Both Kristoff's Sunday, 8/30 column and the comments on his column are well worth reading. The
url is below:
http://www.nytimes.com/2009/08/30/opinion/30kristof.html
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New Article: Re-Placing Property
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Sunday, August 30, 2009
Saturday, August 29, 2009
Job Insecurity Increases Health Problems
According to a recent study by the University of Michigan, job insecurity is more harmful to workers' health than actual job loss or unemployment. The study, conducted by Dr. Sara Burgard at the University's Institute for Social Research, found that in one of the groups studied, job insecurity was a stronger predictor of poor health than either smoking or hypertension.
This study has important implications. It suggests that the structure of the economy is an important source of health disparities. While many studies of health disparities focus on changing the "unhealthy" habits of low-income and minority individuals, this study suggests that these groups have simply been the canaries in the coal mine. For individuals in these groups, job insecurity is a way of life.
The connection between poor health and job insecurity suggests that our economic arrangements are a vector of disease. The short-run efficiency represented by a "flexible" labor force that is chronically on the verge of layoffs, shift changes, benefit reductions, or more punitive management practices has long term costs. In the long-term, the "unhealthiest" behaviors may be those that we exhibit as a society and as individual consumers when we support this business model.
A report on this study can be found at:
http://www.ns.umich.edu/htdocs/releases/story.php?id=7282
This study has important implications. It suggests that the structure of the economy is an important source of health disparities. While many studies of health disparities focus on changing the "unhealthy" habits of low-income and minority individuals, this study suggests that these groups have simply been the canaries in the coal mine. For individuals in these groups, job insecurity is a way of life.
The connection between poor health and job insecurity suggests that our economic arrangements are a vector of disease. The short-run efficiency represented by a "flexible" labor force that is chronically on the verge of layoffs, shift changes, benefit reductions, or more punitive management practices has long term costs. In the long-term, the "unhealthiest" behaviors may be those that we exhibit as a society and as individual consumers when we support this business model.
A report on this study can be found at:
http://www.ns.umich.edu/htdocs/releases/story.php?id=7282
How Deep Is The Ocean?
I just returned from Western Pennsylvania, where I lived for twenty years. This was the western Pennsylvania that inspired President Obama's "guns and religion" comment and John Murtha's description of the populace as "racist rednecks". Each wave of recession that swept over the national economy took a little more from the area- a few more businesses, a little more paint off the houses, a few more young families out of the area in search of better jobs.
But this time, I had been away for nearly a year, and in the interval the national economy experienced something between a depression and a recession. In western Pennsylvania, the "something" clearly resembled the former rather than the latter. It was like homecoming after the apocalypse. The town where I used to live had been hollowed out- abandoned, boarded up houses gapped like missing teeth in middle class residential neighborhoods; over half of the store windows were empty. Groups of men and boys smoked cigarettes on street corners and in front of convenience stores. The color of the street corner loungers was white; one of them wore a "KKK" baseball cap. Except for that, I could have been could have been in Detroit's inner city.
The national media had, for at least a month, been proclaiming that economic recovery had begun. Housing starts were up; the stock market had stabilized; the surfaces of the national political economy were regaining their former shine. Even the optimists admitted that problem areas remained: consumers were reluctant to spend, the unemployment statistics were still upsetting; rates of mortgage foreclosure continued to increase. But, on the surface- which is to say at the top- things have been looking much better.
And this is the precisely the problem. Most politicians, policymakers, economists and social scientists focus on the political economic surfaces. We suffer from paradigm-blindness: we don't see anything beyond the accepted statistics, beyond the boundaries established by the latest Research Funding Proposal, beyond the t0pics that speed us to publication.
Focusing on the surface, we have lost sight of the bottom. We respond quickly to difficulties that show up on the surface. Reports, policies, and papers chart the difficulties and devise solutions to return us to something more like normal.
But beneath the surface, an invisible process goes on: the bottom is steadily eroding. As the lives of individuals, sectors, and geographic regions at the bottom deteriorate, we miss the signs because we focus entirely on the surface. The bottom has been eroding for years.
The signs of erosion are there to read. They've been there for years. There is the increasing number of the uninsured. There is the rising number of families that juggle two, three, four minimum wage jobs. There is the increased need for minimum-wage working families to depend on food banks, rental assistance and even homeless shelters to survive. There is the increased gap between the wealthy and the middle class. There is the massive loss of the family homes that served as primary asset for those at the bottom. But we've learned to ignore all that.
And so, as the waves stop and the yachts return, we anticipate a return to smooth sailing. But this is the thing about an eroding bottom: when the waves return and boats on the surface begin to capsize, a deeper ocean is a more dangerous place to tread water until help arrives.
But this time, I had been away for nearly a year, and in the interval the national economy experienced something between a depression and a recession. In western Pennsylvania, the "something" clearly resembled the former rather than the latter. It was like homecoming after the apocalypse. The town where I used to live had been hollowed out- abandoned, boarded up houses gapped like missing teeth in middle class residential neighborhoods; over half of the store windows were empty. Groups of men and boys smoked cigarettes on street corners and in front of convenience stores. The color of the street corner loungers was white; one of them wore a "KKK" baseball cap. Except for that, I could have been could have been in Detroit's inner city.
The national media had, for at least a month, been proclaiming that economic recovery had begun. Housing starts were up; the stock market had stabilized; the surfaces of the national political economy were regaining their former shine. Even the optimists admitted that problem areas remained: consumers were reluctant to spend, the unemployment statistics were still upsetting; rates of mortgage foreclosure continued to increase. But, on the surface- which is to say at the top- things have been looking much better.
And this is the precisely the problem. Most politicians, policymakers, economists and social scientists focus on the political economic surfaces. We suffer from paradigm-blindness: we don't see anything beyond the accepted statistics, beyond the boundaries established by the latest Research Funding Proposal, beyond the t0pics that speed us to publication.
Focusing on the surface, we have lost sight of the bottom. We respond quickly to difficulties that show up on the surface. Reports, policies, and papers chart the difficulties and devise solutions to return us to something more like normal.
But beneath the surface, an invisible process goes on: the bottom is steadily eroding. As the lives of individuals, sectors, and geographic regions at the bottom deteriorate, we miss the signs because we focus entirely on the surface. The bottom has been eroding for years.
The signs of erosion are there to read. They've been there for years. There is the increasing number of the uninsured. There is the rising number of families that juggle two, three, four minimum wage jobs. There is the increased need for minimum-wage working families to depend on food banks, rental assistance and even homeless shelters to survive. There is the increased gap between the wealthy and the middle class. There is the massive loss of the family homes that served as primary asset for those at the bottom. But we've learned to ignore all that.
And so, as the waves stop and the yachts return, we anticipate a return to smooth sailing. But this is the thing about an eroding bottom: when the waves return and boats on the surface begin to capsize, a deeper ocean is a more dangerous place to tread water until help arrives.
Sunday, August 23, 2009
Protests and Paradigms
In today's Wall Street Journal, John Goodman explains the town hall protests against health insurance reform, arguing that these protests are not "organized" but represent an outpouring of genuine popular opposition. The truth of his assertion depends on how one defines organization.
In fact, the current health reform debate is simply the most recent iteration of a long term organizing project. This project has been a resounding success: it has generated a paradigm that organizes virtually all discussion about inequality in the United States.
Paradigms are powerful precisely because they are invisible. They define what questions can be asked and what answers are acceptable. They organize data, true, but are more important in that they organize the way that data are gathered.
Paradigms are like invisible fences: you don't notice them as long as you stay inside, but if you try to move beyond them, you will be unpleasantly reminded that they exist. The current health care debate has moved too close to the edges of the paradigm: the public protests are, like electric currents at the edge of invisible fences, intended to shock us back inside.
In the United States, the development and implementation of social policy is organized by a paradigm that privileges differences over similarities. It specifies that the first question to be asked by social policy ought to be "can we do without it?" and that the second ought to be "if we have to have it, how can we limit its benefits to the smallest possible number of recipients?" Just as the Aristotelian/Ptolemaic view of the universe meant that questions that began "but what if the earth revolves around the sun..." were either heretical or silly, the American social policy paradigm selects against universalist questions that begin "but couldn't we provide service for everybody?"
The current social policy paradigm emphasizes small payoffs to selected groups of the needy, and large payoffs to selected groups of the more affluent and more powerful. An example: the internal revenue code offers mortgage interests deductions to virtually all middle-class homeowners, but housing assistance programs for low-income individuals and families are managed through programs that operate more like public assistance, making them relatively scarce and relatively hard to access. The prevailing social welfare paradigm consequently rewards cleavages and penalizes unity.
Once in place, paradigms are "sticky": like bad house guests, they hang around long after they have ceased to make a positive contribution. The United States social welfare paradigm has political implications- it guarantees that the most influential players will continue to be those that require the least assistance from social policies. And this, in turn, means that the future distribution of sticks and carrots is unlikely to change.
The American paradigm has another unfortunate feature. It structures the process of comparison. This is evident in the rhetoric of the current health care debate: protestors do not compare their situation to that of less fortunate individuals and ask what could be done to assist them. Rather, they compare their current situation to that which might prevail in some feared future. Similarly, protestors - and even policy analysts like Mr. Goodman- do not compare the United State's provision for low-income individuals with that of other nations. Rather, they focus on their personal satisfaction.
The operation of this paradigm is evident, for example, in Mr. Goodman's assertion that 84% of the individuals in a recent survey were happy with their health insurance. A genuinely comparative perspective would ask questions about this report: Was the sample comprised only of insured individuals? If not, were the uninsured respondents happy with their situation as well? Did the respondents understand the implicit choice to be one between their insurance and no insurance? Were they given the option of choosing between their insurance and the more comprehensive and less expensive plans offered, for instance, in nations like Switzerland?
This brings us back to the town hall protesters. They turn out to be organized after all: they are kept in line by the invisible paradigmatic fence.
To see Goodman's article, go to:
http://online.wsj.com/article/SB10001424052970204884404574362333085067364.html
In fact, the current health reform debate is simply the most recent iteration of a long term organizing project. This project has been a resounding success: it has generated a paradigm that organizes virtually all discussion about inequality in the United States.
Paradigms are powerful precisely because they are invisible. They define what questions can be asked and what answers are acceptable. They organize data, true, but are more important in that they organize the way that data are gathered.
Paradigms are like invisible fences: you don't notice them as long as you stay inside, but if you try to move beyond them, you will be unpleasantly reminded that they exist. The current health care debate has moved too close to the edges of the paradigm: the public protests are, like electric currents at the edge of invisible fences, intended to shock us back inside.
In the United States, the development and implementation of social policy is organized by a paradigm that privileges differences over similarities. It specifies that the first question to be asked by social policy ought to be "can we do without it?" and that the second ought to be "if we have to have it, how can we limit its benefits to the smallest possible number of recipients?" Just as the Aristotelian/Ptolemaic view of the universe meant that questions that began "but what if the earth revolves around the sun..." were either heretical or silly, the American social policy paradigm selects against universalist questions that begin "but couldn't we provide service for everybody?"
The current social policy paradigm emphasizes small payoffs to selected groups of the needy, and large payoffs to selected groups of the more affluent and more powerful. An example: the internal revenue code offers mortgage interests deductions to virtually all middle-class homeowners, but housing assistance programs for low-income individuals and families are managed through programs that operate more like public assistance, making them relatively scarce and relatively hard to access. The prevailing social welfare paradigm consequently rewards cleavages and penalizes unity.
Once in place, paradigms are "sticky": like bad house guests, they hang around long after they have ceased to make a positive contribution. The United States social welfare paradigm has political implications- it guarantees that the most influential players will continue to be those that require the least assistance from social policies. And this, in turn, means that the future distribution of sticks and carrots is unlikely to change.
The American paradigm has another unfortunate feature. It structures the process of comparison. This is evident in the rhetoric of the current health care debate: protestors do not compare their situation to that of less fortunate individuals and ask what could be done to assist them. Rather, they compare their current situation to that which might prevail in some feared future. Similarly, protestors - and even policy analysts like Mr. Goodman- do not compare the United State's provision for low-income individuals with that of other nations. Rather, they focus on their personal satisfaction.
The operation of this paradigm is evident, for example, in Mr. Goodman's assertion that 84% of the individuals in a recent survey were happy with their health insurance. A genuinely comparative perspective would ask questions about this report: Was the sample comprised only of insured individuals? If not, were the uninsured respondents happy with their situation as well? Did the respondents understand the implicit choice to be one between their insurance and no insurance? Were they given the option of choosing between their insurance and the more comprehensive and less expensive plans offered, for instance, in nations like Switzerland?
This brings us back to the town hall protesters. They turn out to be organized after all: they are kept in line by the invisible paradigmatic fence.
To see Goodman's article, go to:
http://online.wsj.com/article/SB10001424052970204884404574362333085067364.html
A Portrait of the Uninsured
This op-ed in today's New York Times makes it clear that the uninsured are not primarily individuals who earn enough to afford insurance but have voluntarily chosen to forgo it.
http://www.nytimes.com/2009/08/23/opinion/23sun1.html
http://www.nytimes.com/2009/08/23/opinion/23sun1.html
Friday, August 21, 2009
Interesting Paper on Basic Income
If only academics could learn to put interesting ideas into more vivid prose! This really interesting article by Claus Offe contains a thoughtful analysis of the ways that a basic guaranteed income affects labor contracts. Translation: If everyone was guaranteed a minimum income, would they all just stop working? And how would this affect relationships between workers and employers? For my money, it's worth trekking through the dense prose to get to the relevant ideas.
http://www.bepress.com/cgi/viewcontent.cgi?context=bis&article=1100&date=&mt=MTI1MDcxMjMyMA==&a
http://www.bepress.com/cgi/viewcontent.cgi?context=bis&article=1100&date=&mt=MTI1MDcxMjMyMA==&a
Tuesday, August 18, 2009
Subprime Contagion and John Donne
Remember the very early phases of the subprime crisis? I've been working with some others on a project that examines the way that very early media accounts framed the crisis. It's fascinating. The New York Times stories that we have studied thus far have two main themes: first,that this is a crisis that affects primarily minorities and, second, that the crisis is unlikely to "spread" to the rest of the economy.
What to make of this? Well, the economic sages were clearly wrong: the entire economy was eventually implicated. There were clearly some problems with economic policy . The widening circles of crisis have many technical explanations: the repeal of the Glass-Steagall Act, the explosion of collateralized debt obligations, regulatory capture and so on. From this technical perspective, strengthening the economic levees is the solution. But the economic sages missed a bigger picture.
The real difficulty is far more than technical. It is rooted in the idea that there are "segments" of the national political economy. As a nation, we believe that John Donne was wrong: we believe that we live in economically and socially constructed tribes on islands in the national ocean.
Some people's islands, of course, are not as nice as ours. The natives have bad financial hygiene, they are needy and they have customs that we find unappealing. If we allow them to leave their island, they will become vectors of dis-ease, and even if we don't the pollution that they create on their island can spill into the ocean and cause us problems.
This sort of thinking is not confined to this period of history or even to this nation. Historically, each of the various versions of the British Poor Law represented new strategies for keeping the poor on their island. And a great deal of the "altruism" that motivated earlier reformers in American history turns out, on closer examination, to be something more like fear of contagion.
Sometimes the feared contagion was physical, like the slum clearance efforts of the Progressive era that were intended to reduce the spread of tuberculosis and typhoid. Sometimes it was racial, as when slum clearance became an explicit effort to break up black communities that were located in neighborhoods that the wealthier wanted to colonize.
In the past decade, as income inequality has risen to a point not seen since the Gilded Age, the feared contagion has been economic. Gradations of wealth have sorted residents into tribes. And, as initial policy responses to the subprime crisis demonstrate, policymakers have become increasingly preoccupied with crafting measures to prevent the problems of impoverished islands within our economy from spreading.
They have been especially preoccupied with enacting policies that strengthen the dams that shore up the high water at the upper ends of the income distribution. Because if the dams broke, floods, rather than trickles, might be released to equalize things.
But, really, shouldn't this crisis have taught us something different? Shouldn't we have learned that we only pretend to live on islands, and that in fact, we're all in the ocean together? Shouldn't we be willing to admit that John Donne was right?
What to make of this? Well, the economic sages were clearly wrong: the entire economy was eventually implicated. There were clearly some problems with economic policy . The widening circles of crisis have many technical explanations: the repeal of the Glass-Steagall Act, the explosion of collateralized debt obligations, regulatory capture and so on. From this technical perspective, strengthening the economic levees is the solution. But the economic sages missed a bigger picture.
The real difficulty is far more than technical. It is rooted in the idea that there are "segments" of the national political economy. As a nation, we believe that John Donne was wrong: we believe that we live in economically and socially constructed tribes on islands in the national ocean.
Some people's islands, of course, are not as nice as ours. The natives have bad financial hygiene, they are needy and they have customs that we find unappealing. If we allow them to leave their island, they will become vectors of dis-ease, and even if we don't the pollution that they create on their island can spill into the ocean and cause us problems.
This sort of thinking is not confined to this period of history or even to this nation. Historically, each of the various versions of the British Poor Law represented new strategies for keeping the poor on their island. And a great deal of the "altruism" that motivated earlier reformers in American history turns out, on closer examination, to be something more like fear of contagion.
Sometimes the feared contagion was physical, like the slum clearance efforts of the Progressive era that were intended to reduce the spread of tuberculosis and typhoid. Sometimes it was racial, as when slum clearance became an explicit effort to break up black communities that were located in neighborhoods that the wealthier wanted to colonize.
In the past decade, as income inequality has risen to a point not seen since the Gilded Age, the feared contagion has been economic. Gradations of wealth have sorted residents into tribes. And, as initial policy responses to the subprime crisis demonstrate, policymakers have become increasingly preoccupied with crafting measures to prevent the problems of impoverished islands within our economy from spreading.
They have been especially preoccupied with enacting policies that strengthen the dams that shore up the high water at the upper ends of the income distribution. Because if the dams broke, floods, rather than trickles, might be released to equalize things.
But, really, shouldn't this crisis have taught us something different? Shouldn't we have learned that we only pretend to live on islands, and that in fact, we're all in the ocean together? Shouldn't we be willing to admit that John Donne was right?
Sunday, August 16, 2009
No Public Option and Publics With No Option
Remember the psychological experiment in which participants were asked to press a button that would cause pain to someone whom they could not see? The results were depressing: those with the button were quite willing to cause pain, ratcheting up the voltage with abandon.
As a nation, we are experimenting with social policy along these lines. The removal of the public option from health care reform is one more upward tick of the voltage. Some people may feel pain, but they are, after all, people whom we have learned as a society not to see.
Most of the individuals and families who are are uninsured fall into one of two groups. One group is uninsured because they lack employer-provided coverage and are unable to afford or unable to be approved for private plans. A second group is uninsured because their employers offer plans that require contributions that are too high or because employer plans will not accept individuals with specific pre-existing conditions.
This is what we know about the uninsured. About 79% are citizens, according to a 2005 report by The Office of Health and Human Services. Blacks are slightly over-represented in relation to their proportion in the population, comprising 12% of the population but 15 % of the uninsured. . Hispanics are considerably over-represented, comprising 14% of the population but 30% of the uninsured. Whites are under-represented: they make up 67% of the population but only 47% of those without insurance.
Most uninsured individuals are below the age of 35, and the vast majority, work at full (46%) or or part-time (28%) jobs. Although some are relatively wealthy individuals whose incomes are above 300% of the poverty line, over half have earnings that place them below 200% of the poverty line. And some of the individuals in the wealthier group may have pre-existing conditions that make them unable to obtain insurance.
It is important to note that most individuals are not chronically uninsured. For most, the lack of insurance comes and goes with job changes or with changes in the terms of employer-offered benefits. Here, something like a lottery structures their ability to afford medical care.
And many other individuals, of course, are underinsured or simply lack the financial resources to meet co-pays in the face of catastrophic medical expenses. These individuals help account for the very high proportion of personal bankruptcies attributable to medical costs.
But, like addicts in a state of denial, we as a nation have learned to see only what serves our purposes. Our addiction is to the status quo, and what we have learned not to focus on is the pain suffered by those who lose under the current arrangement.
Like any practiced addict, we don't just deny. We rationalize and justify. Just as every addict can explain fluently why his or her situation is unique, why that case of beer finished in one afternoon does not, in his or her particular instance, constitute binge drinking, opponents of public health insurance can explain why they are not morally bankrupt.
We explain that the uninsured could get better or steadier jobs; that they could eat more tofu and less Cheetos; that those who have insurance should not be forced to pay taxes to support losers; that no-one that whom we know personally has these problems or, alternatively,that if they do it's because they were not as careful as we were. And many of these uninsured individuals belong to groups that make us uncomfortable in any event.
And we have another problem.
Like good addicts, we have developed an attachment to our suppliers. They've done well by some of us, after all. As long as you have money to pay, the dealer is your pal. We know what we need to do to keep the arrangement going. And our suppliers have said they feel the pain of the uninsured- they're going to help them out. Oh, sure, we'll still be addicts, but the suppliers will try to arrange things so that our buzz isn't ruined by noise from the losers outside.
These suppliers- the insurance, pharmaceutical, and medical industries, along with their representatives in Congress- assure us that they will co-operate on a solution. We can continue to use, but it will be a kinder, gentler sort of addiction. And how long will this co-operation last? If history is any example, just until the impetus for reform begins to nod out.
Any recovering addict can tell you this: for an addict, supply creates its own demand. One is too many and a thousand is never enough, the saying goes. You either quit or you don't. In the end, the surest -and in the case of health reform the only- route to recovery is to go cold turkey.
As a nation, we are experimenting with social policy along these lines. The removal of the public option from health care reform is one more upward tick of the voltage. Some people may feel pain, but they are, after all, people whom we have learned as a society not to see.
Most of the individuals and families who are are uninsured fall into one of two groups. One group is uninsured because they lack employer-provided coverage and are unable to afford or unable to be approved for private plans. A second group is uninsured because their employers offer plans that require contributions that are too high or because employer plans will not accept individuals with specific pre-existing conditions.
This is what we know about the uninsured. About 79% are citizens, according to a 2005 report by The Office of Health and Human Services. Blacks are slightly over-represented in relation to their proportion in the population, comprising 12% of the population but 15 % of the uninsured. . Hispanics are considerably over-represented, comprising 14% of the population but 30% of the uninsured. Whites are under-represented: they make up 67% of the population but only 47% of those without insurance.
Most uninsured individuals are below the age of 35, and the vast majority, work at full (46%) or or part-time (28%) jobs. Although some are relatively wealthy individuals whose incomes are above 300% of the poverty line, over half have earnings that place them below 200% of the poverty line. And some of the individuals in the wealthier group may have pre-existing conditions that make them unable to obtain insurance.
It is important to note that most individuals are not chronically uninsured. For most, the lack of insurance comes and goes with job changes or with changes in the terms of employer-offered benefits. Here, something like a lottery structures their ability to afford medical care.
And many other individuals, of course, are underinsured or simply lack the financial resources to meet co-pays in the face of catastrophic medical expenses. These individuals help account for the very high proportion of personal bankruptcies attributable to medical costs.
But, like addicts in a state of denial, we as a nation have learned to see only what serves our purposes. Our addiction is to the status quo, and what we have learned not to focus on is the pain suffered by those who lose under the current arrangement.
Like any practiced addict, we don't just deny. We rationalize and justify. Just as every addict can explain fluently why his or her situation is unique, why that case of beer finished in one afternoon does not, in his or her particular instance, constitute binge drinking, opponents of public health insurance can explain why they are not morally bankrupt.
We explain that the uninsured could get better or steadier jobs; that they could eat more tofu and less Cheetos; that those who have insurance should not be forced to pay taxes to support losers; that no-one that whom we know personally has these problems or, alternatively,that if they do it's because they were not as careful as we were. And many of these uninsured individuals belong to groups that make us uncomfortable in any event.
And we have another problem.
Like good addicts, we have developed an attachment to our suppliers. They've done well by some of us, after all. As long as you have money to pay, the dealer is your pal. We know what we need to do to keep the arrangement going. And our suppliers have said they feel the pain of the uninsured- they're going to help them out. Oh, sure, we'll still be addicts, but the suppliers will try to arrange things so that our buzz isn't ruined by noise from the losers outside.
These suppliers- the insurance, pharmaceutical, and medical industries, along with their representatives in Congress- assure us that they will co-operate on a solution. We can continue to use, but it will be a kinder, gentler sort of addiction. And how long will this co-operation last? If history is any example, just until the impetus for reform begins to nod out.
Any recovering addict can tell you this: for an addict, supply creates its own demand. One is too many and a thousand is never enough, the saying goes. You either quit or you don't. In the end, the surest -and in the case of health reform the only- route to recovery is to go cold turkey.
Saturday, August 15, 2009
Let Them Eat Tofu: Whole Foods CEO On Health Care Reform
John Mackey, the Whole Foods CEO, channels Marie Antoinette in his 8/11/ 09 Wall Street Journal editorial on health care reform. Marie, at least in the apocryphal story, was told that the peasants had no bread and responded "let them eat cake." Mackey has updated Marie's message, but retained her logic.
In Mackey's updated version, uninsured Americans substitute for hungry French peasants. The alternatives to reform that he suggests substitute for cake. The cake has three main ingredients.
First, Mackey argues that adjustments to the tax structure would solve a great deal of the problem. Legal obstacles to health care savings plans could be repealed. Individual contributions to help the uninsured could be incentivized through the tax code. The tax status of individual and employer-provided plans could be equalized.
Each of these propositions has its own difficulties. HSA's, first of all, are rarely provided by low-wage employers and they are rarely attached to temporary jobs and, secondly, would not be particularly useful for families where virtually all income goes toward housing, utilities and food.
As to the role of the tax code in stopping the stampede of well-off Americans who would otherwise be contributing to health care for the uninsured...a determined philanthropist would hardly be put off by existing arrangements. And, finally, Mackey does not tell us in what direction he would like equalization to occur--should individual plans (which are not affordable for many families in any event) become deductible, or should employer-provided benefits be taxed?
Mackey's second set of suggestions involves providing more assistance to a truly beleaguered sector - the insurance industry. Insurers, he opines, are hampered by their inability to compete across state lines and by federal mandates that require them to provide coverage for certain individuals who are at higher risk.
The last point, of course, is just silly: granted, rates might decrease somewhat if risks could be excluded, but what about the people who are insured only because of these mandates? Wouldn't their repeal increase rather than reduce the number of the uninsured? As to the first point, it is possible that competition might occur, but given the relatively small number of insurers and the strength of their common interests, it seems more likely that this would increase the probability of cartel-like behavior that would further harm consumers.
And so we come to Mackey's third line of argument. This is quite innovative: people who become ill have only themselves to blame. Individuals who eat a healthful diet and maintain a healthful lifestyle are unlikely to become ill, he assures us. Well, sometimes this works out, although often it does not. Does Mr. Mackey, who is presumably the poster child for this line of argument, bother with insurance for himself and his family? After all, they would hardly need it.
This argument does, however, provide an anodyne for any lingering idea that we might, as a society, have any obligation to help those in need of medical care. Of course, those uninsured low-wage single moms who drag themselves home after 8 hours of, say, lifting, turning, and bathing patients in a nursing home may not have the energy to fix a tasty, plant-based, low fat meal for themselves and the kids, even if they had the money to buy the ingredients or a way to the nearest organic market. And they might even be a little stressed from the various difficulties in their lives, although Mr. Mackey does not factor in this empirically-verified cause of health difficulties.
But never mind. Mr. Mackey is not making an empirical argument at all. His concerns are normative. He is, after all, both CEO and political philosopher, as we discover at the end of his argument. " Many promoters of health-care reform," he tells us," believe that people have an intrinsic ethical right to health care—to equal access to doctors, medicines and hospitals. While all of us empathize with those who are sick, how can we say that all people have more of an intrinsic right to health care than they have to food or shelter?" And he assures us that a "careful reading" of the Declaration of Independence and the United States Constitution will demonstrate that no such right exists.
Now, I'm no political philosopher, but I recollect something in one of them about the right to "life", right there with " liberty" and "the pursuit of happiness." Is it just me, or is it hard to sustain life without food, shelter or medical care?
Cake, anyone? John Mackey has lots for sale, and some of it is even organic.
To read Mackey's editorial see
http://online.wsj.com/article/SB10001424052970204251404574342170072865070.html
He responds to the furor over his article in the following selection from his blog:
http://www2.wholefoodsmarket.com/blogs/jmackey/2009/08/14/health-care-reform-full-article/#comments
For my money, this response simply makes things worse!
For a report on the demographic characteristics of the uninsured see
http://aspe.hhs.gov/health/reports/05/uninsured-cps/index.htm#Conclusion
In Mackey's updated version, uninsured Americans substitute for hungry French peasants. The alternatives to reform that he suggests substitute for cake. The cake has three main ingredients.
First, Mackey argues that adjustments to the tax structure would solve a great deal of the problem. Legal obstacles to health care savings plans could be repealed. Individual contributions to help the uninsured could be incentivized through the tax code. The tax status of individual and employer-provided plans could be equalized.
Each of these propositions has its own difficulties. HSA's, first of all, are rarely provided by low-wage employers and they are rarely attached to temporary jobs and, secondly, would not be particularly useful for families where virtually all income goes toward housing, utilities and food.
As to the role of the tax code in stopping the stampede of well-off Americans who would otherwise be contributing to health care for the uninsured...a determined philanthropist would hardly be put off by existing arrangements. And, finally, Mackey does not tell us in what direction he would like equalization to occur--should individual plans (which are not affordable for many families in any event) become deductible, or should employer-provided benefits be taxed?
Mackey's second set of suggestions involves providing more assistance to a truly beleaguered sector - the insurance industry. Insurers, he opines, are hampered by their inability to compete across state lines and by federal mandates that require them to provide coverage for certain individuals who are at higher risk.
The last point, of course, is just silly: granted, rates might decrease somewhat if risks could be excluded, but what about the people who are insured only because of these mandates? Wouldn't their repeal increase rather than reduce the number of the uninsured? As to the first point, it is possible that competition might occur, but given the relatively small number of insurers and the strength of their common interests, it seems more likely that this would increase the probability of cartel-like behavior that would further harm consumers.
And so we come to Mackey's third line of argument. This is quite innovative: people who become ill have only themselves to blame. Individuals who eat a healthful diet and maintain a healthful lifestyle are unlikely to become ill, he assures us. Well, sometimes this works out, although often it does not. Does Mr. Mackey, who is presumably the poster child for this line of argument, bother with insurance for himself and his family? After all, they would hardly need it.
This argument does, however, provide an anodyne for any lingering idea that we might, as a society, have any obligation to help those in need of medical care. Of course, those uninsured low-wage single moms who drag themselves home after 8 hours of, say, lifting, turning, and bathing patients in a nursing home may not have the energy to fix a tasty, plant-based, low fat meal for themselves and the kids, even if they had the money to buy the ingredients or a way to the nearest organic market. And they might even be a little stressed from the various difficulties in their lives, although Mr. Mackey does not factor in this empirically-verified cause of health difficulties.
But never mind. Mr. Mackey is not making an empirical argument at all. His concerns are normative. He is, after all, both CEO and political philosopher, as we discover at the end of his argument. " Many promoters of health-care reform," he tells us," believe that people have an intrinsic ethical right to health care—to equal access to doctors, medicines and hospitals. While all of us empathize with those who are sick, how can we say that all people have more of an intrinsic right to health care than they have to food or shelter?" And he assures us that a "careful reading" of the Declaration of Independence and the United States Constitution will demonstrate that no such right exists.
Now, I'm no political philosopher, but I recollect something in one of them about the right to "life", right there with " liberty" and "the pursuit of happiness." Is it just me, or is it hard to sustain life without food, shelter or medical care?
Cake, anyone? John Mackey has lots for sale, and some of it is even organic.
To read Mackey's editorial see
http://online.wsj.com/article/SB10001424052970204251404574342170072865070.html
He responds to the furor over his article in the following selection from his blog:
http://www2.wholefoodsmarket.com/blogs/jmackey/2009/08/14/health-care-reform-full-article/#comments
For my money, this response simply makes things worse!
For a report on the demographic characteristics of the uninsured see
http://aspe.hhs.gov/health/reports/05/uninsured-cps/index.htm#Conclusion
Friday, August 14, 2009
The Third World is ...where? Another side of health care reform
I recently posted a link to an article about the thousands of uninsured people in Los Angeles who lined up to receive health care from a team of doctors who ordinarily serve the third world. This tells us what we already knew- segments of the US population effectively live in the third world.
And now this. The article below reports on the increasing tendency of Americans to go to Mexico, where treatment is cheaper and easier to obtain, for health care.
http://news.yahoo.com/s/nm/20090814/us_nm/us_usa_healthcare_mexico;_ylt=ArTVt2MxMEEgULxJZzz1rCtH2ocA;_ylu=X3oDMTJyaDl2a3BnBGFzc2V0A25tLzIwMDkwODE0L3Vz
And now this. The article below reports on the increasing tendency of Americans to go to Mexico, where treatment is cheaper and easier to obtain, for health care.
http://news.yahoo.com/s/nm/20090814/us_nm/us_usa_healthcare_mexico;_ylt=ArTVt2MxMEEgULxJZzz1rCtH2ocA;_ylu=X3oDMTJyaDl2a3BnBGFzc2V0A25tLzIwMDkwODE0L3Vz
Health Care Reform and Musical Chairs
A great deal of the public behavior surrounding the health care debate can best be described as "childish". When six year-olds do this sort of thing, any responsible adult will respond firmly with "you need to learn to share."
And, in fact, the political economy of American health care is structurally similar to an extended version of a children's game- musical chairs. Musical chairs, remember, is the game in which there are fewer chairs than players. The players circle the chairs to music- I remember "Pop Goes the Weasel" as the usual tune- and when the music stops, they scramble for one of the scarce chairs. Without careful adult supervision, the scrambling can become quite ugly.
Think of individuals who currently have insurance- through government-funded programs, individually-purchased policies, or employment- as those who have chairs. For one reason or another, they have resources that allowed them to win the insurance game as it is currently structured. Those without insurance are the losers. The music has stopped, and they have no chairs.
If the number of chairs is fixed- that is, if there are only so many chairs to be had- then this arrangement is what game theorists call "Pareto-optimal." Optimal sounds good, doesn't it? But what it means here is that for anyone to become better off, someone has to become worse off. There are only so many chairs, so a loser can get a chair only by displacing a winner. Why would a winner voluntarily give up his chair? That would be silly.
Now for the political part. Assume that everyone who has a chair has resources that he or she can use to pay guards to stand around their chairs so that, if the music starts up, the losers will still be unable to get a seat. The resources in real life include campaign contributions, votes, media contacts, and so on.
When the music starts again, the guards swing into action- they know what to do in order to make sure that the winners keep those chairs. The guards, in fact, have routines that they regularly use to keep things as they are. The distribution of chairs has become "institutionalized." There is a structure that supports the status quo.
And there is one more thing. The winners all sit together, all have the same advantage (the chairs) , all agree that they want to keep it, and all know that in order to stay seated, they just have to make sure that things keep working the way they always have. The losers mill around, are dispersed, have different ideas about how to get chairs, and have trouble concentrating-their feet and backs hurt from standing all the time. The people with chairs, in other words, are better-organized and more focused than those without them. This is a "collective action problem" and it makes the the effects of institutionalization even stronger.
It gets worse. Some of the winners sit in chairs that the losers have helped to pay for. If we were talking about, say, health care reform rather than musical chairs, this would mean that people who were receiving government assistance with health care (like Medicare) would be showing up at town meetings to complain that the losers might get the same deal.
If this were a real game of musical chairs, there would be some easy solutions. The winners could stay seated and send the guards out to get some more chairs, using resources that were being spent on other, less necessary things. Or the rules of the game could be changed- everyone could agree to share chairs, figuring that it was better to be a bit uncomfortable than to have some people standing all the time.
Of course, it couldn't be that easy. In fact, if we were indeed discussing health care rather than musical chairs, there would be entire industries dedicated to insuring that it never would be that easy.
And, in fact, the political economy of American health care is structurally similar to an extended version of a children's game- musical chairs. Musical chairs, remember, is the game in which there are fewer chairs than players. The players circle the chairs to music- I remember "Pop Goes the Weasel" as the usual tune- and when the music stops, they scramble for one of the scarce chairs. Without careful adult supervision, the scrambling can become quite ugly.
Think of individuals who currently have insurance- through government-funded programs, individually-purchased policies, or employment- as those who have chairs. For one reason or another, they have resources that allowed them to win the insurance game as it is currently structured. Those without insurance are the losers. The music has stopped, and they have no chairs.
If the number of chairs is fixed- that is, if there are only so many chairs to be had- then this arrangement is what game theorists call "Pareto-optimal." Optimal sounds good, doesn't it? But what it means here is that for anyone to become better off, someone has to become worse off. There are only so many chairs, so a loser can get a chair only by displacing a winner. Why would a winner voluntarily give up his chair? That would be silly.
Now for the political part. Assume that everyone who has a chair has resources that he or she can use to pay guards to stand around their chairs so that, if the music starts up, the losers will still be unable to get a seat. The resources in real life include campaign contributions, votes, media contacts, and so on.
When the music starts again, the guards swing into action- they know what to do in order to make sure that the winners keep those chairs. The guards, in fact, have routines that they regularly use to keep things as they are. The distribution of chairs has become "institutionalized." There is a structure that supports the status quo.
And there is one more thing. The winners all sit together, all have the same advantage (the chairs) , all agree that they want to keep it, and all know that in order to stay seated, they just have to make sure that things keep working the way they always have. The losers mill around, are dispersed, have different ideas about how to get chairs, and have trouble concentrating-their feet and backs hurt from standing all the time. The people with chairs, in other words, are better-organized and more focused than those without them. This is a "collective action problem" and it makes the the effects of institutionalization even stronger.
It gets worse. Some of the winners sit in chairs that the losers have helped to pay for. If we were talking about, say, health care reform rather than musical chairs, this would mean that people who were receiving government assistance with health care (like Medicare) would be showing up at town meetings to complain that the losers might get the same deal.
If this were a real game of musical chairs, there would be some easy solutions. The winners could stay seated and send the guards out to get some more chairs, using resources that were being spent on other, less necessary things. Or the rules of the game could be changed- everyone could agree to share chairs, figuring that it was better to be a bit uncomfortable than to have some people standing all the time.
Of course, it couldn't be that easy. In fact, if we were indeed discussing health care rather than musical chairs, there would be entire industries dedicated to insuring that it never would be that easy.
Thursday, August 13, 2009
A Different View of the Subprime Crisis
This article by Cleveland Fed senior economist Yuliya Demyanyk offers an interesting and somewhat counter intuitive look at the subprime crisis. She lists ten myths about the crisis, many of which implicate borrowers as the major problem, but argues that the financial industry's use of leveraging and collateralization was primarily at fault. http://www.clevelandfed.org/research/commentary/2009/0509.cfm
Thousands Line Up for Free Health Care
This New York Times story reports on the thousands of persons who lined up to receive free health care from a team of doctors who provide medical care to individuals in the third world who cannot afford treatment. Where in the third world did this occur? Asia? Africa?
Nope. Los Angeles, California.
http://www.nytimes.com/2009/08/13/health/13clinic.html?hpw
Nope. Los Angeles, California.
http://www.nytimes.com/2009/08/13/health/13clinic.html?hpw
Student Loans: Subprime Mortgages on Human Lives
Higher education, as almost every American knows, is the road to a better life: Better jobs, higher income, more opportunities for subsequent generations. Therefore, higher education is an asset- much like a home- that will appreciate in value during the owner's lifetime and pass wealth on to the next generation. Borrowing to acquire an appreciating asset is no problem, right?
But wait...isn't that what happened with subprime mortgages? Things worked out as expected for some people, but for lots of others the yellow brick road to a better life led to downward rather than to upward mobility.
There is something else: the people for whom things worked out badly were not randomly distributed. Rather, minorities and low-wage workers were at ground zero of the eventual economic implosion. Burdened by compounding handicaps in their ability to acquire the assets that would help them and their children achieve better lives, they were forced to take more financial risks to get that first foot on the ladder to success. The rungs on their particular ladder, however, had been sawed through. Many of them fell.
And so we come to student loans. Emerging racial and economic patterns in student loan indebtedness could best be summed up by the old Billie Holiday song: "Them as got shall get/them as not shall lose".
Minority students and low-income students have higher rates of loan indebtedness overall, and are more likely to have taken on less advantageous private loans as well as public loans. Unlike federally-guaranteed loans, private loans cannot be consolidated, forgiven, or mitigated by public service: they are the subprime sector of the student loan industry. Overall borrowing, including both public and private loans, is also higher for low-income and minority students .
These inequalities are increasing. Why? Minority and low income families with fewer assets were hit hard by the current economic meltdown and are decreasingly able to help with college expenses. Competition for part-time jobs has made it harder for students to find part-time work.
Institutional decisionmaking plays a part: despite rhetoric about "diversity" in higher education, institutional grants have increasingly been made on the basis of merit rather than need. But merit ought to be rewarded, right? Too often in the American system of higher education, "merit" means "value-added by intensive parental investment" in SAT tutors, private education or residence in well-funded public school districts with extensive menus of AP courses and extracurricular activities.
Class- and race-based disparities in student loan borrowing are likely to produce cumulative disadvantage that reduce the life-chances of borrowers and of their children. Want to buy a home or car on credit? High debt to income ratios lower credit scores and raise interest rates. Having trouble finding a job that pays well, perhaps because wages for African-Americans remain lower than those for whites? Your loans default and your credit is ruined, further reducing your chances of advancement.
Played out over time, this pattern has even more in common with that of mortgages. Say family A pays cash for a Jim's college education. This amounts to a very large cash gift. It is as if those parents purchased a large, expensive home for a child. Over time, the house could appreciate, but even if it did not the money that would have been spent on mortgage payments can be invested, adding to the Jim's wealth.
Now, consider Mindy, who lives in family B. Mindy's family is unable to contribute to her education, and she borrows. Over time, her earnings are reduced by loan repayments: that is money that cannot be invested and that will not increase her family's wealth. If Mindy and Jim get jobs that pay equally, Jim will still be better off and his situation will become still better over time. If both have employment problems, then difficulties repaying loans will make Mindy's situation worse, but will not implicate Jim's.
As the subprime mortgage crisis demonstrates, the probabilities of being Jim or Mindy are not evenly distributed. The probability of being Jim is much higher if one is white and from a higher-income family. The probability of being Mindy is much higher if one is from a low-income or minority family. And one probability is nearly perfect: these differential patterns of student loan indebtedness will exacerbate rather than diminish overall patterns of social inequality over time.
For an excellent analysis of this topic, see:
http://www.educationsector.org/analysis/analysis_show.htm?doc_id=964333
But wait...isn't that what happened with subprime mortgages? Things worked out as expected for some people, but for lots of others the yellow brick road to a better life led to downward rather than to upward mobility.
There is something else: the people for whom things worked out badly were not randomly distributed. Rather, minorities and low-wage workers were at ground zero of the eventual economic implosion. Burdened by compounding handicaps in their ability to acquire the assets that would help them and their children achieve better lives, they were forced to take more financial risks to get that first foot on the ladder to success. The rungs on their particular ladder, however, had been sawed through. Many of them fell.
And so we come to student loans. Emerging racial and economic patterns in student loan indebtedness could best be summed up by the old Billie Holiday song: "Them as got shall get/them as not shall lose".
Minority students and low-income students have higher rates of loan indebtedness overall, and are more likely to have taken on less advantageous private loans as well as public loans. Unlike federally-guaranteed loans, private loans cannot be consolidated, forgiven, or mitigated by public service: they are the subprime sector of the student loan industry. Overall borrowing, including both public and private loans, is also higher for low-income and minority students .
These inequalities are increasing. Why? Minority and low income families with fewer assets were hit hard by the current economic meltdown and are decreasingly able to help with college expenses. Competition for part-time jobs has made it harder for students to find part-time work.
Institutional decisionmaking plays a part: despite rhetoric about "diversity" in higher education, institutional grants have increasingly been made on the basis of merit rather than need. But merit ought to be rewarded, right? Too often in the American system of higher education, "merit" means "value-added by intensive parental investment" in SAT tutors, private education or residence in well-funded public school districts with extensive menus of AP courses and extracurricular activities.
Class- and race-based disparities in student loan borrowing are likely to produce cumulative disadvantage that reduce the life-chances of borrowers and of their children. Want to buy a home or car on credit? High debt to income ratios lower credit scores and raise interest rates. Having trouble finding a job that pays well, perhaps because wages for African-Americans remain lower than those for whites? Your loans default and your credit is ruined, further reducing your chances of advancement.
Played out over time, this pattern has even more in common with that of mortgages. Say family A pays cash for a Jim's college education. This amounts to a very large cash gift. It is as if those parents purchased a large, expensive home for a child. Over time, the house could appreciate, but even if it did not the money that would have been spent on mortgage payments can be invested, adding to the Jim's wealth.
Now, consider Mindy, who lives in family B. Mindy's family is unable to contribute to her education, and she borrows. Over time, her earnings are reduced by loan repayments: that is money that cannot be invested and that will not increase her family's wealth. If Mindy and Jim get jobs that pay equally, Jim will still be better off and his situation will become still better over time. If both have employment problems, then difficulties repaying loans will make Mindy's situation worse, but will not implicate Jim's.
As the subprime mortgage crisis demonstrates, the probabilities of being Jim or Mindy are not evenly distributed. The probability of being Jim is much higher if one is white and from a higher-income family. The probability of being Mindy is much higher if one is from a low-income or minority family. And one probability is nearly perfect: these differential patterns of student loan indebtedness will exacerbate rather than diminish overall patterns of social inequality over time.
For an excellent analysis of this topic, see:
http://www.educationsector.org/analysis/analysis_show.htm?doc_id=964333
Wednesday, August 12, 2009
Burning Bridges?
I've been thinking about Ruby Payne and her Bridges Out of Poverty program. Payne has developed a sort of manual for bootstrapping the poor. Essentially, she views poverty as a culturally-transmitted illness and has produced what social workers call a "manualized intervention," a sort of curriculum for acculturating poor people to middle class norms.
This is a particularly interesting time to consider cultural arguments about poverty, since many formerly middle class individuals and families have become the new poor. Of course, Payne might say, this will be temporary rather than generational poverty. The latter, she warns, is the especially egregious form of poverty that is rooted in and reproduces cultural deficiencies.
We don't yet know what effects the current recession will have on the structure of poverty, but we can make some guesses. Older workers who have been laid off and have lost their assets may stay poor, but their children would already have been acculturated to middle class norms, so no worries there.
Younger workers, especially those for whom their house was their chief asset, may be trapped in a lengthier episode of poverty, since their access to credit will be compromised for many years. Their children, who were formerly middle class but are now sleeping on a relative's sofa or in a homeless shelter might, in Ruby's world, be harmed by their contact with the deviant generational poor. A Bridges Out of Poverty coloring book might be useful for the younger children in these families, and might provide an additional revenue stream for Payne's growing list of enterprises.
I am not entirely unsympathetic to Payne's argument. I grew up in a neighborhood and in a home where the culture reproduced many of the negative behaviors that concern Payne. Substance abuse and violence were endemic. The woman three streets over drowned her baby while drunk and her husband subsequently commited suicide, one of many substance-related suicides and suicide attempts in the neighborhood. These dysfunctional episodes were common knowledge among the neighborhood children, who learned that some houses- and some parents- were not at all safe.
The police were called frequently. My stepfather, for example, had a habit of firing his rifle at neighboring homes when he had had one too many. Often the police arrived when a family dispute escalated into violence.
Fathers came and went. I saw mine maybe once a year, and the encounters were disastrous. The majority of adults had, at best, a weak attachment to the world of employment. In my own family, for instance, neither of my maternal my grandparents had never worked and my father and stepfather worked only sporadically, quitting whenever the job got to be too much of a hassle. This was a common pattern in the neighborhood.
Bridges Out of Poverty would have been just the thing, encouraging everyone to sober up, go to work, and learn to be "middle-class". Except that virtually everyone in the neighborhood was already rich. I grew up in a lakeside suburb where people didn't work because they didn't have to- they had trust funds. We all lived on transfer payments, but the transfers came from private rather than from public trusts. As my grandfather used to say "if you have to work, it means you're poor."
When the police came to our neighborhood, they were respectful. All the perpetrators had lawyers on retainer and some of them had law degrees. No one ever got arrested.
And everyone had great educations, which they put to little or no use. Taking account of my various parents and stepparents, none of whom ever worked steadily, unemployed members of my family had degrees from Brown, Bryn Mawr, Princeton, Wellesley and Stanford. It was the same thing for most of the neighbors- the Wharton School, Harvard, Lehigh, Bucknell and so on.
What does all this say about Ruby Payne? Well, she could learn something from the apocryphal exchange between Scott Fitzgerald and Ernest Hemingway. When the former said "the rich are very different from you and I," the latter said "yes, they have more money."
The differences between those at the bottom and those in the middle or at the top are not cultural. They are structural.
This is a particularly interesting time to consider cultural arguments about poverty, since many formerly middle class individuals and families have become the new poor. Of course, Payne might say, this will be temporary rather than generational poverty. The latter, she warns, is the especially egregious form of poverty that is rooted in and reproduces cultural deficiencies.
We don't yet know what effects the current recession will have on the structure of poverty, but we can make some guesses. Older workers who have been laid off and have lost their assets may stay poor, but their children would already have been acculturated to middle class norms, so no worries there.
Younger workers, especially those for whom their house was their chief asset, may be trapped in a lengthier episode of poverty, since their access to credit will be compromised for many years. Their children, who were formerly middle class but are now sleeping on a relative's sofa or in a homeless shelter might, in Ruby's world, be harmed by their contact with the deviant generational poor. A Bridges Out of Poverty coloring book might be useful for the younger children in these families, and might provide an additional revenue stream for Payne's growing list of enterprises.
I am not entirely unsympathetic to Payne's argument. I grew up in a neighborhood and in a home where the culture reproduced many of the negative behaviors that concern Payne. Substance abuse and violence were endemic. The woman three streets over drowned her baby while drunk and her husband subsequently commited suicide, one of many substance-related suicides and suicide attempts in the neighborhood. These dysfunctional episodes were common knowledge among the neighborhood children, who learned that some houses- and some parents- were not at all safe.
The police were called frequently. My stepfather, for example, had a habit of firing his rifle at neighboring homes when he had had one too many. Often the police arrived when a family dispute escalated into violence.
Fathers came and went. I saw mine maybe once a year, and the encounters were disastrous. The majority of adults had, at best, a weak attachment to the world of employment. In my own family, for instance, neither of my maternal my grandparents had never worked and my father and stepfather worked only sporadically, quitting whenever the job got to be too much of a hassle. This was a common pattern in the neighborhood.
Bridges Out of Poverty would have been just the thing, encouraging everyone to sober up, go to work, and learn to be "middle-class". Except that virtually everyone in the neighborhood was already rich. I grew up in a lakeside suburb where people didn't work because they didn't have to- they had trust funds. We all lived on transfer payments, but the transfers came from private rather than from public trusts. As my grandfather used to say "if you have to work, it means you're poor."
When the police came to our neighborhood, they were respectful. All the perpetrators had lawyers on retainer and some of them had law degrees. No one ever got arrested.
And everyone had great educations, which they put to little or no use. Taking account of my various parents and stepparents, none of whom ever worked steadily, unemployed members of my family had degrees from Brown, Bryn Mawr, Princeton, Wellesley and Stanford. It was the same thing for most of the neighbors- the Wharton School, Harvard, Lehigh, Bucknell and so on.
What does all this say about Ruby Payne? Well, she could learn something from the apocryphal exchange between Scott Fitzgerald and Ernest Hemingway. When the former said "the rich are very different from you and I," the latter said "yes, they have more money."
The differences between those at the bottom and those in the middle or at the top are not cultural. They are structural.
Tuesday, August 11, 2009
The Policy Panopticon
Jeremy Bentham, the 19th century utilitarian philosopher, developed a plan for the ultimate prison. Called the panopticon, it worked on a simple principle: the prisoner would constantly be under surveillance by his jailers. No aspect of his life would be free from scrutiny. His acts and omissions would be entirely visible to all.
The modern state puts us all in something of a panopticon- credit reporting agencies, insurers, employers and various branches of government "see" deeply into the minutia of all our lives. Visibility is an exchange: we submit because we want what these observers have to offer.
But those of us who who have marketable skills and accumulated assets are in a position to manipulate our terms of trade and gain some shelter from prying eyes. We can change insurers, we can change jobs, we can use our skills or hire advocates to help us manage our relationship with bureaucracies. We have some ability to limit our visibility.
Those at the bottom of the income ladder, however, do not have these options. Minimum wage workers, the unemployed and the disabled may require public subsidies to meet basic needs in every aspect of their lives. Their ability to purchase food, to obtain medical care, to obtain safe, affordable housing all depend on public subsidies, and these subsidy programs each regulate and review almost every aspect of an applicant's life.
An application for food stamps, for instance, requires as much information as a mortgage application: Vehicle titles and license numbers, proof of earned and unearned income, retirement accounts, proof of all property owned, proof of possible future income, employment information, birth certificates, social security numbers...the list goes on. And the food stamp recertification process typically requires this information to be produced at least twice a year, more frequently when circumstances change.
Subsidized housing programs require all this information and more. Criminal histories are required for these programs, along with landlord references from previous tenancies. The criminal histories of family members-even those who do not reside with the tenant can be a reason to deny public housing: if your Uncle Joe, who was once arrested for drug abuse, is a frequent visitor, you can be evicted. Frequently, credit checks are also used to select tenants in subsidized housing programs. And here, too, re-certification occurs at least yearly and more often if circumstances change.
The justification for this surveillance and regulation is the principle of "least eligibility," inherited from the Elizabethan poor law. The major problem in providing assistance, this logic goes, is that of separating the worthy from the unworthy poor. Intensive certification works on the principle that applicants are unworthy until they prove otherwise.
In Bentham's scheme, individuals were consigned to the panopticon because they had committed a crime. The social policy panopticon works on the same principle, but here, the crime is that of poverty.
The modern state puts us all in something of a panopticon- credit reporting agencies, insurers, employers and various branches of government "see" deeply into the minutia of all our lives. Visibility is an exchange: we submit because we want what these observers have to offer.
But those of us who who have marketable skills and accumulated assets are in a position to manipulate our terms of trade and gain some shelter from prying eyes. We can change insurers, we can change jobs, we can use our skills or hire advocates to help us manage our relationship with bureaucracies. We have some ability to limit our visibility.
Those at the bottom of the income ladder, however, do not have these options. Minimum wage workers, the unemployed and the disabled may require public subsidies to meet basic needs in every aspect of their lives. Their ability to purchase food, to obtain medical care, to obtain safe, affordable housing all depend on public subsidies, and these subsidy programs each regulate and review almost every aspect of an applicant's life.
An application for food stamps, for instance, requires as much information as a mortgage application: Vehicle titles and license numbers, proof of earned and unearned income, retirement accounts, proof of all property owned, proof of possible future income, employment information, birth certificates, social security numbers...the list goes on. And the food stamp recertification process typically requires this information to be produced at least twice a year, more frequently when circumstances change.
Subsidized housing programs require all this information and more. Criminal histories are required for these programs, along with landlord references from previous tenancies. The criminal histories of family members-even those who do not reside with the tenant can be a reason to deny public housing: if your Uncle Joe, who was once arrested for drug abuse, is a frequent visitor, you can be evicted. Frequently, credit checks are also used to select tenants in subsidized housing programs. And here, too, re-certification occurs at least yearly and more often if circumstances change.
The justification for this surveillance and regulation is the principle of "least eligibility," inherited from the Elizabethan poor law. The major problem in providing assistance, this logic goes, is that of separating the worthy from the unworthy poor. Intensive certification works on the principle that applicants are unworthy until they prove otherwise.
In Bentham's scheme, individuals were consigned to the panopticon because they had committed a crime. The social policy panopticon works on the same principle, but here, the crime is that of poverty.
Monday, August 10, 2009
Barbara Ehrenreich Series on Poverty from the NYT
I am not entirely a sold-out Barbara Ehrenreich fan, but this is a great current series on poverty.
http://www.nytimes.com/2009/06/14/opinion/14ehrenreich.html?ref=opinion
http://www.nytimes.com/2009/07/12/opinion/12ehrenreich.html?ref=opinion
http://www.nytimes.com/2009/08/09/opinion/09ehrenreich.html?_r=1&em
http://www.nytimes.com/2009/06/14/opinion/14ehrenreich.html?ref=opinion
http://www.nytimes.com/2009/07/12/opinion/12ehrenreich.html?ref=opinion
http://www.nytimes.com/2009/08/09/opinion/09ehrenreich.html?_r=1&em
Cash for Clunkers: Driving Poor People Closer to the Edge
Cash for clunkers seems like a no-lose proposition. Help the environment, stimulate the economy, save jobs. This is no zero-sum game- everyone wins, right?
Well, maybe not everyone. Probabilistically speaking, what population groups are most likely to drive clunkers? Low-income people drive what they can afford, and what they can afford are often clunkers that they can buy for cash. Would they prefer to drive snappy, fuel-efficient vehicles? Mostly they would, if they could afford them. Newer cars raise the costs of driving and operating motor vehicles in ways that are especially problematic for people at the bottom of the income scale.
First, there is the issue of credit. Individuals with higher debt-to-income ratios, lower incomes, and difficult credit histories are less likely to be able to obtain financing, and will pay much higher interest rates if they are approved at all. Secondly, there is the issue of insurance. Cars financed on credit require full coverage- poor people with paid-off clunkers typically choose the minimal coverage that they can afford.
And, for low-income individuals who manage to get through this obstacle course, a final set of problems will show up when the warranty expires. Newer cars are full of bells and whistles: helpful Uncle John probably can't fix them in his garage.
So what if you can't afford to take advantage of cash for clunkers and have instead to buy a clunker to take you to your minimum-wage job? Now, the law of supply and demand becomes your problem. What happens to the clunkers that are traded in? They are crushed and sold for scrap. As the supply of clunkers diminishes, their price will rise.
The end result? More cash for those with credit good enough to take advantage of another government subsidy for the middle- and upper-classes. And, for the poor- less cash, and more expensive clunkers.
Well, maybe not everyone. Probabilistically speaking, what population groups are most likely to drive clunkers? Low-income people drive what they can afford, and what they can afford are often clunkers that they can buy for cash. Would they prefer to drive snappy, fuel-efficient vehicles? Mostly they would, if they could afford them. Newer cars raise the costs of driving and operating motor vehicles in ways that are especially problematic for people at the bottom of the income scale.
First, there is the issue of credit. Individuals with higher debt-to-income ratios, lower incomes, and difficult credit histories are less likely to be able to obtain financing, and will pay much higher interest rates if they are approved at all. Secondly, there is the issue of insurance. Cars financed on credit require full coverage- poor people with paid-off clunkers typically choose the minimal coverage that they can afford.
And, for low-income individuals who manage to get through this obstacle course, a final set of problems will show up when the warranty expires. Newer cars are full of bells and whistles: helpful Uncle John probably can't fix them in his garage.
So what if you can't afford to take advantage of cash for clunkers and have instead to buy a clunker to take you to your minimum-wage job? Now, the law of supply and demand becomes your problem. What happens to the clunkers that are traded in? They are crushed and sold for scrap. As the supply of clunkers diminishes, their price will rise.
The end result? More cash for those with credit good enough to take advantage of another government subsidy for the middle- and upper-classes. And, for the poor- less cash, and more expensive clunkers.
Sunday, August 9, 2009
Wisdom from the Dead
"Constantly choosing the lesser of two evils is still choosing evil." Jerry Garcia
Saturday, August 8, 2009
Poverty and the Public Spectacle
It's always someone. In Rome, Christians were "the others" and their torture was a public spectacle, with refreshments for all. For the Elizabethans, it was criminals- the gallows were a place for family picnics and meeting the neighbors. And in America until, really, a few decades ago, it was lynchings, where white communities congregated while black victims choked to death and photographers recorded the spectacle for postcards.
Now, we have the homeless- who are, after all, a subset of "the poor". In the modern iteration, virtual community has replaced real community. Consequently, videos of "bum bashing" replace postcards and personal attendance and TV snacks replace picnics, but the spirit is the same. These spectacles tell us who "the other" is in any particular period, and reassure us that "we" are not "them."
In the modern era, poverty and conditions associated with poverty- obesity, smoking, cultural backwardness, and its terminal phase of homelessness- define "the other." "Bum bashing" is the least of it. Like lynchings, these incidents say more about our culture than about the specific perpetrators.
Now, we have the homeless- who are, after all, a subset of "the poor". In the modern iteration, virtual community has replaced real community. Consequently, videos of "bum bashing" replace postcards and personal attendance and TV snacks replace picnics, but the spirit is the same. These spectacles tell us who "the other" is in any particular period, and reassure us that "we" are not "them."
In the modern era, poverty and conditions associated with poverty- obesity, smoking, cultural backwardness, and its terminal phase of homelessness- define "the other." "Bum bashing" is the least of it. Like lynchings, these incidents say more about our culture than about the specific perpetrators.
Semi-Revolution
Robert Frost
A Semi-Revolution
A Semi-Revolution
I advocate a semi-revolution.
The trouble with a total revolution
(Ask any reputable Rosicrucian)
Is that it brings the same class up on top.
Executives of skillful execution
Will therefore plan to go halfway and stop.
Yes, revolutions are the only salves,
But they're the one thing that should be done by halves.
Credit Reports and Canon Fodder
The use of credit scores by the military to track recruits into particular areas of service adds another, potentially fatal, twist to a familiar story. During the Vietnam War, the connection between social class and the likelihood of becoming cannon fodder was made through educational deferments. Those wealthy enough to attend college could avoid combat.
Now, the connection between social class and front-line combat is maintained by the use of credit scores to track recruits into particular service areas. Individuals with lower credit scores and higher levels of debt are unable to obtain the security clearances that might allow them to select non-combat jobs. Low-income individuals with high student loan burdens and difficult work histories may view military service as a way to improve their lives, but their path to a better life runs through the front lines.
In a society where race and parental financial situation remain the best predictors of an individual's social class, measures such as credit scores that are highly correlated with social class simply- replicate existing patterns of inequality. Their use provides one more reason why poverty is too often a life- or, in the case of the military, a death- sentence.
Now, the connection between social class and front-line combat is maintained by the use of credit scores to track recruits into particular service areas. Individuals with lower credit scores and higher levels of debt are unable to obtain the security clearances that might allow them to select non-combat jobs. Low-income individuals with high student loan burdens and difficult work histories may view military service as a way to improve their lives, but their path to a better life runs through the front lines.
In a society where race and parental financial situation remain the best predictors of an individual's social class, measures such as credit scores that are highly correlated with social class simply- replicate existing patterns of inequality. Their use provides one more reason why poverty is too often a life- or, in the case of the military, a death- sentence.
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