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Eleven Emerging Challenges
To celebrate the 60th Anniversary of the RAND Corporation and to uphold its tradition of taking on the big issues of tomorrow, a call went out to all RAND staff around the world, inviting them to propose essays on “important policy issues not currently receiving the attention they deserve in the public debate” — issues, in other words, that might be on the back burner today but will likely become front-burner issues within the next five years.
More than 100 issues were raised. The final product: the 11 essays published here. These were selected either because they highlight major public policy problems that have eluded the mainstream media radar or because they point toward major public policy solutions that have been likewise overlooked — or both.
Despite the wide range of topics, from corporate malfeasance to antimicrobial resistance, common themes emerge. The biggest one is the shaky financial footing that threatens to undermine several pillars of the public interest: Medicare, Social Security, roads, bridges, water systems, power grids, elections, military operations, diplomatic endeavors, and public health. At the same time, there are national and global reasons for hope. There is even a concluding vision of a new and better form of statecraft.
Readers might be tempted to connect the issues outlined here with those being debated on the U.S. presidential campaign trail, but that is not the intent. Our goal is to raise public awareness of several salient issues that will likely grow in prominence regardless of the election outcome.
Excerpt:
Corporate America’s Next Big Scandal
By Michael D. Greenberg and Robert T. Reville
Michael Greenberg is a RAND social scientist specializing in civil laws and regulation. Robert Reville is director of the RAND Institute for Civil Justice.
Although the businesses are usually surprised, most scandals involving corporate ethics are predictable.
Before the scandal breaks, practices that are widespread are assumed to be ethical. A change in economic circumstances triggers new scrutiny of business practices, and then — voila — a scandal. This was the sequence for Enron, WorldCom, and Tyco, and it’s playing out now in the subprime lending collapse.
Where is it likely to surface next? Signs point to corporate income tax avoidance. Corporations routinely engage in extensive tax planning and elaborate schemes to minimize their tax burdens. Offshore tax sheltering, stock option write-offs, and “synthetic leases” are all examples of the complicated accounting and business strategies that corporations follow to take maximum advantage of tax laws. Taking advantage of loopholes can be legitimate. At times, it is even encouraged: tax credits for the purchase of hybrid vehicles, for example. But the line is fuzzy between tax avoidance, which is legal, and tax evasion, which is not. In 2006, a scandal emerged at accounting firm KPMG over tax shelters marketed to wealthy clients — a harbinger, in our view, of things to come.
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