“Our Nation’s Biggest Shame”: How Much Money Would It Take To Eliminate Poverty In America?
Last week, the Census Bureau put out its annual income and poverty figures for 2012. The big news on the poverty front is that the percentage of Americans living in poverty is unchanged at 15 percent, which amounts to 46.5 million Americans. More than one in five kids under the age of 18 are in poverty, and nearly one in four kids under the age of six are impoverished as well. These are numbers we’ve all become accustomed to, but they can still shock the conscience if you make an effort to let them soak in again.
The sheer scale of poverty in the U.S. is so massive that it can seem as if eliminating or dramatically reducing it would be nearly impossible. After all, 46 million people is a lot of people. But in reality, if we stick to the official poverty line, the amount of money standing in the way of poverty eradication is much lower than people realize.
In its annual poverty report, the Census Bureau includes a table that few take note of which actually details by how much families are below the poverty line. A little multiplication and addition later, and the magic number pops out. In 2012, the number was $175.3 billion. That is how many dollars it would take to bring every person in the United States up to the poverty line. In 2012, that number was just 1.08 percent of the nation’s gross domestic product (GDP), which is to say the overall size of the economy.
To be sure, you probably don’t want to run a program that hunts out every family below the poverty line and brings them right up to it. Such a program would effectively involve imposing a 100 percent marginal tax rate for all income made below the poverty line. But, things like strategically expanding the Child Tax Credit, the Earned Income Tax Credit, SNAP, and related programs could make enormous strides toward poverty reduction. Implementing a mild basic income and a negative income tax would also help a great deal. The policy solutions for dramatically cutting poverty exist, they are used by countries elsewhere, and they could be used here, if we chose to do so.
It might be helpful to put the $175.3 billion magic number in perspective. In 2012, this number was just one-fourth of the $700 billion the federal government spent on the military. When you start hunting through the submerged spending we do through the tax code, it takes you no time to find enough tax expenditures geared toward the affluent to get to that number as well. The utterly ridiculous tax expenditures directed toward the disproportionately affluent class of people called homeowners—mortgage interest deduction, property tax deduction, exclusion of capital gains on residences—by themselves sum to $115.3 billion in 2012. Throw in the $117.3 billion in tax expenditures used to subsidize employer-based health care (also a disproportionate sop to the rich), and you’ve already eclipsed the magic number.
Eradicating or dramatically cutting poverty is not the deeply complicated intractable problem people make it out to be. The dollars we are talking about are minuscule up against the size of our economy. We have poverty because we choose to have it. We choose to design our distributive institutions in ways that generate poverty when we could design them in ways that don’t. Its continued existence is totally indefensible and our nation’s biggest shame.
By: Matt Bruenig, The American Prospect, September 24, 2013
“Being Crazy Isn’t Enough”: The Greedy Once-Ler Gets All The Way To The End Of “Green Eggs And Ham”
Sen. Ted Cruz (R-Texas), who’s still talking to hear himself talk, raised a few eyebrows last night by reading, among other things, from Dr. Seuss. Watch on YouTube
For those who can’t watch clips online, the far-right Texan read “Green Eggs and Ham” with great earnestness from the Senate floor. (He can’t hold a candle to the Rev. Jesse Jackson’s version, but let’s put that aside for now.) Cruz continued to reference the book after having put it down, insisting it “has some applicability, as curious as it may sound, to the Obamacare debate.”
He added, “The difference with green eggs and ham — when Americans tried it, they discovered they did not like green eggs and ham, and they did not like Obamacare, either. They did not like Obamacare in a box, with a fox, in a house, or with a mouse.”
There is, however, a small problem with Cruz’s choice of literary references: he apparently didn’t understand the story.
In “Green Eggs and Ham,” our protagonist thinks he dislikes food he hasn’t tried. By the end, the character discovers green eggs and ham really aren’t so bad after all. Indeed, he comes to regret criticizing something he didn’t fully understand, and ends up celebrating the very thing he’d complained about so bitterly.
Cruz thinks this “has some applicability, as curious as it may sound, to the Obamacare debate”? What a coincidence; I think it has some applicability, too.
Indeed, the larger point helps underscore why the right is fighting so furiously to defund, delay, sabotage, impair, malign, and otherwise undermine the federal health care law right now, before it’s too late. Unhinged Republicans aren’t worried Obamacare will fail; they’re worried it will work and Americans will discover they quite like green eggs and ham after all.
Eugene Robinson had a good piece on this yesterday, published well ahead of the theatrics on the Senate floor.
Republicans scream that Obamacare is sure to fail. But what they really fear is that it will succeed.
That’s the reason for all the desperation. Republicans are afraid that Obamacare will not prove to be a bureaucratic nightmare — that Americans, in fact, will find they actually like it.
Similarly, Josh Marshall referenced one of my favorite health care stories yesterday. Bill Kristol wrote a strategy memo as the Clinton-era health care fight was getting underway, urging Republicans to destroy reform at all costs. The conservative pundit said at the time that if Clinton succeeded, Democrats would be seen as the “protector of middle-class interests,” and it would be politically impossible to take away the health care benefits once they were in place.
What the GOP had to do, Kristol said, was put the party’s interests over the country’s needs, stopping the reform effort before Americans discovered they like it. Republicans, of course, agreed.
Nearly two decades later, the script hasn’t changed much, except now the green eggs and ham are on the plate and the public is poised to discover how much they like the very thing they’ve been told to complain about.
Why Ted Cruz thinks this story is helpful to his cause is a bit of a mystery, but maybe later today, one of his friends from Harvard or Princeton can have a chat with him about literary interpretation and the potency of metaphors.
By: Steve Benen, The Maddow Blog, September 25, 2013
“Wal-Mart Returning To Full-Time Workers”: Obamacare Not Such A Job Killer After All
Wal-Mart, the nation’s largest employer, announced Monday that 35,000 part-time employees will soon be moved to full-time status, entitling them to the full healthcare benefits that were scheduled to be denied them as a result of Wal-Mart’s efforts to avoid the requirements of Obamacare.
While some analysts believe that the move comes as Wal-Mart is attempting to deal with the negative view many Americans have of its worker benefits program, a closer look reveals the real reason for the shift—
Wal-Mart’s business is going south due to the company’s penchant for putting politics and the squeeze on Wal-Mart employees ahead of the kind of customer satisfaction that produces prosperity over the long-term.
In fact, Wal-Mart’s unwillingness to pay most of their workers a livable wage, while avoiding enough full-time employees to properly run a retail outlet, has led to the company placing dead last among department and discount stores in the most recent American Customer Satisfaction Index—a position that should now be all to familiar to the nation’s largest retailer given that Wal-Mart has either held or shared the bottom spot on the index for six years running.
For anyone who has not been following the Wal-Mart saga, sales have been sinking dramatically at the retailer as the company has turned to hiring mostly temporary workers (those who must reapply for a job every 180 days) to staff their stores while cutting full-time employees’ hours down to part-time status in order to avoid providing workers with healthcare benefits.
The result?
Empty shelves, ridiculously long check-out lines, helpless customers wandering through the electronics section and general disorganization at Wal-Mart store locations.
This is hardly a recipe for success.
A recent description of a Wal-Mart store in Newark, New Jersey published by Bloomberg, says it all—
“Three days earlier, about 10 people waited in a customer service line at a Wal-Mart in Secaucus, New Jersey, across the Hudson River from New York, the nation’s largest city. Twelve of 30 registers were open and the lines were about five deep. There were empty spaces on shelves large enough for a grown man to lie down, and a woman wandered around vainly seeking a frying pan.”
The description pretty much sums up what you will find at the typical Wal-Mart store in the United States these days.
While the company’s trend toward temporary employees has allowed the retailer to avoid its responsibilities under the Affordable Care Act—a law that Wal-Mart publicly supported only to turn around after passage and work to avoid providing health care benefits to employees—they’ve managed to tank their store sales in the process.
Who would have guessed that a well-staffed store filled with competent and reasonably paid employees might actually have an impact on the success of a company?
Home Depot—that’s who.
According to Zeynep Ton, a retail researcher and associate professor of operations management at the MIT Sloan School of Management, in the early 2000s, Home Depot’s CEO, Robert Nardelli, moved to cut full-time staffing levels while increasing part-time employees in an effort to boost profits by trimming the expense that comes with employing full-time workers. It worked for a short while. However, as Ton notes, eventually customer service declined—and with it, customer satisfaction—leading to a severe decline of same-store sales.
Wal-Mart’s penny wise-pound foolish approach to its business was further well documented in the Bloomberg article referenced earlier where they told the story of Margaret Hancock, a retired accountant from Newark, Delaware, who has always viewed Wal-Mart as her “one stop shopping destination”.
While Ms. Hancock had, for years, been able to get everything she needed at her local Wal-Mart store, recent visits resulted in her failing to locate numerous items as the products were simply not out on the shelves and available for purchase.
As Hancock explained it, “If it’s not on the shelf, I can’t buy it. You hate to see a company self-destruct, but there are other places to go.”
And ‘go’ is exactly what Ms. Hancock did—no doubt to Wal-Mart’s competitor, Costco, a company that experienced a 19 percent increase in profits in Q2 2013 while paying its employees 40 percent more on average (the average Costco wage is $21.96 per hour) than what a Wal-Mart worker can earn. In that same quarter, Wal-Mart numbers revealed the company is going nowhere fast given its current state of operations.
So, where is all that product that once filled Wal-Mart shelves?
Oh, the goods are in the store—either in the back room or in the unopened boxes lining the aisles as they await the availability of a store clerk to get to the rather critical job of moving the merchandise from the box to the shelf where a customer can actually purchase it. But when there are insufficient numbers of store clerks available—due to Wal-Mart’s commitment to using temporary workers or busting its full-time employees down to part-time so as to avoid worker benefit—the products Wal-Mart sells stay off the shelves and unavailable for customers to purchase.
Of course, Wal-Mart’s efforts to keep its workers from earning a decent living while achieving health care benefits has created some full-time work for some.
The company now hires people to work with its employees to help them sign up for Medicaid, the government program that makes healthcare available to Americans who neither get coverage at work or are able to afford it without public assistance.
What that means is that you and I are subsidizing Wal-Mart’s poor treatment of its employees as we pay for their workers health care coverage with our tax dollars and all so Wal-Mart can feather and mask its sinking profits by allowing you and I to pay for their responsibilities, whether we shop at Wal-Mart or not.
The moral to the story?
Wal-Mart is finally learning what all American businesses who seek to avoid their health care responsibilities to employees will soon learn.
It may be a clever enough dodge to cut employees below the 30 hours per week in order to avoid the expectations of Obamacare, but the move comes at a substantial price to be paid in lost revenue and profits. Given that the entire point of business is to show a profit, it is only a matter of time before employers learn what Home Depot learned some years ago and what Wal-Mart is slowly beginning to figure out—you get what you pay for.
Cut back on employees and you will, eventually, cut back on your profits as the savings a business creates by cutting worker hours leads to greatly decreased sales as customer satisfaction disappears.
While there are no shortage of Americans who enjoy deriding the Affordable Care Act as a ‘job killer’, what will soon emerge—and sooner than you may think—is an understanding that the losses experienced by businesses that cut worker hours will far exceed whatever is gained by avoiding giving employees the healthcare benefits their families so badly require.
Don’t believe it?
Just ask Wal-Mart.
By: Rick Ungar, Op-Ed Contributor, Forbes, September 25, 2013
“Incentivizing Harmful Behavior”: Sabotaging Obamacare Is A Lucrative Endeavor For Many Republicans
To gain steam for his initiative to tie funding of the government to defunding Obamacare, Senator Ted Cruz appeared at events over the summer with the Tea Party Express, a political action committee. “Either continue funding the government without giving one more dime to Obamacare, or shut down the government,” demands Tea Party Express chair Amy Kremer.
The Tea Party Express, in turn, has sponsored fundraising drives to help “elect more leaders like Ted Cruz.”
One problem for Cruz-acolytes hoping to make their way into office? The Tea Party Express PAC has spent nearly every dollar of the $2.1 million it has raised this year on campaign consultants and fundraising fees, but not a dime in transfers to candidates or on independent expenditures. In previous years, the PAC has funneled much of its proceeds to Russo Marsh and Rogers, a Republican consulting firm in Sacramento, California.
The frantic crusade to screw up the launch of the Affordable Care Act is a sad tale in American politics. If conservatives are successful, even with a short-term government shutdown Cruz and his House GOP allies might achieve, patients will suffer. If young people fail to sign up for health insurance—the stated goal of one Koch-backed front group now airing television advertisements—more will drown under crushing debt if they find themselves in need of serious medical care. But Washington, DC, has a bizarre way of incentivizing harmful behavior, and the sabotage Obamacare campaign is not without its winners.
A set of campaign consultants and insurance agents stand to profit from confusing Americans on the eve of the healthcare reform enrollment date.
The conservative media frenzy over the defunding debate has invigorated donors to many PACs, not just Tea Party Express. The Senate Conservative Fund PAC recorded its largest-ever fundraising hauls last month, though it spends way more on candidates and on candidate ads than the Tea Party Express. Still, the Jim DeMint–linked PAC expended nearly half its coffers on administrative, research and fundraising payments this year. FreedomWorks, the RNC and the Club for Growth have hopped on the Cruz campaign to raise funds by advocating the repeal of Obamacare. For a non-federal election year, at least these PACs are doing well.
The rigid anti–healthcare reform politics of the Koch brothers is also having a stimulative effect upon a small circle of Republican consultants. Americans for Prosperity, the largest Koch-owned front, pays the traditional 15 percent commission rate on all their television buys—the latest round going to Target Enterprises, a Sherman Oaks, California-based GOP media company. And with a seemingly endless appetite for anti-Obamacare paid media and anti-Obamacare grassroots organizers, Koch makes good on its claim of being a stellar job-creator, at least for jobs in right-wing political advocacy.
The New York Times rightfully notes in an editorial that many other conservative advocacy groups, like the National Liberty Federation, have latched onto the Obamacare fight, viewing the healthcare reform debate as little more than opportunity to raise a few bucks.
The second and less noticed benefactor of some of the more malicious attacks upon healthcare reform are health insurance brokers. Health insurance brokers make a living by selling health insurance and collecting a commission for every person or group they enroll. With healthcare reform set to provide easy access to health insurance options, free of charge, many in the health insurance agent industry view the Obamacare rollout as a death sentence. In recent months, the broker industry has mobilized to erect obstacles for the dozens of community group “navigators,” organizations tapped to spread the word about how to enroll in the exchanges.
In Georgia, under influence from health insurance agent lobbyists, the state passed a law that prohibits navigators from providing advice “concerning the benefits, terms, and features of a particular health benefit plan.” Other states have thrown up licensing laws in an effort to curtail navigators from being able to do, well, anything.
The Center for Public Integrity’s Nicholas Kusnetz has done some of the most interesting investigative reporting on this side of the story, revealing that the Independent Insurance Agents and Brokers of America and the National Association of Health Underwriters have orchestrated a multi-pronged attack on Affordable Care Act navigators. The industry, which has secured anti-navigator laws in sixteen states, has poured some $7.5 million into state campaigns since 2010.
While brokers claim they seek only to ensure patients are not scammed by “unlicensed” navigators, in reality, blocking competition seems to be the primary motivation. Last month, the Independent Insurance Agents and Brokers of America released a statement endorsing an effort by Congresswoman Cathy McMorris-Rodgers (R-WA) to repeal all of the funding for the navigators programs. Notes from a lobbying association for insurance agents in California warned brokers before a visit to Sacramento: “If we don’t [lobby lawmakers] they will not think it will matter that much when they allow the unlicensed “navigators” to solicit your book of business!!”
Several community groups that had signed up to participate in the navigators program have now backed out, citing political pressure from Republican politicians. The House Oversight Committee, led by Congressman Darrell Issa (R-CA), and Republican attorneys general have harassed several navigator groups with lengthy questionnaires and other demands.
Some anti–healthcare reform activists are truly motivated by their convictions. But others stand to gain financially from making sure their fellow Americans have problems signing up for health insurance.
By: Lee Fang, The Nation, September 25, 2013
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