Wednesday, October 26, 2016

Update: Political Contributions from Stanford Faculty, Staff, and Students, August 1-September 30, 2016

During August-September 2016, Stanford Faculty, Staff, and Students residing in campus housing (94305) made 116 separate contributions to Hillary Clinton and 51 to Democrat Party Organizations. Some individuals made multiple contributions.

None was made to Donald Trump or Republican Party Organizations.

For the five months May-September 2016, contributions totaled 380 for Hillary Clinton and 0 for Donald Trump.

Tuesday, September 6, 2016

Western Democracy Gone Mad

For decades, but especially following the U.S. overthrow of the Taliban in Afghanistan in 2001 and the invasion and occupation of Iraq in 2003, the U.S. government has tried to promote the establishment of democracies in the Middle East, North Africa, sub-Saharan Africa, and elsewhere around the globe.

This should come as no surprise.  Centers for the Study of Democracy have become an integral feature of universities throughout the United States and Western Europe.  They replaced older schools of realpolitik that used to be taught.  Professors, politicians, and international organizations aggressively promote the doctrine of democracy.

In the West, democracy closely follows sustainability, diversity, and reducing income and wealth inequality as a moral imperative.  The dozens of democracy centers in universities and think tanks house many distinguished scholars, but they have a tendency to act as cheerleaders for democracy.  They seek to promote democracy as a universal prescription for almost every country, regardless of its history and culture.

In recent years, democracy has fallen on hard times in numerous countries in Asia, Africa, and the Middle East.  To address this problem, in 2013 Stanford University inaugurated a Program on American Democracy in Comparative Democracy.  Its purpose is "to seek to understand problems such as ineffective governance, gridlock and polarization, and declining trust in institutions in the United States." It seems that one reason for the failed effort to promote democracy abroad may be rooted in the faults of American democracy itself.  (More on this later.)


Why did President George W. Bush believe, after the invasion, overthrow of Saddam Hussein, and occupation of Iraq in 2003, that he could establish a viable democracy within the artificial borders of Iraq that were drawn by the colonial powers after World War I?  Sunnis and Shiites have been at each other’s throats for centuries.  Kurds have wanted their own independent homeland.  Christians largely lived in relative peace, posing no threat to Sunnis, Shiites, or Kurds.

Bush evidently believed that the desire for democracy beats in the heart of all peoples, regardless of their history and culture.  But it was a bridge too far to try to establish democracy in multi-ethnic Iraq, which only knew dictators, oligarchs, and tribal leaders, and lacked any traditions of the rule of law, individual rights and civil liberties.  Bush’s intervention resulted in massive ethnic cleansing of more than a million Christians from their long settled homes in Iraq.

To be fair, Bush could hardly believe otherwise.  For the past 40 years, diversity and multiculturalism have been official doctrine in America’s universities.  This was the intellectual environment in which President Bush was educated, elected governor of Texas and then president of the United States.  Democracy has been viable in America, which has the shared traditions of civil liberties, individual rights, the rule of law, private property, and constitutional government, although America is fast becoming a collage of ethnic identities:  African-Americans, Spanish-speaking Americans, Native-Americans, and a plethora of Western European-Americans.

In marked contrast with America, Sunnis, Shias and Kurds only have a shared history of national unity based on the imposition of force by one or an alliance of two over the others.  Either no one told Bush that the America model could not be successfully exported to Iraq and serve as an example for other Muslim Arab and North African regimes, or he chose not to listen.   Either way, the overthrow of Saddam Hussein, followed by elections in which Shias voted in a government representing Shia interests, unleashed a hell of Sunnis vs. Shias, Kurds protecting their own territory from both and Turkey, and the growth of Al-Qaeda and rise of ISIS.

The tragedy of Bush’s folly, greater than the cost of several trillion dollars and thousands of American casualties, has been the ethnic cleansing of more than a million Christians from their homes in Iraq by Islamists since the invasion in 2003.

President Barack Obama’s deposing Libyan ruler Colonel Kaddafi compounded Bush’s folly.  Kaddafi’s overthrow unleashed tribal war in Libya, along with the rise of ISIS and its affiliates (Boko Haram, Al-Shahab, etc.) throughout North Africa.  Obama’s support of the Muslim Brotherhood in Egypt, although the regime lasted only a year, led to killing of Coptic Christians and burning of their churches, until Egypt’s military took power and restored order.

Christians are under assault in Syria as well.  In the 1920s, Christians amounted to about 30% of the population, declining to about 10% today.  Estimates put the number of Christians who have fled Syria or been displaced in the hundreds of thousands.  Whole Christian villages have been destroyed and dozens of churches damaged.

Ethnic cleansing of Christians in the Middle East and North Africa is one of the great tragedies of the twenty-first century.   Today, Iraq, Libya, Egypt, Syria, Chad, and other Middle Eastern and North African countries do not enjoy democracy, stability or prosperity.

Hussein, Kaddafi, Mubarak, and Assad were not and are not paragons of virtue.  But what has followed is worse and the worst may be yet to come.


Those who propose to intervene in foreign countries to replace autocracy or other forms of authoritarian rule with democracy first need to produce a comprehensive, proven blueprint for a successful post-intervention transition to democracy.  The Bush and Obama administrations did not produce any such plans for Afghanistan, Iraq and Libya.

We have learned that the Democrat Party’s regime of super delegates, coupled with the Wikileaks email dump of the nefarious activities of the Democrat National Committee, insured the nomination of Hillary Clinton from the very beginning.  Bernie Sanders never had a chance.  Democracy as practiced by the Democrat Party made a mockery of real, one man-one vote democracy, which was the political ideal that Bush and his aides proposed to bring to the Middle East.

Well then.  If U.S. political party insiders can impose rules to cheat rival candidates of the opportunity to compete in a fair election, so too can elected leaders in one-party states, or who jail opposing candidates, and impose other rules that narrow the franchise in African, Asian, or Latin American elections, as the case may be.

What happened in democracy studies parallels what happened in the economics profession as it failed to anticipate the financial crisis of 2008 and the Great Recession it spawned.  Perhaps a bit of humility is in order before we try to remake foreign political systems.


Something new has emerged in the democracy madness arena, namely, suggestions to transform America’s stable two-party democracy into a (unstable) multi-party democracy.

Some democracy specialists suggest that the unpopularity of both Hillary Clinton and Donald Trump as seen in the high negatives of both candidates means that third-party candidates should be given greater latitude in meeting the requirements to run for president.  These include a lower percentage threshold of 5% instead of 15% in public opinion polls to qualify for the autumn presidential debates.  Another proposed change would make it easier to qualify for the ballot in all 50 states.  And so on.

The U.S. has experienced third parties in some elections, but these have had little chance of success, mainly serving as spoilers for one of the two main parties.

But any set of changes that enhances the prospects for third parties would be disastrous in the United States.  It would give rise to ethnic politics, spawning a Black party, a Spanish-speaking party, an Asian American party, and several White parties.  Leaders in each group would seek power by promising to be the strongest defender and promoter of their groups’ interests, giving rise to extremists in each group.  The U.S. would join the ranks of unstable “plural societies.”

It’s bad enough that the democracy promoters have destabilized the Middle East.  Now they want changes that would threaten to destabilize the United States.  None of this would be happening if the liberal professoriate were certain that Hillary Clinton would defeat Donald Trump.  But their fear that Trump could become president is leading them to propose changes that could undermine the most successful democracy in history.  Democracy promoters love democracy—until they don’t like the outcome of the democracy they profess to admire.

In August 2016, your friendly proprietor addressed a group of Chinese scholars.  I asked if they thought the 200,000 or so Chinese students studying in the United states would return to China having observed the 2016 U.S. presidential election during their stay in America, and urge Chinese President Xi Jinping to adopt U.S.-style democracy.  They all broke out in laughter.

Friday, September 2, 2016

Update: Political Contributions From Stanford Faculty, Staff, and Students, July 1-31, 2016

None were made to Donald Trump.

Adding these to the prior data for May and June, contributions for the three months May, June, and July totaled 264 for Hillary Clinton and 0 for Donald Trump.

Several Republican campus residents maxed out contributions for George W. Bush, Bob Dole, and Mitt Romney in the four previous presidential elections.  None is enamored of Trump.

Figures for August will be reported when they become available.

Wednesday, August 31, 2016

Reduce Inequality? Not If It Affects My Livelihood!

Most leading American universities have established “Centers for the Study of Inequality.”  Reducing inequality is one leg of the holy academic triad of diversity, sustainability, and reducing inequality.   Inequality scholars assert that the future of democracy and social justice requires reducing inequality in income, wealth, educational opportunity, health care, neighborhood safety, and so on, that harms the less well-off members of society.

Scholars disagree on the best way to reduce inequality.  One school of thought favors more progressive income and heavier wealth taxes to reduce the income and wealth of the top 1% percent of households, and redistribute the additional revenue to middle- and lower-income households in the form of lower taxes and/or more spending.  Another school wants targeted spending programs to provide greater pre-K education, smaller class sizes, higher teachers’ pay, more local health clinics, and other services to lower-income households.

Universities rely on tax-deductible gifts to pay salaries and build and maintain physical facilities. For the 2016-17 fiscal year, Stanford projects $350 million in gifts, about 6% of its projected revenue of $5.88 billion.  Stanford also has a capital budget of $4.1 billion for the three fiscal years 2016-17 through 2018-19, of which gifts are estimated to provide 21% of funding.  Harvard is in the midst of a $6.5 billion fund raising campaign.  It received $436 million in expendable gifts in 2015-16.

Gifts are tax-deductible up to certain IRS limits.  Rich donors, who are in a higher income-tax bracket than lower-income givers, receive a larger tax deduction for their gifts, thus contributing to inequality.  These are the very people that help fund (inequality) research centers.  The wealthy also fund the bulk of capital projects. Nine-figure millionaire and billionaire donors, the 0.001% and 0.0001%, are the principal source of gifts for new buildings and research facilities.

IRS Statistics of Income and Itemized Charitable Deductions

In tax year 2013, 4.81 million households filed tax returns with Adjusted Gross Income exceeding $200,000. Their itemized charitable contributions totaled $91.0 billion.  Altogether, 36.43 million household filed returns with $194.7 billion in itemized contributions.  Households with AGI exceeding $200,000 constituted 13.2% of all returns, but itemized 46.7% of total contributions.

So, those who propose higher taxes on the income and wealth of the rich are financed, in part, from the tax-deductible contributions of the rich on whom they want to impose higher taxes.  One way to achieve greater equality of income is to eliminate the tax deductibility of gifts to universities.  But the majority of scholars do not think that this is a good idea.  Wonder why?

Let’s dig a little deeper into the numbers.  Membership in the top 2% of income-earners requires an annual AGI of about $250,000.  Many full professors in leading universities fall in the top 2%, and certainly in the top 3%.  Academic stars reporting $430,000 and above in AGI are in the top 1%.  (It takes $1.9 million to join the 0.1% club.)

It’s no surprise, then, that academics that want to levy higher taxes on the rich limit their recommendation to the top 1%, not the top 2%.  But, and a very important but, they believe that any new taxes should retain the home mortgage deduction, which they utilize, and the charitable contribution, which helps pay their salaries.  Development departments in universities are concerned their scholars’ proposals to reduce inequality do not reduce gifts from the unequal rich.

Nonetheless, these professors teach students that the income and wealth of the 1% is harmful to society, but that their contributions to universities are not.  Wonder why so many students and graduates are muddle-headed?

PS.  When Robert E. Hall and I first proposed our flat tax in 1981, which eliminates charitable deductions, we got nasty comments from Stanford’s development department.  Its fund-raisers expressed concern that eliminating the tax deductibility of charitable contributions would reduce giving to Stanford.

Friday, August 26, 2016

Another Day Brings Another Batch of Republican Bigwigs Against Trump

On August 25, 2016, the Wall Street Journal released the results of a survey of 37 current and former living members (8 others did not respond to the Journal's inquiries) who served on the White House Council of Economic Advisers under 8 presidents.  Twenty served under Democrat presidents and 17 under Republicans.  Of the 8 who did not respond, 2 served Democrat presidents and 6 Republicans.

Of the 17 serving Republican presidents, 6 said they opposed Donald Trump and 11 declined to say either way.  The 6 were concerned with Trump's anti-free trade policies.  Two said they would vote for Hillary Clinton, one for Libertarian Gary Johnson, and the other 3 said they could not support Trump or Clinton.

Of those serving Democrat presidents, 13 said they supported Hillary Clinton and 7 declined to say.

The headline of the article is the message:  "Economists Who've Advised Presidents Are No Fans of Donald Trump."  It would be expected that advisers to Democrat presidents would oppose Trump. What is evidently newsworthy is that none of the CEA members under Republican presidents would state support for Trump.

Another story in the daily saga of prominent Republicans coming out against Trump.

Wednesday, August 24, 2016

Political Contributions From Stanford Faculty, Staff, and Students

Zip Code 94305 encompasses all of Stanford University.  About 40% of the faculty and high-level staff and their families inhabit (own) campus residences.  Well over 10,000 undergraduate and graduate students live in student housing on campus.

The Center for Responsive Politics reports political contributions to individual candidates, parties, and PACs, among others.  As of August 24, 2016, data are available through June 30, 2016.

For Stanford (94305), 136 individual contributions were made to Hillary Clinton during the months of May and June 2016.  (I did not add up the total amount of money contributed).

No contributions were made to Donald Trump.  To be fair, most campus Republicans did not support Trump in California's Republican primary.

Your friendly proprietor will update these numbers when data are reported for July, August, and September, and will total the dollar amounts for the last reported month prior to November 8.  

Sunday, August 14, 2016

Numbers On Political Parade

250, 600, 70, 22.  What do these numbers have in common?  These are the number of people who have signed various open letters opposing Trump and/or stating their intent to vote for Hillary Clinton. 600 historians, 250 members of the foreign policy establishment, 70 former foreign policy officials in Republican administrations, and 22 authors in National Review, to name several. More open letters are likely to appear in the remaining days before the election.

18,000, 23,000, 10,000, 15,000, 30,000.  What do these numbers have in common?  These are the size of crowds that have attended Trump rallies, many people waiting in line for hours to get in. These are the folks who want to see and hear Trump.

The mainstream media (MSM) and punditocracy give more attention and attach greater importance to signatories of the letters than they do to the hundreds of thousands of individuals who show up every month at Trump rallies.  They cite polls showing Clinton in the lead, both nationally and in key battleground states.  But her largest crowds during the campaign, apart from her acceptance speech at the Democrat National Convention, rarely exceed a thousand.

The MSM and pundits speculate that Trump's huge crowds may not show up to vote.  But these are the same people who proclaimed that he had no chance to win the Republican nomination for president from Day 1 of his campaign.

Many analysts contend that Trump's primary wins and large crowds represent a rebellion against the status quo politics of the [corrupt] ruling elite.  If so, why would any member of the Academic Political Media Industrial Complex (APMIC) think that their names on letters would sway voters to their point of view?  Rather, each new letter and list of signatories are likely to strengthen Trump's support among those disenchanted with American politics and who want a change.