Category Archives: Public Policy and Governance

Politics and Protectionism

I think I know why Santa Claus punishes disobedient children by leaving lumps of coal in their stockings.

It’s been interesting to follow the response of Indiana coal interests and the politicians they influence to the EPA’s recent–and long overdue–efforts to reduce carbon emissions from existing power plants.

It may surprise readers to know that there are currently no limits to the amount of carbon pollution a power plant can dump into our air. (It surprised me!)

The lack of any rules governing how much carbon an existing plant can spew has had significant consequences–not just for our climate, but for public health. An IU Medical School study calculated the public health cost of burning coal at five billion dollars annually, due to the effect on heart disease, lung disease, asthma and related respiratory disorders.

Recently, a speaker at Carnegie Mellon’s Distinguished Lecturer Series reported that air pollution kills as many people each year as smoking. (While smoking is riskier, only 20 percent of the population smokes. Everyone breathes.)

Indiana’s coal industries have long been accustomed to favorable treatment by state agencies, and their hysterical reaction to these overdue rules shows just how dependent they are on political protection from the forces of the free market, and on the indirect subsidies we taxpayers provide by allowing them to pollute with impunity.

Here’s an analogy: We don’t allow manufacturers to dump toxic waste into our rivers; we expect them to dispose of their effluent properly, and to include the cost of that disposal in the price of their products. That may make it more difficult for them to compete, but it’s a cost of doing business–we don’t say, well, if it is too expensive not to poison our water supply, just go ahead and poison us.

Some of the hand-wringing and dire warnings are a recognition that the price of clean energy–especially wind and solar–has plummeted; in fact, utilities all over the country are seeing wind and solar bids that are cheaper than coal, the price of which has been steadily rising. (Austin Energy in Texas recently announced that it’s buying solar at half the price of coal, and that electricity costs for Austin residents will drop; an Oklahoma utility (AEP) says its purchase of wind power will save customers over 50 million dollars.)

The policy question is pretty simple: why should government protect the coal industry from market forces by asking taxpayers to continue paying for the industry’s externalities?

The answer is pretty clear, too: why in the world would we subsidize something that is costing the state clean energy jobs, contributing to climate change and making Hoosiers ill?

Welfare for Our Constituents is Okay— For Yours, Not So Much

A comment to an earlier blog alerted me to a remarkable provision in the House GOP’s version of this year’s agriculture bill: they want to restrict a summer program intended to feed poor children who rely on school lunches during the rest of the year to rural children only.

As Politico reported,

And in a surprising twist, the bill language specifies that only rural areas are to benefit in the future from funding requested by the administration this year to continue a modest summer demonstration program to help children from low-income households — both urban and rural — during those months when school meals are not available.

Since 2010, the program has operated from an initial appropriation of $85 million, and the goal has been to test alternative approaches to distribute aid when schools are not in session. The White House asked for an additional $30 million to continue the effort, but the House bill provides $27 million for what’s described as an entirely new pilot program focused on rural areas only.

Democrats were surprised to see urban children were excluded. And the GOP had some trouble explaining the history itself. But a spokeswoman confirmed that the intent of the bill is a pilot project in “rural areas” only.

At Ten Miles Square, Chad Stanton has a pretty persuasive analysis of this offensive measure. After referencing Paul Ryan’s recent remarks about “inner-city men,” he writes

Let me be clear. Offering food aid to children in rural areas while denying that same aid to children in urban areas is a poorly disguised attempt to replicate the effects of Jim Crow policies. The impetus for the Civil Rights Movement wasn’t merely a desire to be able to sit in the same classroom as white people (although the continued reality of segregation is undeniable), but to demand rightful access to the resources that black tax dollars paid for. Republican attempts to limit aid to “rural kids only” is a thinly veiled challenge to the laws designed to end Jim Crow policies. Combined with recent efforts of voter suppression and the refusal to amend the Voting Rights Act, the Republican position amounts to open contempt for black Americans’ rights as citizens.

Racism doesn’t explain everything. But it explains a lot.

 

It Isn’t Only About the Money

One of the most time-honored adages in political life is “follow the money.” And for many issues that policymakers debate, that’s good advice. Self-interest often explains positions that are otherwise inexplicable.

Sometimes, however, a cynical approach to the political process can blind us to cultural assumptions and ideological commitments that have significant explanatory power. That’s particularly true of American debates about social programs, poverty and inequality; I would argue that some of the most passionate advocates of “market-based healthcare,” and “personal responsibility” are unaware of the roots of their perspectives on these issues.

Representative Paul Ryan is a handy example of what I’ve come to call “economic self-delusion.” Ryan is a favorite of self-styled “fiscal conservatives” who see him (as he clearly sees himself) as a hard-headed advocate of economically-responsible policies. The problem is, the anti-safety-net policies he defends as fiscally responsible tend to be more costly to taxpayers than he and his partisans are willing to admit—and often more costly than the programs he would gut.

A couple of recent studies of homelessness highlight the phenomenon.

Typically, liberal arguments for providing homeless folks with permanent housing center on morality and compassion, allowing conservatives (like Ryan) to respond that such an approach is far too costly (and somehow un-American).

The Central Florida Commission on Homelessness provides a fiscal argument as well. “The numbers are stunning,” Andrae Bailey, the organization’s CEO told the Orlando Sentinel. “Our community will spend nearly half a billion dollars [on the chronically homeless], and at the end of the decade, these people will still be homeless.”

Bailey was referring to a study by Creative Housing Solutions, which tracked public expenditures on local homeless people in the Central Florida region. That analysis calculated the costs of frequent emergency room visits, hospital admissions and repeated arrests for homeless-related crimes, and estimated that each homeless person cost taxpayers $31,065 each year. Providing the chronically homeless with permanent housing and case managers to supervise them would cost about $10,000 per person each year.

Homelessness is hardly the only area where American society is stubbornly “penny wise and pound foolish.” From early childhood education to health care, research supports the cost savings of early interventions via a strong social-safety net.

Why are so many elected officials—and the constituents who elect them—absolutely convinced that social programs are simply costly incubators of dependency? Why are they unwilling to believe credible research that dispels stereotypes like those of the “Welfare Queen” and the lazy “inner-city” social parasite?

If we really want to understand where these attitudes come from, we need to revisit some historic attitudes about poverty. In a very real sense, proponents and critics of social welfare programs are still arguing about policies dating to 1349, when England enacted the Statute of Laborers; that Statute prohibited people from giving alms, or charity, to “sturdy beggars,” that is, those who had the ability to work.

The Elizabethan Poor Law incorporated a distinction between the “deserving” and “undeserving” poor that would be carried to the colonies and reproduced in the laws of most states. It was the model that settlers brought to the New World; it was the approach adopted by the original thirteen colonies, and as people moved west, it was the approach incorporated in the Ordinance of 1787, which prescribed rules for governing the Northwest Territory.

To a significant extent, the distinction between the deserving and undeserving poor and the emphasis upon work have remained the primary framework through which Americans view social welfare and poverty issues.

That distinction was further reinforced by religion, especially Calvinism.

The belief that poverty is evidence of divine disapproval—that virtue is rewarded by material success—was held by a number of the early Protestants who settled the colonies, and that belief has continued to influence American law and culture. In the early 1900s, moral disapproval of the poor found an ally in science, and poverty issues were caught up in a national debate between Social Darwinists like William Graham Summer and their critics.

In language eerily reminiscent of earlier admonitions against rewarding “sturdy beggars,” Sumner wrote: “But the weak who constantly arouse the pity of humanitarians and philanthropists are the shiftless, the imprudent, the negligent, the impractical, and the inefficient, or they are the idle, the intemperate, the extravagant and the vicious. Now the troubles of these persons are constantly forced upon public attention, as if they and their interests deserved especial consideration, and a great portion of all organized and unorganized effort for the common welfare consists in attempts to relieve these classes of people….”

It wasn’t until the Great Depression that American lawmakers acknowledged the need for some sort of social safety net. It would be a mistake, however, to assume that the dislocations of the 1930’s or the passage of New Deal legislation changed Americans’ deeply-rooted beliefs about the relationship between poverty and moral defect.

We see the influence of Social Darwinism and echoes of Sumner in today’s “makers and takers” meme, in the arguments that welfare creates “dependency” (in the poor, but evidently not among recipients of corporate welfare) and in Paul Ryan’s proposed budget.

Research dispelling the mythology is important, but it isn’t enough. Somehow, we need to change the cultural assumptions that produce punitive policies.

We need a new Social Gospel.

Politics 101

Governor Mike Pence has unveiled a proposal to expand Medicaid using Healthy Indiana, prompting blogger Steve Benen to suggest that Indiana’s Governor might be “evolving.”

Although I’m sure Pence would reject terminology that even slightly referenced evolution, his plan to expand Medicaid through Healthy Indiana is a good thing. That it is also a brave thing is a sad commentary on the current GOP, which is where most criticism of the proposal has come from.

It seems to be slowly dawning on Pence that there is a considerable difference between pontificating in DC and actually running a state. In Washington, the man who has been described as “a Tea Partier before there was a Tea Party” could–and did– sermonize ad nauseum without paying a political price. He could–and did–ignore the nitty-gritty of actual lawmaking (he served 11+ years without passing any legislation). A chief executive doesn’t have that luxury; he’s expected to actually do something.

And a chief executive with ambitions/delusions of higher office will be evaluated on the “somethings” that he did.

The problem is, when you are a Republican Governor, you have to satisfy a base that demands ideological purity and ever-more-red meat, at the same time that you have to deal with real budgets, real challenges and the real consequences of bad decisions.

Pence–and several other GOP officeholders–think they’ve figured a way to thread that needle.

We saw it earlier with Common Core. When the GOP suddenly turned on a dime and decided that Common Core was evil (right after the scary black dude in the White House embraced it), Republicans who’d previously been very supportive of Common Core faced a dilemma. They solved the problem by passing  “Indiana” standards that looked a lot like Common Core, but were called something else.

Now we have Medicaid expansion by a different name.

Mind you, these strategies are A-OK with me. There really is no “Hoosier” version of math (unless you count the time our legislature passed a measure changing the value of pi…); and 350,000 Indiana citizens desperately need access to affordable health care. If the current Administration has to engage in a bit of misrepresentation to get it done, I won’t complain.

It’s just a shame that these gyrations are necessary in order to avoid being eaten alive by the angry, uninformed people who now control the party.

A Conservative Argument for Raising the Minimum Wage

The American Conservative has a lengthy article arguing for a raise in the minimum wage from a conservative perspective. A couple of highlights:

Although the direct financial benefits to working-class Americans and our economy as a whole are the primary justifications for the proposal, there are a number of subsidiary benefits as well, ranging across both economic and non-economic areas.

First, the net dollar transfers through the labor market in this proposal would generally be from higher to lower income strata, and lower-income individuals tend to pay a much larger fraction of their income in payroll and sales taxes. Thus, a large boost in working-class wages would obviously have a very positive impact on the financial health of Social Security, Medicare and other government programs funded directly from the paycheck. Meanwhile, increased sales tax collections would improve the dismal fiscal picture for state and local governments, and the public school systems they finance.

Furthermore, as large portions of the working-poor became much less poor, the payout of the existing Federal Earned Income Tax Credit (EITC) would be sharply reduced. Although popular among politicians, the EITC is a classic example of economic special interests privatizing profits while socializing costs: employers receive the full benefits of their low-wage workforce while a substantial fraction of the wage expense is pushed onto the taxpayers. Private companies should fund their own payrolls rather than rely upon substantial government subsidies, which produce major distortions in market signals.

—–

Public policy experts sometimes glorify complexity, proposing intricate, interlocking systems aimed at a desired result. But such structures are only as strong as their weakest link, and a proposal too complex to fully understand is also too complex to fix. Our government has sought to ensure a decent living for American workers through an enormous array of income subsidies, public benefits, training programs, and educational loans; at this point, many of these components have accumulated powerful and parasitic side-beneficiaries while leaving the working class behind.

Since this vast and leaky conglomeration has failed at its intended goal, perhaps we should just try raising wages instead.

Reducing the quoted material to its essence, the argument has 3 parts. First, raising the minimum wage will help the economy and the federal budget by increasing demand and tax revenues, by reducing the amount government pays out in various subsidies, and by strengthening social programs like social security. Second, it will be simpler and less costly than the ungainly patchwork of programs necessitated by poverty-level wages.

Third (and in my opinion most compelling), it will require employers to pay their own workers (and not so incidentally, compete with others in the market on equal footing) rather than depending on taxpayers to subsidize those wages as we do now.

Back when the GOP was a genuinely conservative party, it would have understood–and embraced–these arguments.