Ann Logue for the R Street Institute: One of the more interesting signs that the economy is picking up again is the new focus on social responsibility emanating from the C-suites of major corporations. The signs are everywhere, from McDonald’s executives announcing the company won’t buy chicken raised with antibiotics to the Ringling Brothers circus retiring all of its elephants to such conservative investors as Vanguard announcing activist campaigns.
Start-ups are getting into the act, too, for profit. Last month, I received a press release for a company called Amplifyd Pledges, which asks people to pledge money to cover the cost of companies making various “socially conscious” changes. Its first project is asking Peet’s and Starbucks to use organic milk…
In a perfect world, companies would maximize value for shareholders and consumers alike. In the real world, companies cut corners, consumers want rock-bottom prices and investors want steady growth in earnings-per-share every quarter. No one really wants companies to destroy the environment or to behave in a way that damages society, but making more “socially responsible” decisions often has a price tag, and it’s one few are willing to pay.
Maybe the secret to more socially responsible corporations isn’t in finding market inefficiencies that need to be corrected by regulation, but simply having a better, more prosperous economy. Perhaps social responsibility is, ultimately, a luxury good.
SWEET BRIAR’S DEMISE MORE ABOUT MONEY THAN EDUCATION
Alan Smith for the Roosevelt Institute: After 114 years of educating young women in rural Virginia, Sweet Briar College recently announced that the 2015 academic year would be its last. It’s closing its doors, administrators say, because its model is no longer sustainable.
There are plenty of people coming out of the woodwork to explain Sweet Briar’s problems. James F. Jones, the school’s president, claims that there are simply not enough people who want to attend an all-women’s rural liberal arts school (though application numbers and some pundits disagree); he blames the discount that the school was giving to low-income students for the institutional budget shortfall. Billionaire investor Mark Cuban says that Sweet Briar has fallen victim to the student loan bubble …
These takes are varied and complex, but they are all missing an important point: that predatory banking practices and bad financial deals played an important and nearly invisible role in precipitating the school’s budget crisis.
A quick look at Sweet Briar’s audited financial reports (easily available in public records) reveals enough confusing and obfuscating financial-speak to last a lifetime, but a few days of digging did manage to unearth a series of troubling things.
[For example,] a single swap on a bond issued in June 2008 cost Sweet Briar more than a million dollars in payments to Wachovia before the school exited the swap in September 2011. …
Sweet Briar appears slated to close because it is a small organization without the resources to counter the huge information imbalance that has helped precipitate the financialization crisis. It is closing because it signed some terrible deals to get what must have felt like “needed” money at the time.
UTAH’S STRANGE BEDFELLOWS OPEN A DOOR
Jonathan Rauch for the Brookings Institution: The landmark Mormon-gay compromise that overwhelmingly passed deep-red Utah’s legislature last week isn’t a template for other states. But it’s a doorway. And possibly also a pathway.
The agreement pairs anti-discrimination protections for LGBT Utahns with religious-liberty protections for faith-based organizations. No, the agreement can’t be picked up and copied elsewhere. But it got the attention of gay-rights and religious-rights activists nationwide; it suggests new grounds for conversations between the two sides; and it suggests a fruitful style of negotiation …
Depolarization can happen — really! — but it takes time and effort. Key Utah leaders … agreed that the aftermath of the [Mormon] Church’s endorsement of California’s anti-gay-marriage Proposition 8 in 2008 left scars of anger. But the church and Equality Utah had a series of confidence-building conversations and realized that continued confrontations would lead to mounting casualties on both sides. Meanwhile, the electorate and many politicians tired of zero-sum, polarized politics. Those factors came together, but it took patience. …
Turns out that religious and gay folks share worries about losing their livelihoods if they, say, take a stand on a controversial initiative like Prop 8, so both sides saw this new element as a win. Gov. Mike Leavitt called the Utah deal “a legislative toolkit available to people in any jurisdiction;” my guess is that the speech protections are a tool we’ll see used in other places.
Consensus may be creeping closer for federal legislation. Sarah Warbelow said (I’m paraphrasing) that she can support religious-freedom protections that track with existing law and don’t impose special burdens on LGBT people, and Nathan Diament said (again I paraphrase) that he can support LGBT anti-discrimination protections that track with existing law and don’t create special carve-outs for LGBT people.
Compiled by Joseph Lawler from reports published by the various think tanks.
