Bill Weye

Tag: Economics

Why Non-Profits Annoy Me

Fund raising by non-profits drives me crazy. I don’t think non-profits take the task very seriously, are not bold enough, and annoy people by living from fund drive to fund drive. People or organizations that might donate pick up on this dynamic and do what the non-profit asks: give nickles and dimes. Frankly, I don’t like these groups asking me for money I don’t have. Here I’m arguing that the smaller organizations–those with the smaller budgets–are most able to change this dynamic of begging for their operating budgets.

I volunteer my labor for Valley Free Radio, a low power FM (LPFM) station in Northampton, MA; I help them with their Website and some other online issues. The station is unusual in a few respects: it is truly community-run; it is a non-profit station; and it has no paid staff members. That’s right, the station exists and functions entirely because of volunteer labor. It’s not perfect, but the station is an interesting project in community owned media.

Because the station is an all volunteer endeavour the operating costs are low; last I heard, I think the yearly budget for the station was about $13,000 (that’s the rock-bottom number). The station could use a lot more funding to improve equipment, but it can survive with relatively little funding. Even still, keeping the station fully funded is a chore. Tasking an all volunteer organization into a unified fund raising effort, with many moving parts, is like trying to grab mercury.

Here is my proposal: VFR needs an endowment that will pay for its yearly operating budget, and the endowment could increase year by year (interest and donations), allowing for greater yearly budgets. My basic research tells me that standard practice for endowments allows for the spending of 4.5 percent of the total endowment per year (interest covers that and allows for the endowment to increase at the same time). With that assumption, and spending 4.5 percent of the endowment, VFR would need a $300,000 endowment to pay out $13200 per year.

I didn’t even know this, but there are people that help non-profits take care of this very thing, setting up endowments. Doing a bit of research, I find these companies (themselves non-profits) are generally referred to as “community foundations.” Check this out! There’s one right here called the Community Foundation of Western Massachusetts.

Let’s be bold, outrageous, and have large goals. Pitch ideas: “The mother of all fund raisers!” “The fund raiser to end all fund raisers!” “The last fund raiser!” “We’ll never ask you again, you can take that to the bank (we will)!”

Gasoline And Fun

My partner and I want to travel to the upper peninsula of Michigan to visit a friend this summer, but the 2,300 mile round trip cost has caused us pause; is the $300+ bill for gas (just gas), worth the three or four days we’ll spend visiting? I don’t know. We’re strapped for cash, and there are plenty of other distractions in New England this summer.

If I knew the majority of the cost of a gallon of gas was going towards taxes and spent on improved public transportation across the country, I might spend the money.

In the not too distant future, I think (and many other people think too), this planet will be forced to change its energy consumption habits; we’re going to need to live closer to work, have good public transportation, and increased living density.

Greedy Bunch

The Greedy Bunch rocks! Oh, do they rock.

GW Bush, in one of his grandest acts of boosterism, is having his economic forum in Waco, TX, so that we can all see how well the economy is performing, despite all his efforts to sabotage it (see the 60% of the tax cuts that went to the richest 5% in the country). If you want to get an idea about how foolhardy these tax cuts are, just listen to Paul Krugman a while; he wrote the book Fuzzy Math: The Essential Guide to the Bush Tax Plan. You can also read the transcript of an interview he gave to NPR about the book.

And just so he stays “on message,” the results of the forum have been called in ahead of time. Why leave anything to chance, when you can simply rewrite history; as the Washington Post reported: “A media guide says the participants on the eight panels will have ‘diverse points of view,’ but the White House official acknowledged that there are limits. ‘I don’t think there’s any point in picking someone who has the opposite point of view,’ the official said.”

And the greedy bunch . . . in that Fortune Magazine article, listing what they considered the greediest CEOs in the US, at least two of the top 25 were participants in Bush’s economic forum. Why not? They’re rich, so they must be smarter than you or I, no?

perfect capitalism

It cracks me up that the current business mischief affecting the economy are often attributed to a “perfect storm” of events, and not simply as a matter of corporate malfeasance. It seems that if a conflation of events did not occur, we would never have known about the underlying accounting problems. I don’t think it is problem of accounting irregularities, but a systemic character of capitalism (hyper-capitalism) that there is an incentive to cook the books.

I did a Lexis-Nexis search for “a perfect storm” and not “movie,” with 155 hits in major newspapers during the last year (the phrase “a perfect storm” is an obvious reference to the movie and book of the same name). Here are some examples of economic events being attributed to “perfect storms” coming together and creating a mess (is the “unseen hand” a “perfect storm”?).

In the “The Boston Globe”, June 30, 2002, by Hiawatha Bray:

You say this telecom slump will continue for at least another year. Why? A. We’re in the middle of a perfect storm, as far as technology is concerned. Many forces have come together simultaneously to put not just the tech market, but any kind of capital spending . . . in a bad situation for corporate America.

From an editorial in “The Jerusalem Post” on June 10, 2002:

Let’s adopt another metaphor. A perfect storm is brewing over Israeli skies. The daily threat of terrorism, growing ever greater in the expectation of a “mega-attack” that could take hundreds of lives is worry enough. A self- inflicted economic tsunami is the last thing this storm- tossed ship needs.

On June 25, 2002 in “The Atlanta Journal and Constitution,” Shelley Emling wrote a story titled “Did Martha weep dirt under the rug”:

And the ripples could spread much wider. Analysts say the country is in the midst of “a perfect storm” — a confluence of business scandals that seem perfectly timed to stir public outrage over corporate greed.

“It’s unfortunate for Martha Stewart this is happening now,” said Jeffrey Klinefelter, an analyst at U.S. Bancorp Piper Jaffray in Minneapolis. “There’s a heightened emphasis on stock trading these days.”

The “Los Angeles Times” ran the story titled “Andersen Jury Hears Forceful Arguments,” by Jeff Leeds on June 6, 2002:

“The issue isn’t whether they did a perfect job” of destroying all incriminating papers, he said. “They did it because their strategy was … the less, the better. Who knows what kind of hideous documents might be buried in those worker bee files?”

But Hardin, in an often manic four-hour summation, said Andersen drifted into a “perfect storm” of circumstances that made the document destruction appear “suspicious.”

But he insisted the firm’s conduct did not amount to a crime. No one persuaded anyone else to shred documents with the intent of keeping them from the SEC.

“The San Francisco Chronicle,” May 26, 2002, in an article titled: “No sequel in store to state energy crisis”:

“We’re forecasting there should be enough power to meet demand in California this summer,” said Gregg Fishman, spokesman for the California Independent System Operator in Folsom (Sacramento County).

That’s a far cry from late 2000 and much of 2001, when a combination of weather, soaring natural gas prices, a poorly designed market and manipulative power traders conspired to create a “perfect storm” scenario that made supplies tight and prices high.

In a story written by Jerry Hirsch in the “Los Angeles Times” titled “There’s No Accounting for Andersen’s Miscalculations” on May 12, 2002:

The result is turning out to be what proponents of accounting industry reform feared; with the collapse of Andersen, the industry will be concentrated in the hands of four powerful firms.

“There’s been a perfect storm of elements whipping things around,” said Alan Schulman, a veteran class-action securities litigator. “We have all of these forces at work and no one making good decisions.”

In the “Milwaukee Journal Sentinel” on May 5, 2002, in an article titled “A perfect storm”:

The perfect storm. That’s what former Gov. Martin Schreiber calls it. A conjunction of forces never seen before has swept away the political status quo in Milwaukee and Wisconsin. In a land of legendary stability, everything is suddenly up for grabs.

From a story titled “Healthcare again grabs political attention” by David R. Francis in “The Christian Science Monitor” on February 5, 2002:

It’s “a perfect storm,” says Dr. Richard Corlin, president of the American Medical Association. This is a “very serious issue.”

The storm is multifaceted: Washington is trying to hold Medicare payments in check – imposing a 5.4 percent cut in payments to physicians this year – even as medical prices generally are rising at three times the overall US inflation rate. At the same time, the recession means hundreds of thousands of people are losing health insurance along with their jobs.

Tom McGhee wrote “Bankruptcy filings inch past first quarter of volatile 2001” on April 10, 2002, in “The Denver Post”:

Businesses and consumers drifted into the economic equivalent of a perfect storm last year, said Jack Williams, a professor at Georgia State College and the bankruptcy institute’s 2001 scholar-in-residence.

Consumer debt was high with an average credit-card debt of $ 8,367 for every household that had at least one credit card, according to CardWeb.com, which tracks the credit card industry. The high debt burden made it more likely that a weakened economy with its corresponding increase in unemployment would push more people to seek bankruptcy protection.

plutocracy

There is an interesting piece by Paul Krugman in the New York Times titled Plutocracy and Politics. I like Krugman; he is a liberal economist (not radical, mind you), and doesn’t shy away from giving somebody a shot to the gut. My only gripe with him is that he doesn’t think the econmic system we have is rotten at the core, that by definition, capitalism does not benefit a majority of people.

Krugman writes about the new Kevin Philips book, Wealth and Democracy, which is about the plutocracy in the United States. What is a “plutocracy”? Here is what it says in the dictionary: “1. Government by the wealthy; 2. A wealthy class that controls a government; 3. A government or state in which the wealthy rule.”

If you want to learn more about the political economics of our economy check this out.

Learning about tax expenditures

Do yourself a favor and learn what “tax expenditures” are because that is how the government, after lobbying from special interests groups, give away the store. Here is how the Digest of Educational Statistics describes tax expenditures: “Losses of tax revenue attributable to provisions of the federal income tax laws that allow a special exclusion, exemption, or deduction from gross income or provide a special credit, preferential rate of tax, or a deferral of tax liablility affecting individual or corporate income tax liabilities.”

What does that mean? The government keeps track of how much money is lost to tax breaks in specific instances, some of which are for poor people, but not all.

I am doing some research about these tax expenditures and will be posting some of my findings. You can find out what the tax expenditures were in the 2001 budget here. Download the “analytical perspectives.”

Copyright © 2019 Bill Weye

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