“The Rejection Of Reality”: Conservative Claims About Low-Income Excess Are Just Wrong
Are people better off than they were before the recession? By most headline figures they’re not: Poverty and inequality have risen to record levels, median incomes declined. Unemployment has improved marginally, but 37 states have yet to regain their pre-recession job levels.
Conservatives like to push back on claims of rising inequality or worsening poverty by pointing out that their measure of poverty or inequality insufficiently captures the increasing well-being of even the poor. They’re better off, they say, because low and middle-income Americans are living better than they did in the past. These arguments manifest themselves in concern over “Obamaphones” or access to liquor or drugs, and generally recommend policy solutions as odious as drug-testing as a prerequisite for welfare or stricter control over food stamps. As Matt Bruenig aptly pointed out on this blog, even taking these conservative policy solutions at their face value, fraud complaints are spurious. We want poor people to have more money. Programs like food stamps and Medicaid undoubtedly accomplish that.
But let’s dive deeper into whether families are better off. The Census Bureau periodically publishes assessments of well-being. Their most recent iteration, released yesterday, measures well-being comprehensively based on various conditions such as homeownership (or rentership) and housing condition, access to appliances and electronic goods, neighborhood conditions, meeting basic needs to avoid eviction and eat, and ability to get help from families or the community should they need it. Most of the trends in the results aren’t shocking, with extreme differences in situation based on age, sex and race.
Their headline results are sobering, however. How households fared from 2005 to 2011, according to the Census Bureau’s more comprehensive assessment:
Families are having an increasingly difficult time paying basic expenses. From 2005 to 2011, the number of Americans who couldn’t pay rent or afford food climbed from 16.4 to 16.9 million, a 16 percent increase.
Households with unmet essential expenses increased from 16.4 to 20 million. One in five households now experience difficulty meeting basic needs.
Those experiencing food shortages increased from 2.7 to 3.4 million.
A plurality of households lack access to basic appliances. 36 percent of households didn’t have either a washer, dryer, fridge, stove, dishwasher or phone.
There are strong racial correlations to decreased well-being. Only 44 percent of Hispanics reported access to all six basic appliances compared with 71 percent of white households.
So, even conceding that headline stats don’t tell the whole story, conservative arguments fail on their own merits. No, there isn’t an increasing access to basic appliances that would signal a middle-class lifestyle. No, low-income families aren’t better able to meet basic needs like paying rent or purchasing food. Families are worse off because they’re poorer. Making some goods (like phones) marginally less expensive in the face of collapsing incomes and household wealth hasn’t truly improved the plight of low-income workers. Trying to restrict or reduce proven government programs despite these conditions isn’t then a conservative acknowledgement of nuance, it’s the rejection of reality.
By: Joe Hines, The American Prospect, September 6, 2013
“A Stash Of Riches”: Walmart Getting Ahead On The Backs Of Others
Having been raised in a small-business family and now running my own small outfit, I always find it heartwarming to see hardworking, enterprising folks get ahead.
So I was really touched when I read that, even in these hard times, one extended family with three generations active in their enterprise is hanging in there and doing well. Christy, Jim, Alice, Robbie, Ann and Nancy are their names — and with good luck and old-fashioned pluck, they have managed to build a fairly sizeable family nest egg. In fact, it totals right at $103 billion for the six of them. Yes, six people, 100-plus billion bucks. That means that these six hold more wealth than the entire bottom 40 percent of American families — a stash of riches greater than the combined wealth of some 127 million Americans.
How touching is that?
The “good luck” that each of them had is that they were either born into or married into the Walton family, which makes them heirs to the Walmart fortune. That’s where the “pluck” comes in, for the world’s biggest retailer plucks its profits from the threadbare pockets of low-wage American workers and impoverished sweatshop workers around the world.
Four of the Walton heirs rank as the 6th, 9th, 10th and 11th richest people in our country, possessing a combined net worth of $95 billion. But bear in mind that “net worth” has no relationship to worthiness — these people did nothing to earn their wealth; they just inherited it. And, as Walmart plucks more from workers, the heirs grow ever luckier. In recent years, while the wealth of the typical family plummeted by 39 percent, the Waltons saw their wealth grow by 22 percent — without having to lift a finger.
How odd then that the one-percenters (on in this case, the 1/100-of-one-percenters) are hailing themselves as our country’s “makers,” while snidely referring to workaday people as “takers.” With the Waltons, it’s the exact opposite.
Indeed, you’d think that the Bentonville billionaires would realize that their fortunes are tied directly to these disparages. Apparently, they’re unaware that America’s economic recovery cannot truly be measured in the performance of the stock market but instead should be gauged by the sock market.
Most economists, pundits and politicos see today’s boom in stocks and say: “See, the recovery is going splendidly!” But they should go to such stores as Kohl’s, Target and even the Waltons’ very own Walmart and find out what’s selling. The answer would be socks. Even in the present back-to-school season (usually the second-biggest buying spree of the year), sales are sluggish at best, with customers foregoing any spending on their kids except for socks, underwear and other essentials.
This is not only an economic indicator but also a measure of the widening inequality in America. The highly ballyhooed “recovery” has been restricted to the few at the top who own nearly all of the stocks, get paychecks of more than $100,000 a year and shop at upscale stores. But meanwhile, the many don’t have any cash to spare beyond necessities. Walmart’s chief financial officer seems puzzled by this reality. There is, as he put it last week, “a general reluctance of customers to spend on discretionary items.”
Golly, sir, why are those ingrates reluctant? Could it be because job growth in our supremely wealthy country has been both lackluster and miserly? Yes — jobs today are typically very low paying, part-time and temporary with no benefits. Mr. Walmart-man should know this, since his retail behemoth is the leading culprit in downsizing American jobs to a poverty level in order to further enrich those at the very top, including Christy, Jim, Alice, Robbie, Ann and Nancy. In recent months, corporate honchos at the Arkansas headquarters have directed Walmart managers not to hire at all or to concentrate on hiring temporary and part-time workers, while cutting the hours of many full-time employees
Since the Great Recession “ended” in 2009, Walmart has slashed 100,000 people from its U.S. workforce, even as it added some 350 stores. In addition, while the giant banked more than $4 billion in profit just in the last three months, the chieftains changed the corporate rules to make it harder and costlier for employees to get Walmart’s meager health care plan.
Yet, executives wonder why customers aren’t buying “discretionary” items. Hello — even your own workers can’t afford to buy anything in the store besides socks.
By: Jim Hightower, The National Memo, August 28, 2013
“Lord Help Us!”: The Return Of One Of The GOP’s Dumbest Ideas
Lord help us, is the balanced budget amendment—one of the dumbest policy ideas the right ever cooked up (and that’s saying something)—actually back? Only time will tell, but today on the New York Times op-ed page, two prominent conservative economists, Glenn Hubbard and Tim Kane, try to revive it with an argument so unconvincing that I worry it’s going to be embraced by every Republican in sight. If you think the sequester was a terrific idea and worked out great for everyone, have they got a deal for you.
Hubbard and Kane start by insisting that deficit panic must not be allowed to wane. “We are stuck in a bad and worsening place: sure, deficits strike fear in the hearts of economists and intellectuals, but they don’t matter at the ballot box.” Haven’t we actually cut the deficit by more than half from its 2009 peak? And isn’t creating jobs and increasing wages more important? And aren’t most “economists and intellectuals” not actually driven to terror by the deficit at the moment? Of course not, silly. We must put aside parochial concerns like jobs and focus our fear on deficits, lest they one day…well, one day they’ll do something really bad, but don’t worry about what it is.
You never hear conservatives articulate exactly why running a deficit, any deficit, is so problematic. They rely on the fact that it seems self-evident, and in fairness, some Democrats, Barack Obama in particular, contribute to widespread misunderstanding of the subject by repeatedly comparing the government’s finances to a family’s finances. But the government’s budget isn’t at all like a family’s budget. For instance, when it’s faced with a crisis like the Great Recession, borrowing more and spending more is exactly what it has to do. In the last 50 years, we’ve had a balanced budget eight times, four of which were at the end of the Clinton years. There’s no reason why the deficit has to come down to zero. If that’s what you’re forced to do, then you end up making problems worse at the worst moments. That’s what happened to states over the last few years; because nearly every state has a requirement to balance their budget every year, when tax revenues plummeted, they were forced to slash government services and lay off hundreds of thousands of workers. This made the recession more painful for everybody (and the federal government sent billions of dollars to the states in an attempt to mitigate the damage).
If you had a balanced budget amendment in place, when a recession hits and tax revenues fall, the federal government would have to immediately cut back its spending, precisely the opposite of what it ought to be doing. Yet for years, a balanced budget amendment was Republican dogma, nearly on par with tax cuts for the wealthy and big defense budgets. Which brings us to Hubbard and Kane’s new balanced budget amendment proposal. Here’s part 1:
First, because reconciling expenditures and revenues would be impossible in real time, the constraint should be on expenditures only. A good rule would be this: Congress shall spend no more in the current year than it collected, on average, over the previous seven years. No more overspending in fat years and no draconian cuts to expenditures during future recessions.
This rolling average idea makes things a bit more sane, but do you see what they did there? I’ve highlighted it in bold. “The constraint should be on expenditures only,” meaning that their balanced budget amendment would require spending cuts, but not tax increases. Why? Because these are Republicans, that’s why. Here’s part 2:
Second, any amendment should be simple, focused only on fiscal balance. The best mix of tax and expenditure changes is for each generation of voters to decide.
Is that supposed to mean that the amendment itself shouldn’t actually write into the Constitution budgetary limits for every single federal agency for every year in the future? Well since that would be insane, I’m not sure why it has to be an explicit part of their three-part proposal. Perhaps they should also specify that a balanced budget amendment shouldn’t deal with abortion and drug legalization, or that the amendment need not specify the headline font on the Department of Energy’s press releases. And on to part 3:
Third, there should be an exception to the spending constraint for national emergencies.
And what would be a national emergency? Would the Great Recession count? How about the Iraq War, which the Bush administration (where Glenn Hubbard served) financed through deficit spending? This is basically a way of saying, don’t worry, we’ll require balanced budgets, unless requiring balanced budgets looks like a terrible idea, at which point we won’t. And then we get to the end, where Hubbard and Kane finally reveal the threat posed by deficits, a threat so profound it must be met with the constitutional equivalent of permanent sequestration:
America’s high and rising national debt threatens our economic health through higher future taxes, crowding out important government services, or both. The best antidote is a focus on economic growth and a balanced approach to deficit control
Ah, there we are. We must force draconian budget cuts now, because if we don’t, at some point in the future we might have to…force budget cuts. And of course raise taxes, which we can’t ever, ever do. So by imposing those cuts, we can “focus on economic growth,” not by actually promoting economic growth, but by…um…confidence!
This isn’t some dopey politician offering his opinion on a topic he plainly doesn’t understand, this is two highly-placed and supposedly informed conservative economists. Hubbard is dean of the business school at Columbia and was George W. Bush’s chief economic adviser. Kane is chief economist at the Hudson Institute. These are the Republican party’s big economic thinkers. And this is what they have to offer.
By: Paul Waldman, Contributing Editor, The American Prospect, August 12, 2013
“We Did Something Constructive Today”: The New Republican Definition Of Constructive Is What You Can Block And Destroy
We talked at length yesterday about the failure of the Transportation and Housing and Urban Development (or “THUD”) appropriations bill in the House — a move that sent the Republican budget process into chaos — so it’s only fair to note what happened to the Senate version of the same bill.
In short, nothing good.
Early on Thursday afternoon, a few hours before the start of a month-long summer recess, the U.S. Senate held a doomed vote on a $44 billion package of transportation and housing funds. The vote was 54-43, six short of cloture, most Republicans making sure that the bill with the accidentally perfect name of THUD (Transportation, Housing, and Urban Development) went down in flames for now.
Pennsylvania Sen. Pat Toomey, whose work on a gun control amendment this year gave him the temporary glow of a centrist, walked from the Senate to a special, open live-streamed meeting of the Republican Study Committee, all about the Obama administration’s scandals. Anyone watching the Tea Party Patriots-sponsored feed could hear Toomey tell a colleague that “we did something constructive today” in the Senate.
“We denied cloture on the THUD bill,” said Toomey. “I told you we’d kill it, and we did.”
We talk from time to time about the post-policy nihilism that’s come to define so much of Republican politics, and this is rather striking example.
The Senate’s THUD bill was expected to pass with relative ease. It had bipartisan support; it was pulled together responsibly; and it sailed through the committee process as non-controversial bills should. As Joan McCarter explained, “The transportation funding bill has always been a non-controversial, reliable bipartisan effort, because there was something tangible in it for every member of Congress to take home: jobs, infrastructure improvements, a display of federal dollars at work for their constituents. That’s all changed.”
And not for the better.
After the House Republicans killed their own version of the bill, GOP leaders feared a moderate, bipartisan THUD package would give Senate Dems the upper hand in a conference committee. What’s more, Senate Minority Leader Mitch McConnell (R-Ky.) was eager to prove how right-wing he is to conservatives back home, so he lobbied Republicans who supported the bill to change their mind.
The result? A bill that was supposed to be approved easily was killed with a filibuster — which in Pat Toomey’s mind, is evidence of doing “something constructive.”
The larger point, of course, is that policymakers used to have a less ridiculous definition of what “constructive” means. Not too long ago, members of Congress used to think they did “something constructive” when they, you know, passed a bill. Or maybe reached a compromise. Or perhaps struck some sort of deal.
The hallmark of post-policy nihilism is the belief that policy outcomes and substantive governing are largely irrelevant. Officials have begun defining themselves solely by what they can block and destroy, rather than what they can accomplish, even if that means opposing what they support.
And that’s not good.
What’s more, as McConnell panics about his re-election bid, this dynamic is likely to become more common. Yesterday, for example, Sen. Susan Collins (R-Maine) hoped to see the Senate pass the bipartisan bill, but quickly found herself on the losing side of a McConnell broadside.
Sen. Susan Collins of Maine, the top Republican on the panel that wrote the $54 billion transportation bill, appeared to grope for an explanation for why Minority Leader Mitch McConnell (R-Ky.) worked so hard to kill her legislation.
Asked if McConnell’s upcoming primary fight with a tea party challenger might have something to do with the pressure, Collins told POLITICO: “I can’t speculate on why. All I can tell you is he has never worked harder against a member of his own party than he did against me today.”
For context, note that Collins and McConnell have worked together for 16 years — and she’s “never” seem him work this hard to beat another Republican.
By: Steve Benen, The Maddow Blog, August 2, 2013
“A One Trick Pony”: The Tea Party’s Unhealthy Obsession
Bipartisanship is a four letter word to the tea party zealots in Congress.
This week, Congressional Republicans dismissed President Obama’s proposal for corporate tax cuts out of hand. Last year, the president proposed the American Jobs Act, which House Republicans didn’t even consider despite the inclusion of tax cuts for businesses that hired new employees.
The president generously proposes and the House GOP caucus automatically disposes. Corporate tax cuts are the holy grail of the Republican Party, so the GOP’s resistance to the president’s proposals makes me think that House Republicans would automatically reject any proposal from the White House. I’m sure that Republicans would even find a reason to reject a plan initiated by Obama to build a memorial on the capital mall dedicated to conservative hero Ronald Reagan.
The president has given up on congressional Republicans, but he hasn’t given up on the American people.
In a series of speeches and proposals, Obama has discussed the urgent need to invest in projects that will put Americans back to work and rebuild our sagging infrastructure of bridges, water systems and transportation. The president has also explicitly denounced the politics of austerity as a road to prosperity. The sequester budget cuts have already slowed the economic recovery and the additional cuts that the tea party wants will reverse the fragile economic recovery.
The president has said that House Budget Committee Chairman Paul Ryan’s package of budget cuts, his so called Path to Prosperity, is really the path to austerity, which runs directly into the road of recession. Besides austerity, the only thing that congressional Republicans have to offer is the repeal of the Affordable Care Act, which would, in turn, repeal the new restrictions against predatory health insurance company rip offs.
The public worries about jobs and the economy. Congressional Republicans have not only rejected the president’s constructive economic proposals, but they have an unhealthy obsession with destroying the progress created with the passage of the Affordable Care Act. House Republicans have voted 38 times to repeal the new health care reform law. Now, Tea Party zealots like Senator Ted Cruz, R-Texas, want to force repeal of the law with the threat of a government shutdown.
The GOP would be a lot better off if it would bet the farm on a key economic issue. Playing chicken with a government shutdown to repeal Obamacare is a risky wager. Voting 38 times against the health care law makes it seem like the GOP is a one trick pony racing in the wrong direction.
The president is also trying to move his own party away from the politics of austerity. Democrats can’t beat Republicans in a battle of green eyeshades. Eyeshades have their uses, but mostly they limit vision.
The Grand Old Party’s obsession with the Affordable Care Act not only ignores the public concern about the economy, but it has created an internal Republic party crisis. This week, Cruz laid into Republicans who don’t want to play a game of chicken with ACA repeal and a government shutdown. The battle between the Tea Party radicals and establishment Republicans will be prime time TV for the next few months.
Gridlock has the economy in a headlock. Hopefully President Obama can use his bully pulpit to move Republicans off the dime.
By: Brad Bannon, U. S. News and World Report, August 1, 2013
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