Tag Archives: social safety net

Talk About Cutting The Safety Net….

When you elect people who have very limited knowledge of government or the legal system, you get a lot of unanticipated and unfortunate consequences.

Trump is hardly the only self-proclaimed “genius” who is actually clueless; in fact, voters need to recognize that the real villain of this surreal moment we’re experiencing isn’t Trump–who is arguably too far out of it to even know what he’s doing–but the current in-over-their-heads gang of Congressional Republicans who are protecting and enabling him.

A recent, glaring example is in the combined impact of their much-touted tax “reform” bill and their proposals to dramatically cut America’s social safety net.

Republicans love to talk about the negative consequences of social welfare programs–the purported encouragement of “dependency,” the “unfairness” of taxing working folks to support laggards who are sitting at home eating bon-bons (and while they rarely say it out loud, there is usually a “wink wink” suggesting  that those laggards are disproportionately black or brown). Data and evidence–things foreign to their comprehension–dispel all of this, of course. For example, most adult food stamp recipients work full time, as do most non-disabled adults on Medicaid. There is absolutely no research supporting accusations that receipt of welfare produces dependency, and most people on welfare are white.

Even more irritating is Republicans’ repeated insistence that, if government would just get out of the way, poor people’s needs could be met by private and/or nonprofit charities, especially religious charities. When George W. Bush called on the “armies of compassion” to replace much of the welfare system as part of his “Faith-Based Initiative,” researchers (I was among them) pointed out that private charities didn’t have the resources to even come close to his goals–and most churches were barely keeping the pastor paid and the roof fixed.

As we’ve seen, facts are pretty irrelevant to this crew. Nevertheless, given their constant lip-service to American generosity and private-sector charity, you wouldn’t expect them to pass a tax bill that threatens to cripple those same efforts. After all, they are now proposing massive cuts to Social Security, Medicare and Medicaid–cuts they evidently assume will be made up by funds from the charities their tax bill is eviscerating, if they think about it at all.

Patrick Rooney is an economist at the Lilly School of Philanthropy at IUPUI, where I teach. (Full disclosure; I am adjunct faculty at the Lilly School.) I know  Patrick and his work, and he is a first-rate scholar. Here’s his analysis of what the tax bill means for charitable giving:

The tax-code overhaul that Republican lawmakers approved and Trump signed into law will raise the price of charitable giving for millions of Americans, surely reducing how much money the nation gives.

As an economist and a scholar of philanthropy who researches how public policies shape charitable giving, I anticipate that the tax tweaks will lead Americans and U.S. companies to donate roughly US$21 billion less per year to charity.

The link will take you to the article detailing the impact of the tax bill’s various provisions on incentives for charitable giving, and those details are instructive. But the real “take away” is the utter failure of Congressional Republicans either to connect the dots– or worse, to care about the harm they are doing to millions of Americans (most of whom are elderly or children) in order to further enrich their donors.

Those who aren’t “geniuses” like our President–aka mental midgets–are something even worse. They’re moral midgets.



Has Liberalism Failed?

For quite a while, I called myself an “18th Century liberal,” because I considered myself a genuine conservative, a term I defined as a fiscal conservative who believed in conserving the libertarian principle developed during the Enlightenment.

The meaning of “liberalism” (at least until Rush Limbaugh et al appropriated the term for use as an expletive) was–as Fareed Zakaria recently noted in a New York Times book review–

the tradition of liberty and democracy and, by extension, the open, rules-based international economic and political system that has characterized the Western world since 1945, and many more parts of the globe since the fall of the Soviet Union in 1991.

A couple of weeks ago, in the Sunday New York Times, Zakaria reviewed a book by Edward Luce, titled “The Retreat of Western Liberalism.” Luce was surveying the economic and political decay of the United States and European democracies, and he was less than sanguine about the future of Enlightenment liberalism, to put it mildly.  I haven’t read the book, but judging from Zakaria’s response, Luce places much blame for the current assault on liberty and democratic norms on the “elites” that it has become so fashionable to bash (and so rare to define).

Zakaria points out that recent European elections–with the exception of Brexit–have actually been cause for celebration by those who are rooting for the success of the European Union and the stability of liberal democratic regimes.

Instead of viewing the entire West as being overwhelmed by a tsunami of right-wing populism, we might step back and study countries separately. Those that have had strong safety nets as well as programs to help people move up the economic ladder, like Northern Europe, do not have as much of a problem as others. There, immigration rather than economics is the key driver, but that will wane in importance since immigration flows are dwindling. In my view, Germany seemed vulnerable to right-wing nationalism in the form of the Alternative für Deutschland only after Merkel’s extraordinary decision to take in a million refugees, but as that fades into the background, so has the AfD. In France, Macron is articulating a defense of Western democracy against Russian interference in much stronger terms than is the American president.

Zakaria began his review by focusing upon a recent speech by Chrystia Freeland, the Canadian Foreign Affairs Minister. The speech was widely reported in the U.S., because Freeland essentially suggested that Canada–along with other democracies–needed to step up its defense of the liberal international order to compensate for the “situation” in the United States. (Although she never mentioned Trump, it was pretty clear what “situation” she was referring to.) Zakaria returned to Canada in his final observation.

In many ways, the one Western country that has seemed immune from any of this populism has been Chrystia Freeland’s Canada. That is not because Canadians are genetically immune to populism but rather because for the last 20 years, they have pursued good public policy. Canada’s economics, health care, banking and immigration policies have been inclusive and successful. One sign of the strength of Western liberalism would be if the United States could recognize that there are now other countries with a deep commitment to these ideas and values that might even be approaching them more successfully than is Washington. The West, in other words, we now live in is a post-American West.

Social science research confirms Zakaria’s reference to “good public policy.” Countries with strong social safety nets, like Canada’s, are more stable and less violence-prone; their populations exhibit fewer socially undesirable behaviors (everything from crime rates to out-of-wedlock births, divorce, drug abuse, etc.)

Paul Ryan and his cohort can insist that taking away access to health care and reducing other social supports is “pro freedom,” but people aren’t free when their waking hours are consumed by efforts to put food on the table, and their nightmares are of an accident or illness that plunges them into bankruptcy.

Eighteenth Century liberalism promised personal autonomy; your right to live your life in accordance with your own values and beliefs, so long as you were willing to accord an equal liberty to others. That’s a concept of liberty that is not only consistent with a social safety net–these days, as a practical matter, it requires one.


The Social Safety Net and the Ideologues

I know I tend to harp on the difference between thoughtful policymaking and ideology. Good policymaking depends significantly upon expertise and research, learning from experience (otherwise known as trial and error) and careful empirical observation; ideology dismisses poor results and unfortunate side-effects as irrelevancies or attributes them to insufficiently thorough implementation.

Congressional Republicans, led by Paul Ryan, and with the likely concurrence of the Senate GOP and Mitch McConnell, are determined to make drastic changes to American social policy. To the extent they are not prompted by corruption (that is, acting on behalf of and at the behest of their donor base), their desired changes to Social Security, Medicare and Obamacare are entirely ideological. They don’t want to improve these programs; they want to dismantle them.

It has long been an article of Rightwing faith that welfare programs—indeed, social insurance of any sort—creates unhealthy dependency. (Somehow, that belief does not extend to corporate welfare. But that is a post for another time.)

The evidence, not unsurprisingly, suggests otherwise.

There is substantial research suggesting that countries with more robust social safety networks experience fewer socially undesirable behaviors: less crime, less divorce, less child abuse…the list goes on. Rates of murder, robbery, burglary, rape, and other serious crimes are generally much higher in the U.S. than in industrialized nations offering universal health care and other social supports. Homicide rates in the U.S. have consistently ranged between three and twenty times those of other industrialized countries.

It is particularly notable that Canada’s murder rate is far below that of the U.S. (running around a fourth of our levels). For homicides committed by youth, the U.S. rate has been as much as ten times the Canadian levels. Yet Canadians watch American television, log onto American websites, read American publications, share our culture. There is also widespread gun ownership in Canada.

What most differentiates us is the fact that Canadians have guaranteed health care and less social insecurity.

The U.S. is more economically stratified than any other advanced country. Its levels of income inequality and relative poverty are triple those of other wealthy nations. Scholars tell us that developed countries having relatively low levels of income inequality have low crime rates; in countries where one segment of the population has great wealth while another segment is in extreme poverty, crime rates are high.

As a 2015 article in The Week noted, the differences in approach to social welfare are ideologically based.

Conservatives often want to tie safety net programs to having a job, so that people aren’t tempted by handouts to hold off working. There are work requirements for food stamps. More heavy requirements were added to traditional welfare in the late 1990s. And now Republicans are suggesting requirements for Medicaid as well. This makes little sense. The much more generous European systems have higher labor force participation, and the U.S. economy has done progressively worse over the last three decades at actually creating enough jobs for everyone to have.

Add it all up, and it’s not surprising that most other advanced Western countries have much lower poverty rates than America.

Recent research has tied declining rates of marriage to poverty, and has confirmed that “failing schools” are typically those trying to educate children from impoverished homes—that growing up in poverty creates identifiable physical and emotional impediments to learning.

There is an overwhelming amount of evidence that a strong social safety net reduces crime and other social dysfunctions that cost Americans significant tax dollars—and that the availability of such social supports does not discourage workforce participation.

Evidence, however, is no match for rigid ideology. Americans should expect a full-court effort to gut Social Security and Medicare by zealots impervious to evidence.

Rights for Me, Not So Much for Thee….

There’s plenty of information available detailing America’s troubling economic inequality; just recently, for example, Salon Magazine ran an article highlighting numbers that showed “America’s busted priorities” and their contribution to that widening gap. They presented the numbers in a variety of ways, but the summary tells the tale:

The following are averages, which are skewed in the case of tax breaks and investment income, as a result of the excessive takings of the .1% and the .01%. Details of the calculations can be found  here.

$8,600 for each of the  Safety Net recipients

$14,600 for each of the  Social Security recipients

$27,333 for each of the  Pension recipients

$54,740 for each of the  Teachers

$200,000 for each of the  Tax Break recipients among the richest 1%

$500,000 for each of the  Investment Income recipients among the richest 1%

The super-rich feel they deserve all the tax breaks and the accumulation of wealth from the productivity of others. This is the true threat of entitlement.

A recent investigative report from the New York Times confirms the suspicion that Salon’s numbers are not the result of inadvertence or accident. The subhead pretty much says it all: “The very richest are able to quietly shape tax policy that will allow them to shield billions in income.”

These numbers tell an important story, but they don’t tell the whole story: economic inequality both leads to–and results from–other kinds of inequality. It’s a vicious cycle.

Less affluent neighborhoods are less safe. Schools attended by poorer children have fewer resources and poorer results. Friends and relatives of poor Americans are unlikely to benefit from the networking that the more affluent use to find job opportunities. Access to quality healthcare remains unequal even after Obamacare.

Actually, what is even more troubling than these  persistent inequities has been the hysterical resistance to Obamacare’s very modest effort to extend health care to poorer Americans. A substantial portion of the public has responded to the Affordable Care Act with hostility and a truly unhinged animus. The assault has not focused upon reasoned concerns about aspects of the law; instead, opponents have indignantly rejected the very suggestion that access to healthcare might be a human right, or at the very least, a primary good that government should provide.

It isn’t only efforts to equalize access to healthcare that have met with hostility. Increasingly, we see  substantial support for unequal rights in other areas:

Americans place a higher priority on preserving the religious freedom of Christians than for other faith groups, ranking Muslims as the least deserving of the protections, according to a new survey.

Solid majorities said it was extremely or very important for the U.S. to uphold religious freedom in general. However, the percentages varied dramatically when respondents were asked about specific faith traditions, according to a poll by The Associated Press and the NORC Center for Public Affairs Research.

This reluctance to understand that rights are different from privileges—this inability to understand that no one really has rights if government gets to decide who gets them and who doesn’t—reminded me of Nat Hentoff’s 1992 book “Free Speech for Me, But Not for Thee.” If there is one area in which equality is supremely important, it’s equality before the law–and contrary to what too many Americans seem to believe, equality is not a zero-sum game.

There’s a significant “chicken and egg” component to these various manifestations of inequality—which comes first, economic deprivation or reduced social efficacy? We may not be able to answer that question, but surely we can figure out a way to break the cycle.



The Not-So-Great Gatsby Curve

As the issue of inequality has become more politically and socially salient, researchers are increasingly “connecting the dots”–finding and measuring relationships between social phenomena that may not appear on the surface to be related.

It’s one thing to measure economic distances; to draw conclusions about the ability of low-income workers to afford to rent a two-bedroom apartment, for example. Such statistics represent only a fraction of the social damage done by rising levels of poverty and inequality, but they do offer a window into individual struggles that lead to other, less tangible and/or immediately obvious harms.

The United Ways of Indiana recently issued a comprehensive analysis of the financial distress experienced by “Alice”– Alice being an acronym for Asset Limited, Income Constrained, Employed. These were households with income above the federal poverty level, but below the actual, basic cost of living.  The research concluded that more than one in three Hoosier households cannot afford the basics of housing, food, health care and transportation, that 37% of Indiana households live below the Alice threshold, that these families and individuals have jobs, and many do not qualify for social services or support, and that despite the importance of their jobs to their communities,  they are unsure if they’ll be able to put dinner on the table each night.

Other researchers are beginning to investigate the ancillary effects of living like Alice–including the consequences for physical and mental health of individuals, the diminished prospects of their children, and the effects of inequality on America’s social fabric.

The Brookings Institution, for example, recently issued a disheartening study about inequality and stress.

Income and opportunity are increasingly unequally shared in the United States. It turns out that there are also significant inequalities in happiness, stress, and optimism about the future… The poor have lower levels of life satisfaction than the rich, they are far more likely to experience high levels of stress and worry, and they are far less optimistic about the future. They are also less likely than the rich to believe in the American Dream: that hard work can get them ahead.

An important question is how far these inequalities relate to each other. One of most well-known connections is the one between income inequality and intergenerational mobility, labeled the “Great Gatsby Curve” by Alan Kreuger. The idea behind the curve is that inequality in parental incomes (and other means) will result in even greater inequality for their children, as children’s opportunities are increasingly linked to their parents’ means.

The report makes the case that stress related to issues of survival–can I pay my rent this month? Will I lose my job if I stay home with my sick child?–is significantly different in kind and impact from the sorts of stress experienced by middle and upper income individuals. Those issues–Will I get that promotion? Will I get into my first choice law school? Will Heather go with me to the prom?– just aren’t in the same league, stress-wise.

The whole study is worth a read, but I was especially struck by the finding that there was “a higher concentration of both stress and worry among the poor in more unequal MSAs. Stress levels among the rich, by contrast, were essentially the same across cities.”

It has long been known that societies with stronger social safety nets have lower incidents of social dysfunction: everything from out-of-wedlock births, to divorce, to crime and violence. A recent study highlighted by Vox connected inequality to death rates.

Eventually, perhaps we’ll recognize that remedying the costs of social dysfunction is more expensive than a social safety net, and far more expensive than paying people a living wage.