I’ll Take Apple over Amazon Any Old Day

Amazon.com Inc. isn’t the only West Coast technology giant shopping for a new community to build a large corporate campus. Apple Inc. is looking to make a big investment as well, although it hasn’t drawn nearly much attention to itself. As with the Amazon project, Northern Virginia appears to be in the running.

From a trophy hunting view, Amazon would be the big prize — $5 billion in investment plus 50,000 new employees. The Seattle company has narrowed the list of candidates to 20 localities, and only one can win. But Apple would make a nice consolation prize. Its history of expansion in Austin, Texas, suggests that a new corporate campus could well entail an investment of $1 billion or more and the hiring of 1,000 or more employees.

If Apple wants an East Coast location, North Carolina might have an edge in the fact that CEO Tim Cook graduated from Duke University’s business school and COO Jeff Williams grew up in Raleigh. Last week, reports the Wall Street Journal, North Carolina legislators changed the state’s incentives package targeting technology companies that pledge to invest at least $1 billion in the state and create at least 3,000 jobs. Could Apple be heading to the Research Triangle?

Definitely a possibility, but the company also is eyeing Northern Virginia. Apple representatives have spoken to Virginia officials about options near Washington, D.C., the Washington Post has reported. Says the Wall Street Journal: “Northern Virginia could be attractive to both Apple and Amazon given its deep pool of talent, strong fiber network, and proximity to political leaders, location experts said.”

Bacon’s bottom line: So far, there is no indication in published reports that Apple is seeking tax breaks and subsidies on the same massive scale that Amazon is. Assuming that incentives are not a decisive consideration in Amazon’s location decision — an assumption that needs to be confirmed — Apple would constitute a far more preferable corporate citizen. The Amazon project looks too big to digest comfortably: The company’s expectation of giant subsidies will strain the ability of state and local governments to build the infrastructure needed to accommodate the resulting surge in development. Apple’s campus, though large by any other standard and a plum in any metro’s cap, would be more modest in size and far less disruptive.

The Veiled Racism in the School Shooting Debate

U.S. Homicide rate… down. Graphic credit: Richmond Times-Dispatch

An axiom of Bacon’s Rebellion is that while progressives (progs) and social justice warriors (SJWs) oppose racism in their rhetoric, they support policies that have the unintended result of being racist in effect. Nowhere is this clearer than in their approach to the criminal justice system, in which they decry the criminals as victims while ignoring the victims of their criminality. Today I will take my argument one step further and suggest that progs and SJWs betray a pattern of behavior that, if observed among conservatives and libertarians, they would tar as racist.

This truth was brought to my mind by the lead editorial in the Richmond Times-Dispatch today, which published graphs contrasting the decline of the U.S. homicide rate over the past three decades (despite an uptick in the past two years) with the decline in mass shootings.

School massacres and other mass shooting.

The thrust of the T-D editorial was to observe that once upon a time, when access to guns was far easier than it is today, there were far fewer school mass shootings. Clearly, something is going on that has nothing to do with guns.

I would suggest that that “something” is a cultural/psychological phenomenon connected to white male alienation and mental illness, the spread of the Columbine-massacre template among disturbed teenage whites, mass media hysteria that guarantees maximum exposure of every shooting, and the rise of social media creating a platform for the killers to create manifestos explaining and justifying their rage. But that’s a side observation.

The larger point is this: National U.S. media inundate the public with coverage of mass shootings, even though they account for an almost trivial amount of total homicides. Why is that? Could the reason be that the overwhelming majority of all homicide victims are black, brown, or lower-income whites while the overwhelming majority of school shooting victims are white — just like the Mika Brzezinkis, Joe Scarboroughs, Rachel Maddows, Chris Cuomos and New York Times editorial writers? Could the reason be that the overwhelming majority of homicide victims live in neighborhoods where elite opinion makers never set foot, therefore elite opinion makers do not share the same sense of alarm as other Americans about criminal violence, while school shootings occur in places where the victims “look like them”?

Consider this graph from the Bureau of Justice Statistics. Blacks are about 30% more likely to be victims of violent crimes than whites. Of course, a large percentage of violent crimes within any racial/ethnic category are committed by domestic partners or other acquaintances. Exclude those categories, and the rate of violent-crime victimization of upper-income, college-educated whites is very low. Upper middle-class progs and SJWs don’t worry much about assaults by domestic partners, gambling buddies, drug suppliers, or random street muggings. To them, the perceived threat of school shootings looms larger. As far as black victims of violent crime… meh. Inner city crime can be written off as an outcomes of institutional racism anyway — not their fault.

There is a fine balancing act here. The U.S. criminal justice system arguably does incarcerate too many people, and it arguably does need an overhaul. Virginia does an exemplary job of recycling jail and prison inmates back into the community — we have one of the lowest recidivism rates in the country — but we could always do more. And we are. As an example: Yesterday, Governor Ralph Northam signed bipartisan legislation raising the threshold for a felony larceny from $200 to $500 — an action that hopefully will have the effect of reducing jail populations without increasing the incidence of petty crime.

But we need to be careful. According to the “broken windows” theory of criminality, a tolerance of misdemeanors leads to more minor crimes. A tolerance of minor crimes leads to more major crimes. The victims of those crimes come disproportionately from minority and lower-income neighborhoods. While these victims receive attention from local news media, they warrant almost zero from the national media that exert such a profound influence on the public policy agenda. If all crime victims were given the same platforms to express their fear and frustration as, say, the Parkland, Fla., school shooting survivors, the public policy debate in the United States would look very different indeed.

Will Ghosts Haunt The Senate Today?

Hunter B. Andrews

If you listen very, very carefully you can hear it:  A double whirring sound.  It is the sound of the late state Senators Ed Willey and Hunter Andrews spinning in their graves.

Four decades ago as Finance Committee chairs they were responsible for establishing the independent authority of the Senate in the state budget process, which before their day was led by the House of Delegates with the House offering the only actual bills.  The Senate ended its subsidiary role by introducing its own bills to bring to the inevitable annual conference committee.

News broke late yesterday that the 2018 budget impasse may break later today, with the Senate expected to vote to discharge the Finance Committee and bring the House budget bill directly to the Senate floor for consideration.  There will still be Senate amendments offered and adopted, but in reality what will be offered is the final version – the result of an unofficial conference led by Senate Finance Co-chair Emmett Hanger and House Appropriations Committee Chair S. Chris Jones.

Also late yesterday it became obvious that the actual Senate amendments and some summaries were floating around, but initially I couldn’t find them.  They were not posted on the Senate Finance Committee web page.  I emailed a member of the Senate Finance staff and was politely directed to find them on (ahem) the House Appropriations Committee web page.   The Senate hasn’t even met yet but the full amendments are posted by the House.  That to me said it all.

Here is the summary if you’d like to go through it on your own.  I may follow up on the content after adoption but wanted to note this amazing turn of events.  If you are  watching the Senate this afternoon and  the voting board gets glitchy or paintings start falling to the floor, the names of the poltergeists responsible will be easy to guess.

Behavior Has Changed But Within Limits

Gifts per legislator. Source: Virginia Public Access Project

There are plenty of complaints these days that the legislative process is unduly influenced by money, but when the spotlight shines or a major scandal erupts, behavior can change. For example, Virginia legislators simply do not want to report that they have received gifts or attended lobbyist dinners, on public records which are available to their voters, the media and potential opponents.

How few actually do show up on 2018 reports is well-illustrated in the graphic above recently posted on the Virginia Public Access Project (click here for interactive features). Readers of Bacon’s Rebellion are probably already following VPAP as well, but if not this is worth a look.

Except for one very popular event, the annual Agribusiness Council Dinner, 91 of Virginia’s 140 legislators would have reported no gifts or meals at all. In many rural districts the political cost of skipping the Ag Dinner and not being seen by constituents attending would also be high. Yet 64 legislators missed that one, too, and avoided having to explain that $69.48 repast.

Several legislative offices have signs out front expressing a policy against accepting any gifts, even innocuous gifts such as a ball point pen or a box of candy or a calendar. That is growing but is not universal. It is the aversion to reporting gifts or entertainment that is becoming more widespread.

That report makes one think the place has really changed since the Bob McDonnell case, right? Not so fast. First note the data covers the period of the regular General Assembly session, from January 1 to Sine Die in March, not the whole year. As you can see with the full 2017 data here the totals tend to grow through the year, especially with paid trips to summer conferences. But there is no dispute that the number and value of reported gifts and meals is shrinking. For example look at the same report for 2012.

Second, remember that gifts or entertainment expenses of $50 or less do not trigger a reporting requirement. Lobbyists or organizations are keeping a closer eye on the cost of items, but $50 can still pay for some very nice gifts or meals.

Does it at least mean the days of the big restaurant dinners are over? Oh my no – and here is how they do it. It can be tracked on VPAP as well but it takes research. The $50 reporting trigger is interpreted to mean $50 per person per lobbying principal (client) paying the bill. If two clients for the same firm split the tab the trigger is $100 per person, and if three – well, you get the drift.

To confirm this is still the practice I easily found an example, but will not provide the details because I did not reach out to the major lobbying firm involved. I noted that one client reported a dinner on January 25, 2017 with 12 persons and a bill of $149 – well below the cost that would require naming the legislators. But by clicking down its full client list I found four more clients reporting a dinner for 12 at $149 on the same date.

Assuming the firm didn’t host five different dinners that night, the real bill was $745 for 12 people, or $62 per person.  That’s hardly lavish, but the intent to disclose the names of attendees has apparently been thwarted. They could stay on the list of those with no reportable gifts for 2017.

As VPAP helpfully explains: “Disclosure forms do not require clients to state clearly the average cost per person. Calculating the average cost per person may not be as simple as dividing the total cost by the number of people attending. Because the forms and instructions are unclear, the amount listed can represent either the total cost of the event, the amount spent on only the officials who attended or the average cost per person.”

It is silly and arbitrary to assume that somebody who accepts a $51 dinner has been compromised while somebody who skips dessert or drinks and spends $40 has not. Frankly neither has been compromised in my book. The real purpose of these dinners is to get the undivided attention of the legislators for a while – admittedly an advantage for that lobbyist and an edge on the competition. That is reason enough they should be fully reported.

If the costs of a dinner can be shared among multiple clients then the costs of other forms of entertainment or gifts could also be divided, seeking to keep the cost below $50 per client per recipient and keeping the recipient(s) off reports. I have not scoured the records to see if that happens, but nobody should have to.  The General Assembly needs to end this particular game.

A Newer, Bigger, Shinier Command Bunker

Bacon’s Rebellion is moving its hidden underground command center to a new, undisclosed location today. This massive logistical effort will entail a temporary diminution of insurgent activity. But have no fear, the blogging of the rebellion will resume shortly.

Medicaid Can Cost Taxpayers Less than ACA Plans

Source: United Healthcare Group

One of the interesting tidbits gleaned from a presentation last week on the Medicaid expansion debate was that with expansion perhaps 60,000 Virginians now enrolled in Affordable Care Act Public Exchange plans will qualify for and switch over to Medicaid.

People who have low-enough incomes to qualify for Medicaid are also eligible for subsidies for an ACA exchange plan, so both programs are costing the taxpayers. A recent report indicated Medicaid is actually costing taxpayers less than ACA plans for that population.

UnitedHealthcare Group’s report noted – not a surprise – that Public Exchange coverage has proven to be more costly and less sustainable than envisioned (or promised). Since 2014 – the first year of Public Exchange coverage – the average annual unsubsidized premium for a benchmark silver plan has increased 88 percent for a 27-year-old and 76 percent for a 40-year-old.

The original projection was that it would reach 25 million persons by now, and in 2017 it was more like 10 million.  Recent actions at the federal level will keep that from rising much beyond 12 million.

Compare that to Medicaid, which has enrolled more than 16 million additional people nationally since 2013.  These figures are national, and Virginia would vary somewhat, but the estimated average cost for the newly eligible Medicaid enrollee has been $5,400 and the average total cost for Public Exchange coverage has been $9,400.   In the case of the Exchanges, of course, much of that is coming from the consumer’s pocket.

But the low-income Exchange adult enrollees – the persons who could switch with Medicaid expansion – pay only $2,400 out of pocket and their federal share is about $7,000. That is still higher than the cost of Medicaid, which is fully government funded (state and federal combined).

This may not matter much to the Virginia voters and legislators opposed to expansion.  The state taxpayer makes zero financial contribution to the ACA health plan subsidies, and is going to be paying a share of the cost for new Medicaid enrollees.  We should find out early this week if the state Senate has a consensus on the expansion issue.

UnitedHealthcare Group (UHG) is hardly a disinterested observer in this discussion. It provides managed care for Medicaid in various states, now including Virginia, and based on its website it participates in some ACA marketplaces.  If the company has an economic incentive to prefer one approach over the other, it is unlikely to admit that in these presentations.

But it does argue the billions planned for ACA subsidies would be better spent on Medicaid.  It is unsaid but true that the future of the ACA Public Exchanges is cloudy at best, while Medicaid isn’t going anywhere, with or without expansion.

Absent from this is any discussion of quality outcomes when comparing the ACA Public Exchange plans with Medicaid, although UHG does advocate for managed care in general as providing higher quality for lower cost.  And the cost of Medicaid is hardly expected to remain stagnant.  Also absent is any discussion of which is preferred by the providers getting paid under the two approaches.

A footnote in the UHG report takes you to the most recent (2016) actuarial report on Medicaid. It was projecting federal costs would grow almost 6 percent per year, but also reported that the costs for newly-eligible adults were dipping slightly and might dip below those already eligible.  As always the most expensive Medicaid populations were the aged ($14,323 per enrollee in 2015) and disabled ($19,478).

The audit noted most states that had opted for expansion were using managed care contracts to lower the costs.  That will be the case in Virginia, and the 2017 Annual Report on Medallion 3.0, Virginia’s managed care approach, gives you a good idea of the services available.  If this is a choice open to them the lower-income ACA covered population will probably make the change.  It seems a very easy economic choice for them.

(Hat tip: Doug Gray)

Money Always Finds a Way

Every right-thinking person in America is concerned, if not downright appalled, by the role of money in politics. Citizens want their legislators to base their lawmaking decision on the merits of the case, not how much money corporations and special interest groups are shoveling into their campaign coffers. Some states deal with the problem by putting caps on campaign donations. Here in Virginia, there are no such limits in campaigns for state office, but the Commonwealth does require full transparency. Go to the Virginia Public Access Project to find out who’s donating money — and presumably has the ear of — your elected representatives.

But the debate over money in politics rages unabated. Not without some queasiness, I hew to the view that Virginia does it right. I could cite reasons of lofty principle, such as the argument that campaign contributions constitute a form of free speech that should not be abridged. And I could cite reasons of base practicality: Restrictions on campaign contributions will just drive influence seeking into the shadows where it cannot be tracked.

Now comes research by four economists (lead author Marianne Bertrand with the University of Chicago), “Tax-Exempt Lobbying: Corporate Philanthropy as a Tool for Political Influence,” which illuminates a surprisingly common means of subterranean influence — corporate philanthropy.

The authors examined where philanthropic foundations of Fortune 500 and S&P 500 corporations donated their money. Lo and behold, a significant percentage went to charities in the districts of congresspersons sitting on committees that oversee the industries of the donating firms.

Our analysis suggests that firms deploy their charitable foundations as a form of tax-exempt influence seeking. Based on a straightforward model of political influence our estimates imply that 7.1 percent of total U.S. corporate charitable giving is politically motivated, an amount that is economically significant: it is 280 percent larger than annual PAC contributions and about 40 percent of total federal lobbying expenditures. … Charitable giving may be a form of political influence that goes mostly undetected by voters and shareholders, and which is directly subsidized by taxpayers.

It would be naive to think that corporations are the only players in the philanthropy-for-influence game. Corporate motives might be easier to discern, but individual philanthropists often back causes and crusades of an ideological nature — the environment, social justice, free markets — that intersect with political controversies. Are billionaires and centi-millionaires any less likely than corporations to curry favor with elected officials than corporate executives?

Bertrand et al. posit a mechanism by which charitable contributions translate into influence.

To understand how charitable contributions directed to a congressional district may serve as a channel of political influence, one can build on the notion of credit-claiming by self-motivated politicians, an idea in political economy and political science that dates back at least to Mayhew’s observation that “Credit claiming is highly important to congressmen, with the consequence that much of congressional life is a relentless search for opportunities to engage in it.”

Although it is typically discussed in the context of federal grants and earmarks, political credit-claiming of local charities is a natural means of appealing to voters, given the visibility of many charities to politicians’ constituencies.

As a concrete example, the authors point to Washington Senator Patricia Murray, whose official webpage describes her work on housing, stating, “I was proud to establish the Washington State Farmworkers Housing Trust to help families who work hard to keep one of our state’s most important industries strong.” The charity’s donors include the foundations of JPMorgan Chase, Bank of America, and Wells Fargo. (The authors would have made a stronger case if Murray served on a committee regulating the banking or housing industries, but it doesn’t appear that she does.)

There’s an old saying that water seeks its own level. So does money in politics. We live in a political system that intrudes into every corner of the economy. No business activity is beyond the reach of taxation and regulation. As long as politicians have the power to reward and punish, businesses will have an incentive to influence the political process. If they don’t do it one way, they will do it another. As we’ve seen vividly with the machinations of the Clinton Foundation, politicians and corporations are infinitely ingenious in finding ways to trade in influence. Two hundred and fifty thousand dollars for a speech? Outrageous. But what’s the solution? Prohibit former presidents from being paid to give speeches?

The question for citizens is this: Would we rather they conduct their influence peddling out in the open where we can see it, dissect it, and denounce it? Or would we rather have it go underground?

Grant Process Tightens at VEDP

Not His Best Day

Tomorrow Governor Ralph Northam travels to the coalfields for what is billed as a major economic development announcement, and steps have been taken so that four years from now he won’t cringe when shown the old photos.

For the past year the Virginia Economic Development Partnership (VEDP) has been doing additional due diligence on companies receiving discretionary incentives, and if there is a high enough level of perceived risk the incentives are paid only after performance.

The tighter policy was described by President and CEO Stephen Moret in a response to my earlier post about detailed performance measures on Virginia’s various incentive programs.  “With this new approach in place, Virginia may not win some projects that we previously would have won, but neither will we place taxpayer dollars at undue risk,” Moret wrote.

The agency and its practices were the subject of a scathing review by the Joint Legislative Audit and Review Commission after the embarrassing failure to launch of a major Chinese-owned project near Appomattox, announced with great fanfare by Governor Terrence McAuliffe.  The firm in that case had received $1.4 million from the state in advance, and two years later a newspaper reporter found obvious signs that should have warned the state it was possible fraud.   Apparently the same pitch was rejected by North Carolina.

Then Moret came in from Louisiana and the General Assembly weighed in with 2017 legislation.  Now Moret reports all applications are vetted by a Project Review and Credit Committee (PRACC).  Prior to the revelations there was no VEDP person assigned full time to administering incentive programs and now there are four – with the potential for more and the inclusion of somebody with commercial credit experience.  Somebody is held to account for each project’s compliance.  

 

“During my first year at VEDP (2017), I asked PRACC to begin producing both company risk ratings and incentive risk ratings for every project, as well as to shift substantially all incentive payments associated with moderate- or high-risk companies to occur after the Commonwealth has received at least as much new state tax revenue as the amount of a given incentive,” he wrote in providing details.  He stressed he is fully on board with the new system.

The early tax money from these projects often comes to the locality, which imposes property taxes on any new building, equipment or business personal property as soon as they enter service.

The state tax revenue tracked is basically two sources slower to kick in, the same two sources that Secretary Aubrey Layne recently complained are too dominant in the state budget – personal income taxes and sales tax.  So for the state to have received an amount equal to the grant, the company has to be well underway in meeting its hiring goals.  The state does add in a multiplier on the assumption that the new employees are spending money generating indirect taxes.  And the state does recognize the substantial sales and use taxes paid on construction materials and other assets.

“Sometimes this means an incentive will be provided only after a project is fully completed; other times it means that incentives are provided in tranches as milestones are achieved. Notably, for low-risk companies (e.g., a large, well-capitalized Fortune 500 firm), we typically propose to provide incentive funds early in the development of a project, as otherwise the impact of the proposed incentive on the company’s decision process would be substantially diluted by the company’s net present value discount rate that often is in the range of 8-10%.”

Continue reading

The Logperch Veto

The Roanoke logperch

Virginia has its very own snail darter — the Roanoke logperch, a threatened species of fish, the existence of which could delay or even obstruct a multibillion-dollar infrastructure project.

The snail darter became a cause celebre for endangered species in 1973 when concerns arose that the habitat of the endangered fish would be obliterated by construction of the Tellico Dam on the Little Tennessee River. Although the dam ultimately was built, the controversy over the snail darter’s fate held up the project through years of legal appeals and eventually required a literal act of Congress to override a U.S. Supreme Court ruling.

The Roanoke logperch is one of six endangered or threatened species whose habitat will be crossed by the Atlantic Coast Pipeline (ACP), according to the Richmond Times-Dispatch. The ACP won’t obliterate the habitats of the logperch, the Indiana bat, the Northern long-eared bat, the Madison Cave isopod, the rusty patched bumblebee, or the clubshell mussel in the way that the Tellico Dam did the homeland of the snail darter. But the pipeline will cross these species’ habitats, subjecting them to additional stress, and perhaps killing some individuals. A federal appeals court ruled that the U.S. Fish and Wildlife Service had set unacceptably vague criteria for monitoring and complying with the Endangered Species Act. Pipeline foes regard the threat to the species as sufficient grounds to shut down construction.

A question unasked by the media in coverage of the ruling is just how threatened are these species? What impact might pipeline construction have on their habitat? Could the pipeline precipitate their extinction or will the effect be marginal? But alert reader D.J. Rippert raised the issue in a comment to an earlier article on the topic. According to the International Union for Conservation of Nature (IUCM) Red List, he wrote, “the Roanoke Logperch is one notch above endangered. The key question is whether the pipeline would push it from vulnerable to endangered.”

Good point, Don. Let’s see what IUCM has to say about the six species in question. But first some nomenclature: A “vulnerable” species is one that is likely to become endangered unless the circumstances threatening its survival and reproduction improve. The next steps up the ladder towards extinction are a “endangered” and then “critically endangered.” The term “threatened” applies to any species “likely to become an endangered species within the foreseeable future throughout all or a significant portion of its range.”

Roanoke logperch. Precina Rex is listed as “vulnerable.” Its range extends through the upper Roanoke, upper Dan, and upper Chowan river systems. Eight populations are separated by wide river gaps or dams. The fish resides in riffles, runs, and pools with sandy to boulder-strewn bottoms. Despite the ongoing threats of urbanization, industrial development, flood control projects, and agricultural runoff, the population is believed to be increasing. However, siltation from agricultural “and other human activities” remains a concern.

Indiana bat. Myotis soldalis is listed as “near threatened.” The bat has an extensive range across the eastern United States but the range and population have shrunk in recent years.  The most significant threats to the species are habitat loss, forest fragmentation, winter disturbance and environmental contaminants. Half the bats are believed to hibernate in Indiana (hence the name); other major population centers are located in Kentucky and Missouri. Virginia is a minor and peripheral part of the bat’s range.

Madison cave isopod. Antrolana lira is classified as “vulnerable.” This tiny critter is an eyeless, unpigmented freshwater crustacean that lives in flooded limestone caves in the northern Shenandoah Valley, with documented population centers around Staunton and Harrisonburg. The ICUN database contains little information about the isopod. Contamination of underground water is the major threat to the creature’s habitat — definitely an issue in the karst terrain in Virginia mountain terrain.

Rusty patched bumble bee. IUCM does not have this species of bumble bee in its database. But Fish & Wildlife does refer to it as “endangered.” “Rusty patched bumble bees once occupied grasslands and tall grass prairies of the Upper Midwest and Northeast, but most grasslands and prairies have been lost, degraded, or fragmented by conversion to other uses,” states the endangered species website. The range has constricted to 13 states, of which Virginia is one, plus one Canadian province. The biggest threat comes from intensive farming and the use of pesticides.

Clubshell mussel. Also not included in the IUCM database, the clubshell mussel is described by Fish & Wildlife as an “endangered” species. The bivalve, which lives in small to medium rivers and streams, once was found from Michigan to Alabama, Illinois to West Virginia — Virginia does not warrant mention as part of its range — and now is relegated to “portions of only 13 streams.” The major threats listed are pollution from agricultural run-off, industrial wastes, and extensive impoundments for navigation, all compounded by competition with the Zebra mussel.

Northern long-eared bat. The Northern long-eared bat does not appear in the IUCN’s red list but it is listed as “threatened” by Fish & Wildlife. The bat’s range extends throughout most of the Eastern U.S. and parts of Canada. Its population decline has been caused by the “white-nosed syndrome,” a fungal disease. The disease has spread to bats in Virginia.

Bacon’s bottom line: This is a superficial survey, and I welcome the input of anyone who has more detailed and authoritative knowledge. But it seems reasonable to draw several conclusions.

First, none of these species are “critically endangered.” Only two are listed as “endangered.” The other four are classified as “threatened” or “vulnerable.” Continue reading

Faculties, Not Donors, Drive University Hires

Steven Pearlstein

Steven Pearlstein, a Washington Post business and economics columnist, teaches economics at George Mason University. While he applauds making visible contractual terms between the libertarian, loathed-by-the-left Koch Brothers and GMU’s Mercatus Center, he doesn’t see a big threat to academic freedom. (Get the background to this controversy here.)

Any time a philanthropist makes a donation to a university, writes Pearlstein, he or she influences the priorities of that institution.

When someone gives $10 million to an engineering school rather than the college of humanities, it changes the university’s priorities. When someone endows a center to study the causes and consequences of climate change, it affects who is hired and what is taught and researched. When someone gives enough to name a school after a public figure, it shapes a school’s ideological profile. It would be great if all donations were unrestricted, but they aren’t. Many donors have agendas; the Kochs are just an extreme example.

In the case of Mason’s economics department, the faculty have driven the donor relationships. In most instances, it was the faculty who approached and solicited Koch and other donors with specific projects in mind, not the other way around. Faculty also recruited and hired for the newly funded professors’ positions, decided which courses would be taught, chose which topics to research and selected the students who would attend its graduate programs. Our economics department is not libertarian and conservative because it is funded by Koch and his friends; they fund our economics department because its faculty is — and always has been — overwhelmingly conservative and libertarian.

The underlying problem, suggests Pearlstein, is that “the rules and norms of university governance give faculty the power to hire people who think like they do. … There is ample evidence that feminists prefer to hire other feminists, behaviorists like to hire other behaviorists, ‘crit lit’ scholars hire other ‘crit lit’ scholars. Sorting by political or academic ideology is a naturally occurring phenomenon at universities.”

Pearlstein is absolutely right, but he doesn’t quite complete the loop. The phenomenon he describes is overwhelmingly a left-wing one — progressives systematically purging liberals and conservatives from among their ranks. GMU’s economics department and law school are oases of alternative thinking in a vast, desiccated Sahara of the nation’s overwhelmingly left-leaning schools, centers, institutes and academic departments.

The demand for Koch Brothers transparency, while justified at one level (I totally believe that higher ed should be more transparent), is not uniformly applied. At Virginia Commonwealth University a few years ago, Philip Morris USA contracts with university researchers created a huge controversy that ended with the retirement of President Eugene Trani. The controversy was justified. But no one is holding other donors to comparable levels of public scrutiny. When philanthropist Jane Batten donates $10 million to the University of Virginia’s Frank Batten School of Leadership and Public Policy, as was announced yesterday, does anyone ask if strings are attached? Does anyone demand to see the contract? No. No one asks because, I’ll wager, there are few high-profile libertarians or conservatives in the faculty to trigger progressives’ ire. (If I’m wrong, please let me know. I’d love to think that there is still some philosophical diversity at UVa.)

This controversy is all about power. Principles such as transparency and academic freedom are employed selectively and tactically to de-legitimize and expunge conservatives, libertarians and other bogeymen of the left like tobacco companies. Progressives never apply the principles against their own. It’s all about enforcing leftist ideological conformity.

(Hat tip: Steve Haner)