Notes from the Left Coast

Drummond Pike’s Blog

I came to Yokohama, the historical port for Tokyo, to give a talk about our new GreenSpace enterprise to support development of new green, Nonprofit Centers. The occasion is the “TBLI” (Triple Bottom Line) Conference that occurs regularly each year in Europe and Asia.

The trip turned into a wonderful opportunity to reprise my time in Japan nine years ago, lecturing to those active in the nascent movement to create a nonprofit sector in Japan. A new law was passed in 1998 creating the possibility for these corporate structures which hadn’t previously existed in Japan. Since, there have been three refinements in the law, and there is much work being done to expand the applicability for tax deductibility. Only some 300 NPO’s are deductible out of the 36,000 that have been formed, and there are other aspects to the question of establishing clear boundaries for appropriate NPO activity in the advocacy sphere. It’s a vibrant time in this small sector of Japanese social landscape, and it holds so much potential.

One of the most interesting conversations I had was with Professor Kanji Tanimoto and a small seminar group at Hitotsubashi University (in Tokyo) comprised mainly of executives with multi-nationals and banks (Microsoft, HSBC, etc.). We spent a good deal of time talking about Katherine Fulton’s premise that the for-profit and nonprofit sectors are converging toward each other. The old paradigm where business really ONLY cared about the bottom line is giving way to a new paradigm where success in business may in fact be more linked to practices that incorporate ESG (environmental, social, and governance) aspects into HOW businesses do business. In Japan, it would seem, the NPO sector can play a role in working with businesses to embrace this emerging awareness.

This discussion was a wonderful connector back to the TBLI Conference that had brought me to Japan in the first place. More on that in another blog post.  Let it suffice to say that while our friends on the right continue to see Tides and progressives in a very limited light, there is an expanding and fascinating world out there in the business community that ties together strands of creative private enterprise and deep commitments to addressing social justice and global sustainability. The inanity – and occasional tragedy (witness the assassination of Dr. Tiller) – of the right / left divide simply must give way to a new synthesis.

Japan has unique characteristics as a society – a very different and non-western society – that may enable it to make significant contributions to this evolving possibility. A more homogeneous society, Japanese have the ability to forge a new consensus and move quickly to pursue implications of a changing awareness.

Out for a walk, trying to stave off jet lag. Japan is plus 15 hours from SF, and the flight is 11 hours, so from an 11 AM departure, I am in the fog two days later, wanting to sleep when the world around me is awake. 

I’ve been fascinated by Japan since I first visited at age 15 for a summer exchange program in 1964. During that trip, among the most moving experiences was sitting at the ceremony in Hiroshima, commemorating that most terrible event. The ability of this culture to have absorbed that and all else that WWII brought, to have suffered the war years and the harshness of the ensuing occupation, and then to have dusted off the defeat and forged into the economic miracle that became the second half of the 20th Century…just boggles the mind. Even then, they had shifted remarkably to acceptance and learning when confronted by Americans. Now, for all the challenges that last decade might suggest as the Japanese have endured stagnant economic growth, it is us who might want to emulate them. 

I’m here to speak about the non-profit sector and what it has to offer those interested in social change. They have literally invented the NPO Sector, as they refer to it, over the past decade, and they are well along to making it a fixture in Japanese society. But this is not the area from which WE have to learn. We might learn a lot from them about how to manage limited resources, imported energy, and a rapidly changing economic outlook. 

Japan is different from the US. It is socially homogenous in a way the US will never be, and that produces both benefits and challenges. But they have got some things very much right. Waste is frowned upon. Recycling is a way of life. Transit is extraordinarily well developed, and urban landscapes are pedestrian friendly. Though their ubiquitous advertising has more in common with “Bladerunner,” they have evolved a savings, not a consumption culture. 

Among the most notable things, though, is the degree to which politeness is deeply ingrained in the culture. During my walk, I passed by a construction site. As with most commercial driveways, there was a security person ensuring people and vehicles maintained safe passages. As I approached, he conferred with the survey team blocking the way, then turned to me, and with a deep bow, showed me the way.  A most remarkable experience.?

Also of interest:

In the rain, running through DC
VP sirens-blaring events of past years
Only rarely echo along Mass Ave,

Then, right around the Finnish, then the Belgian, Embassy,
across the Connecticut Ave sky bridge,
veering into the Embassy conclave covering
the escarpment above the Rock Creek,

So, Joe has replaced Cheney,
And….
what does it mean?

fewer sirens,
less torture.

My Country, ’tis of thee….

A week ago, I attended the Global Progressive Forum, organized by Poul Ryup Rasmussen, former Prime Minister of Denmark and held in the Parliamentary hall of the European Union – an amazing space for such an event. It is called the Hemicycle and is a large oval space surrounded by 3 floors of “sky booths” containing the translators who were borrowed from the EU for the purposes of this two-day session. For an American, at least of my generation, it is with some embarrassment that I watched many of the representatives from various African, South American, Asian, and European countries in a facile way move between languages depending on who their audience happened to be. Me, I was consigned to grabbing the earphones whenever the speakers departed from English. (I’m happy to say that both of my children have avoided the mono-linguistic shortcomings of their father…)

A second, equally simple, observation at the GPF was the comfort that virtually the entire rest of the planet has with the idea of socialism and, perhaps more to the point, social democratic systems where the state plays a far more important role ensuring the social welfare of all its citizens and workers. America’s often outright hostility and deep skepticism of the role of government – not to mention the idea that government can be as well run an enterprise as any private organization of similar scale – has confused me for years. After all, my parents generation benefitted from the astonishingly successful governmental intervention in both the domestic economy and in international relations with more success than any other period in modern history. Government was the answer to the Depression and to the rise of fascism across the globe. No private enterprise could have achieved either outcome, much less had the foresight that was the Marshall Plan and the reconstruction of Japan and Korea. Yes, and the same generation was on duty when Vietnam happened and the Cold War flourished, but as a whole, there were an awful lot of good things about that era, and one has to think we may well be headed into a similar time. Lord knows, there are as many compelling challenges on the table.

May we live in interesting times.

The Global Progressive Forum is a bit like the Take Back America conference has been over recent years in the US – a collection of activists, elected officials, and academics who all share a concern for how to move things back in a more progressive direction.  Europe, as many are aware, has been on a march to the right. Of course, everything is relative. The right in this context means a more conservative interpretation of European style social democracy.  By contrast to the US, Merkel’s and Sarkozy’s conservatism is downright leftist. Rush Limbaugh would choke just trying to say the word when describing Europe’s version of a safety net. He’d probably call it ‘communist’ or something which isn’t terribly far from the truth, again in contrast to the US experience.

One of the most interesting things to emerge from this two-day gathering held in the chambers of the European Parliament, has been the repeated raising of concerns about tax havens and the role they have played in the melt-down. This isn’t well understood in the US, but the movement of capital and income through tax-haven subsidiaries was a contributing factor in low accountability, but also in avoidance of tax. As everyone is desperate for revenue, there is some possibility that taking on this beast will become a signal call from many for how future reforms need to be structured.

One speaker noted yesterday that if one has to rely, as is currently the case, on agreements between two countries to manage tax reporting and reciprocity, the number of countries in the world would require some 18,000 agreements. Not likely.  However, a truly international regime – like the WTO, for example – could be put in place, perhaps required for participation in WTO or some such. A fascinating idea.

One other surprise, speaking of the WTO, has been that the Secretary General of the WTO, Pascal Lamy, is an honored member of this community and will be speaking tomorrow. Who knew he was one of these socialist leaning Europeans? It does make one wonder if we have got this all right – our American blanket critique of trade which we typically see as benefitting corporate interests over poor people. What appears to be more the case is that we just haven’t got it right yet. True, corporate interests have got a great deal of what they want out of trade deals, but the same mechanisms can be used for much more positive social impacts, if we just have the will.

It is an interesting contrast from the American experience to travel in Europe.

They have this thing called “mass transit” which most of us in the US associate with behemoth SUV’s – very large mass transporting us from our sprawled suburban homes to the mall or school or the office park where we work. And every time we need a carton of milk, it’s back into that huge gas guzzler and back on the road to the convenience store down the road. Now, of course it is true that many eastern cities (NY, Washington, Boston, Philly) all have aging subway systems that are well used. But for most of us, transit is us sitting at the driver’s wheel, frustrated at the slow moving mass of cars ahead and behind us.

Night before last, I flew to London, cleared customs in 20 minutes, caught an express train to downtown (it left 6 minutes after I got to the platform), and 20 minutes later I was at Paddington Station. Then it was a 15 minute ride on the “tube” to , a 40 minute wait for the Eurostar Train – a highspeed, quiet, comfortable ride for less than 2 hours to Brussels via the Channel where I arrived in downtown maybe 10 minutes from my hotel. The thing that I couldn’t get over was that it was all so EASY.

As we stumble our way toward decisions on what to do with the stimulus investments we are about to make in the US, investing in transit seems like such a sensible thing to do. We are so unbelievably behind most parts of the world, but we also have the opportunity to design a system that can truly meet future needs.

California will soon begin work on a high-speed train network to connect the northern, southern, and central metropolitan areas. Let’s add in a really robust Bus Rapid Transit system (which can be shovel ready very quickly), create metropolitan planning and management districts, and all the other elements we need to create a robust, green, and smart road to the future.

Also of interest:
TreeHugger.org  articles on High Speed Trains

Madoff. What more is there to say. Pretty soon, we’ll be saying “so-and-so pulled the most amazing ‘madoff.’” Poor Mr. Ponzi may end up being left by the wayside, eclipsed by the shear scale, the unreal duration, and the depth of betrayal exhibited by the now jailed Bernie. But, as we all rue his very birth, I think it worth asking a question about just how and why so many charities and their assets went down the drain.

These charities that invested much or, in the case of several, all their assets with the now notorious Mr. Madoff have exposed just how poorly they oversaw the investment process. Two questions emerge. How could regulators have failed to expose the fraud long before it was made public? Second, are the standards for charities in this regard adequate for the quasi-public nature of charitable funds? The first I will leave to the myriads of people addressing it (though I will be avidly consuming every article I can find on the subject). The second question, though, fascinates me. My conclusion? The answer is a simple “no.”

(more…)

The Chronicle on Philanthropy reports on their website this week that the leaders of the Council on Foundations and Independent Sector have come out publicly in opposition to the President’s budget proposal that proposes in 2011 to reduce the tax savings on charitable gifts from top rate-payers’ current 35% to 28%, the lower rate of taxation paid by the vast majority of taxpayers. The example is often given for the high income donor giving $100,000 to a charity of her or his choice; under current law, the donor would save $35,000 in taxes, and in the future regime, this would be reduced to $28,000 for the same gift. The argument of our colleagues in philanthropy is that this will lead to a reduction in charitable giving, though I haven’t seen a study that supports this empirically. If true, I suspect the influence would be most likely marginal; market changes are far more of an influence on charitable giving practices. And, to be sure, no one is suggesting a change in the most important factor: the avoidance of capital gains when gifts are made of appreciated stock.

Let’s look at the other side of the equation. What’s so wrong about doing this? Let me start with the matter of basic equity. Why should two taxpayers, both giving the same $10,000 gift to the same charity, receive differing tax benefits because one earns more money than the other (and therefore pays a higher tax rate)? In some ways, the lower-earning individual is giving away more value relative to net income (and likely net worth as well).

Second, let’s look at just what this proposal is intended to help – the creation of a program for universal health coverage in America. This would address a profound social tragedy, and the deep shadow of embarrassment in which the US lives internationally, if we could achieve it. Wouldn’t it make sense if the philanthropic sector, contrary to expectation, embraced this policy initiative and asked, instead, “how can we help?” Perhaps sacrificing a bit of the privilege we experience, living outside the realm of the taxable economy as we do, in order to contribute to the final outcome would connect us to the deeper social good. After all, aren’t we really supposed to be about the public good?

Let’s instead support the proposal. If it succeeds, 45 million Americans will, for the first time, have access to health care – something that all our grants for many years could never finance.

Also of interest:

hr676.org:

According to news reports and analysis the Bush Administration believes it reasonable for the people’s employees in the Executive branch to be permanently exempt from having to testify before the people’s representatives about their activities while in office….even long after they have departed the government. The matter at hand has to do with Harriett Miers and Karl Rove and the Congressional inquiry into the famous firings of US Attorneys who failed what is largely understood to be a test of partisanship. That US Attorneys are supposed to be above the partisan fray in upholding federal law would hardly seem controversial, but for the past 8 years, we’ve seen the most severe challenges to this idea one can recall.This is a matter where I think the progressive community must speak up. It is not clear that the Obama White House, so clearly wanting to “look forward,” will want to see John Conyers and others pursue these matters. But there is such an important principle at stake – the fundamental balance of powers. If members of the Executive Branch cannot be held to account, especially after any vulnerability to executive action has ceased with advent of a new administration, we might indeed end up with the “imperial presidency” as some characterized the Bush/Cheney regime.We should watch for the outcome of the US Court of Appeals case involving Harriett Meirs and Josh Bolton on the US Attorney’s firing inquiry in the House. They have asserted this “absolute” privilege and the new Administration will have to present their position on privilege at this early moment in their tenure. Something worth speaking up on, that’s for sure.

For years, we’ve lived with this crazy idea put forth by conservatives that “class warfare” is a terrible thing that Democrats often fall back on and it only divides America. In January, 2003, then-President Bush decried critics of his tax cut proposals as agents of “class warfare,” despite the diminutive response the proposals were receiving from the opposition. It was an aggressive, in-your-face statement that set the stage for the bi-elections later that year. What would have been more appropriate would have been for him to be talking into a mirror, for few can now doubt what Bob Borosage of the Campaign for America’s Future has been arguing for years – namely that the signature accomplishment of the Bush years has been to drastically weaken the lot of working Americans. Everything from tax cuts that gave 90% of the benefits to the already wealthy to coddling of Wall Street at every possible opportunity that arose, most notably in the deregulating of the financial markets. 

In many ways, we have been at this since “supply-sider” Ronald Reagan assumed the presidency. He quite straightforwardly sought to shrink government while embracing the free market cheerleaders who believe in unfettered markets. Tax cuts became the answer to everything. Reduced federal spending was close behind. Outside of the military, real progress in the evolution of governance in America came to a standstill for the past 28 years. So perhaps it is no great surprise that the barons of Wall Street are having a bit of difficulty adjusting. One loves the story about John Thain, recently dethroned from Merrill Lynch after revelations that he spent $1.2 million of the firms money to “redo” his office about a year ago. While the meltdown hadn’t taken full force then, it was well understood that the financial giant was in trouble and had been losing money for some time. It has, of course, ended up in the dumps, recently purchased for a song by B of A. What I love about the story is the simple idea that he apparently thought the role to model (as all CEO’s realize that role modeling is a core requirement) was that of potentate not worker bee. Having an antique “commode” worth tens of thousands of dollars somehow conveyed a message he cared about. 

Thain is hardly alone. It seems as though the titans of industry, whose bonuses long ago departed any connection to the overall financial performance of their companies, view the ascension to pinnacle roles as a license to take all they can get away with. Reading that 2008 Wall Street bonuses amounted to some $18.4 billion in the worst financial period since the Great Depression is simply astonishing. If not illegal, it is certainly the moral equivalent of stealing. So, I say a pox on all their houses. Let’s “claw back” everything we can, but let’s also bring these people back to earth. Maybe establish a legal limit on the ratio of highest paid to lowest paid employees? In my organization that ratio is about 8 to 1. So the non-profit world is a bit different. Let’s set it for 20 to 1 in the for profit world. I bet there would be a lot more well paid folks on the low end of the scale. So, what was wrong with the idea of class warfare?