Charity is Bad?

I am truly conflicted about whether to praise monumental generosity or to fear nurturing a dangerous leviathan, so I will do both. Start with praise. I will play the skunk at the party later in the posting. Warren Buffett’s fantastic gift is just another example of the ongoing generosity of our fellow (rich) Americans. We do with private initiative what most other countries do with government but since Buffett’s billions will now remain forever untaxed, Federal, state and local governments are kicking in 30-40% too.

John D. Rockefeller invented the philanthropy industry when he realized That he had too much money to give away effectively as an individual. Despite his stingy reputation, Rockefeller tithed. Even as a nearly penniless worker, he gave generously of his time and money He said it was his Christian duty. As he got richer and richer, and 10%+ of his income got bigger and bigger, he found that he had much more money than time to determine worthy charities, so he developed methods run charity on the same sort of business principles he used at Standard Oil. He did this on an ad hoc basis for years and eventually founded the Rockefeller Foundation It seems like small potatoes compared to Gates, but it was a big deal at the time and the Gates foundation has a similar method of operation, and so do most foundations of this sort.

(BTW - There is some reason to dispute who is the richest American ever. Gates has more money in both real and inflation adjusted dollars, but America has become so much richer that even his immense wealth is just a small part of GDP. Rockefeller actually owned a significant part of the total American GDP at the time. There will probably never again be an American as rich as John D. Rockefeller in relation to other Americans.)

Running charity as a foundation creates efficiencies and makes giving more effective. Entrepreneurs bring their management skills, the same ones that made the successful in private business, to the world of philanthropy. So a dime used by a private charity is likely to be much more effectively spent than that same dime taxed by government and run through the bureaucracy. In a country like the U.S., private efforts trump similar government programs in both money spent and effectiveness. Proponents of government having preponderant power and responsibility often forget that a society is much more than government and helping hands need not to be the same ones that collect taxes.

Now for the Skunk

While I applaud the generosity, and I know we count on it to make our country work, it worries me just a little. The Gates Foundation will have more money than most countries in the world. Money in the billions buys power. And even if a leviathan doesn't seek or want power, it cannot help but exercise it by making choices. Any activity will inevitably create winners and losers, and have political and social ramifications. Consider power and accountability.

A democratic government is accountable to the people. A key reason is revenues and taxes. The people pay for the government, so the government has to be reasonably accommodating at least some of the time. A firm is similarly constrained by shareholders and the market. There are abuses, but we have leverage. Shareholders can vote or sell; customers can boycott. Large charities that must raise funds from donors also have constituents they must satisfy. A large private NGO faces no such countervailing forces. It has no shareholders who can vote and who can/will boycott a free gift? And it can be big, really big. Let's put this in perspective. The Gates Foundation will have assets greater than the GDP of Iraq in 2002 (before the invasion) despite all that oil.

One reason why oil and resource rich countries are often despotisms is the resource curse. Rulers can be tyrants because they enjoy an independent source of income. Even the best people need checks and balances to keep them on the right path. We are all only human, after all, and all humans are flawed.

There is no reason to believe that the humans running foundations will be any less flawed than others. In the first generation, we are probably safe, but after Bill and Warren pass, what then? You don't need a profit motive oo be corrupted by power. People with good intentions, or at least those for whom greed was not the primary motivation, have fomented most of the really big disasters in world history. Mao was not in it for the money, but millions died horribly anyway.

So I get to my question. This is not rhetorical; I really am conflicted and undecided. Is it possible for a very large, rich and powerful NGO to remain true to its better aspirations? Or will the 21st Century see the rise of the "robber NGOs", parallel to the robber barons, but instead of seeking money, seeking power to impose their idea of "good" on society. Both sorts of barons are Rockefeller's children.

Posted by Jack at June 27, 2006 8:41 PM
Comments
Comment #162517

Jack:

You are a funny man. Just because John D. Rockefeller and Warren Buffet were democrats, you automatically assume the worst of them.

Rest assured, these men are unlike the remaining Top 10% who support the GOP. Their Charities will not cater to Jack Abramoff and funnel his illegal Campaign Contributions to Republicans. They are Democrats. As such, their Charities are what they appear to be: Gifts from the Heart.

Posted by: Aldous at June 27, 2006 9:01 PM
Comment #162518

Yo, this Gaza strip conflict is some serious sh*t!

Posted by: rahdigly at June 27, 2006 9:04 PM
Comment #162520

rahdigly:

Its just same-old, same-old.

I expect Israel to lob 500 lb. bombs into the most densely populated refugee camp in the world again and kill 1 terrorist plus a dozen “collateral” civilians every time. The next generation of Palestinian “Insurgents” will thus be created.

Same old. Same old.

Posted by: Aldous at June 27, 2006 9:10 PM
Comment #162522

Aldous

John D Rockefeller was Republican (such as he participated in politics) and a good capitalist. I have read his biography. You evidently have not, but you should. Read the Ron Chernow book. The current generation is Dems, since they no longer have to work for a living, but the old man was not.

But not everybody is so party mad as you are and this is not a party political problem and you don’t understand the basic point of power corrupting and/or choices being forced.

The road to hell is paved with good intentions, you must have heard. And if you have that much money behind you, you can make a superhighway.

Posted by: Jack at June 27, 2006 9:16 PM
Comment #162526

I knew there would be a topic on this gift. In answer to your question, Jack, if Warren Buffett, one of the most shrewd money-men in America, thinks his money is safe in the Gates Foundation, that’s good enough for me.

If they turn into “robber NGO’s”, seeking to impose their ideas of 1)excellence in education for all American children, 2)the end of several deadly illness that needlessly claim millions of lives every year, and 3)anything else along these lines that they think is important, then I say more power to them.

The difference is heart and intention. If your intention is toward maximizing power, then power will eventually corrupt you. If you already have masses of money and the power it provides, and your intention is the betterment of our society and the world through education and health projects, then chances are good your heartfelt intentions will protect you from spoilage.

And as far as what happens after these major doners are gone from the helm, there are plenty of good, smart, people who would give their eye teeth to work toward having a hand in this kind of positive impact on society. With the same shrewdness that was used to build their empires, Gates (with Buffett’s help if need be) will develop a foundation worthy of their money and their name (in the Gates case).

That’s my answer to your question.

Posted by: Maggie Rose at June 27, 2006 9:37 PM
Comment #162529

Jack:

You forget, Jack. The Republican Party of John D Rockefeller’s time is not the GOP of today. The GOP back then wasn’t segregationist, Lobby-Funded and Top 1% Supporting like it is now.

Posted by: Aldous at June 27, 2006 10:01 PM
Comment #162533

Maggie

Only in retrospect can we see how good intentions are not enough.

Missionaries who converted the heathen were 100% conviced they were doing good. We do not always see it that way now.

I think Gates and Buffett are doing good. But I do worry about the possibility of such power. There are lots of things I could list as good things I would do in (to) society. Not everyone would agree that they were good things.

Some of the most heated arguments I have seen have been between people talking about the meaning of “good”.

Let me give an example from your post. What does an excellent education mean? I studied Greek and Latin and consider that an imporant part of education. What if I gave a million dollars on the condition that every kid study the classics? It is a good thing, but what other good thing would it displace?

The problem with Gates/Buffett is the really big money we are talking about. Think of all the damage foreign aid did to many developing countries? Big piles of money put in some places can cause more problems than good.

Posted by: Jack at June 27, 2006 10:06 PM
Comment #162537

Aldous

You can hate Republicans all you want, but it is really getting kind of old. I am a Republican. I bet I stack up pretty well against most Dems when it comes to how I live my life. Most of the Republicans I know are generous good people. Maybe you hang around with the wrong people or maybe you project your own hates and fears on others. I don’t know. But I find it interesting that your posts can often be both factually correct and completely wrong on the analysis.

Posted by: Jack at June 27, 2006 10:12 PM
Comment #162539

Jack,

I see your point with this. That much money, and the power that will come with it, well, anything could happen. I believe (and hope) that all the comments Maggie made will be true to the end for this massive enterprise, but it is not guaranteed, by any means.

One of her points, “the betterment of our society and the world through education” is a good example.

Suppose, just suppose, that their idea of better education finally convinces them (in a generation or two?) that a system of private schools should be set up to better pursue their idea. Maybe it’s for top achievers or low income kids or whomever, but it starts, and grows.

As a private system, there stands a chance that some slant comes into their agenda - who knows what it might be, but something “extra” is being taught. Now, this might be good, but it could be something else, too.

How would we know? How could we do anything about it, at least in time to keep however many kids it happens to from this “other” indoctrination, of sorts? I don’t know.

It’s not all that scary of a scenario, really, but one that came to mind. But worse come to worst, it could get scary.

Posted by: myles at June 27, 2006 10:22 PM
Comment #162543

hmmm, I see that while I was writing it, you were posting something similar. lol

oh well

Posted by: myles at June 27, 2006 10:28 PM
Comment #162546

Myles

I think that is a point. We all choose what we consider good. Many times it turns out we are mistaken. The principle of a pluralistic society is that there are many voices. The combination and conflict creates our society. If some of those voices and choices have billions of dollars behind them, it may well cause distortion.

We have not yet seen this kind of thing that the giant NGOs could be. I think concentrations of power are dangerous. These NGOs could be the least accountable institutions we have yet seen and we will rely on the judgement of a couple people. They may be good people, but unselfish motivations need not be good.

And I repeat: The road to hell is paved with good intentions.

Posted by: Jack at June 27, 2006 10:34 PM
Comment #162555

Jack,

But when companies are given free reign to do whatever is going to make them most profitable you have no problem with that right? That’s always in the public’s best interest right? There should be no government oversight at all right?

I trust wealthy people no more than I do companies. At least Gates doesn’t have a political axe to grind like Murdoch. At least Gates doesn’t want to say, buy all the television channels and newspapers to put forward some kind of agenda. As far as I can tell, he wants to help the hungry and better educate this nation. Who knows? He could end up being a monster, but there are soooooo many people ahead of him on the list. Intentions do matter when there are sooo many that have nothing but bad ones.

I mean, the road to hell must be paved with bad intentions too, right?

Posted by: Max at June 27, 2006 11:07 PM
Comment #162557

Jack, one of the serious shortcomings of privately funded NGO’s is precisely their classic business model. I am not in anyway criticizing private charity or NGO’s, but, their model is distinctly different from the federal government’s which distinguishes what NGO’s are willing to do, and what the government often does.

I am speaking about the efficient productive use of the dollar. One of the reasons for the immense failure of the eleemosynary system during the depression and in Charles’ Dicken’s England was the demand for the dollars to go where the biggest bang could be achieved. This leaves large numbers outside those areas completely unserved by the private charitable causes.

This is why FDR could not rely on the eleemosynary system to address poverty and joblessness in the Tennessee Valley areas or on the Colorado River. Private giving was directed toward urban soup kitchens where the greatest number of needy could be served by the available dollar.

This is important to the question you pose. Because big bucks tends to look for big projects, and big projects divert private charitable dollars into private-for-profit hands. This is one of the big areas where the potential for corruption and misuse can occur.

Another could happen if big charitable projects become used on the floor of Congress to replace programs directed toward individual needs outside areas where the big charitable giving projects are producing beneficial results.

And finally, as you imply, big bucks have far more pull with politicians than individual Americans. The potential for influencing legislation using potential targets for big charitable spending as a bargaining chip is HUGE!

And let’s be honest. If there are billions to be poured into charitable projects, you can bet your ass a host of politicians will sell out their country’s future to get close to the campaign boost created by proximity to those charitable dollars. Here is a hypothetical example.

A politician, in order to woo the Gates Foundation’s spending their dollars in his home state, promises a few favorable legislative votes on issues near and dear to some foundation planning leaders like tax exempt status for earnings while employed by a charitable organization.

Posted by: David R. Remer at June 27, 2006 11:12 PM
Comment #162559

Jack, btw, charity is great. I love giving to charities. What fallible humans do with charitable dollars is not always so great. Look at what happened to 10’s of millions of dollars Americans sent to Indonesia after the Tsunami.

Posted by: David R. Remer at June 27, 2006 11:14 PM
Comment #162560

Even a great organization like FEMA can go wrong with this administration’s mismanagement:

It turns out that thieves and wastrels feasting in the wake of Hurricane Katrina have been doing a heck of a job too — pushing the tote in government loot toward $2 billion and counting. Government investigators have found fraud and waste consuming more than 1 in every 10 dollars of the $19 billion spent so far on Katrina and Hurricane Rita — double the usual rate after a disaster. Thousands of criminal investigations are under way, with hundreds of people already charged with price-gouging and fraud. Even frontline workers with the Red Cross and the Federal Emergency Management Agency are being charged with profiteering.

The most graphic evidence of FEMA mismanagement is the 10,000 mobile homes, costing $34,500 each, that proved useless in post-storm Louisiana and now sit empty at an Arkansas airfield at a storage cost of $250,000 a month. Meanwhile, contractors billed taxpayers for phantom hotel guests, phantom emergency meals and phantom caravans of storm debris. Even prison inmates allegedly gamed the system for housing aid. As much as 21 percent of the $6.3 billion sent directly to victims was improperly distributed, according to a detailed report by The Times’s Eric Lipton.

The widespread fraud, waste and bungling was abetted by FEMA’ s failure to put a high priority on existing tools for catching schemers and thieves, according to the Government Accountability Office. FEMA officials, wary at the advent of a new hurricane season, insist that tougher accountability precautions are now in place. But there’s been no credible evidence of the top-to-bottom revamping that FEMA needs.

Thanks Bush! Keep that eye on the ball!

Posted by: Max at June 27, 2006 11:21 PM
Comment #162561

The Bush Administration is already making noises on using Private Charities to replace Veteran Administration Benefits.

Posted by: Aldous at June 27, 2006 11:23 PM
Comment #162562

The Repubilicans of Rockefeler were Teddy Rosevelt the protecter of the enviorment and author of the inhertance tax,buut repubs of have left that all behind and become the party ofthe money grubbers at all cost to Hell with the future.

Posted by: Earl at June 27, 2006 11:23 PM
Comment #162567

Max

I believe in the free market, which includes rule of law, reasonable regulation and the use of the market mechanism. Firms are subject to regulation and the rule of law, as well as the market discipline of shareholders and having to satisfy customers.

As of now, I think that Gates and Buffet are acting very admirably. Gates is doing more for development than the foreign aid programs of most governments. It is the concentration of power that troubles me. As we used to say during the Cold War, you have to look at capabilities, not intentions. Intentions can change rapidly.

David

Private charity has been a big part of our society. It is not the only part. There are things only government can do and things that private firms and people do better. We should use all the tools, not reach for the hammer when a screw driver is better suited.


Earl and Aldous

Yes. We know you think Republicans are bad. But sometimes we are not as interested in trashing them as we are discussing an issue. Myles, David, Max and Maggie did a decent job. Learn from them. You can still say bad things about Republicans within the topic.

Posted by: Jack at June 27, 2006 11:40 PM
Comment #162568

I am hardcore Republican and some friends and myself are busting our humps working to establish a charitable foundation.

I don’t recall the OP making an overtly political point. It was a simple analysis of the pros and cons of private charity. Then bamo someone comes in and using mistaken facts paints the piece as bashing Democrats.

Good intentions don’t prevent corruption.

Anyway the book that forms the foundation of our society says we and not the government are the keepers of our brothers and sisters.

The question at the end. I do not believe it is possible for large ngos to stay true to their original purpose. Eventually they win their fight but instead of dissolving they redefine their fight and usually by defining down their mission.

I have an item in the organizaiton I am working to establish. In it the organization is to be dissolved when there is one person alive who knew the founers personally. This way our intentions will not get corrupted. The funds forming the foundation are to be disbursed to charities.

Posted by: Marcus Aurelius at June 27, 2006 11:46 PM
Comment #162570

not precisely on-topic, and not about charities, but I wrote a little piece not long ago about a possible way to start controlling the escallating insurance costs.

That would be to reform the insurance industry in this country to require that all insurance operate as non-profit organizations, with salary caps for directors, having all insured parties be allocated voting rights in the operation of the company, etc.

I don’t know enough about any of that to see it all the way through, but I’m sure there are plenty who could, if it were brought to them. At least it’s a way to start, I thought.

Posted by: myles at June 27, 2006 11:51 PM
Comment #162572

Jack,

Melinda Gates announced that it was her intention to make sure there was a cure for AIDS, among other things.
You have to admire them for trying.
Philanthropy is a forgotten art. If you look at a list of known philanthropists in modern times the names that pop out are Carnegie and Rockefeller.

BTW, Nietzsche, opposed philanthropy, seeing it as the weak sponging of the strong.

Posted by: Rocky at June 27, 2006 11:55 PM
Comment #162579

“BTW, Nietzsche, opposed philanthropy, seeing it as the weak sponging of the strong.”

Another philosophy that matches the Republican Creed.

Posted by: Aldous at June 28, 2006 12:14 AM
Comment #162584

I think that Warren Buffett has done a very good thing. I don’t know much about him or the Gates Foundation. But anytime folks are willing to help others in anyway it’s good. And it don’t matter to me what party they claim.
Different folks give in different ways. Some give to charitable organizations. Some give directly to the folks they see in need. Some can give millions and some only a few dollars. Either way these folks are being generous with what they have and are to be commended.
I wounder, how many that criticize the givers do any giving themselves?
We weren’t rich when I was a kid, lower middle income bracket, and cash was tight a lot of times. But Momma would feed anyone that came to her door hungry. Reckon that’s as much charity as $100,000,000.

Posted by: Ron Brown at June 28, 2006 12:34 AM
Comment #162586

Good grief, I go to dinner, and look what happens!!!

Jack, I don’t even know where to begin with your response to my previous post. “Only in retrospect can we see that good intentions are not enough.” Yes, and that’s why it takes research, savvy, intelligent professionals working with objective, goals. We’re not talking about my good intentions when I get up intending to clean the house today, or start my diet. Of course my good intentions will fail me most days. But, we’re not talking about me, we’re talking about successful businesspeople committed to the betterment of society.

Comparing missionaries converting “heathens” to the work of the Gates Foundation???? As a student of sociology, I could probably fill this blog up with examples of how people (often white, intellectual men) have done things for the “good” of someone or a society, when in retrospect (and with the advent of voices of women and minorities into the fray) the opposite was achieved. That comparison doesn’t hold water here.

You asked in your post “What does an excellent education mean?”, for instance and suggested that someone might require inclusion of classical studies. Well, I don’t think that would hurt at all. A broad upper level education which exposes one to historical events, philosophical ideas, and artistic creations would be preferable to the upper level education many students receive today. Have you ever watched some of the spots on Leno where average citizens are asked simple questions, or compete in a panel? It is horrifying how uneducated the younger American populace is.

But from what I understand, Bill and Melinda Gates are working to find a better system for high school education. One that keeps the kids interested and enthusiastic about learning, creating, especially in math and science. America is falling so far behind many other countries educationally; minorities are dropping out in droves, many before even reaching the high school level; the US spends $10,000 per child per year, that’s an average of $250,000 per classroom (most of which is wasted on bureaucracy instead of being spent on the teacher and the child), and we still have failing teachers, failing schools, and failing children. Given all this, how can you seriously question their goal of improving education….keeping kids tuned in and turned on (to use a 60’s phrase) so as to provide America with the next generation of able and competent workers????

And finally “The problem with Gates/Buffett is the really big money we are talking about…. Big piles of money put in some places can cause more problems than good.”

I couldn’t agree more. But I trust philanthropic endeavors with big piles of money more than I do big corporations, international banking, and all the other Sharks in the financial arena (whose intention is PURELY profit) that we’ve talked about on other posts re global class wars by big business against the middle class.

Frankly, when I heard of this ususual bequest, I hoped more wealthy people would see the benefit of pooling their resources with proven and trustworthy established organizations instead of starting from scratch, reinventing the wheel and wasting time, effort, and money getting going. Then, I remembered, that most people don’t have the purest of intentions, because what they really want at the end, is their name on some big building or hospital or foundation. But that brings us back to intention, and ego. When the ego is involved, intention is often sullied.

I stand by my previous post, while acknowledging that not every NGO is comparable to this one in more ways than just size. I don’t give to the Red Cross (is it an NGO?) because of all the poor management I read about. I don’t give to many other organizations that apply for donations. But I would rather trust my money to the Gates Foundation than our government any day of the week. I agree with Max that there are many more examples of bad intentions in big politics, big government, and big business.

Your thesis that too nuch money in one pocket may lead to problems is a valid one. But you choose to apply it to the molehill instead of the mountain.

Posted by: Maggie Rose at June 28, 2006 12:36 AM
Comment #162588

First of all, excellent topic and thoughtful analysis. As to the “BTW, Nietzsche, opposed philanthropy, seeing it as the weak sponging of the strong.”

Another philosophy that matches the Republican Creed.

On that Comment the truth is the opposite. Only the Communists (who liked Nietzsche) have outlawed charity. In Soviet Union of past or Comm Korea or Cuba today you can go to prison for helping others.

The big problem is that rich tend to either be liberal or give it to liberals to spend. If Warren gave that money to the Salvation Army the results would be unbeliveable.

It would end non volantary poverty in USA and more.

Then there is the Ford Foundation, Henry was not far left but Ford Foundation is. You have to give Leftists their due. They have a great ability to latch on to and spend OPM.

If only the super rich spent there charity money on productive things, instead of Communist Oil Tycoon Armand Hammer’s art muesums, which is where so much of it goes.

Posted by: Darp at June 28, 2006 12:38 AM
Comment #162589

All the good that one man can do for another is lost when money becomes the object instead of the tool.

“Do not store up for yourselves treasures on earth, where moth and rust destroy, and where thieves break in and steal. But store up for yourselves treasures in heaven, where moth and rust do not destroy, and where thieves do not break in and steal. For where your treasure is, there your heart will be also.” Matt 6:21

Let’s pray this collaboration is a blessing for the least of our brothers & sisters in need throughout the world. No apologies to you non believers out there, 1st amendment and all!

Posted by: JR at June 28, 2006 12:45 AM
Comment #162590

JR

“All the good that one man can do for another is lost when money becomes the object instead of the tool.”

That’s great! Is it a quote, or your? If a quote, whose? If it’s yours, congrats on the wisdom.

Posted by: Maggie Rose at June 28, 2006 12:52 AM
Comment #162592

Jack

For I was hungry and you gave me something to eat, I was thirsty and you gave me something to drink, I was a stranger and you invited me in, I needed clothes and you clothed me, I was sick and you looked after me, I was in prison and you came to visit me.’

“Then the righteous will answer him, ‘Lord, when did we see you hungry and feed you, or thirsty and give you something to drink? When did we see you a stranger and invite you in, or needing clothes and clothe you? When did we see you sick or in prison and go to visit you?’

“The King will reply, ‘I tell you the truth, whatever you did for one of the least of these brothers of mine, you did for me.’ Matt 25:35-40

Have faith brother!

Posted by: JR at June 28, 2006 12:53 AM
Comment #162594

maggie

I hope it’s mine but will apologize if I’ve somehow stolen it from my readings and stashed it away subconsciously!

Posted by: JR at June 28, 2006 1:06 AM
Comment #162595

It appears that Warren Buffet made another wise choice with his money. There is such a lesson to be learned here. Hopefully it becomes just one drop in the bucket.

“Judge each day not by the harvest you reap but by the seeds you sow.” R.L Stevenson

Posted by: j2t2 at June 28, 2006 1:08 AM
Comment #162597

Jack,

In response to your initial post I believe that this mega charity could become and may already be a problem. Money is power and power corrupts. Huge amounts of concentrated money magnify this problem. With such huge sums of money the Gates foundation will have the power to bend various organizations to their political will. Hey State University you want to keep receiving that fat annual research grant? Then you appoint our buddies (people who think the way we like)to your board. Hey Boy Scouts, you want this nice 8 figure grant, then you allow gay scout masters. What? The Boy Scouts say keep your cash? Well then I guess we will donate it to the local ACLU to help fund idiotic lawsuits against the Boy Scouts until we bend you to our political will. Campaign finance laws? No problem, around election time just fund a PBS special about the history of elections that shows Republicans as greedy and heartless while democrats are generous and caring. Point is that this foundation will be able to flex a tremendous amount of political muscle while they do their work as a “charity”. Illegal? Probably not on the basis of the letter of the law but probably yes in terms of the spirit of the law. But will they actually do these kinds of things? Hell, if they don’t do these things liberals will denounce them as closet Republicans and move to put in a new board at the Gates foundation.

Posted by: Carnak at June 28, 2006 1:29 AM
Comment #162600

Carnak

Unfortunate but true. read this

Posted by: JR at June 28, 2006 1:40 AM
Comment #162602

TO ALL REPUBLICANS:

So, when can we Liberals expect Dick Cheney and his Halliburton Friends to donate 80% of their income?

According to you Republicans, there is great power to be gained by giving to charity.

So when will your Corporate Board Campaign Contributors give theirs up?

Posted by: Aldous at June 28, 2006 2:05 AM
Comment #162603

From the Wall Street Journal:

Law school clinics weren’t always incubators of left-wing advocacy. But once the Ford Foundation started disbursing $12 million in 1968 to persuade law schools to make clinics part of their curriculum, the enterprise turned into a political battering ram. Clinics came to embody a radical new conception that emerged in the 1960s—the lawyer as social-change agent. Ford Foundation head McGeorge Bundy declared in 1966 that law “should be affirmatively and imaginatively used against all forms of injustice.” No one can object to fighting discrimination and poverty. But no one elected a Ford-funded “poverty lawyer” to create a new entitlement scheme. If that lawyer can find a judge who shares his passion for welfare, however, the two of them will put into law a significant new distribution of rights and resources that no voter ever approved.
see the whole article here

Posted by: JR at June 28, 2006 2:11 AM
Comment #162606

Aldous

Your hatred has eaten you up friend. What does your rant have to do with this? For all you know Cheney may donate 80% of his salary to a charity of his choosing. Maybe not. So What? Haliburton? What about EXXON? Got another company you love to hate? Place their name here. Charity means giving, especially to the poor, it also means lenient judgment of others. Try it sometime.

Posted by: JR at June 28, 2006 2:22 AM
Comment #162607

sorry for the bad link to the WSJ article. this is it

Posted by: JR at June 28, 2006 2:34 AM
Comment #162612

JR:

It is you Rightwingers who are questioning Buffett’s motives.

As I said, where are your Legions of Rich Republicans giving their BILLIONS away?

Posted by: Aldous at June 28, 2006 2:54 AM
Comment #162628

Large NGOs may have agendas to change the country by purposely distorting the truth or working against what most Americans want. They are able to do so in ways that have ~no opposing advocate, and nearly no checks and balances (relative to democratic govt’s, businesses, etc.). I hope they all remain benign, even if often not positive, influences on America.

I suspect Conservatives / Traditionalist more than others fear that such foundations will not be politically unbiased (at least, not for long), and will push an agenda different than their own.

I. The relatively few who run foundations and consider themselves to be unbiased ‘Business People’ … I suspect still are not. Their ranks are dominated by those who want to get other people’s money and advance a societal agenda — rather than a drive to work and create wealth on their own. In short, from my experience and my reasoning, Democrats dominate this field.


II. ONE OBSERVATION of a large NGO changing America to their vision: The Ford-Foundation’s 10hr ‘Jazz’ documentary on PBS was excellent in many ways. To those who watched it, it may ~define 50 years of Americana; to those who didn’t, I suspect you are being influenced by those who did … whether you know it of not.

However, instead of a focus on music with passing ~balanced commentary of societal contexts, the common thread and very often the prominent theme was to describe whites badly.

Ken Burns gave tens of thousands of words to anti-white experiences of relatively unknown musicians — focusing on anti-white experiences to the near exclusion of all other life experiences for many musicians.

On the other hand, he provided the ~total description of (not far from the exact quote I will bet you) “the primarily Republican Glen Millar Band was the most successful jazz band. However, since they were known for rarely making a mistake during performances, they may not have contributed much to Jazz music since one can assume they did not push themselves musically as other musicians did, and they played songs including ‘Little Brown Jug’”.

Should perhaps the Most Popular (then and now), Best Selling, Highest Quality, Finest Musicians, Hardest Workers/rehearsers, Non Druggist (as opposed nearly ~all others covered), Volunteer Patriots (and, it turns out, martyrs) for the WWII effort be so marginalized … just because they were white Republicans??

THINGS ARE WHAT THEY ARE — NO MORE, NO LESS.

Posted by: Brian at June 28, 2006 4:39 AM
Comment #162631

You guys that have faith in the free market, why not let the Charity NGOs quite “compete”. When one will abuse its power, the “customers” should turn to another NGO, right?

What? The NGOs market is not that *free*?
Yeah, right. Not more than the usual one…

Charity NGOs aim should be to become useless one day. It means that people being paid for working in these NGOs should aim to lost their job one day. What a paradox. Could be counter-productive too. My wife used to work for the french Cystic Fibros foundation and saw many, her included, people being more and more careless of the foundation cause while the foundation grew.

The business model when applied to NGOs create bureaucracy as much as it does in corporate field. Looks at these huge UN agencies. It doesn’t make them useless, but size clearly does matter in effectiveness ;-)

Plus, above money, *time* is more valuable when it come to help someone.

Posted by: Philippe Houdoin at June 28, 2006 5:07 AM
Comment #162648

Interesting article, Jack.

I find it interesting that you like the wealth of the Corporations and Trusts OK, but you question the Wealth of Foundations. It makes me wonder what makes your brain tick.

John D was the robber Baron, not his children. The Foundation was the idea of his children and actually, in part, a PR campaign to change his image. It seems to have worked on you.

It’s curious to me why people praise these benefactors so much but don’t question where this money came from. Which child starved or was not educated because of the sharp business dealings of these guys? What exactly did John D, Warren Buffet, or Bill Gates produce that justifies this kind of remuniration?

John D increased effiency in the oil market. Then he cut ruthless deals that cheated others and created a monopoly that allowed him to reverse that efficiency for his gain. It resulted in anti trust legislation

Warren Buffet is simply a insurance mogul who trades money around. He produces nothing while the insured are screwed by restrictive and legalistic contracts in an industry which is protected by the government. Is the world safer or better because of Buffet?

Bill Gates designed some useful software for computer hobbyists and then set about using exclusivety contracts to stifle the software industry and line his pockets. Would software be cheaper and better without Gates?


Posted by: gergle at June 28, 2006 7:56 AM
Comment #162654

gergle:

I am a Systems Analyst and I can say without any doubt that without Biil Gates, our software would still run on mainframes and floppy disks.

Bill Gates is too Computers what Ford was for the Assembly Line.

Posted by: Aldous at June 28, 2006 8:15 AM
Comment #162662

gergle,

Warren Buffet is not an insurance mogul. He is an investment mogul…big difference. He made his fortune by finding undervalued companies, and buying them. He is regarded as the world’s greatest investor…see how many books were written about the man over the years.

He likes insurance companies (property-casualty and reinsurance) because of 1. the ROE he can get and 2. the immense cash flow. Guess what, more cash means more he can invest.

As an underwriter in the insurance industry reading your comments, I would gather that you don’t bother to insure your home, or your car, or any other valuables you may own because you feel you are getting screwed over by the big bad P&C company. Am i right?

Posted by: Greg at June 28, 2006 9:01 AM
Comment #162665

Jack-
What a pessimistic outlook. Look, any approach can fail. People just have to connect theory to results. It should not be a bad thing that a man is giving away his fortune instead of just accumulating more dollars he’ll never spend.

An economy is like the circulatory system in your body. It’s not enough that the blood gets to the big veins and arteries. The blood has to get into the smaller vessels to do the most good for the body. Otherwise, the body becomes weak and vulnerable in those areas.

So too does wealth need to flow more freely, even if it never gets distributed equally. It’s in the nature of society to give the gifts of wealth unevenly, moreso in these Republican-dominated times. It’s when the economic energy that the wealth represents is more widely used that it stands to do the most good.

Money should flow in a system, rather than stagnate in one area or another. Buffet and Gates are increasing the flow of that money, to the benefit of the community.

Don’t worry, the money can flow back into the pockets of the rich again. But in the meanwhile, it will have driven parts of the system whose bloodflow has been anemic.

Brian-
Jazz, by it’s very nature is about improvisation and syncopation, playing outside the box, if you will. As to anti-white agenda’s, I think you’re looking too hard. First, we can’t be the good guys in every story. Second: Jazz, like Rap and Hip-Hop today, was treated like a social menace, a low part of culture. It’s origins in Black America and the accompanying stigma on both the music and the people is part and parcel of Jazz’s history, though it may be politically incorrect in your view to say so.

It always seems silly to me to talk like we whites are so vulnerable. We’re not. We’re on top, likely to remain so for quite a while, and a big reason, aside from population, is simply that we had this unfair dominance for so long before. Now the rules are changing, and we don’t automatically rule the roost anymore.

And you know what? That’s fine with me. I’d just as soon we start living like fellow human beings rather than treating the other fellows like mutants. If in 200 years, America looks as brown as the rest of the world, what will be the loss? It won’t be the first time a Demographic change altered the face of humanity Do a little research and you’ll find race means more culturally than biologically.

Posted by: Stephen Daugherty at June 28, 2006 9:11 AM
Comment #162667

Aldous,

Bill Gates is to Computers what Ford was for the Assembly Line.

I guess that’s why I feel so bored when I’ve to work on a MS system then ;-)

Posted by: Philippe Houdoin at June 28, 2006 9:20 AM
Comment #162669

Stephen,

If in 200 years, America looks as brown as the rest of the world, what will be the loss? It won’t be the first time a Demographic change altered the face of humanity Do a little research and you’ll find race means more culturally than biologically.

Beside demography, maybe 200 years of global warming could be a factor in the American *brownization* too.
;-)

Posted by: Philippe Houdoin at June 28, 2006 9:26 AM
Comment #162673

The Gates foundation seems very focused on mitigating poverty and disease in poor countries.

Is anyone concerned that most of this money will go overseas?

Will it result in a global population explosion?

This kind of money will change the world.

Posted by: Schwamp at June 28, 2006 10:03 AM
Comment #162677

Gergle -

Stick to what you know.

Buffet’s companies include brick manufacturing, candy manufacturing, utilities, home building, flight training, shoes, etc etc etc etc etc.

He has created more value for his early shareholders than any investor EVER. Imagine the impact he had on their lives and how they were able to subsequently gift.

IN FACT - up until a 6-7 years ago Berkshire Hathaway had a charitable matching program for shareholders! If you owned A shares you could submit charitable gifts and Berkshire would “match” up to a certain dollar level.

I’m a Christian. I have voted all over the map at the local level. Republican at national level. Warren has had some whacky (in my perception) ideas in the past. He was an early believer in the “population bomb”. oops - that didn’t work out so well.

So - I guess I separate “politics” in this sense - his heart is in the right place (he could give his kids the money) and he is trying to help people.

PS - Gergle, how did these people get their money, ummmm, duh - its called capitalism. And in this case Buffet is a beacon on what capitalism can be when coupled with a generous heart.

Posted by: echop8riot at June 28, 2006 10:12 AM
Comment #162679

The gates foundation has a track record, and they handle significent sums of money. So far who can complain aout what they have done.
All you Repubs seeing a conspiracy to among other things, get the boy scouts gay take off the tinhats and take a deep breath. relax.

Posted by: j2t2 at June 28, 2006 10:22 AM
Comment #162700

Bill and Warren will both be on the board of directors for some time, and I’m pretty satisfied that they have individually been approached by greedy politicians who who want to tell them how to spend thier money. You just don’t get that wealthy following the advice of politicians. I would look for some type of legislation making NGO’s regulated by the government in tradeoff to the tax break.

Posted by: DOC at June 28, 2006 11:40 AM
Comment #162720

Aldous

So, when can we Liberals expect Dick Cheney and his Halliburton Friends to donate 80% of their income?

They might never donate any of their income to charity. But that’s their business. And they’ll be the ones loosing out in the end.
When can we hear that you’ve donated anything to charity?


While big gifts like the on Warren Buffett gave the Gates foundation is going to make the news because of the size of it, I believe that it’s the little folks that can’t give much and still quietly do so are the true philanthropist.

Posted by: Ron Brown at June 28, 2006 12:29 PM
Comment #162785

Jack:

Great post.

I’d like to comment on several statements you made. First you say

“In a country like the U.S., private efforts trump similar government programs in both money spent and effectiveness.”

This is your Republican philosophy of less government. But then you say:

“A democratic government is accountable to the people. A key reason is revenues and taxes.”

In other words, we can depend on the government because it is accountable. That’s the Democratic philosophy.

Finally, the real point:

“And even if a leviathan doesn’t seek or want power, it cannot help but exercise it by making choices.”

This is why you are afraid of big charities. This is also why I am afraid of big business. It’s extremely hard to fight a multinational - like Wal Mart, for instance.

I’m glad to see that you have some leanings to the Democratic side.

Posted by: Paul Siegel at June 28, 2006 2:41 PM
Comment #162803

Jack,

Good article and good questions. It is perfectly reasonable to acknowledge the danger where such huge sums of money are involved of potential corruption or misdirection downstream.

It is even more important to call out existing instances of corruption where huge sums of money have already been concentrated in the hands of the few. If you believe that a few convictions of Enron & WorldCom executives is doing the job to rein in corporate malfeasance and excess, then I have a bridge to sell you in the desert.

We liberals get branded as anti-corporate when we decry the extent of deregulation being heralded in with the Republican majority. On the contrary I believe there are many outstanding contributions to our society that come from corporate largesse, but the concentration of wealth there demands tighter oversight than most Republicans are interested in insisting on. Some regulations are too burdensome, others which are needed don’t exist or have been eliminated, but the penalties for those which are there are more often than not far too paltry to be effective in deterring the misbehavior.

Sorry to go off track, but I just had to get in my Democratic perspective. ;-) I agree with the fundamentals of your post, though, with the clear exception that believing that the market, the shareholders, and the threat of customer boycotts supply sufficient leverage to curb corporate abuse.

Posted by: Walker Willingham at June 28, 2006 2:53 PM
Comment #162836

I should clarify (though it’s likely obvious) that I DON’T believe that the market, the shareholders, and the threat of customer boycotts supply sufficient leverage to curb corporate abuse.

Posted by: Walker Willingham at June 28, 2006 3:50 PM
Comment #162864

Consider Carnegie.

Andrew Carnegie made his fortune streamlining and modernizing the steal industry. He was a brilliant human being and also a ray of light in the leave-things-better-than-you-found-them sense of the word.

Andrew Carnegie was a staunch advocate of INCREASING estate taxes. The reason was that he felt it was destructive and irresponsible to create generations of families who never worked, understood the value of wealth or appreciated its cost and responsibilities.

Moder wealth holders seem more corrupt, less deep in awareness or thought, greedier and more stubborn in their insistence that they are right. Ultimately, the wealthy today are infinitely lazier. The shrinking middle class are the real give-a-shit types among us today. That is why the estate tax is being undermined. The very wealthy seem to want to deprive their children of the ability to dream and strive.

The exceptions are the Gates and those like them. I am not YET concerned about the possibilities brought to light in this article…but I understand the concern of the author. I hope the more negative possibilities turn out to be unfounded fears.

Posted by: RGF at June 28, 2006 4:50 PM
Comment #162902

I wonder how long before somebody accuses Gates and Buffet of being liberal and socialist.I mean, look at all that money and they want to give it all to people less fortunate than them.The worst thing about it,they are not looking to make a profit out of the deal!!So unAmerican.

Posted by: john doe at June 28, 2006 6:33 PM
Comment #162919

Jack,

Nice topic. I personally tend to think that the bigger tendency of the big foundations in their third and subsequent generations is toward mission diffusion, complacency, and becoming fatter bureacracies. I don’t think we will see true abuse by the Gates foundation.

RGF,

Gates and Buffet are exceptions to the general rule in philanthropy. Usually it is the second or third generation of a wealthy family that is the most philanthropic. In the sociology of wealth, there are two major groups: old money and new money. Generally, old money is less concentrated than new money because it is dispersed through the generations. Old money tends to run “society” in big cities. They do this by sitting on the boards of the major local charities, music, and arts boards of directors. These institutions and their events are the center of the “society” universe.

At the passing of the wealth from the first to second generation and subsequent generations, the interest in making money diminishes. The goal is to become a leader of “society”. This is accomplished via major gifts to museums, concert halls, and charities. Those gifts get a seat on the board and the name of the family begins to change from being looked down on as nuveau riche to an upstanding member of “society.” This change is cemented in subsequent generations by relationships established in school, college, clubs, etc. With that comes access to more of “society’s” institutions and ultimately some control and managing the entrence criteria.

Gates and Buffet like Rockafeller and Carnegie in the past are exceptions because they take the endeavor on in the first generation and because of the sheer size of their gifts.

So take some solace that those lazy, greedy bastards of today will produce some progeny that may transform them.

Posted by: Rob at June 28, 2006 7:09 PM
Comment #163012

Paul

I think government is accountable. It does not mean it should expand into areas where it has no expertise or where it will do harm. There are many things that do not belong in the political area.

I also think firms are accountable through shareholders and markets.

Finally, I am not against big charities, per se. I do fear any large unaccountable power. That is why I prefer power to be scattered among and between government, private firms, individual etc. The market tends to take care of big accumulations of power in private business. Remember when the Feds went after IBM because they were sure that IBM had such market power that it could control its markets forever? I didn’t. Or when JK Galbraith wrong that a firm like General Motors was SO powerful that it could squash any competitors?

I don’t believe we have ever seen anything like the Gates Foundation. It is bigger than most firms and than many governments. But it does not have to satisfy any market or cater to any voters. Right now it is a really good thing. I hope it remains that way. But such power is dangerous.

Gergle

I was speaking figuratively about Rockefeller’s children.

Re the general idea of wealth, I think many people make a mistake thinking that wealth is laying around and some people pile up more than their share. IN fact wealth is created by human ingenuity. Wealth only has meaning in relation to society, culture and technology. Oil was not a resource until people figured a use for it. Oil was not a resource for the Arabs until western technology figured out how to get it for them. Oil was a disorganized industry until men like John D. Rockefeller gave it some order. His contribution to our welfare through his business acumen was greater than his contribution through charity.

Posted by: Jack at June 28, 2006 9:29 PM
Comment #163068

Jack,

Fearing unaccountable power and how very large sums of money is only natural. However, why pick on Buffet and Gates and only when they give their money to a foundation? What are you afraid they will do?

Why aren’t you afraid of Rupert Murdoch or are you?

Why aren’t you afraid of Exxon Mobile or the Tobacco industry funding junk science or are you?

Why aren’t you afraid of multi-millionaires who have the best chance of funding their own campaigns because “money equals free speech” or are you? Why not advocate for publically financed elections or giving an incumbent 75% less money than the challenger to give the challenger a fighting chance?

Jack, you represent a thoughtful element in these blogs, right or left. However, the current topic of righties centering around Buffet seems fearful. Is it because he is thoughtful enough to advocate for estate taxes as a check against an even greater aristocracy in this country?

Would it be better if the obscene amounts of money “earned” by Buffet, Gates, Cheney, Heinz-Kerry, Lee Raymond, etc. went to the government, private individuals, or legitimate tax-exempt charities?

Personally, I see no problem with larger and more charities. They are accountable as they have a great incentive not to abuse their tax-exempt status which is enforced by an elected government (at least in theory as is everything with our current elected government).

Posted by: Chris2x at June 28, 2006 10:48 PM
Comment #163091

Chris2x

As I wrote, I have no problem with them now. It is the foundation, which will last well into the future. It is also that it is so rich.

Marcus Arelius had a good idea. He said that the foundation would last only until the last of the living founders was still alive.

I think a foundation like this, with such assets and power, is less accountable than either democratic government (accountable to voters) or firms (accountable to the marketplace and shareholders). My study of history tells me that many of the really big disasters have been perpetrated by people who firmly believed that they were doing right. Buffett and Gates still remember how they made the money and they remember a time when such fantasic wealth was not theirs. A future generation, either of children or professional charity managers, may forget.

I don’t see this as an imminent threat, but I do think that such a new thing may create its own trouble.

BTW - I think both Buffett and Gates are admirable in this case. I don’t fear either of them. It is the immortal foundation they are building.

Posted by: Jack at June 28, 2006 11:49 PM
Comment #163140

i was going to talk about the great Andrew carnegie also, what a giant, and he came here poor from scotland.pig iron was the metal of the day,and he made millions of tons of it,and could have made it for a long time. but he was a visionary and knew exposed iron rusted. so what make more! nope, he invested in a new metal called steel.and he spent millions of his money to start up the bessmer process to convert pig iron to steel and adding more minerals like zinc and by directing a blast of hot air to the molten metal, steel was born. and so was the new industry. he paid his people very well. and that day when old JP morgan bought the company, carnegie was ready to sell and.

Posted by: Rodney Brown at June 29, 2006 3:08 AM
Comment #163216

How many of y’all know that the Carnegie Foundation is responsible for the libraries in a lot of small towns that might not of been able to afford them? He believed that anyone could educate themselves in a library.
In the late 19th and early 20th centuries he spent over $55,000,000 on 2,509 libraries in the English speaking world with 1,679 of them in the US.
Check out http://www.carnegie.org click on Libraries.
I’d link it but don’t know how.

Posted by: Ron Brown at June 29, 2006 12:40 PM
Comment #163217

Looks like I linked it without knowing it.

Posted by: Ron Brown at June 29, 2006 12:41 PM
Comment #163226

Jack, I don’t disagree with the fact that John D and Bill Gates contributed something at the beginning of their careers. I stated that.

My point was that what have they produced since then? Mostly they have produced deals tilted in their favor. They no longer operate in a competetive sense. They both became monopolies which simply perpetuated themsevles through bullying and legalistic theft.

As to Berkshire Hathaway. I am not an expert on Buffets holdings and frankly don’t care. I understand that it is a large reinsurance company. Yes, Buffet is a long term investor which I like. Again, I do not see what he has produced. I don’t begrudge his wealth, but all he does is move money around. It is largely his wealth that produces him more wealth.

And to answer your question, Greg, I insure my car because by law, I must. I don’t insure anything else, because I think it is cheaper to save, invest and fix it yourself. Yes, I believe insurance has become a scam. It is anti- competitive. It often becomes an excuse for carelessness.I know many so called honest people who turn in insurance claims for trivial reasons and then buy repairs at much reduced cost. It price fixes and in major disasters it has a pattern of cheating its clients.

Aldous, did Bill Gates invent Windows or “steal” it from apple? Is Linux inferior to windows?

Posted by: gergle at June 29, 2006 1:34 PM
Comment #163518

An interesting article on Buffet

I did no research on my original post in this thread and have been accused of not knowing the subject. I am not a celebrity watcher, but I know PR when I hear it.

Mythology says that these are stellar performers. I say they are greedy little bastards. I don’t dispute they have made contributions to society, but so do the ironworkers that built Golden Gate Bridge or the World Trade Center.

What I dispute is their relative worth to society. I’m not promoting socialism here, just questioning the idol worship of people who have screwed many over. You don’t get that rich being a nice guy.

That’s my dose of reality for today.

Posted by: gergle at June 30, 2006 6:34 AM
Comment #189977

Maybe you can help me with a quandry. I thought I was Republican because I support much of the ideology however I also believe in animal rights. I think farm animals should be protected from cruelty, ban tethering of dogs and veal crates for calves etc. Why is it that Republicans get across the board F’s for voting on behalf of animals? I don’t get it!

Posted by: Joleen at October 24, 2006 5:26 PM
Comment #242348

If you want to give your money to a charity, then just do it. Red Cross, Salvation Army, Alzeimers Foundation, orphanages, food banks. Oh, that’s right actual people would be helped by that. Notice how these types give with strings attached, not to people but to foundations who ‘hold’ it, so they never have to give up control of it. It’s not about charity with these guys, it’s about control.

Posted by: Ted Cox at January 5, 2008 9:44 PM
Post a comment