Friday, May 31, 2002
What you didn't know about the GOP: Republicans are cold, heartless, kitten-drowning bastards -- each and every one of them.
New York Times columnist Paul Krugman uses the current Third World tour that U.S. Treasury Secretary Paul O'Neill and U2 lead singer Bono are on to point out that if you're in the GOP, you must be evil.
In one of the oddest enterprises in the history of development economics, Bono -- the lead singer for the rock band U2 — has been touring Africa with Paul O'Neill, secretary of the treasury. For a while, the latent tensions between the two men were masked by Bono's courtesy; but on Monday he lost his cool.
Notice the characterization of Bono as the one being courteous -- O'Neill is the difficult one. Those Republicans, it's so difficult for normal people to be around them because they're so boorish. Just maybe O'Neill was having an equally hard time dealing with an arrogant rock star, but is simply more courteous because he didn't' lose his cool.
The pair were visiting a village in Uganda, where a new well yielding clean water has radically improved the villagers' health. Mr. O'Neill's conclusion from this, as from the other development projects he saw, was that big improvements in people's lives don't require much money -- and therefore that no big increase in foreign aid is required. By the way, the United States currently spends 0.11 percent of G.D.P. on foreign aid; Canada and major European countries are about three times as generous. The Bush administration's proposed "Millennium Fund" will increase our aid share, but only to 0.13 percent.
Bono was furious, declaring that the projects demonstrated just the opposite, that the well was "an example of why we need big money for development. And it is absolutely not an example of why we don't. And if the secretary can't see that, we're going to have to get him a pair of glasses and a new set of ears."
Rather than relying solely on Krugman's characterization and dismissal of O'Neill's statements, let's see what he said. From The Washington Post's reporting:
During a visit to a well in Wakiso, an area outside of Uganda's capital, Kampala, the Treasury secretary emphasized how cheaply the well had been built, noting that it cost $1,000 and provided clean water to more than 400 people. Using "back-of-the-envelope arithmetic," he said, he and Uganda's central bank governor had calculated the night before that wells serving all of the nation's people could be drilled for about $25 million. He questioned why it couldn't be done within a year.
"Last year the World Bank lent $300 million to Uganda," he said later in the day to a university audience. "What was so important that there wasn't $25 million to $30 million to give everyone in Uganda clean water? Where did the money go?"
The answer, unfortunately, is that much of the money that is targeted for aid is gobbled up by bureaucracy at some international aid agencies, and, when the money finally arrives in a country it is often stolen by government officials who use it to live a life of luxury while their people die.
Maybe the easiest way to refute Mr. O'Neill is to recall last year's proposal by the World Health Organization, which wants to provide poor countries with such basic items as antibiotics and insecticide-treated mosquito nets. If the U.S. had backed the proposed program, which the W.H.O. estimated would save eight million lives each year, America's contribution would have been about $10 billion annually — a dime a day per American, but nonetheless a doubling of our current spending on foreign aid. Saving lives — even African lives — costs money.
Well, that's $36.50 a year for every man woman and child to pay for one proposed WHO program. Now, many Americans would willingly pay an extra $40 a year if it meant saving millions of lives -- and many do through charitable organizations. The difference between contributing through taxes and through a charitable organization is a "donor" has more say in where the money goes and how it is used. The WHO uses more than one third of its budget at its headquarters (see Page 12). [Link requires Adobe Acrobat]. One can safely assume that those costs are administrative. You can also assume that some small portion of the costs for the other geographic areas is administrative.
Compare that to the American Institute of Philanthropy's guidelines for charitable organizations:
Percent Spent on Charitable Purpose
This is the portion of total expenses that is spent on charitable programs. In AIP’s view, 60% or greater is reasonable for most charities. The remaining percentage is spent on fundraising and general administration.
That 60 percent figure takes into account the fact that, unlike the WHO, most charities also spend money on fundraising campaigns. The WHO just lobbies governments. A generous look at the WHO's numbers suggests that if they were a charity, their administrative costs may be reasonable -- but not necessarily good. (For a list of charities that fare better look here.)
All these issues are certainly debatable. Are the American people willing to have their taxes raised slightly in order to help Third World countries? Maybe the Times can do some polling on the issue. I'd be interested to find out the results.
If Krugman stayed on this issue, I probably wouldn't have had too much to say. Unfortunately, he buried the lede.
But is Mr. O'Neill really blind and deaf to Africa's needs? Probably not. He is caught between a rock star and a hard place: he wants to show concern about global poverty, but Washington has other priorities.
A striking demonstration of those priorities is the contrast between the Bush administration's curt dismissal of the W.H.O. proposal and the bipartisan drive to make permanent the recent repeal of the estate tax. What's notable about that drive is that opponents of the estate tax didn't even try to make a trickle-down argument, to assert that reducing taxes on wealthy heirs is good for all of us. Instead, they made an emotional appeal — they wanted us to feel the pain of those who pay the "death tax." And the sob stories worked; Congress brushed aside proposals to retain the tax, even proposals that would raise the exemption — the share of any estate that is free from tax — to $5 million.
Let's do the math here. An estate tax with an exemption of $5 million would affect only a handful of very wealthy families: in 1999 only 3,300 estates had a taxable value of more than $5 million. The average value of those estates was $16 million. If the excess over $5 million were taxed at pre-2001 rates, the average taxed family would be left with $10 million — which doesn't sound like hardship to me — and the government would collect $20 billion in revenue each year. But no; the whole tax must go.
Aha! Those rich people not wanting to pay taxes are killing children in Africa!
I would also like to note that Krugman has pointed out that the drive to repeal the estate tax was bipartisan. Maybe Democrats are just a little bit evil too.
Unfortunately Krugman's opportunity-cost argument could be made about any manner of issues. I'd be perfectly willing to lose some of the government pork (including the whole damn farm bill) and spend the money in Africa. According to Citizens Against Government Waste, a nonpartisan group: "This year's pork list was comprised of 8,341 items that cost taxpayers $20.1 billion."
Of course, getting rid of the waste would be great. I think most Americans, including Krugman, would agree that the politics of pork should stop. Getting rid of the pork would certainly be easier politically than trying to pass a tax hike of some kind. In fact, Bush is trying to do just that. According to CAGW: "The Bush Administration has proposed moving funds from lower priority projects such as those identified in the Pig Book to higher priorities such as homeland security and the war on terrorism."
Let me say that no one in my family is rich enough to be affected by the death tax. I don't feel very strongly about the whole estate tax issue, and I'm not opposed to raising the exemption to $5 million, but I don't like the principle of the taxman reaching into the casket to take a good chunk of money that someone has earned over their lifetime.
So here are our priorities. Faced with a proposal that would save the lives of eight million people every year, many of them children, we balk at the cost. But when asked to give up revenue equal to twice that cost, in order to allow each of 3,300 lucky families to collect its full $16 million inheritance rather than a mere $10 million, we don't hesitate. Leave no heir behind!
Which brings us back to the Bono-O'Neill tour. The rock star must have hoped that top American officials are ignorant rather than callous — that they just don't realize what conditions are like in poor countries, and how foreign aid can make a difference. By showing Mr. O'Neill the realities of poverty and the benefits aid can bring, Bono hoped to find and kindle the spark of compassion that surely must lurk in the hearts of those who claim to be compassionate conservatives.
Here we are back to the evil Republicans. Just a couple paragraphs after Krugman says that the move to repeal the estate tax was bipartisan, and all of the sudden the Democrats shared responsibility has disappeared. Oh well, it was to be expected.