shot at some cost control measures—not many, but some. In the Obamacare approach, the diet is in the details—a million and one policy-wonk changes to the system.

Paul Ryan’s approach is just the opposite. Don’t bother with the details. Just say: here is how much money we have—figure it out. People (and states) will be given vouchers to pay for health care. The rest is up to them and the health care system (including insurance companies).

It’s a Gordian-knot solution. You don’t untangle the knot. You cut it. There’s a lot of appeal in its simplicity. But the devil will still be in the details.

If the Obama approach puts a lot of faith in policy wonk prescriptions, Ryan places a lot of faith in the “free market” health care system.  If you give it a certain set amount of money, it will figure out how to spend it wisely.  I’m not optimistic. As far as I can see, the system isn’t a system, just a collection of interest groups whose workings are greased with a lot of money.

Suppose we adopt Ryan’s approach. What happens when a middle-class somebody with inadequate insurance gets very, very sick, requiring a million dollars worth of treatment that his insurance won’t pay for? Does that somebody just die? If ten thousand middle-class somebodies die, how long does Ryan’s approach last?

What do you think? Can the policy wonks figure out how to make the system work efficiently? Or will putting the system on a strict allowance make it stop overeating?  When I consider these two options, I’m pushed toward the much-reviled Canadian option, which combines elements of both: a strict allowance, with policy wonks in charge of figuring out how to spend it. And yes, we ration health care. Just like we do now.