Saturday, March 31, 2012

Moving the Safety Net

On Thursday, the House of Representatives passed the budget crafted by Rep. Paul Ryan. The vote was 228-191 with 10 Republicans voting against and 0 Democrats voting in favor. There has been the predictable news coverage about breaks for the wealthy and "ending Medicaid" with a lot of talking points from both sides playing politics without really getting at the impacts.

So I set out trying to take it at face value and figure out what was going on. The full argument is summarized in this website created by the House budget committee. The picture at the right is the cover of the PDF that provides the narrative supporting the legislation.

I was particularly interested in the impact on the social safety net and found an excerpt from the full document posted by the Kaiser Family Foundation. In reading through that excerpt, I was struck by how much of the argument in the Ryan Budget is based in polemics and not in policy. I'll examine a few of these examples and then consider the larger implications.

There are two implications in these opening passages. First, the safety net is for those who have difficulty "through no fault of their own". The logical outcome is that those who have acted badly deserve their fate and the safety net is not for them. Second, non-governmental institutions will always be better suited to solve these issues. It's not just the government is inefficient (although the document contains lots of anecodotal stories about waste and abuse). It's that it fosters dependence while localities would solve problems. They just need to be freed up to do so.

Again, it's not a federal government that cares for people but citizens helping their neighbors. Furthermore, the heart of shifting medicaid and food stamps to the states allows them to better manage their costs within the needs of their local population.

Theoretically, state and local governments can use competition to manage costs and "tailor programs" that meet those unique local needs.

At the heart of this proposal (the solutions in the document are in bold) is the idea that competition will solve the cost problems at the local level. But competition in a fixed market like health care will either lead to increasing personal premiums (the claim of the "ending Medicaid" crowd) or result in reduction of services. That's what "better options" and "personal choice" lead to. It's why I got to keep my employer-provided insurance but now have a $30 co-pay. That's what competition for plans looks like when there are only a fixed number of sources at the local level.

This passage expresses some of the same concerns with regard to access to higher education. Two things to notice here. First, Pell Grants would be limited to low-income students, presumably raising out of pocket college costs for some segment of families. Second, we've again got the intrusive "truly need it" line, suggesting that there must be those taking advantage of the system. (By the way, it's always puzzling that conservatives never mean for-profit schools when they talk of those taking advantage. Must be that profit thing.)

I could take apart the rest of the document (including the parts that are about social security, defense, and tax policy). But the same basic principles would apply. Decisions are best at the local level, the federal government makes things worse, and immoral individuals are unfairly gaming the system.

This all ties in with something it took me a long time to figure out but has never been part of the analysis of the political media. For all the focus on Grover Norquist and his infamous tax pledge, the real issue to folks like him isn't cutting spending and taxes. Even his famous, "government small enough so I can drown it in the bathtub" quote isn't quite right. What he wants is for the FEDERAL government to drown.

The logic expressed in the Ryan budget and by those who argue for austerity budgets is that the Federal budget must get under control. But because they really don't like revenue based solutions, the only solution is to shift the costs to 1) state and local governments and 2) individual citizens.

What happens if we block grant Medicaid to the state of Michigan? The program can be adjusted at the state level to provide the amount of support the block grant will cover. What happens when we max out Michigan's block grant? Either 1) provisions will be cut, 2) state taxes will have to be raised because the state can't run a deficit, and/or 3) individuals will have to pay a larger share of their health care costs. The same things happen to Food Stamps, Pell Grants, and Highway funds, In fact, everything except defending the borders moves downward.

The result of all this is that the social safety net does get closer to where people live, but so do the costs. It's fascinating to think that the Tax Revolt in this country began in 1978 about property tax rates in California. The Tea Party's concern with taxation and deficits is the grandchild of that earlier revolt. So if we really shift costs downward, local taxes will go up.

Families, churches, social service agencies, and non-profits can try to pick up the slack. But it's really hard to argue that the cost burden on local entities will go down. True, the federal deficit will come under control but people will be paying higher state taxes, greater out of pocket costs, or participating in greater rates of voluntary activity on behalf of the needy down the street. It's hard to figure out how our household will be better off if we're paying higher taxes to Jackson or Lansing but not to the IRS.

As a result, the social safety net might remain in some form but it will be closer to the ground, more regionally variable, and more costly to those trying to hold it together. At some point, the webbing of the net gets so loose that it's hard to call it a net at all.

Wednesday, March 28, 2012

Politifact Report Card

I've written before that I'm a follower of Politifact. While they aren't perfect, they attempt to use consistent methods in evaluating the claims made by politicians. They rank statements as True, Mostly True, Half True, Mostly False, False, and Pants on Fire.

Today they came out with a new tool -- the Politifact Report Card. They summarize the ratings they have given to each of the Republican candidates plus President Obama. You can see their summary here.

Because I'm a geek, I had to take the raw data and convert it to percentages. Then, of course, I had to create pie charts. The results are very interesting. If you look at the three shades of "false" statements, the  totals are Romney (40%), Santorum (51%), Paul (36%), Gingrich (59%), and Obama (29%). While I wish the president would be far more careful, the summary says everything that is wrong with modern politics. An informed electorate requires better and we should expect it.

Saturday, March 24, 2012

Thinking about Coming Apart

In my attempt to avoid the very kind of balkanized information gathering I regularly post about, I followed closely the various news stories about Charles Murray's recent book, Coming Apart: The State of White America 1960-2010. I wasn't a fan of Murray's earlier work, but this seemed to speak to issues related to the 1% and 99% in ways that were worth tracking.

Since I'd be doing some solo driving during my recent spring break, I downloaded the book from I-tunes. The main advantage to listening to the book is that you can talk back (hopefully with not too many others listening). The downsides are that you can't look up particular passages and that the narrator mispronounces certain sociological words (mores in sociology is pronounced like Morays not S'mores). But I decided it would be good for me to listen. And it was until I got really angry and had to quit about 3/4 of the way through the 12 hour audiobook.

First, Murray posits a cohesive society on the eve of JFK's assassination. He's speaking nostalgically about his own 20s (he was born in 1943) and I could forgive some rose-colored glasses (he ignores the cold war and much of the civil rights movement). Next, he explores the world of Belmont -- a town made up of the 5% of Americans he claims make up "the broad elite". These folks have wealthy lifestyles, work in knowledge/opinion/finance kinds of jobs, went to elite schools, live in McMansions surrounded by other folks with McMansions, have relatively high IQs, and have children with higher IQs (Murray's been making too much of IQ since The Bell Curve). He paints this picture by combining census data with anecdotes about conspicuous consumption. It's no different than scores of similar sociological pieces that show the sorting impacts of college, neighborhood, and occupation. His conclusion is that these opinion shapers changed the culture (beginning, for some reason, with the television show thirtysomething). Furthermore, these folks are isolated from the rest of America in terms of values, politics, and culture.

The next part of the book shifts from Belmont to Fishtown, where the poor live. He begins this section by talking about how the Founding Fathers placed importance on certain values: Family, Religion, Honesty, and Ingenuity. He then suggests that the residents of Fishtown have abandoned these critically American values. He notes that Workers Disability claims have gone way up, which is a sign that people would rather take money from others than work. He talks about the breakdown of the family and how out of wedlock births and divorce rates are higher in Fishtown than in Belmont. He sees a decline in religious attendance among his Fishtown residents. And our attempts to placate Fishtown residents with social support networks have been counterproductive (about six hours in, Murray makes clear that he operates from a libertarian framework -- might have been good to start with that).

As I said, I got mad and had to quit. But it took me until this week to figure out what made me so upset. In prepping for my stratification class, it finally came clear. Murray's argument about the rich Belmont residents is entirely correlational. These neighborhoods show such and such patterns, and residents have different lifestyles. But the argument about poor Belmont residents is entirely characterological. In other words, they lack the basic values that Americans take for granted. Their cultural expressions are different from what was originally intended.

Murray has written about what his preliminary solutions would be here. In fact, I've never seen anybody write as many editorial responses to others who commented on his book (he's been running about one every couple of weeks since the book came out).

Here's where Murray goes wrong and how it relates to our entire conversation about inequality in America. He bases his argument about the poor in terms of what's wrong with them -- the deficiencies in their values and behaviors. He bases his arguments about the rich in terms of advantages in social network opportunities. If one is to argue that Fishtown residents turned from values of honesty, family, religion, and industriousness then it makes sense to argue that the Belmont folks got that way by embracing those same values. But that's not the case. Conversely, if Belmont residents can leverage their networks toward cultural cohesion then Fishtown folks simply lack social capital.

Murray's mistake plays out again and again in our political discourse. The rich are morally pristine and should be trusted to pursue business opportunities which will benefit us all. The poor are seen as freeloading (called "takers") with critics wondering why they don't pay federal taxes (it's because they don't make enough and are disproportionate retired). This is bad sociology and worse theology. The real problem with inequality in America is not cultural first but structural first.

We just played my modified monopoly game in the Intro to Sociology class. For 30 years it has shown that the structural differences built into the game create certain cultural responses. This is true regardless of the intentions, values, or IQ scores of the players. Libertarians bemoan using the tax code to "pick winners and losers" but we seem quite comfortable picking winners and losers when it comes those who live in Belmont and Fishtown.