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Treasury Inspector General Probes Trump Tax Cut Abuse

Reprinted with permission from ProPublica.

The Treasury Department’s inspector general is looking into the opportunity zone program following stories by ProPublica and The New York Times about how the tax break meant to help the poor had been manipulated by billionaires.

The development, which was first reported by NBC News, comes after three congressional Democrats wrote to Treasury’s inspector general in October asking for the probe and citing the ProPublica and Times stories.

“We are conducting an inquiry, and expect to complete our work and respond to the Congressional requesters in early spring,” Deputy Inspector General Richard Delmar said in a statement.

The opportunity zone program, passed as part of the 2017 Trump tax overhaul, offers tax breaks to investors who put money into specially designated areas. While it was pitched as a way to help struggling neighborhoods, ProPublica and others have documented how the process has appeared to benefit billionaires with investments in areas that should not have qualified. In other cases, governors have granted the tax break to their political donors and, in some cases, themselves or their families.

Sen. Cory Booker, an architect of the program, along with Reps. Emanuel Cleaver and Ron Kind, asked the inspector general to do a “complete review” of areas picked for the opportunity zone tax break to see if they were truly eligible. The October letter also asked the inspector general to collect all correspondence between Treasury, White House officials and outside interests about the process.

The inspector general said that once the inquiry is complete it plans to publicly post its response to the congressional Democrats.

Do you have access to information about opportunity zones that should be public? Email justin@propublica.org. Here’s how to send tips and documents to ProPublica securely.

When Charity Is A Mask For Brutal Exploitation

Our society has coined expressions like “philanthropist” and “season of giving” to encourage and hail people’s charitable spirit.

Look on the flip side of those shiny coins of generosity, however, and you’ll find that they’re made of a base substance of societal selfishness. After all, the need for charity only exists because we’re tolerating intentional injustices and widespread inequality created by power elites.

A supremely wealthy society (which so loudly salutes its historic commitment to the deeply moral values of fairness, justice and equal opportunity) ought not be relegating needy families and essential components of the common good to the vicissitudes of a season and the whims of a few rich philanthropists. Yes, corporate and individual donations can help at the margins, but they don’t fix anything. Thus, food banks, health clinics, etc. must constantly scrounge for more charity, while big donors have their “charitable spirit” subsidized with tax breaks that siphon money from our public treasury.

Especially offensive is the common grandiose assertion by fat-cat donors that charity is their way of “giving back” to society. Hello — if they can give so much, it’s probably because they’ve been taking too much! As business columnist Andrew Ross Sorkin points out, “All too often, charitable gifts are used … to make up for the failure of companies to pay people a living wage and treat their workers with dignity.”

Sorkin notes that it’s not just the unemployed who rely on food banks but janitors, nannies, Uber drivers, checkout clerks and others who work full time but are so poorly paid they can’t make ends meet. That’s not a sad charity case but a matter of criminal exploitation by wealthy elites — and the charitable thing to do is to outlaw it and require a living wage for all.

We must shift from charity to fundamental structural change. “The aim,” says Sorkin, “should be to create a society where we don’t need places like food banks in the first place. … we should be trying to put the food banks out of business.”

In the absence of structural change, our society relies on charity and government programs to address issues regarding poverty and hunger. While it’s fashionable in many enclaves of the rich to bemoan government programs that use tax dollars to aid the poor, guess who receives by far the fattest benefits from the public treasury. Bingo — if you said the rich!

Consider recent actions by President Donald Trump’s secretary of agriculture, Sonny Perdue. He’s been dubbed the “Georgia Goober” for his ignorant insults and preposterous policies, and he issued a harsh new regulation in December that’s both. It slaps poor people living in depressed areas with a sneering work requirement in order to be eligible for meager food stamp benefits, which amount to only about $127 a month. Yes, Perdue is literally taking food from poor people, piously claiming it’ll help them become self-sufficient. “(G)overnment dependency has never been the American dream,” preached Purdue, who has personally been dependent on a government check for more than two decades.

Crass hypocrisy, however, is integral to the Donnie & Sonny policy approach. Last year, they pushed out a $28 billion tax bailout for farmers impacted by Trump’s inept tariff tiff with China. Many U.S. farm families have been wrecked by Trump’s failed ag policies, but they’re not the ones who got the Trump government’s helping hand. The bulk of the billions went to the biggest, richest agribusiness interests that neither needed nor deserved a public handout — about 75 percent of the total was taken by the largest 10 percent of farm corporations (including foreign-owned operations). And, unlike a food stamp recipient getting a pittance to buy a little bit of food, some ag-biz outfits pocketed more than $2 million each from us.

But wait. Trump and Perdue have more meanness in store for the poor. They’re pushing another federal regulation that’d cut off food stamps if a low-income family has barely $2,000 in “assets.” Hello — that means a family that has an old used car to get to their poverty-wage jobs would be denied food assistance.

What’s wrong with these shameful public officials who perversely pamper the rich while taking pleasure in punishing the poor? It’s immoral.

Populist author, public speaker and radio commentator Jim Hightower writes “The Hightower Lowdown,” a monthly newsletter chronicling the ongoing fights by America’s ordinary people against rule by plutocratic elites. Sign up at HightowerLowdown.org.

In Trump’s ‘Great Economy,’ Inequality Is Getting Worse

Reprinted with permission from Daily Kos.

Every month when the Bureau of Labor Statistics releases its monthly jobs report, Donald Trump and Republicans crow about the economy and the low unemployment rate. And every month, too many Americans wonder when they’re going to start feeling the effects of that “great economy.”

A recent study on poverty and a new way of measuring the quality of jobs show the shallowness of GOP claims about the U.S. economy. Poverty went up in at least one county in every state, concentrated in rural areas and the South. And a new system of measurement called the Job Quality Index shows that, although there are jobs available, for the most part, they aren’t jobs that pay well and aren’t career jobs for the long term. Often, they don’t even employ workers for a full 40 hours a week.

Combine that with the disastrous effects of the Trump tariffs and the trade war with China, especially how that trade war hurt U.S. manufacturing; the surge in bankruptcies of small farmers; the fact that American consumers now have a record $14 trillion in debt; and the 2017 GOP tax reform scam that turned into a windfall for big companies instead of helping everyday Americans, and most of us don’t feel that we’re better off than before Trump became president—a benchmark used by challengers in nearly every election.

Don’t forget that, after the GOP House and Senate passed and Trump signed the tax overhaul in late 2017, Trump’s message to his rich cronies at Mar-a-Lago gathered for the Christmas holidays was, “You all just got a lot richer.”

That was not a message that trickled down to average Americans. The supposed tax savings didn’t do much trickling down for them, either. Since the country started coming out of the Great Recession in 2009, the overall U.S. poverty rate has decreased. But between 2016 and 2018, the poverty rate grew in 30 percent of counties across America, according to data from the U.S. Census Bureau.

As a story from HuffPost put it:

The counties with the biggest jumps in poverty ranged across the political and demographic spectrum: from 97 percent white and solidly Republican-voting Carter County in Kentucky to black-majority, Democratic Bullock County in Alabama.

Most of the biggest increases were in areas both rural and Southern. Those areas generally had residents who lacked job training and skills and industries that suffered downturns.

Those industries included the coal industry in many of those poverty-stricken areas. Coal output has decreased by 27 percent in the last five years, and 50 coal power plants have closed across the country since Trump became president. That’s good news for the environment, but bad news for those counting on coal mining for a paycheck. It’s also a betrayal of one of Trump’s main promises in coal country.

But the unemployment rate is only 3.5 percent. That’s got to be great, right? Actually, considering the kinds of jobs available—and the fact that wage growth is fairly stagnant—not so much. And this isn’t a recent phenomenon.

The U.S. Private Sector Job Quality Index, or JQI, is a new economic indicator developed by academic economists that measures desirable higher-wage/higher-hour jobs versus lower-wage/lower-hour jobs. Job quality is defined as the weekly dollar-income a job generates for an employee. A paper defining the system and explaining why the detailed indicator is a more accurate reading of the economy is available at this link.

The paper’s conclusion reiterates the fact that U.S. manufacturing jobs have “declined dramatically in the last three decades,” and replacement jobs are poorer-paying, service-sector jobs with no guarantee of job stability or even a full work week. There also has been a “massive loss of market share, revenue, and jobs to foreign manufacturers.”

An important question surrounding the decline of manufacturing is whether those leaving manufacturing are transitioning into better or worse jobs. …

With other countries targeting what they see as high-value industries, the US is not just in danger of, but actually has been, forced into greater reliance on low-value, low-growth industries, offering lower-wage, lower-hours jobs. The success of superstar companies like Google or Apple or Pfizer should not blind us to the fact that today Leisure & Hospitality is our largest sector with 14.7 million non-management employees. It’s a sector that pays  such workers $16.58 an hour and the average worker works just  25.8 hours a week — resulting in average weekly income of $428. …

When all that a country has left is the domestic manufacture of processed foodstuffs, you end up with a lot of unhealthy and unwealthy workers who are in dire shortage of security, much less dignity. A republic that offers no better than this cannot long endure.

“When U.S. unemployment is at a 50-year low, why do so many people have trouble finding work with decent pay and adequate predictable hours?” asks a story from Forbes on the JQI. Answer: Few non-specialized good jobs are available.

Tens of millions of working-aged Americans are still not formally employed and have no apparent interest in sending out a resume. If the job market is so hot, why are so many people sitting on the sidelines? One frequently cited explanation is the growing proportion of older generation workers. Now we have another more important element. Workers don’t re-enter the workforce because many of the jobs themselves are rotten. …

Many looked to the category of jobs known as Professional and Technical Services as a path for the economy to “move to higher ground.” Professional and Technical Services were supposed to offer high pay, growth in employee numbers, and an opportunity to increase productivity. In fact, the JQI does report that employment is up 41 percent in this sector and the average weekly pay for non-managerial workers of $1,575 exceeds the pay of many other industries. But that’s not enough to rescue what the economy lost in manufacturing.

To recap:

  • Many of the jobs available are poorer, with stagnant wages and little job stability or full employment guarantees.
  • The tax bills of many big companies ended up being even smaller than what was anticipated in the GOP tax scam law. This has caused a ballooning federal deficit that could reach $1 trillion in 2020.
  • Trump’s trade war with China led to a loss of U.S. manufacturing jobs and higher prices. No matter what he claims about a new agreement, it’s not a done deal, and it’s only “Phase One” of a partial deal with few specifics released.
  • After Trump’s tariffs against China, China retaliated with tariffs that were devastating to U.S. farmers. Despite $28 billion in farm subsidies in the last two years (many of which went to large agriculture suppliers, some foreign-owned), farm bankruptcies surged, especially in the Midwest.
  • The record $14 trillion in debt that Americans owe is spread across mortgages, auto loans, credit cards, student loans, and other forms of debt. By themselves, student loans make up $1.5 trillion of the debt total. And medical costs are still growing faster than income—medical costs have gone up 33 percent since 2009.

It doesn’t matter if the stock market had its best annual gain in six years. When only those at the top are benefiting from those stock market gains—not every worker has a 401(k) or fat IRA account—then there’s no trickle down from a bloated stock market. Although 20 states and 26 cities and counties are raising the minimum wage in 2020, the federal minimum wage of $7.25 an hour hasn’t gone up since 2009.

This is a message that all Democratic candidates should be repeating over and over, whether they’re running for president, the House, the Senate, or a state office: The Trump economy isn’t helping most Americans.

Trump’s New Homeless Czar Threatens The Destitute

Reprinted with permission from DCReport

Team Trump is sharpening its teeth on a new, nationwide crackdown on homelessness.

Though the details are not known, we do know a bit about Robert Marbut, who has been named essentially czar for homelessness for the White House. Marbut built a reputation for making the homeless earn admittance to shelters while clearing the streets to gather them in central holding facilities.

Marbut puts emphasis on an approach that is less about empathy and closer to the model we know as jail.

Formally, Marbut was named director of the U.S. Interagency Council on Homelessness (USICH), a position that coordinates on homelessness policy among 19 federal agencies. His appointment was quickly condemned by housing advocates, including the national nonprofit Invisible People, which described Marbut’s past work as “real-life horror.”

Homeless policies are still cooking in the White House, but the details that have emerged suggest an approach heavier on law enforcement than empathy.

Marbut describes himself as wielding a “velvet hammer” toward homelessness to avoid coddling those on the street.

Criminalizing Homelessness

While whatever is emerging as homeless policies is still cooking in the White House, the details that have emerged suggest an approach heavier on law enforcement than empathy, and one generally described as an attack on funds for cities and states that are seen as places where homelessness is most visible.

For sure, homeless populations are growing in this nation–numbers of more than 1.4 million are said to be in various kinds of housing programs, with hundreds of thousands more living on the streets of major cities. Concern and frustration with homelessness as a problem crosses political boundaries, of course.

Donald Trump has been increasingly vocal recently in criticizing cities, particularly Los Angeles and San Francisco, for allowing homelessness to grow as opposed to looking directly into the economic and social causes for rising numbers finding themselves in the street. Trump apparently sees it as good politics to try to embarrass local Democratic officials rather than working to resolve the problems.

In other words, Trump wants to Do Something that makes it look as if homelessness is being contained rather than examine and treat the reasons for its growth. In medical terms, he wants the appearance of cancer going away without treating the disease.

More Money for Cops, Less for Housing

According to Citylab.com, advocates for homeless policy say that they expect an executive order on homelessness to assign new resources to police departments to remove homeless encampments and even strip housing funds from cities that choose to tolerate these encampments. While several approaches are being reviewed by the White House’s Domestic Policy Council and the Department of Housing and Urban Development, the preferred approach is aggressiveness on the streets over attempts to provide housing first.

Advocates say that the government is looking closely at ways to turn former correctional facilities and federal buildings into shelters, a controversial approach backed by  Marbut, who has said he sees “housing fourth” rather than “housing first.”

San Antonio Model

Citylab notes that Marbut’s career has been marked by controversy. Thirteen years ago, during his term as a San Antonio city council member, Marbut oversaw the development of a shelter model for the city in the wake of Hurricane Katrina, when hundreds of thousands of New Orleans residents fled to Texas cities. The downtown facility named Haven for Hope—which calls itself a “transformational campus,” not a shelter—has been praised by state leaders and now accommodates 1,500 people as well as a wide range of services, 24 hours a day. Access to the 1,000 beds must be earned. People entering the shelter must sleep on mats in an outdoor courtyard and can only move inside after participating in services like job training, education and substance abuse counseling. Breaking rules like missing curfew can mean getting demoted back to the courtyard.

Marbut became a paid consultant for other cities. He once disguised himself as homeless to mix with the homeless in Daytona Beach, Florida.

Increasingly, U.S. cities have instead been trying to provide “housing first,” believing that having shelter is a first step toward stabilizing the lives of those on the street, particularly if children are involved. At the same time, they want to address jobs and medical, financial or substance abuse problems. While expensive, building shelters has proved more economical than public spending on emergency care, officials say.

Rising Numbers

But progress is slow, especially as numbers increase, the result of economic or opiate problems. After years of decline, the population has gone up during the Trump years.

Marbut has recommended that cities stop giving out food, criminalize sidewalk sleeping and force homeless residents who want services to move into city-operated facilities in large temporary structures. Housing and Urban Development Secretary Ben Carson has said housing for homeless residents should not be “a comfortable setting that would make somebody want to say: ‘I’ll just stay here. They will take care of me.’” Carson has moved to end some federal homelessness programs, including protections for transgenders.

Policing Street Activities

In an interview with Huffington Post, Marbut said it is too soon to know what he will recommend. “We’re going to be coming up with new ways to look at and address homelessness,” he said.

The White House Council of Economic Advisers said in a September paper that the “tolerability of sleeping on the street” is an important factor in the prevalence of homelessness in a given town, a factor that could be affected by “the policing of street activities.”

Trump wants to push cities to round up homeless people, having called encampments disgusting and dispatched federal officials to scout out empty facilities across the country to be used as shelters. Ben Carson toured a large Houston shelter last week and previously had looked at an empty federal building in California and an unused jail in Oregon.

Texas Tribune published a profile of Marbut that is worth reading, including his sense that feeding people enables homelessness.

We should remember that there is a pattern in the Trump approach to government to hide away societal problems to make the policies he pursues look better.

This issue is worth public debate.