A Simple Solution and a Less Simple

http://www.morganwarstler.com/post/44789487956/guaranteed-income-auction-the-unemployed

If our governing class were competent and had some sense of noblesse oblige, we might see a program like this instituted. Of course, they are incompetent and ignoble. Result: problem people (those with negative economic value under our current system) become more problematic--and their problems become contagious, instead of being contained and ameliorated.

 

The second discussion is less simple, much-much much-much longer, more entertaining and intelligent--and more realistic in assessing the likely elite response to the "dire problem":

 http://unqualified-reservations.blogspot.com/2013/03/sam-altman-is-not-blithering-idiot.html

Perhaps he overestimates the difficulty of solving the problem under the current dispensation. Paperwork may easily be created for anyone who can even marginally read--what do you think our regulators do other than create mostly superfluous paperwork requirements? The problem is the failure of our Marxist overlords to make clear the distinction between the lifestyles of workers and those of welfare cases. They prefer to integrate these opposing types into "diverse" communities with virtually identical effective incomes. The bottom quarter or so of our society has insufficient incentive to work. And this temptation to idleness is inflicted upon precisely those limited human types who are least capable of independently discovering the value of work, its saving characteristic of offering a point, a goal to the life beyond crude hedonism and recreational criminality. The Marxists, being atheists, ought to understand this issue all the more clearly for their lack of supernatural faith--which is one of the other two main sources of purpose in human life, along with family. But, at best, their idealistic preconceptions foreclose any such insight. At worst, they're playing a most cynical political game. Make-work is thus the most realistic of the solutions on offer to save the increasing numbers of economically useless Americans from degeneration. The guaranteed income idea above is one well-considered form of this make-work option. It would likely produce lower birth rates among the make-workers as well, a happy Darwinian benefit.

Dignity or Decline

http://www.nytimes.com/2012/11/18/opinion/sunday/douthat-The-Liberal-Gloat.html

 

A solid editorial that smacks both parties.

 

But, he should have brought out the implication that the Republicans are in a much worse position than they realize. The breakdown of local associations is virtually impossible to rebuild after a generation or two of absence. Welfarism caused the breakdown by displacing these traditional means of supporting the indigent, but removing welfare does not cause it magically to repair itself. If major government support were discontinued, a collapse into third world chaos would follow in large swathes of our great cities. The Democratic solution is to expand these areas of dependency, to render ever more of the population idle (but half-imprisoned) serfs on the DC estate. The Republican strategy is denialism and electoral defeat. This is a vicious cycle. And it only goes one way. As someone said, Cthulhu only swims left.

Some Poor Realities

http://www.nytimes.com/interactive/2012/10/02/business/how-health-care-affects-income.html

The income estimates do not include unreported income, prevalent at the low and high ends of the scale. It also skips the value of services provided to our 2 million prisoners. By the way, the CBO is now basing its income estimates on the methodology exemplified in the graph. But, by including Medicare and Medicaid benefits as income, it completely alters the picture of inequality--and pushes the real working class to the bottom of the income pyramid.

http://www.nytimes.com/2012/10/11/opinion/americas-ineffective-antipoverty-effort.html

A Republican doing what Republicans do not like to do: thinking seriously about reform of the welfare state, rather than wallowing in the idealistic rhetoric of abolition. The crux of his argument: "We can start by measuring outcomes (results) rather than inputs (how much money can we throw at the problem). Our effectiveness should be assessed, in part, by the per-person cost of moving individuals from dependency to self-sufficiency."

The Parasite Parade

185 federal welfare programs, plus an uncountable number of state programs--I think, seriously, we should offer welfare prizes, cash rewards for the person who benefits from the greatest number of programs and another reward for the person who receives the greatest yearly dollar value. It would be a hell of a publicity stunt and piss off a lot of working people (not to mention less successful and therefore envious parasites).   http://blogs.forbes.com/peterferrara/2011/04/22/americas-ever-expanding-welfare-empire/

Priorities

It's interesting to note the options not presented in this game: Medicaid, food stamps, section 8 housing come to mind. And the real problem remains overall health costs, not the budget deficit--which is just a symptom of health costs. http://www.nytimes.com/interactive/2010/11/13/weekinreview/deficits-graphic.html?choices=h7u6c816

Crossing the Line

This is not the sort of review one expects to find in a leftist magazine like The New Republic: http://www.tnr.com/book/review/what-hope Nevertheless, even if enlightenment is achieved by the socialist component of our polity--I think a change of policy likely to lag very far behind, for political, psychological, and cognitive reasons. This is a key insight: Wax [author of the book under review] is well aware that past discrimination created black-white disparities in education, wealth, and employment. Still, she argues that discrimination today is no longer the “brick wall” obstacle it once was, and that the main problems for poor and working-class blacks today are cultural ones that they alone can fix. Not that they alone should fix—Wax is making no moral argument—but that they alone can fix.          The Johnsonian "Great Society" interventions in black America are as flagrant a public policy failure as the Nixonian "War on Drugs" that followed. In each case, the government stepped in, all money and arrogance, spent profligately to ensure black men no longer faced any financial responsibilities, ruined millions of American lives by process of moral hazard, and made the original problems much worse. The black family was ruthlessly destroyed as an institution, and black culture went with it. Further, as I've mentioned at other times, the black-white IQ gap is not irrelevant to the problem. It has persisted at the same level for the 100 years that IQ testing has been administered. But, to reiterate a basic consequence of this fact, if the top third of whites pull bachelors degrees, their average IQ would be about 114 and the minimum would be 106. Only 8% of blacks meet this minimum and 2.5% meet the average--a fourfold difference between college-capable whites and blacks. With ever more sophisticated demands faced by professionals, the fact that only 8% of blacks can hope to meet those demands constitutes a serious problem requiring such redress as we can muster. Wax does mention this, but only in a single paragraph that fails to grapple with its implications. I do credit her, however, with the courage to admit that the possibility of genetic differences in IQ between races yet remains, "the science on this question is inconclusive." (69) In the next quote, I disagree with the reviewer, who hasn't learned the limits of governmental competence. Throwing more handouts at black America will exacerbate the problem, which stems in the first instance from a lack of self-reliance reinforced over decades by the nanny state. Wax stipulates that the government should do all that it can to ensure equal opportunity, which includes providing decent education and enforcing civil rights laws. I [the reviewer] would say that there is somewhat more that the government can do, given the historical circumstances. Programs to ease ex-cons back into society could do infinitely more for black inner-cities than suing car companies over small differences in loan deals. The welfare state imposes a system of incentives on blacks that encourages irresponsibility. Black men who walk on their families are at the center of the problem. But, why do they walk? They did not do this in 1960. What has fundamentally changed except the vast and comprehensive governmental provision of all necessities to black mothers and children? And the less involved the father is, the greater the government's largesse. The incentives are clearly perverse, and they have achieved the effect one might have expected. Incentives work. I do not mean to claim that this monstrous bureaucratic affliction impacts only blacks--attenuated versions may be seen among other groups as well. The welfare state has entirely remade lower and working class American society. It has not only robbed these orders of all dignity, but even of the sense that human dignity has value. So have the economic incentives crafted by our left-wing experts corrupted the character of much of America. The author, seeing the psychological results without fully understanding the causes which lie embedded in the system, then moves on to her summation: Wax usefully asks: “Is it possible to pursue an arduous program of self-improvement while simultaneously thinking of oneself as a victim of grievous mistreatment and of one’s shortcomings as a product of external forces?” To the extent that our ideology on race is more about studied radicalism than about a healthy brand of what Wax calls an internal locus of control, her book provokes, at least in this reader, a certain hopelessness. If she is right, then the bulk of today’s discussion of black America is performance art. Tragically, and for the most part, she is right. This is dead on. The whole of our handling of black America since Johnson has been a cynical game of elites (especially gentile and Jewish elites) engaged in social status competition. The most "generous" on the face of it, at the superficial level, won the competition, as demonstrated by the ever leftward tendency of our politics. Assuming that the poor are angels who will not humanly respond to incentives in the way that the contemptible "bourgeois" would counted as a sound basis for policy design. It turns out the poor are human, and the incentives came into play, and the poor were ruined--just as the middle classes would have suffered ruination had the incentives been generous enough to tempt them. This is what comes of officially sanctioned lies. To adapt Henry James, these are the black and merciless things that are behind the great socializations.

Socialism in Action

http://www.nytimes.com/2010/03/14/nyregion/14hunger.html?hpw   "The South Bronx, Plagued by Obesity, Tops a Hunger Survey" You've got to love a headline like that! How did they determine these denizens are hungry? Well, they asked them whether they were short of food money at least once in the last year. In America, answering yes is sufficient to define you as hungry--at least, under socialist lights. Who believes this crap? It's not enough that we feed these morons with food stamps and free school lunch and breakfast--now they want us to subsidize the healthy items of their free food--since they cannot make intelligent decisions for themselves. They do not have healthy foods in these areas because businesses cannot make money selling what people do not want. It's no accident that this area is entirely overrun with blacks, puerto ricans, and dominicans--the third world imported to America and put on welfare because they cannot function in a first world society. The socialists know this--they will not say they know it, but their actions betray the knowledge. An eloquent British perspective on this issue, fortified with "knowledge by acquaintance": https://www.city-journal.org/html/starving-criminal-12383.html Excerpts: The existence of malnutrition in the midst of plenty has not entirely escaped either the intelligentsia or the government, which of course is proposing measures to combat it: but, as usual, neither pols nor pundits wish to look the problem in the face or make the obvious connections. For them, the real and most pressing question raised by any social problem is: “How do I appear concerned and compassionate to all my friends, colleagues, and peers?” Needless to say, the first imperative is to avoid any hint of blaming the victim by examining the bad choices that he makes. It is not even permissible to look at the reasons for those choices, since by definition victims are victims and therefore not responsible for their acts, unlike the relatively small class of human beings who are not victims....He feels the need to retreat into impersonal abstractions, into structures or alleged structures over which the victim has no control. And out of this need to avoid the rawness of reality he spins utopian schemes of social engineering. The British intelligentsia has thus come up with an abstraction that fits this particular bill perfectly—that is to say, the need to explain widespread malnutrition in the midst of plenty without resort to the conduct of the malnourished themselves: food deserts....The only homes in which there were ever any signs of genuine cookery and of eating as a social activity, where families discussed the topics of daily life and affirmed their bonds to one another, were those of the Indian immigrants. In white and black homes, cookery meant (at its best) re-heating in a microwave oven, and there was no table round which people could sit together to eat the re-heated food. Meals here were solitary, poor, nasty, British, and short....The Indian immigrants and their descendants inherited a far better and more elaborate cuisine than the native British, of course, but this is not a sufficient explanation of their willingness still to buy fresh food and to cook it: they continue to cook because they still live in families, and cookery is a socially motivated art. Even among Indian heroin addicts (principally Muslim), the kind of malnutrition I have described is rare, because they do not yet live in the solipsistic isolation of their white counterparts, who live alone, even when there are other people inhabiting the house or apartment in which they themselves live....If food deserts truly exist—and they cannot in these times of easy transport be very extensive—the explanation lies in demand, not in supply. And demand is a cultural phenomenon... The connections I have drawn are obvious, yet denied—or rather avoided altogether—in the typical modern British approach to social problems... The liberal intelligentsia has several reasons for failing to see or admit the cultural dimension of malnutrition in the midst of plenty—in failing to see its connection with an entire way of life—and in throwing the blame instead onto the supermarket chains. One reason is to avoid confronting the human consequences of the changes in morals, manners, and social policy that it has consistently advocated. The second is to avoid all appearance of blaming people whose lives are poor and unenviable. That this approach leads it to view those same people as helpless automata, in the grip of forces that they cannot influence, let alone control—and therefore as not full members of the human race—does not worry the intelligentsia in the least. On the contrary, it increases the importance of the elite’s own providential role in society. To blame the supermarket chains is implicitly to demand that the liberal and bureaucratic elite should have yet more control over society. This is how the British government’s current Food Poverty Eradication Bill should be interpreted. By attempting to tackle the sources of supply rather than those of demand, it will sidestep the question of an entire way of life—a problem that it would take genuine moral courage to tackle—and aim at an easy target instead. The government will increase bureaucracy and regulation without reducing malnutrition. This, in miniature, is the story of modern Britain.

Fight or Flight

http://www.nationalreview.com/articles/228250/spreading-wealth/stephen-spruiell
The key line here is "This is welfare for the middle class." That is Obama's goal. Once the middle class is sufficiently swaddled in a comfortable little welfare blanket, the road to socialism is cleared and paved--and the American tradition is fled.

The Meaning of American "Poverty"

http://article.nationalreview.com/?q=NjJiMDE5Y2M1OWNmNDFhMDIwNWMxYTA1Mzk5ZDkxMTk=&w=MA==

 

Welfare does not count as "income" for determining whether a household is defined as poor by the government. This greatly diminishes the relation between its definition of poverty and the reality of poverty. But, of course, the Left considers close relations with reality too painful to contemplate, much less seek out. Hence, this rather successful propaganda campaign that brays about the high "poverty" level and the need to increase welfare spending (though the poverty determination formula prevents even a tripling of welfare spending from impacting the "poverty" rate). What we have here is another number without a comprehensible meaning to the vast majority of Americans. But, who can compete for public legitimacy with the propagandizers of the Census Bureau who churn out these lies?

Another important reality rarely noted is the incentive structure the government foists upon the poor to not work too much or get married: both work and marriage reduce the various forms of welfare payments.

More Health

http://newsbusters.org/blogs/noel-sheppard/2009/06/14/george-will-tells-dirty-little-secrets-universal-healthcare

Pretty clean counter-arguments from Mr. Will. My only disagreement with him is relatively minor: most people actually are too stupid to determine what a competitive health plan is. However, this is of limited consequence since the vast majority have their plans selected for them (or narrowed down) by their employers or the government.
 

Obama knows that even the smallest, most modest "government option" on health insurance opens the door to an almost inevitable socialization of the system, however gradually it may occur. A government option will destroy competition and grow ever larger--and the larger it gets, the more people it covers, the more voters will support it, creating a self-sustaining cycle of continuous growth. Entitlements last forever because none of their natural predators can match them--their vicious cycle of growth and influence confers immortality.  

 

The AMA knows this and is running hard against it. Their problem is that the status quo sucks, with no good options to rectify it. Between greedy doctors, greedy lawyers, incompetent bureaucrats, and patients with no incentive to restrain costs--we spend an enormous amount on health care for results that, on the whole, are no better than countries that spend half as much and which, as a result, have a competitive advantage in business. But, you can't bring doctors under control without second-guessing them or putting them all on salary. The lawyers, at least in theory, keep a lid on the problem of incompetent, dangerous, and negligent doctors. Bureaucracies attract incompetent, unmotivated people, then fail to incentivize them properly--and are never efficient in managing complex systems. Most patients are too stupid to respond effectively to incentives even when they're in place. It's very difficult to do much about any of these four problems, and very little has been done. Obama has talked about restricting doctor's options through cost-effectiveness analysis, and about reducing legal costs and defensive medicine costs by limiting malpractice suits--a good start if he can make it happen. But, his plans will make the bureaucracy problem much worse and probably do nothing for the incentive issue.

Redefining "Dignity" and "Pride"

http://www.nytimes.com/2006/07/31/business/31men.html?adxnnl=1&pagewanted=all&adxnnlx=1318172581-aGaU9McISvTHvJDEZTsZDQ

This article is actually from a couple of years ago, pre-recession. But, the trends it gets into are multi-decade in nature. The mystery under examination is the huge number of American men, age 30-54, who do not work, even in a period of 4% unemployment. Fully 13% do not work, some of whom are looking, most of whom are not.

It's useful, first, to separate those looking for work (unemployed) from those not looking (idlers). These are clearly distinct categories. The unemployment figures are well-known; the number of idlers is a more interesting issue. From the numbers in the article and supporting data provided, the trend toward increased idlers was mostly gradual in the 50s, 60s, and 80s. In the 70s, 90s, and 00s it increased rapidly. Approximate number of idlers in each year:

1968: 3%
1980: 6%
1990: 6%
2000: 7.5%
2005: 8.5%

Unfortunately, the stats (on race, education, income) the Times provides do not distinguish between unemployed and idlers--an idiotic misstep. After all, the point of the article is to investigate the mystery of increasing idleness.

Some percentage of the idle work off the books at any number of casual, temporary, informal, or illegal jobs. Mostly, this type of thing is ill-paid and irregular. The main inducements to idleness are likely disability and Medicare benefits or a wife who takes up the slack with her income. A third of the unemployed and idlers have $50k+ household income--either they have significant financial resources or spousal income.

Given that the federal disability program increased its charity cases from 3 to 6.5 million from 1990 to 2005--it's fair to say it's being gamed by millions. This was a time period when jobs were becoming less strenuous and dangerous and population only grew 15%. The problem is that neither the Social Security bureaucrats nor the administrative law judges, who determine whether someone qualifies for disability payments, have an incentive to ensure a fair decision. They take the easy way out--approval (sometimes after appeals of the initial decision) for almost everyone who applies for this charity. No doubt many more will suddenly become disabled during this recession.

The racial breakdown for these men (unemployed and idlers), somewhat disguised by the statistical presentation the Times chose, is thus:

White:     11.5%
Black:      27%
Hispanic: 13%

The blacks are a special problem, as in so many other areas of life. Their excessive rate reflects various causal factors: a high rate of criminality, residence in areas with few jobs, poor education and training levels, the alternative appeal of criminal activity (esp drug dealing), the collapse in black America of the tradition of men supporting women and children, habituation to the low income/welfare dependency lifestyle.

Health Care Realities

I posted this response to a Krugman editorial that denounced McCain's health care policy proposal (which seems to be based on salutary market principles, but appears highly questionable in practice):

There is a fundamental distinction between health care and other sectors of the economy. The great majority of Americans will not in practice or in theory accept the appearance of unequal health care between the rich and the poor. In virtually every other area there is acceptance of this inequality, even in education. And, since the affluent demand a high level (ie, an expensive level) of care, the rest of society expects to receive a level of care reasonably comparable. This means health care will be very expensive and a significant part of society will be unable to pay the true price of their health care. Consequently, the affluent subsidize the less affluent through various government programs and in a number of other less visible ways (like free care for the indigent in emergency rooms).

 

The republican party notices this final result and denounces the economic unfairness of such redistribution and its economic inefficiency (stemming from lack of incentive to reduce medical costs on the part of those who do not pay for them). The democratic party notices that care is not in fact perfectly equal (though it is much more nearly equal than income)—and it denounces the unfairness of unequal treatment and its economic inefficiency (due to relatively limited preventive care available to the poor, which causes health problems to be ignored until they become serious and expensive).

 

McCain’s solution is absolutely irrelevant because it will never pass Congress. Why even analyse it?

 

But, Obama’s plan takes on a special signifance because the democrats will control Congress. One element not in his plan is any credible attempt to limit the increases in health care costs as a whole. This is the essential problem: health care absorbs 16% of GDP, and health costs grow much faster than GDP. Instead, Obama wants to shift around the costs by forcing productive members of society to pay yet another subsidy to unproductive (or less productive) members of society. The health sector is already massively redistributive (government pays, directly or indirectly, for 60% of total health costs), and Obama’s plan would probably have only a modest impact in increasing the level of redistribution. But, the underlying problem of cost is not addressed; it is entirely ignored. Yet, this is one of the major threats to our current position as the leading economy in the world—and also one of the principal reasons why median incomes in the U.S. have been flat for 30 years (it has consumed about half the gains that would have been realized through productivity growth).

 

 

The Triumphs of Republicanism

Thinking about the role of the federal housing agencies in this financial collapse led me to wonder: have the republicans ever managed to extinguish a socialist or entitlement policy in the party's history? Fannie Mae and Freddie Mac have always been harbingers of socialism. The republicans may be less complicit in their creation than the democrats, but why haven't they been killed? Why didn't the republicans do anything to restrain unions during their reign of corruption (2000-2006), when they controlled all 3 branches of the federal government. Oh, I forgot, that's because they were busy inventing a new entitlement. The republican party has not only failed to halt the encroachments of socialism, it has actively abetted this destructive trend. Reaganite populism may have revived the republican party, but this populist tendency has grown decadent and lost touch with its principles. What we now have in this country are two socialist parties: the socialist proclivities of the first range from rabid to merely shameless and of the second from complacent to actually conscience-troubled. Yet all submit to this levelling tendency, with its detrimental knock-on effects of contracting liberty and increasing pyschological (and not only psychological) dependence upon the government. 

Interesting Social Proposal

http://www.aei.org/publications/filter.all,pubID.24092/pub_detail.asp This may not be an ideal solution, but the principles from which he derives his proposals are sound and it's far better than persisting with the status quo. This is what the Republicans should have been doing during the Bush administration on the domestic front--instead of inventing a new Medicare handout and letting a bunch of feminists pursue a Title IX inquisition into our best university science and engineering programs.

How Many Times Has Bush Shot America?

http://www.nytimes.com/2008/07/15/science/15tier.html?em&ex=1216267200&en=68581e548380028b&ei=5087%0A

Is it really possible that the Republican Congress in 2006, during a Republican administration, could set these wheels in motion? From the Democrats one might expect this sort of myopic infantile pandering, but from the Republicans? Aside from the Iraq invasion and the climate change issue, what most disappoints me about the Bush administration and his Congress (2000-2006) is that they adopted so many of the worst habits of the Democrats--this is merely one of many examples. I suppose the most notorious instance remains Bush's vast new Medicare entitlement program (the costs of which his people criminally and, I believe, intentionally underestimated when trying to push it through Congress). But this, working toward a new quota system in our university science departments, this is as much as to stab a vital organ necessary to the life of American competitiveness in economic and military spheres.