The GOP Plan for the Poor: More!

October 29, 2015 by Leave a Comment

Eduardo Porter of the NY Times, reports on his home state of Arizona, where I happen to be right now.

Arizona, where I was born, in July became the first state to cut poor families’ access to welfare assistance to a maximum of 12 months over a lifetime. That’s a fifth of the time allowed under federal law, and means that 5,000 more people will lose their benefits by next June.

This is only the latest tightening of the screws in Arizona. Last year, about 29,000 poor families received benefits under the Temporary Assistance for Needy Families program, 16,000 fewer than in 2005. In 2009, in the middle of the worst economic downturn since the Depression of the 1930s, benefits were cut by 20 percent.

And of course it’s not just an Arizona problem:

… if Paul Ryan, the Republican lawmaker from Wisconsin who is expected to become speaker of the House, has his way, poor people in many other states can expect similar treatment in the years ahead.

Two forces are driving this very unchristian behavior towards “the least of us”: a deep and misplaced moral punishment ethos, joined with a states rights bias that pretends what “big” government can’t do, “state” government can.  Under this fig leaf the long-ago federal aid to the poor has been replaced by block grants to the states, which then distribute funds intended for the poor anywhere they want.

Even thoughtful Republican policy wonks, and this does not include any of the current candidates for GOP presidential nomination, think what was done, was done badly.

… states were given both incentives and tools to redeploy the money to other priorities. Notably, they could get around the requirement to meet job participation benchmarks simply by reducing the caseloads of beneficiaries — almost a direct instruction to bump people off.

“States did not uphold their end of the bargain,” said Ron Haskins, an expert on welfare who worked for more than a decade for House Republicans. “So why do something like this again?”

It’s well worth a read of Porter’s article to understand just how mean spirited and deceptive this has been, with promises of more such in the wind.

For an earlier article on the myth of welfare’s corrupting influence see here.

For a public apology and detailed analysis of the current policies of block grants see Peter Germanis paper, here.

Filed under Economy, Poverty Tagged with , , ,

Public Immorality

September 16, 2015 by Leave a Comment

Robert Reich is always worth listening to whether about economics or trade or work, usually all three at the same time.  In recent blog posts he’s gone after the disappearance of public morality in great corporations, an absolute necessity, he says:

An economy depends fundamentally on public morality; some shared standards about what sorts of activities are impermissible because they so fundamentally violate trust that they threaten to undermine the social fabric.

He’s written about it twice in recent weeks, following on earlier posts about The Outrageous Ascent of CEO Pay and Corporate Welfare in California

 

 

At a time many Republican presidential candidates and state legislators are furiously focusing on private morality – what people do in their bedrooms, contraception, abortion, gay marriage – America is experiencing a far more significant crisis in public morality.

CEOs of large corporations now earn 300 times the wages of average workers. Insider trading is endemic on Wall Street, where hedge-fund and private-equity moguls are taking home hundreds of millions.

A handful of extraordinarily wealthy people are investing unprecedented sums in the upcoming election, seeking to rig the economy for their benefit even more than it’s already rigged.

Yet the wages of average working people continue to languish as jobs are off-shored or off-loaded onto “independent contractors.”

All this is in sharp contrast to the first three decades after World War II.

Read All

And if you didn’t see him in Inequality for All, here is a trailer.  Available out there in internet land

 

 

Filed under Economy, Labor / Unions Tagged with , ,

Inequality Sinks All

August 10, 2015 by Leave a Comment

A couple of millionaires call out to their caste-cohort.  “Wake up!  Or lose it all!”

Peter Georgescu in the NY Times

“I’M scared. The billionaire hedge funder Paul Tudor Jones is scared. My friend Ken Langone, a founder of the Home Depot, is scared. So are many other chief executives. Not of Al Qaeda, or the vicious Islamic State or some other evolving radical group from the Middle East, Africa or Asia. We are afraid where income inequality will lead.

For the top 20 percent of Americans, life is pretty good.

Inequality the-uss-inequality-sinking-ship-inequality-cartoon

But 40 percent are broke. Every year they spend more than they have.

While so many people are struggling, even those on the higher end of the middle class have relatively little after paying the bills: on average, some $1,300 a month. One leaky roof and they’re in trouble.

If inequality is not addressed, the income gap will most likely be resolved in one of two ways: by major social unrest or through oppressive taxes, such as the 80 percent tax rate on income over $500,000 suggested by Thomas Piketty, the French economist and author of the best-selling book “Capital in the Twenty-First Century.”

We are creating a caste system from which it’s almost impossible to escape, except for the few with exceptional brains, athletic skills or luck. That’s why I’m scared. We risk losing the capitalist engine that brought us great economic success and our way of life.

… The fact that real wages have been flat for about four decades, while productivity has increased by 80 percent, shows [employees sharing amply in productivity increases and creative innovations]  has not been happening. Before the early 1970s, wages and productivity were both rising. Now most gains from productivity go to shareholders, not employees.

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Inequality Rules

May 6, 2015 by Leave a Comment

Eduardo Porter in the NY Times business section, always interesting to read, reminds us that inequality is not simply a minimum wage issue.  Citing Joseph Stiglitz’s latest book, “The Great Divide” (W.W. Norton & Company), he writes:

It includes the steady tightening of intellectual property rights and the rise of finance, with its lavish rewards for activities of dubious social value. It includes the furious consolidation of industry, which has reduced competition across the economy.

Professor Stiglitz is particularly incensed by the Obama administration’s attempt to include investment pacts in trade agreements it is negotiating with Asia and Europe, which would allow multinationals to sue governments for compensation if regulation hurts their profits.

Another commentator, Shi-Ling Hsu at the Florida State University College of Law, that that a huge piece of the inequality puzzle is being missed:

 the role of law in distributing wealth.” Subsidies, tax treatment, legal protection and other mechanisms conspire to aid the wealthy while often serving to damp economic gains.

Grandfathering existing businesses to protect them from new regulation is a classic way to protect profits, shielding incumbent businesses and deterring new entrants that would face costlier regulations. Granting water rights to whoever first uses the water amounts to another gift to business that can entail large social costs. (In California, for example.)

Read it all.  Good thought points

Filed under Economy, Labor / Unions Tagged with ,

The Disgrace and Danger of Inequality

October 14, 2013 by Leave a Comment

Along with Robert Reich [do see his movie, Inequality for All] Joseph Stiglitz is one of the continuing, believable voices on the growing disgrace and danger of inequality.  In the New York Times yesterday he looks at a new study by World Bank economist Branko Milanovich:  Inequality between nations, and within them.  America is the warning poster for what not to do.

Last year, the top 1 percent of Americans took home 22 percent of the nation’s income; the top 0.1 percent, 11 percent. Ninety-five percent of all income gains since 2009 have gone to the top 1 percent. Recently released census figures show that median income in America hasn’t budged in almost a quarter-century. The typical American man makes less than he did 45 years ago (after adjusting for inflation); men who graduated from high school but don’t have four-year college degrees make almost 40 percent less than they did four decades ago.

American inequality began its upswing 30 years ago, along with tax decreases for the rich and the easing of regulations on the financial sector. That’s no coincidence. It has worsened as we have under-invested in our infrastructure, education and health care systems, and social safety nets. Rising inequality reinforces itself by corroding our political system and our democratic governance.

… Asymmetric globalization has also exerted its toll around the globe. Mobile capital has demanded that workers make wage concessions and governments make tax concessions. The result is a race to the bottom. Wages and working conditions are being threatened. Pioneering firms like Apple, whose work relies on enormous advances in science and technology, many of them financed by government, have also shown great dexterity in avoiding taxes. They are willing to take, but not to give back.

Inequality and poverty among children are a special moral disgrace. They flout right-wing suggestions that poverty is a result of laziness and poor choices; children can’t choose their parents. In America, nearly one in four children lives in poverty; in Spain and Greece, about one in six; in Australia, Britain and Canada, more than one in 10. None of this is inevitable. Some countries have made the choice to create more equitable economies: South Korea, where a half-century ago just one in 10 people attained a college degree, today has one of the world’s highest university completion rates.

For these reasons, I see us entering a world divided not just between the haves and have-nots, but also between those countries that do nothing about it, and those that do. Some countries will be successful in creating shared prosperity — the only kind of prosperity that I believe is truly sustainable. Others will let inequality run amok.

NY Times

wealth-distribution-big

 

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