There Are No More People on Disability

Paul KrugmanI recently had a conversation with my father. Or rather, I was driving my father somewhere and for no apparent reason, he mentioned that a lot of people just live on welfare their whole lives. I brushed it aside, saying that wasn’t true. But he pushed it, no doubt thinking that it was just my liberal way to think that everyone is basically good. He really should know better than to push a political point with me. It would be one thing if it caused me to yell at him. But it’s much worse than that: I use it as an excuse to educate him.

I explained that there was this president named William Jefferson Clinton. And he ended “welfare as we know it.” And as a result, there are great limits on how long any person in the country can get welfare — just a few years. So the idea of some guy getting on welfare out of high school and riding it out for the rest of his life is just not true. It might have been true in the 1970s, but it hasn’t been true for about two decades. The whole thing made me really angry, but I didn’t let it show.

Here’s why it made me so angry: no conservative change in policy ever matters. Clinton savaged welfare in this country. In so doing, he made us a much worse and un-humane country. He made us a far more conservative country. I don’t like any of that. But okay: he did it and America doesn’t seem to care. But conservatives never change. Clinton signed the Personal Responsibility and Work Opportunity Act on 22 August 1996. But conservatives made the same complaints in the decades before that as they have after that. But I’m not so much mad at people like my father as I am people like Bill Clinton. Because he really should have known it would turn out like this.

But after I got done with my lecture, I felt a bit bad about it. Even with all the facts on my side, I could tell that he wasn’t buying it. Like conservatives everywhere, he just “knew” what the truth was. This is because for the conservative, the fantasies created inside their minds (think: welfare queen) are far more vivid than anything in the real world. And it isn’t surprising. Most conservatives have no real experience with people on welfare. It’s always easy to vilify people who you don’t know.

One thing I admitted to not knowing much about was disability. My father took this as explaining it all. Obviously, all those lazy welfare recipients have just transferred over to disability! Note to self: never admit ignorance to a conservative because they will assume if something isn’t known, it must prove what they “know.” But Paul Krugman provided some great data on this issue in an article over the weekend, Jeb and the Nation of Takers. It turns out that the number of people on disability are increasing. But there are two reasons for that. First, our population is increasing. Second, our population is aging. The older a worker is, the more likely she is to be disabled. That hasn’t changed. So if you take both of those factors into account, what you find is that the number of people on disability has actually been falling modestly over the last two decades.

But I’m not planning to run to my father with this information. Krugman was exactly right, “But none of this will, of course, make any dent in the right-wing narrative: they just know that the rising number of bums on welfare is a problem, even though there basically isn’t any welfare and there are no more bums than there ever were.” Anyway, my father is well into his 80s now. And I think he was having a bad day.

Saving Money Is Not the Point of Complex Welfare

Matt BruenigMatt Bruenig wrote an interesting article, A Basic Welfare Framework. He was arguing against the idea that welfare states have to be “dizzyingly complicated.” He noted that it was actually pretty simple to create a welfare state, and he provided a four part framework for providing one: healthcare for all; education and childcare for all; income for all; and leave for all. This does cover pretty much everything that we think of as the welfare state. But uncommonly for Bruenig, it wasn’t put in the larger context of these discussions.

The question to me is not that welfare is complicated. Rather, it is why it is complicated. And the reason it is complicated is because we choose to make it so. The biggest issue is that we are so concerned that welfare might go to the undeserving. This is why a guaranteed minimum income is such a great idea. Rather than deciding how many children a woman ought to reasonably have, we could (if we were humane) just decide that all people deserve a basic lifestyle. And everything would flow from there. But rather than that, we decide that we must micromanage the poor. And the micromanagement can get bizarre, as it is in many states where ex-felons who did drugs can’t get food stamps, but ex-felons who murdered people can.

Of course, the whole thing is actually a kind of bait and switch that conservatives do. The whole idea that we must pay close attention to the poor so that they don’t bleed us dry is a conservative obsession. What was the whole “Welfare Queen” meme other than a myth told about undeserving people getting welfare, only to be used to stop deserving people from getting it? The idea was never that there are some people who don’t deserve welfare, but that all of them were like the “Welfare Queen” to one extent or another.

But it is more than that. One of the most frustrating conservative attacks on Obamacare has been that it so complicated. “Why does it have to be over 9,000 pages long?” they whine. Leave aside the fact that the length of a law is a completely irrelevant criterion to judge it on. The reason it has to be so complicated is because it’s a neoliberal law. It is a “partnership” between the public and private sectors. It couldn’t be a straight government program like single-payer insurance. As it was, conservatives call it the worst thing that ever emanated from Stalin’s anus — “Socialism! Socialism, I tell you!” We would have had Civil War II otherwise.

The main thing is that conservatives (including many in the Democratic Party) want welfare to be an extremely painful thing. People like Stuart Varney have been complaining for years that poor people own refrigerators. They want to be able to spot the poor people by their lack of shoes and socks — or even better: the presence of government mandated yellow arm bands. They certainly don’t want poor people to have the dignity of being part of the same government programs that everyone else is. I don’t think we save money by making welfare complicated. But I don’t think saving money is the point.

Morning Music: Bob Seger

Night Moves - Bob SegerI have an active dislike of Bob Seger. Really, his work is mostly just crap. And I’ll admit, part of it is not his fault, because he didn’t write “Old Time Rock and Roll.” But I got thinking about him because I just watched Night Moves again. I’ll probably write about it later. I have a few things to say about it. The song, of course, has nothing to do with the film.

Anyway, I do think that “Night Moves” is a song that transcends its artist, much the same way that “Jack & Diane” transcended the then John Cougar. But ultimately, both songs are typical rock posing: we are young and have sex. Still, there are worse things to listen to. This is an indictment of the music business. “I awoke last night to the sound of thunder; how I got this rich really makes you wonder…”

Anniversary Post: New York City Draft Riots

New York City Draft RiotsOn this day in 1863, the New York City draft riots started. Basically, it was Irish immigrants who were rioting. There is a just side to this and an unjust side to it. Let’s start with the just side.

During the Civil War, young men in the north could avoid the draft by hiring someone to go in their place. That wasn’t generally possible because most of the men around were also being drafted. Or they could just pay a $300 commutation fee. Well, plenty of young working men were angry that rich men could just buy their way out of the war. They were understandably upset. So that’s the just side. The unjust side is that things turned ugly.

Very soon, the draft riots turned into the race riots. The rioters started attacking African Americans. A total of 116 people ended up dead when the riots were put down by the US military three days later. But the whole thing is entirely typical. The working class whites had an actual grievance against the rich elite. But it quickly turned into an attack on African Americans, and even more oppressed group than the working class whites. And we see this same narrative replay itself over and over today in the US.

So we mark the start of the New York City draft and race riots.

LGBT Rights Is No Analogy to Global Warming

Melting GlaciersI’m with Erik Loomis on, The Despair of Climate Scientists. This is in reference to some happy talk by Gavin Schmidt. He’s a climate scientists, who does actually seem to think that all hope is lost. But he thinks we should put on the best face. In an article in Esquire, it noted, “But things can change much quicker than people think, he says. Look at attitudes on gay marriage.” It could. And flights of angels could sing thee to thy rest! Anything at all is possible.

The problem, as Loomis noted is that “fighting climate change means taking on huge corporations and gay marriage does not.” He also said that Americans have a special fondness for “freedom” issues. I think he’s wrong about that. But the fact of the matter is that same sex marriage doesn’t cost corporations a dime. So they don’t have a problem with it. Climate change is something that will hurt the current corporate structure of the world. I actually think that addressing climate change would be great for the world economy. But that’s not what corporate CEOs care about. And they certainly don’t care about anything that might happen more than a year or two from now.

Now some people may know that I’ve often dismissed drawing broader conclusions based upon gains in LGBT rights. And they might point out that usually I talk about how the LGBT community has an advantage in that it is evenly distributed among the large community. That’s still true. But that’s the reason that LGBT rights are not a good analogy for African American or Latino or basically any other minority group’s rights. And that is the mechanism by which LGBT rights have made major progress. But the corporate side is big in a different way. It isn’t that they helped a great deal, but it didn’t stand in the way.

When it comes to corporations, we aren’t just dealing with them wielding political influence. When I was studying this stuff in graduate school, there really wasn’t much in terms of global warming denial. Certainly the oil industry was finding any scientists it could that pushed against the developing narrative. And they were funding their own science. But they hadn’t figured out then that they didn’t even need to do science. They could just fund freaks like The Heartland Institute and pretend that they weren’t spouting nonsense. But even that didn’t seem to go all that well until they had Fox News to make global warming denial really big.

Part of the problem here is that if corporations were humans, we would all agree that they are psychopaths. They have no empathy and they are required by law to do whatever they can to maximize shareholder value. (You really have to wonder if the people who created that law weren’t psychopaths!) Now it is certainly true that some small number of corporations will see addressing global warming as being to their advantage. But most will not. And so they will continue on pushing the idea that global warming is just no big deal. Because millions of people dying in the coming decades — and even the possibly of a global mass extinction — is nothing compared to next quarter’s profits.

So no: there will not be a sudden change of policy on global warming like we saw with same sex marriage. As it is, same sex marriage is only legal because of a bare majority on the Supreme Court. If it were up the Congress, same sex marriage would be outlawed. Regardless, we head into global warming at full speed. And I know that people will look back on this time and wonder why we did nothing. “It was irrational,” they will say. And they’ll be right.

How Malaysia Improved Its Human Rights Ranking

Erik LoomisIt’s amazing the progress Malaysia has shown in human rights ever since Obama decided the Trans Pacific Partnership was his top priority…

Malaysia has done all it needed to do — become important to Obama’s trade agenda. At this point, it can use all the slave labor it wants, knowing Obama will do nothing. Promoting pharmaceutical companies’ rights for long monopolies over profitable medicines and allowing corporations to sue nations for raising their minimum wage or implementing new pollution controls is far more important than the human rights of migrant laborers in southeast Asia for this administration.

—Erik Loomis
Malaysia: A Leader in Human Rights Once It Joined the TPP!

Fiscal Stimulus Without Deficits

Mark ThomaMark Thoma wrote a great article over at CBS Money Watch, Yes, Growth Can Be Boosted Without Raising the Deficit. But I think it is critical to understand why this isn’t generally a self-evident point. Conservatives always claim that their problem with government action has to do with the budget deficit. Despite the fact that they have been the biggest deficit spenders, Republicans always campaign against deficits. That’s because it sells. The people don’t like the idea of deficits — it goes against the Protestant Work Ethic and the idea of living within one’s means.

But conservatives could not possibly care less about deficits. And they’ve been very clear about this. Back in 2004 — while the Bush administration was racking up huge budget deficits for tax cuts and wars — Dick Cheney said, “Reagan proved that deficits don’t matter.” But it is more fundamental than a single quote. Every time that the Republicans offer up a new budget, the first thing in it is huge regressive tax cuts. This is followed by lots of happy talk about how these regressive tax cuts will so stimulate the economy that the budget will be balanced. Republicans have been pushing this supply side nonsense for 40 years and it has literally never been true.

So when Mark Thoma notes that the government can provide fiscal stimulus without raising the deficit, it doesn’t much matter. Now, it could matter. But that would take a press that cares enough to cover it. And the press clearly does not. If it did care about the truth, the press would have been all over Republicans for the last two decades for their idea of balancing the budget through tax cuts. It’s really pretty simple. It’s like an indebted person saying, “I’m going to pay my debt by quitting my job!” But pointing that out would apparently be too partisan for the press. So they just report this hogwash in a “neutral” way.

Thoma’s ideas for stimulate the economy are very good, however. And what’s interesting about the two ideas that he talks about is that they really should appeal to conservatives. This is because they would only work in a depressed economy. So as soon as the economy improves, these ideas lose their credibility. The first is simply to raise taxes. People (especially rich people) don’t consume all of their money; they save some portion of it. If their money is taxed, the government will spend all of it, thus providing more economic activity. Note that this is true now, because we have lots of unused capital. But in a booming economy, the saved money would be invested in he economy.

The second idea is to redistribute income. Poor people spend all the money that they get just to make ends meet. In fact, they often spend more — with loans. Rich people do not spend all the money that they get. So taking from the rich and giving to the poor will actually improve the economy. Note also that it provides an incentive to business owners. The way things are now, at the slightest hint of a downturn, businesses start laying people off. But if the owners knew that their taxes would go up if unemployment went up, they would have an incentive to hang onto employees.

Clearly, I’m thinking that Thoma’s two ideas could be systematized. You could have the top tax rate 39.6% when the unemployment rate was 5% or less. But have the top tax rate go up 0.1 percentage point for every 0.1 percentage point that the unemployment rate gets above 5%. But it is a pipe dream. Regardless of what conservatives say, they are against taxes on the rich. That’s really all there is to say. But Thoma does provide some good information to counter these ridiculous claims that we can’t do any fiscal stimulus because of the budget deficit.

Conservatives Continue to Game Bestseller List

Ted CruzPerhaps the most interesting thing in David Brock’s Blinded By the Right was the revelation that conservative publishers gamed The New York Times bestseller list. They would buy their own books as a kind of loss leader. Getting on the bestseller list would generate talk and interviews and, most important of all, credibility. Regardless, the whole thing paid for itself. It was, put simply, a kind of guerrilla marketing. What was shocking to me was that The Times didn’t do something to shut it down. It makes the list a joke — even more of a joke than the idea of basing opinions of books on the number of sales — much less the number of sales in one city.

And it is this thing that just the right wing does. For one thing, there isn’t much of a “liberal press” — and what exists doesn’t have much money. (Conservatives would laughably claim that all non-conservative publishers are liberal.) I remember reading in an Eric Alterman’s book What Liberal Media? that when someone looked into this gaming of the bestseller list, the only liberal book they found that used this strategy was conservative apostate David Brock’s Blinded By the Right. Old habits die hard, I guess.

Regardless, at some point The New York Times decided to do something about how the conservative press was gaming the system. And thus we come to the news late last week that Ted Cruz’s new book, A Time For Truth, was not put on the bestseller list despite selling very well. Attack of the liberal media? Not really. According to The Times spokeswoman Eileen Murphy, “In the case of this book, the overwhelming preponderance of evidence was that sales were limited to strategic bulk purchases.” Apparently, The Times isn’t messing around anymore.

Of course, the truth is that the conservatives have a built in system for pushing books to the top of the bestseller list. There are conservative book clubs. There is conservative media. It isn’t like normal commercial outlets. These groups are pushing this dreck for ideological purposes. And to keep their consumers hungry for the next dopamine injection from fear and outrage. Oh! My! God! Have you heard about the liberal fascists? What about the crazies to the left of me and the wimps to the right? Or why you should never trust a liberal over three — especially a Republican?! Essential readers, my friends. It is at least if you don’t want to get duped by the lamestream media.

Conservatives are all over the Ted Cruz thing. There is nothing that makes conservatives happier than a bit of news that allows them to feel as though they are being persecuted. And Ted Cruz has to be pleased as punch. This story is getting him more press than getting on the bestseller list ever would. His book is, after all, just yet another campaign book. I’m sure it’s dreadful. But as I write this, it is the #17 best selling book at Amazon. Looking over the reviews there (good and bad), I don’t think anyone has done more than scan it — if that. It’s all a bunch of people talking about politics. It has 80 total reviews, 73 5-star, one 2-star, and 6 1-star. And the one 2-star reviews was at first a 5-star review. It’s just bizarre. But I’m sure it will make Ted Cruz — and Amazon — a lot of money.

Morning Music: The Doors

Touch Me - DoorsI have an odd relationship with The Doors. On the one hand, they are solid band with a lot of strong material. On the other hand, I hate them. But if I had to be honest, I would admit that I mostly just hate Jim Morrison. He has always struck me as a fraud. Just the same, I think it speaks to Ray Manzarek’s brilliance that he saw that the young poet had “it.”

I thought we would listen to the one Doors song that most assaults me, “Touch Me.” It was written by guitarist Robby Krieger. He also pretty much wrote “Light My Fire.” Both of those are perfect Doors songs in that I love and hate them. With “Fire,” you’ve got that great Middle East sounding melody. Yet it is the ultimate in sexual braying. “Touch Me” has a wonderfully awkward verse melody — I really do love that. But the terrible slant rhymes make me want to scream.

Enjoy!

Anniversary Post: 1967 Newark Riots

Newark RiotsOn this day in 1967, the Newark riots started. It was something that we are very familiar with today. The police arrested an African American cab driver for a driving violation. In the process, they beat him so badly that he ended up in the hospital. But there was a rumor that the police had killed him. This sparked the riot. But the police, ever the professionals short two rioters dead right away. The whole thing would continue on for six days and 26 people would end up dead.

The riots are often used to explain “white flight.” But let’s face it, our entire society was set up to incentivize whites to run to the suburbs. Public schools are now as as segregated as they were before the mid-1960s. People who blame whites running to the suburbs on things like the Newark riots have things exactly backwards. Anyway, Newark is no more black now than it was then. It is a lot more brown, however. It’s all about social class and how closely that is linked to race in this country.

This all reminds me of the Gil Scott-Heron poem, “Whitey on the Moon.” It’s as true now as it was then. Actually, it might be more true. The white elites don’t give a damn. And all whites are pretty smug about that.

Forty-Eight years later, and nothing has changed.

Why We Only Talk About the Income Tax

Who Pays? - Institute on Taxation and Economic PolicyWhile reading a very good article about Rick Perry by Jonathan Chait, I came upon this amazing report by the Institute on Taxation and Economic Policy (ITEP), Who Pays? 5th Edition (pdf) — that’s the 2015 version of the report. What’s interesting about the report is how it looks at how much money is paid in taxes by people in different income groups. In general, people present it as total amounts. But that isn’t fair because (obviously) the rich make more than the poor. So the report looks at the percentage of the income that each group pays in taxes. And the results are astounding.

We’ll get to the individual states in a moment. But even taking into account all of the states — including the supposedly liberals ones — ends with the result that the more money people make, the less they pay in state and local taxes. The lowest 20% of income earners in the nation pay 10.9% of their income in state and local taxes. The top 20% of income earners pay just 7.5%. So as a percentage of their incomes, the lower class pays almost 50% more than the upper class. It’s even worse when they look at the top 1% of earners. They pay only 5.4% in state and local taxes. That means the lower class pays over twice what the rich pay.

The situation is far worse in individual states. That shouldn’t be surprising. What was going on in Ferguson was just an especially egregious example. What I’ve seen everywhere is that taxes that hit the rich are rolled back, only to be replaced by flat or regressive taxes. And this is not just a red state problem, because the neoliberals are often even worse than the conservatives. The ten most regressive states are (from worst to least worst): Washington, Florida, Texas, South Dakota, Illinois, Pennsylvania, Tennessee, Arizona, Kansas, and Indiana. That’s three blue states, and two of them are in the top five.

In Washington, the bottom 20% pay an average of 16.8% of their income in state and local taxes. The top 1% pay only 2.4%. That means the lower class is paying seven times what the rich are paying. Evening looking at lower class and the middle class is terrible: the lower class is paying two-thirds more in taxes than the middle class. The situation in the least worst state, Indiana, looks pretty good, but only in comparison: the lower class only pays 2.3 times what the rich pay. But in that case, it’s almost as bad for the middle class who pay just over twice what the rich pay. How does this happen? It happens by instituting regressive taxes. The best way to do that is to have no income tax and depend heavily on consumption taxes. Of the ten most regressive states, they either have little or no income tax, a flat tax, or a low top tax rate.

The least regressive states are: District of Columbia (DC), Vermont, Minnesota, Delaware, Montana, Oregon, and California. Those are more or less in order, but it does depend upon how you calculate it; I’ve just compared the lower class to the upper class. What’s interesting is that by this measure, only DC is progressive; the others are all regressive to one extent or another. And DC is quite regressive when comparing the middle class to the upper class. But these states manage to not be too bad mostly because they have progressive income taxes, tax credits, and low use fees.

The one thing that I wish people would take away from the report is this graph:

Comparison of Tax Types

What it shows is that both use and property taxes are particularly regressive. Only the income tax is modestly progressive (and hardly even that when you look at the middle class). But all you ever hear conservatives talk about is the income tax. This is a con. They know that the tax system is stacked against the poor in a big way on every tax but the income tax. But they’ve managed to fool the whole country into thinking of taxes just in terms of the income tax.

And this is what allows there to be a steady whine coming from Fox News and CNBC about how badly the rich are treated. Well, look at “Who Pays?” It’s bad enough that the poor are screwed by the tax system. But we also have to listen to rich complain about how much they suffer. It’s unbelievable.

The Real Purpose of the Greek Bailout

Mark BlythThe roots of the crisis lie far away from Greece; they lie in the architecture of European banking. When the euro came into existence in 1999, not only did the Greeks get to borrow like the Germans, everyone’s banks got to borrow and lend in what was effectively a cheap foreign currency. And with super-low rates, countries clamoring to get into the euro, and a continent-wide credit boom underway, it made sense for national banks to expand private lending as far as the euro could reach.

So European banks’ asset footprints (loans and other assets) expanded massively throughout the first decade of the euro, especially into the European periphery. Indeed, according the Bank of International Settlements, by 2010 when the crisis hit, French banks held the equivalent of nearly 465 billion euros in so-called impaired periphery assets, while German banks had 493 billion on their books. Only a small part of those impaired assets were Greek, and here’s the rub: Greece made up two percent of the eurozone in 2010, and Greece’s revised budget deficit that year was 15 percent of the country’s GDP — that’s 0.3 percent of the eurozone’s economy. In other words, the Greek deficit was a rounding error, not a reason to panic. Unless, of course, the folks holding Greek debts, those big banks in the eurozone core, had, over the prior decade, grown to twice the size (in terms of assets) of — and with operational leverage ratios (assets divided by liabilities) twice as high as — their “too big to fail” American counterparts, which they had done. In such an over-levered world, if Greece defaulted, those banks would need to sell other similar sovereign assets to cover the losses. But all those sell contracts hitting the market at once would trigger a bank run throughout the bond markets of the eurozone that could wipe out core European banks.

Clearly something had to be done to stop the rot, and that something was the troika program for Greece, which succeeded in stopping the bond market bank run — keeping the Greeks in and the yields down — at the cost of making a quarter of Greeks unemployed and destroying nearly a third of the country’s GDP. Consequently, Greece is now just 1.7 percent of the eurozone, and the standoff of the past few months has been over tax and spending mixes of a few billion euros. Why, then, was there no deal for Greece, especially when the IMF’s own research has said that these policies are at best counterproductive, and how has such a small economy managed to generate such a mortal threat to the euro?

—Mark Blyth
A Pain in the Athens