December 2016 – Sheila Kennedy

Another Unequal New Year?

This is the last day of 2016, a year that most definitely will not be missed. It’s hard to know whether people of good will can make 2017 any better.

The United States will begin the new year by ushering in a President who promises to “make America great again.” Unfortunately, with every utterance and tweet, it becomes more obvious that his definition of “greatness” is an autocratic wet dream unconnected to either the common good or reality.

As discouraging as it may be to admit, the truth is that a significant percentage of the American public is equally delusional, especially when it comes to accurate assessments of the extent of current inequality, and America’s past economic “greatness.”

A 2015 article in Scientific American took a look at both myth and reality. It was titled “American Inequality: It’s Much Worse Than You Think,” and subtitled, “The great divide between our beliefs, our ideals, and reality.”

The average American believes that the richest fifth own 59% of the wealth and that the bottom 40% own 9%. The reality is strikingly different. The top 20% of US households own more than 84% of the wealth, and the bottom 40% combine for a paltry 0.3%. The Walton family, for example, has more wealth than 42% of American families combined.

Remember this infographic video that went viral several months ago? According to the article, it has been watched more than 16 million times. I was one of those who was shocked by the distribution of wealth it showed, and I actually follow these matters fairly closely.

The great virtue of the Scientific American article, however, was not in schooling readers about the present chasm between the rich and the rest; it was in puncturing our ahistorical and fanciful belief that in America, success is an artifact of effort and hard work, that anyone willing to invest the necessary grit and determination can “make it,” and that American meritocracy means that entrepreneurial workers are not doomed to remain in whatever poverty or class they are born to.

It’s a lovely belief. The brutal reality, however, is very different.

In a study published early in 2015,

researchers found Americans overestimate the amount of upward social mobility that exists in society. They asked some 3,000 people to guess the chance that someone born to a family in the poorest 20% ends up as an adult in the richer quintiles. Sure enough, people think that moving up is significantly more likely than it is in reality. Interestingly, poorer and politically conservative participants thought that there is more mobility than richer and liberal participants…. We may not want to believe it, but the United States is now the most unequal of all Western nations. To make matters worse, America has considerably less social mobility than Canada and Europe.

This belief in American economic mobility doesn’t simply ignore the immense importance of family wealth and social connections, access to educational equality, and a wide range of discriminatory obstacles and structural social barriers.

Our stubborn belief in an American economic mobility that doesn’t exist creates an unwarranted optimism—an optimism that, ironically, is more prevalent among those at the bottom of the income distribution. And because we are optimistic—because we see opportunities that aren’t really there—we don’t get serious about correcting the social and financial structures that keep poor people poor.

The people who agreed with Trump that America was “great” at some indeterminate point in the past but is no longer so blessed seem to fall into two not mutually exclusive categories: those who resent the advancements of women, people of color and immigrants (America was great when “they” knew their place); and those who believe the mythology of a “lost” American mobility.

What would be great would be to make 2017 the year we began to restore content to our belief in American mobility and civic equality. A girl can dream….

Happy New Year.

Comments

Peter the Citizen and “Less Appealing” Indiana

On Wednesday, I shared portions of an analysis of TANF–welfare after “reform”–from Peter the Citizen, a conservative policy analyst who has deep experience with social welfare policies.

Among the many papers he has written on the subject is one I found particularly interesting, because it references poverty and welfare policy in my home state of Indiana–and because Peter’s analysis is consistent with my own understanding of conditions in the Hoosier state.

In this particular paper, Peter was responding to an article attributing the “success” of welfare reform to the fact that such reforms have made welfare “less appealing.” (I suspect that many recipients would be shocked to discover they were accepting help because they found it “appealing.”) His rejoinder is worth reproducing at some length.

TANF is best viewed on a state-by- state basis and digging deeper suggests that there are limits to Winship’s argument about making welfare “less appealing.” Some states have tried to focus on real “welfare reform” (to the extent they can given the limitations of TANF’s block grant structure and dysfunctional federal requirements), while others use it primarily as a slush fund and have adopted very harsh policies to push families off the welfare rolls. Using a simplistic pre-post approach, one can easily compare states over time based on the harshness of their policies. (Note: This is not the evaluation approach I prefer, but it seems to resonate with conservatives.)

Robert Doar, now at the American Enterprise Institute, says he ran a “model” TANF program in New York – both at the state level and in New York City. (Doar’s bio states: “Before joining the Bloomberg administration, he was commissioner of social services for the state of New York, where he helped to make the state a model for the implementation of welfare reform.”) Doar is proud of New York City’s track record in reducing poverty:

In America’s biggest cities, more and more Americans are now living in poverty. From 2000 to 2013, the poverty rate in America’s 20 largest cities grew by 36 percent, to an average of 22.7 percent. Nationally, the poverty rate has risen too, from 11.3 percent in 2000 to 14.8 percent in 2014.

But there’s one stand-out exception to this phenomenon: New York City.

Over the last decade, New York City’s poverty rate has defied national trends by declining. While New York once suffered one of the highest poverty rates among the country’s large cities, today it boasts one of the lowest…

Indeed, Doar presents data to show that between 2000 and 2013, the percent change in poverty in New York City was minus 0.9 percent – the lowest in the nation among major cities, followed by Los Angeles and San Diego (plus 3.6 and plus 7.5 percent, respectively). At the opposite end of the spectrum, with the largest increases, were Indianapolis (81.5 percent), Charlotte (67 percent), and Detroit (57.9 percent).

Notably, both New York and California (the states with the top three cities) have much more appealing TANF programs than Indiana, North Carolina, and Michigan (the states with the bottom three cities) and they have become relatively more appealing over time. New York and California didn’t eliminate the entitlement (an important component of “welfare reform” for conservatives), they don’t impose full family sanctions or enforce the federal 5-year time limit (California removes the adult’s needs after 48 months but children continue to receive benefits; New York simply continues assistance with state funds.) Both states have among the most generous benefits, paying over $700 a month for a family of three. In contrast, the states with the cities in the bottom three have lower benefits ($272 to $492 a month for a family of three), do impose full-family sanctions and do enforce the federal 5-year limit and two have shorter time limits (24 months in Indiana – for adults – and 48 months in Michigan – for the entire family).

While Indiana, North Carolina and Michigan were “less appealing” in 1996 (and 2000) than both California and New York, they have become much, much less appealing over time. For example, between 1996 and 2014, the TANF-to-poverty ratio (the ratio of families receiving cash assistance per 100 poor families with children) fell from 101 to 65 in California and from 79 to 40 in New York. The declines were much larger in Indiana (61 to 8), North Carolina (74 to 8), and Michigan (88 to 18).15 The maximum benefit for a family of three fell 23 percent in real terms in California and 10 percent in New York; compare that to Indiana (-34 percent), North Carolina (-34 percent), and Michigan (-30 percent). TANF is failing as a safety net everywhere, but much more so in some states than others.

I’ve written before about the United Way of Indiana’s description of ALICE families (Asset Limited, Income Constrained, Employed) and the huge gap between what those families need simply in order to survive and the public and private resources available to them.

There’s a lot of faux concern about “welfare dependency” expressed by people who are quite comfortable themselves. What those people worry about is “takers” getting too comfortable with those appealing “handouts”.

Peter the Citizen uses the term properly, to describe people who depend upon social welfare programs in order to survive.

There are many things policymakers could do to decrease that real-world dependency: raise the minimum wage, reinstitute Reagan-era tax brackets, eliminate the ACA in favor of “Medicare for All”…and jettison a self-satisfied ideology that equates poverty with a lack of moral fiber and “middle-class values.”

Comments

Do We Dare to Hope?

Has Amazon’s Jeff Bezos developed a workable business model for real journalism? According to Politico and other sources, the Washington Post–which Bezos bought three years ago–plans to add sixty reporters in the first quarter of 2017.

That’s not a typo–the Post really is hiring sixty new reporters.

The Post newsroom will grow by more than 60 jobs — or 8 percent — an astounding number in this day and age. Such contrarian additions, of course, come at a time when newsroom staff reductions are the rule across daily journalism.

The Post newsroom will number more than 750, third among the national newspaper-based press and moving it closer to the Times, with which it increasingly competes for high-end talent. The Times complement stands at about 1,307, the company says. USA Today’s newsroom stands at about 450, while the Journal, after its recent buyouts, tells me it employs 1,500.

Furthermore, subscriptions are evidently up at the Times, Journal and USA Today.

According to the story, Bezos believes that old-fashioned journalism — increasingly delivered via a variety of digital platforms from smartphone apps to the Kindle to Facebook — sells.

The Post has seen a 75 percent increase in new subscribers since the first of the year and says it has doubled digital subscription revenue over the year. Many of those new subscribers prove out Bezos’ theory that a mass market of low-price (generally around $36 a year for the national edition, after up to six months of “free trial”) subscription sales will form the leading revenue source for the Post in the years ahead.

In a time of journalistic business desperation worldwide, that’s a hugely important lesson being retaught to all news publishers by both the Post and the Times this year.

This is an incredibly important development. It is not an exaggeration to say that the displacement of genuine journalism by today’s fragmented and inadequate media bears much of the blame for today’s toxic and broken politics. Increasingly, as legitimate journalism has ceded its place to less-than-credible outlets, people don’t know whether they can trust what they read and so they read–and believe–what confirms their pre-existing biases.

As formerly reputable newspapers have competed online for eyeballs and “clicks,” far too many have eliminated sound reporting and substituted “infotainment,” celebrity news, the “bar beat” and sports. They have fired reporters and reduced substantive news coverage (which is more expensive to produce) in an effort to protect their bottom lines. It hasn’t worked.

The Post’s experience vindicates those of us who have insisted that any successful business plan would necessarily begin with a return to quality content–to what used to be called the journalism of verification.

Dare we hope that this “discovery” by national news outlets–their renewed recognition that the public wants substantive content and a return to journalism’s “watchdog” role–might encourage a similar trend locally?

As promising as this news is–and it is–it only addresses the deficit in national news. In Indianapolis and similar communities, we are still without anything approximating adequate coverage of local and state government. Gannett is still chasing those eyeballs by telling us more than most of us want to know about Colts’ games and bar openings.

Fingers crossed; maybe even Gannett will figure out that success in the news business requires…what was that they used to provide? Oh, yeah…news.

Comments

Labels Aren’t Analyses

Not long ago, in response to one of my periodic posts decrying policies that ignore evidence in favor of ideology, I got an email from Peter Germanis, who writes as “Peter the Citizen” and takes the unusual approach of evaluating policies on the basis of whether they actually work, rather than whether they are labeled conservative or liberal.

Peter attached an exchange from Poverty and Public Policy that reproduced three of his articles on poverty and welfare.

Peter’s background certainly entitles him to his chosen label, which is conservative: between 1986 and 1996, he helped President Reagan develop and implement his welfare reform policies, and he has worked with the Heritage Foundation and the American Enterprise Institute, both of which are very conservative advocacy and research organizations.

Here are some of the things Peter says about TANF, the much-ballyhooed “bipartisan welfare reform” that is considered a great success by Paul Ryan and others intent upon reducing expenditures on social welfare.

The suggestion that TANF helps people out of poverty is–by any objective analysis–wrong.
TANF is not welfare reform; it is welfare to states, not the needy.
TANF is really revenue sharing; states use a considerable share of TANF funds to supplant state expenditures.

Peter points to Texas as an example of how TANF actually works. He notes that in 2014, for every 100 poor families with children, only five received TANF cash assistance, and the state invests little of its TANF block grant to provide education, training or work supports for the working poor. In fiscal year 2014, Texas used just 20% of its TANF funds to provide what Peter designates as “core welfare reform activities”–basic assistance, work activities and child care.”

In the wake of the election, Paul Ryan and the House Republicans plan to apply TANF’s “success” to other social welfare programs, and they have issued a proposal along those lines titled “A Better Way.” As Peter writes,

The Task Force’s Report for reforming the safety net is a seriously flawed document–it would not solve problems, it would add to them…As described above TANF is not “welfare reform”; it is not a “success” it is Truly a National Failure (TANF). The fact that conservatives do not understand this suggests that they do not have “A Better Way”–they have “The Wrong Way.”

Conservatives like Peter the Citizen represent a once-vibrant and now-dwindling strand of intellectually honest conservatism, and the recognition that the labels we employ–liberal, conservative, libertarian, socialist–are frequently short-hand for categorizing and discarding (or embracing) policies without bothering to evaluate them. More of his work can be accessed at this link.

Perhaps I am cynical, but I think there is one other difference between the bygone conservatism of people like Peter and what passes for conservatism today. The conservatives who used to be engaged with poverty policy genuinely wanted to help poor people. They might disagree with liberals about the best way to go about it, but the shared goal was to enable impoverished Americans to become self-sufficient. Today’s “conservatives” aren’t simply uninterested in honest analysis; they are uninterested in actually helping poor people. Their idea of “success” is spending less money on social welfare so that they can reduce taxes on the wealthy.

Because after all, poor people don’t vote, don’t contribute and don’t employ lobbyists.

Comments

Speaking of White Privilege….

In the wake of the election, there has been a renewed call to get rid of the Electoral College–or at least modify its operation via the National Popular Vote Project to require electors to vote for the candidate who wins the popular vote.

The Electoral College was originally a concession to the slave states, allowing them to “count” their slaves (albeit at a discount). Today, it has all sorts of pernicious and undemocratic effects. Not long ago, Jamin Raskin, who teaches Constitutional law at George Washington University, summed up a number of those effects in a post to the American Constitution Society’s blog. Raskin noted that,

in the absence of the Electoral College, it would no longer make strategic sense to “turn off the lights and fly over 40 states – from California to New York, Texas to Vermont, Georgia to Mississippi, Hawaii to Alaska, South Dakota to Montana, and so on.” And he disputed the argument that the rest of the electorate “should be content to be long-distance spectators because the voters of Virginia or Arizona or Florida are just like us and are effectively acting as proxies for our interests and our values.”

This was precisely the argument that was rejected in the American Revolution.

The British tried to convince the American colonists that they didn’t need their own elections and representatives in Parliament because they were “virtually represented” by members back home representing Englishmen of similar views. The colonists rebelled against this insulting doctrine of “virtual representation,” which they treated as an assault on political liberty and authentic democracy rooted in the politics of place. Roughly 140 years later, we similarly rejected claims that women didn’t need the vote because they were adequately represented by men.

Every citizen’s vote should count equally in presidential elections, as in elections for governor or mayor. But the current regime makes votes in swing states hugely valuable while rendering votes in non-competitive states virtually meaningless. This weird lottery, as we have seen, dramatically increases incentives for strategic partisan mischief and electoral corruption in states like Florida and Ohio. You can swing a whole election by suppressing, deterring, rejecting and disqualifying just a few thousand votes.

My own biggest “gripe” is, as I have previously written, the extra weight the system gives to votes from rural areas. In effect, urban votes count less and rural preferences count more–an anti-democratic result. But an analysis by Vox has confirmed that it isn’t only voters from more thinly populated areas who are privileged by the system. The Electoral College also privileges the votes of white Americans.

The probability of one person’s vote being decisive, we found, ranged from roughly one in a million for a resident of New Hampshire — a swing state with a relatively small population — to less than one in one billion in states that are reliably “red” or “blue,” such as New York, California, Kansas, and Oklahoma.

We can use a similar approach to show how the Electoral College increases not just the weight of voters in swing states but the weight of voters of certain ethnicities — based on their distribution across the states. We find that, based on the current distribution of voters of different ethnicities across states, and particularly within swing states, the Electoral College amplifies the power of white voters by a substantial amount….

After running the numbers, we estimate that, per voter, whites have 16 percent more power than blacks once the Electoral College is taken into consideration, 28 percent more power than Latinos, and 57 percent more power than those who fall into the other category.

I’m sure that analysis warms the cockles of Bill O’Reilly’s heart. (I assume he does have one. Somewhere.) It doesn’t do much for mine.

Comments