Tuesday, August 20, 2013


Total annual income of the top 1 percent income earners in the United States has more than doubled from 9 percent in 1976 to 20 percent in 2011, reports the study published in the Journal of Economic Perspectives.

While the income share of the bottom 90 percent fell from 65 percent to 52 percent. Those kinds of swings have spurred public outrage and protests.

Peter Buffett, the son of billionaire investor Warren Buffett explains  at meetings of charitable foundations, “you witness heads of state meeting with investment managers and corporate leaders. All are searching for answers with their right hand to problems that others in the room have created with their left.”  The state of philanthropy in America, he says, “just keeps the existing structure of inequality in place.”

 The capitalists’ philanthropy, totaling $316 billion in 2012, has done little to combat economic inequality. In fact, a recent paper published in the Journal of Economic Inequality shows philanthropy hasn’t simply failed to meet its goals; it’s made the situation worse. "Using measures of both absolute and relative inequality,” the study’s authors conclude, “we have shown that philanthropy may actually exacerbate inequality, instead of reducing it.”

The philanthropists have won the class-war of entrenched and widening inequality, and their charitable giving helps hide the ugly truth of the situation — from us as well as themselves.

A 2010 Chronicle of Higher Education study found that  one in four boards at private colleges have such financial ties, signing contracts involving “banks, law firms, construction companies, and insurance conglomerates” linked to trustees. And the trend is accelerating, with 58% of colleges (64% among private institutions) now allowing business relationships with trustees, as opposed to 46% just two years ago.

The Koch and Bull Story

David and Charles Koch, together worth $35 billion, have perfected this philanthropic misanthropy perhaps better than anyone else. Together they control thousands of miles of oil pipelines from Alaska to Texas; fertilizers, minerals and biofuels. Researchers at American University found that from 2007 to 2011, Koch foundations gave $41.2 million to 89 nonprofits and sponsored an annual libertarian conference. The report details how Koch Industries’ $53.9 million federal and state lobbying budget routinely goes hand-in-glove with Koch-affiliated nonprofits’ “public advocacy” for reasons having little to do with the public and everything to do with the brothers’ sprawling business interests. Koch lobbyists advocate for bills like the Energy Tax Prevention Act — which sought to roll back the Supreme Court ruling allowing EPA regulation of greenhouse gases — that are then supported in congressional testimony by “experts” from Koch-funded nonprofits. Though private foundations cannot legally “be organized or operated for the benefit of private interests,” the study’s authors note that IRS enforcement is largely “sporadic and somewhat mysterious.” The Koch nonprofit machine has exploited this loophole for all it’s worth, testifying before congressional committees at least 49 times since 2007.

Koch philanthropy has also waged ideological warfare within U.S. universities, contributing over $30 million to 221 universities since just 2011. A 2012 report in Academe documented theKoch-funded coup in Florida State University’s economics department, showing how “in exchange for his ‘gift,’ the donor got to assign specific readings, select speakers brought to campus and instruct them with regard to the focus of their lectures, shape the curriculum with new courses and specify the number of students in the courses, name the program’s director, and initiate a student club.”
The Charles G. Koch Foundation gave FSU $1.5 million to sponsor two assistant professors, fund fellowships and shape curricula promoting free-enterprise doctrine. It then created an advisory board to distribute money to faculty and ensure their work aligned with the foundation’s ideology.

 Inside Higher Ed exposed how administrators at Clemson University cultivated the Koch Foundation to build its “Institute for the Study of Capitalism,” receiving $1 million for the effort. BB&T, the financial institution whose former chairman and CEO John Allison heads the Koch-backed Cato Institute, regularly pays universities to chair favorable professors, typically in economics. Cooperative institutions are rewarded with Koch dollars as a bonus. American University’s Investigative Reporting Workshop found 10 such universities, where BB&T-chaired professors coincided with Koch cashflow.

The Pope

James “Art” Pope, a discount retail baron,  is a founding board member conservative advocacy group Americans for Prosperity. As North Carolina’s single largest political donor he literally bought his way into office. While his network of conservative foundations continues steering the debate rightward, Pope puts policies in motion as the state’s deputy budget director. His family’s nonprofit — the John William Pope Foundation, worth nearly $150 million — to pour tax-exempt donations into thinly veiled conservative advocacy groups like the John W. Pope Civitas Institute, the John Locke Foundation and the Pope Center for Higher Education Policy. Over the years, these groups have worked closely with Tea Party organizers, attacked climate science (and scientists) and generally championed free market principles. His foundation spends more than two-thirds of its money providing some 90% of the funding for North Carolina’s leading conservative organizations, at most of which he enjoys a leadership role.

 In 2010, three of these groups — Civitas Action, Real Jobs NC and Americans for Prosperity — banded together with Pope and his family to flood North Carolina’s legislative races and stage the first Republican takeover of the state since 1896.  Policies long advocated by Pope foundations are now proposed and enacted on a daily basis, seeking to eliminate corporate and income taxes,shrink healthcare coverage, gut environmental regulations, remove early education opportunities, oppose public transit and defund public schools and higher education. . In exchange for his foundation’s more than two dozen grants over the past 15 years, last year Pope was rewarded with a seat on University of North Carolina‘s “blue ribbon” panel to craft a five-year strategic plan for the 16-campus system. Students claim the move defies UNC’s mandate for public accountability, reeking of blatant corruption.  His past contributions include $900,000 for pro-free market political science program at North Carolina State University; an attempted $10 million for a UNC program in “Western civilization,” later diverted to football coaches’ salaries after widespread outcry; and a similarly ill-fated $600,000 attempt to launch a constitutional law center led by the director of a Pope-funded nonprofit at North Carolina Central University.

The Gates of Charity

Bill and Melinda Gates $36.4 billion charitable foundation is by far the world’s largest. In 2007, the Los Angeles Times uncovered “hundreds of Gates Foundation investments — totaling at least $8.7 billion, or 41% of its assets… in companies that countered the foundation’s charitable goals or socially concerned philosophy.” These included endowment holdings in top polluters like ConocoPhillips and Dow Chemical Co., oil refineries and paper mills that sicken the children whose parents the foundation treats for AIDS, and “pharmaceutical companies that price drugs beyond the reach of AIDS patients the foundation is trying to treat.”

Although leading global health campaigners want an end to Big Pharma’s monopoly drug patents to increase affordability in poorer countries, the Gates Foundation opposes any changes to existing intellectual property law. Advocates for loosening IP regulations point out that doing so would both lower prices by encouraging generic competition and enable innovation outside of patent-hoarding companies. This proposal, however, threatens multinational pharmaceutical corporations, well-represented among foundation leadership, as well as monopolistic firms like Microsoft, which as late as 2007 was lobbying the G8 to tighten global intellectual property protection — a move Oxfam has consistently warned spells disaster for the health crisis in the Global South.

The LA Times report traces the effects of this position on the ground, quoting an intellectual property expert who claims the foundation’s stance makes “medicines available only to a narrow spectrum of a rich elite in a developing country” in a form of “pharmaceutical apartheid.” As millions of impoverished  AIDS and HIV patients are priced out of the market, lucrative patents allow the world’s top 10 drug companies to collect some $80 billion in profit annually.

 And Gates sure won’t stop them.

Extracts from Truth-Out website

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