Friday, March 26, 2010

How is that again?

I was going to the airport this morning at 0'dark thirty and heard one of NPR's reporters (David Folkenflick) make the following statement about the Corporation for Public Broadcasting - "CPB is a non-profit corporation that is funded entirely from public money." Indeed, on the CPB site it explains the entity as "The Corporation for Public Broadcasting is a private, non-profit corporation that was created by Congress in 1967."

What puzzles me is the question about whether, under that definition the US Department of Defense, which is also funded entirely from public dollars, could also be a non-profit corporation. What is the point here? CPB promotes public radio and TV - that is a goal that Congress thought was important - but why is it necessary to make this artificial distinction on status? The mind reels.

I guess a non-profit corporation funded entirely by the government is like a government trust fund. This week the Social Security Administration announced that our largest trust fund was running an excess of payments over receipts a half dozen years before their actuaries said they would. That sure builds trust.


Lee said...

To call it a trust fund implies a commitment. Back in the 80s I ran a non-profit, entirely funded by tax dollars, that provided transportation to seniors and persons with disabilities.

I was funded by local sales tax revenue, via the country transportation commission (a jpa), the Area 4 Agency on Aging ( a non-profit) , a conduit for Older Americans Act money and the Regional Center (a non-profit) a conduit for state money targeting people with developmental disabilities.

The only honest-to-god government entity I got funding from was Caltrans, which was really just passing on federal capital improvement money.

Dr. Tax in Sacramento said...

Those are good comments. But I think it is a lot cleaner to simply call government funded entities government. It blurs the concept.

As to the "trust" fund - don't get me started. It should be called the Ponzi Fund.

Lee said...

It's like Apple (and everyone else) building things in China. It's a way to distance yourself from accountability and to get things cheaper.

Dr. Tax in Sacramento said...

The difference between the CPB arrangement and Apple producing in China is substantial. Apple moves manufacturing to the most efficient place they can get production - the intellectual property which drives their products is still produced in the US. David Ricardo called this "comparative advantage." I am not sure the same logic applies to government run corporations.