Public Policy and Governance – Page 50

Health And Debt

I was fascinated by a recent column in which Paul Krugman examined the geographical clustering of low credit scores.

Krugman was deconstructing some recent research showing what he described as a “big band of credit-score calamity that stretches across the American South.” The research confirmed that, in virtually every part of the South and across all demographic groups– every race, every income bracket — credit score are low.

Low credit scores penalize people in a number of ways. As Krugman notes,

The region’s poor credit means Southerners are paying more to borrow money, assuming they can qualify for loans at all. That sets them back in everything from car and home purchases to credit card rewards.

But why the South?

Many of us would suggest the influence of racism. But that turns out not to explain the phenomenon.

Our first guess about what might be happening here involves race. Almost 3 out of every 5 Black Americans live in the South, and they make up almost 20 percent of the region’s population. Centuries of slavery, sharecropping, apartheid and exclusion from many elite educational institutions left some Southern Black folks with little credit and even less collateral.

When researchers ran the numbers, the Blackest parts of the South had roughly the same credit scores as the least-Black areas. And their scores were far lower than places with similar Black populations outside the South. So while race may play a role, it’s clearly not a defining factor.

Well, what about poverty? The South has the highest poverty, lowest income and lowest education rates of any region in the U.S., and counties with lower income and lower college graduation rates are likely to have lower credit scores.

Nope.

Even some of the South’s biggest, most dynamic cities — think Atlanta or Dallas — have the same below-average credit scores as their more rural Southern neighbors. Within every income bracket, the typical Southerner has a lower credit score than someone who lives in the Northeast, Midwest or West.

So–if it isn’t racism and it isn’t poverty, what explains this phenomenon?

The answer, it turns out, is America’s refusal to follow virtually every other modern nation and offer national health care. Medical debt is the reason credit scores are so low in the South.

It turns out the South has the highest levels of medical debt in the country.

Of the 100 counties with the highest share of adults struggling to pay their medical debt, 92 are in the South, and the other eight are in neighboring Oklahoma and Missouri, according to credit data from the Urban Institute. (On the other side, 82 of the 100 counties with the least pervasive medical-debt problems are in the Midwest, with 45 in Minnesota alone.)

And sure enough, when you look at areas across the nation where adults are struggling to pay down medical debt, they have similar credit scores.

This raises an obvious question: why is this problem concentrated in the South?

One answer is that the South is simply less healthy than any other region. Data from the Centers for Medicare and Medicaid Services shows that among Medicare recipients, the population for which we have the best data, those in the South are substantially more likely to suffer from four or more chronic conditions. And poor health tends to go hand in hand with people having overdue medical debt and poor credit scores.

Poor health isn’t the only factor–Red State policy choices are a huge contributor.A recent analysis in the Journal of the American Medical Association found that medical debt “became more concentrated in lower-income communities in states that did not expand Medicaid. The share of residents with overdue medical debt is more strongly linked to a county’s credit score than any other factor– including debt related to car loans, credit cards and student loans.

Last year, the federal Consumer Financial Protection Bureau (CFPB) issued a scathing report finding that medical debt is “an unexpected, unwanted, and financially devastating expense” that is “far less reliable and predictive of people’s ability to pay their bills” than other kinds of borrowing.

The lack of national health insurance–or even Medicaid availability–means that folks in the South pay higher rates on mortgages and car loans, and have more trouble getting credit.

But there are social as well as individual costs involved.

Insecurity fosters anti-social behaviors. When a serious illness means you might lose your house or go bankrupt—you tend to take those worries out on others. Research shows that countries with better social safety nets are more tolerant of differences in race, religion and sexual orientation, and some studies have suggested that Canada’s lower rate of gun violence can be attributed to their stronger social safety net.

But national health insurance would be “socialist” and Southerners wouldn’t want that…

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The Way We Are

Persuasion’s Yascha Mounk recently interviewed Rachel Kleinfeld, a senior fellow at the Carnegie Endowment for International Peace.

Kleinfeld’s response to a question about interpreting the midterm results, and whether those results showed a rejection of extremism and election denialism, was–in my opinion–an important summary of just where we Americans find ourselves politically, and although it was rather lengthy, I’m quoting it in its entirety:

The election showed that with a gigantic amount of work on behalf of many, many organizations, you can move a tiny percentage of independent and right-leaning swing voters away from election denialism and real authoritarianism in swing states. That mattered a lot, because it means that the 2024 election will be free and fair. But what it didn’t do was fundamentally shift the dynamics in the Republican Party. While Trump might be losing steam, Trumpism, Christian nationalism, othering people to build your base with wink-and-nod authoritarianism, is still alive and well. We’re seeing DeSantis do it. We’re seeing other front runners do it. We saw candidate intimidation. We still saw election deniers win in deep red states. We have about 16 states now where there’s trifectas—a state in which the governor, the attorney general and both chambers of the legislature (basically all of your major executive roles that would control elections) are all of one party. In about 15, maybe 16 states, those are all Republican and a number of election deniers were elected to those positions. It’s worth remembering that the Jim Crow South was only 11 states, really, in its full form of election suppression against African Americans and poor whites. It doesn’t take the entire United States to have an authoritarian enclave somewhere. The role of the RNC in Arizona was notable. Arizona is really the only place we saw any kind of election violence, with the supervisor of Maricopa County elections going into hiding. An RNC phone call seems to suggest that the Republican National Committee was possibly threatening that the mob would be released if certain things didn’t happen.

A significant minority of Americans continue to embrace “Trumpism, Christian Nationalism and ‘othering'” and the most obvious question is why? Those of us who follow politics and policy answer that question with various allocations of racism, anti-intellectualism and (especially) fear of loss–loss of privilege, loss of social dominance.

As Kleinfeld highlighted, attacks on the bases of America’s governing philosophy are being nurtured and encouraged by today’s GOP.

Devoted Republicans with whom I worked “back in the day”–when the GOP was a very different animal– bemoan the reality that the party that bears that name has no resemblance to the party we once knew. The lack of two respectable, adult parties in America’s two-party system is more than troubling for a multitude of reasons, many of which I have previously explored, but in a recent column, Jennifer Rubin discussed a consequence that had not occurred to me: the GOP’s disdain for objective fact attracts voters and candidates who also believe facts to be irrelevant and governance beside the point.

Rubin calls this “politics as performance art,” and references GOP fabulists besides George Santos. She says that Republicans have moved on from the party’s lies about climate change, vaccines and voter fraud — they’re increasingly lying about themselves.

Granted, it would be hard to beat Santos for lying, and no one else (to the best of our knowledge) comes close. But not for lack of trying. Rep. Anna Paulina Luna has claimed to be Jewish– to have been raised as a “Messianic Jew.” (Messianic Jews aren’t Jews, for one thing, and it seems her father was Catholic and her grandfather fought for Nazi Germany.)

She changed her last name from Mayerhofer to Luna, and The Post found no evidence for her claims that her father was incarcerated for long periods. Other claims that she was traumatized by a home invasion in 2010 did not check out, either.

Rep. Andrew Ogles is not an economist, despite claiming to be one during his campaign-he has no degree in economics and was never employed as an economist. He also wasn’t a “trained police officer and international sex crimes expert,” as claimed; he was actually a volunteer reserve deputy. (Shades of Hershel Walker…)

It isn’t only in folks running for Congress. Arizona’s Republican attorney general investigated election fraud, then buried the findings when no evidence emerged. (The documents were just released by his Democratic successor.)

If it is “harmless exaggeration” to fabricate a life story, and “politics as usual” to insist that your election loss was due to vote fraud, what are assertions that “those people” want to replace White Christians, or that “woke” people are indoctrinating your children?

When such people hold office, how can we hope for governance based upon evidence and reason?

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When Does Consistency Matter?

We’ve all heard the quote–attributed to Emerson–decrying “foolish consistency” as the “hobgoblin of little minds.”

The phrase requires us to distinguish between the sort of consistency that signals a thoughtful intellect and the “foolish” consistency that Emerson disdained.

I have recently concluded that the distinction is critical to a proper evaluation and interpretation of today’s partisan political arguments.

Many of us still remember the critique of John Kerry when he was running for President; he was widely mocked as a “flip flopper” because he’d changed his position on some issue. I no longer recall what the issue was, but I do recall his entirely appropriate response, which was along the lines of “when I encounter facts of which I have previously been unaware–when I learn more about a subject–I change my position to accord with those facts.”

When scientists discovered that disease is caused by germs, and entertained the possibility that smallpox hadn’t been sent as a punishment from God, as many had thought, that inconsistency led to the development of medicines and vaccines. Human progress requires the recognition and correction of error. “Consistency” in such matters would merit Emerson’s scorn.

On the other hand, right now, one of the thorniest problems of American governance is the large number of elected officials–almost all Republicans– who absolutely refuse to change or reconsider their beliefs even when faced with credible contrary evidence. Their stubborn refusal to modify their positions even after those positions have become logically and factually untenable is a perfect example of Emerson’s “foolish consistency.” (No one can call them “flip-floppers”!)

When ideologues refuse to rethink or reconsider mistaken positions, the resulting incoherence is arguably worse than the temporary confusion that often accompanies necessary change.

Ideological rigidity and a refusal to recognize how hypocritical their resulting messages sound is an obvious trait of today’s GOP. Ironically, in their refusal to rethink or reconcile incompatible articles of faith, Republicans are struggling to apply a totally incoherent political philosophy to issues that really do require a measure of intellectual consistency.

A few examples will illustrate that incoherence:

Free markets are good because they expand choice. Individual choice is an integral part of freedom and a public good–unless, of course, we are talking about women’s reproductive choice, because that’s bad.
Religious folks should be allowed to act on the basis of their sincere beliefs, even if those actions disadvantage other people. But those accommodations shouldn’t extend to adherents of non-Christian religions or to liberal denominations that permit abortion.
Parents should be given the right to exercise very broad choices when it comes to how they raise and educate their children–unless, of course, mom wants to take Junior to Drag Queen Story Hour at the local library, or give Junior’s teenage sister free reign to read whatever might be on those library shelves.
Parents should be trusted to do what’s best for their children–unless they’ve decided to work with medical professionals to help their children cope with gender dysphoria, or manage transition.
Business owners should be free of heavy-handed government regulations; after all, those owners and managers know best how to create jobs, serve their customers and make a profit. But government shouldn’t allow them to factor “woke” concerns about inclusion and the environment into their business decisions.
Welfare programs just encourage dependency; hard-working taxpayers shouldn’t have to support people who can’t or won’t make it on their own. But those taxpayers definitely should continue to fund the huge annual subsidies that further enrich profitable corporations and obscenely profitable fossil fuel companies. That’s not welfare, that’s economic development.

In all fairness, there really is a consistency lurking beneath these surface incompatibilities: theocratic consistency.

If we approach those examples from the perspective of a Christian Nationalist, the seeming disparities become far more cohesive. The lawmakers and pundits who hold these otherwise inconsistent positions are operating out of a theocratic conviction that they should have the right to impose their “sincerely held” religious beliefs on everyone else–after all, they are the “real” Americans, listening to the “real” God.

Even the clear influence of money in all this has a theocratic element–U.S. policy has always been influenced by a corrupted version of Calvinism–the belief that financial success is evidence of moral righteousness, and that poverty is a sign of God’s displeasure.

Speaking of hobgoblins….

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Poverty

What is poverty?

The usual measure is economic. Those who don’t fall into that category tend to accept data reported by government agencies, but a recent article from the Indiana Capital Chronicle points out that Hoosiers with income inadequate to meet basic needs “is much higher and more extensive in Indiana than official counts would suggest — particularly among working, single mothers of color.”

The Overlooked and Undercounted report commissioned by the Indiana Community Action Poverty Institute analyzed how wages failed to keep pace even as expenses to families increased – namely food, shelter, health care, transportation and child care costs.

However, federal and state governments continue to use a measure that defines poverty based on one cost alone – food – and doesn’t account for increases in other categories.

This is hardly a surprise. I’ve previously posted about the ALICE research conducted by Indiana’s United Ways.

AlLICE is an acronym for Asset Limited, Income Constrained, Employed. ALICE households have income above the official federal poverty level, but below reality– the actual, basic cost of living. The first report, issued in 2014, was eye-opening. Researchers found that

More than one in three Hoosier households cannot afford the basics of housing, food, health care and transportation, despite working hard.
In Indiana, 37% of households live below the Alice threshold, with some 14% below the poverty level and another 23% above poverty but below the cost of living.
These families and individuals have jobs, and many do not qualify for social services or support.
The jobs they are filling are critically important to Hoosier communities. These are our child care workers, laborers, movers, home health aides, heavy truck drivers, store clerks, repair workers and office assistants—yet they are unsure if they’ll be able to put dinner on the table each night.
For families living on the edge, families struggling just to put that dinner on the table, saving money is a pipe dream. There is nothing left to save. So these families are vulnerable to any unexpected expense—a car repair, an uninsured illness, even an unexpectedly high utility bill can be enough to plunge them into debt or worse.

For obvious reasons, families falling into this category struggle to find the time and energy to participate in civil society, or to engage in the kinds of information-gathering necessary to create informed voters. Financial poverty is all too often so overwhelming a challenge that the other “riches” that most of us take for granted–social, civic, intellectual–are simply beyond reach.

The United Way report was updated in 2016 and again in 2018. It probably won’t surprise you that ALICE’s situation didn’t improve. In 2018, I wrote

As the researchers point out, traditional measures of poverty don’t capture the real picture–the number of people who are struggling financially because the actual cost of life’s necessities where they live is more than they earn.

Indiana, for example, has 2,530,581 households. Thirteen and a half percent of those households fall below the official poverty line–but another 25.2% fall between the poverty line and the ALICE threshold. That’s 38.7% of Hoosiers who face a constant, debilitating struggle for economic survival….

The stress experienced by impoverished and ALICE families isn’t just financial: struggling people live in poorer neighborhoods that are less safe and less healthy. They lack the time and resources that permit other citizens to participate in civic and political life–and as a result, their voices aren’t heard–or their needs considered– in most public policy debates.

As the ALICE reports have emphasized, ALICE folks are in large part the workers that we more privileged folks rely upon for a multitude of essential services. Evidently, we aren’t willing to pay a living wage to the people who provide those services. (There’s a parallel here with our unwillingness to pay taxes adequate to support the public services we demand.)

The irony is, we pay in other ways. As the ALICE reports and the Business Journal series document, there are significant social costs to a system that leaves so many hard-working people behind.

Dismissing the struggle of ALICE families as a consequence of laziness or lack of ambition is a sign of moral obtuseness–when it isn’t intentionally self-serving. When you tell people to pull themselves up by their bootstraps, you should probably check to see if they have any boots.

The Capital Chronicle found that Hoosier families struggling to make ends meet are “neither a small nor a marginal group, but rather represent a substantial proportion of households in the state”… More than one in four Indiana households lacks enough income to meet basic needs.

Meanwhile, we punish poverty. Effective state and local tax rates start at 11.4 percent for the poorest 20 percent of Americans, fall to 9.9 percent for the middle 20 percent, and then decline to 7.4 percent for the top 1 percent.

After all, ALICE folks can’t afford lobbyists.

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And Then There’s Indiana’s Housing Crisis…

Our Indiana’s legislative overlords concentration on bullying trans kids and impoverishing public education evidently leaves them little time or interest in solving the state’s real problems, like the lack of affordable housing and/or the plight of low-income renters.

As I’ve indicated before, tenants in Indiana have almost no rights and no recourse against bad actor landlords. Indiana law–or really, the lack thereof– is an open invitation to out-of-state buyers of real property, with the result that Indianapolis is now first in the nation for out-of-state ownership of rental property. (In most cities, around 3% of rental properties are owned by out-of-state investors. In Indianapolis, the percentage is 15% and climbing.)

We have an eviction crisis, made more severe by Indiana’s lack of affordable housing. The Greater Indianapolis Multi-Faith Alliance (GIMA) reports that Indiana has a gap of 135,033 rental units affordable for Hoosiers in the bottom 30% of the income distribution. Indiana has the single highest housing cost burden among all Midwest states for those residents.

As a result,many Hoosiers are spending 50-80% of their incomes on rent. One minor emergency – an issue with a car, an emergency room visit, a layoff– can cause a spiral into evictions.

Indianapolis ranks #2 in the country for evictions. Only New York is higher, and costs are a huge factor; Marion County rents have increased an average of 20% since 2020, while wages have only increased by 4%.

As GIMA has reported, out-of-state institutional investors are drawn to Indiana for its landlord-friendly laws, a situation that doesn’t just hurt renters, but drives up costs for would-be homebuyers as well.

Some other statistics: Sixty percent of rental property owners in Indiana live in Illinois, California, Georgia, Texas, and Florida. Indiana is on track for more than 30% of all residential property purchases to be by investors. Indianapolis is #1 among U.S. cities for out-of-state corporate investment in real estate.

GIMA is trying to get legislators’ attention.

It is supporting HB 1005, Rep. Doug Miller’s bill to establish a residential housing infrastructure assistance program and revolving fund.

Rep. Miller’s bill will be particularly beneficial in rural Indiana, which highlights that this is not an urban, city-focused issue. It affects all of Indiana. Providing state-supported programs to build more housing is critical to stopping the evictions crisis. We would encourage our legislators to take this first, modest step to show the people of Indiana that they come first, that human dignity is a Hoosier value, and that housing is critical to human well-being.

The organization is also supporting SB114., a bipartisan measure sponsored by Sen. Eric Koch, Sen. Shelli Yoder and Sen. Stacey Donato. That bill was prompted by an incident that received widespread publicity: in February of last year, Citizens Energy shut off the water supply for 868 tenants of Capital Place and Berkley Commons apartments for 21 hours, because the landlord, JPC Charities, owed $1.3m in missed utility payments.

Citizens Energy Group certainly deserves to be paid for its services, but tenants should be able to apply pressure by paying their rents into escrow accounts until the landlord remedies its misbehavior.

As GIMA’s policy paper put it,

This incident highlights the reality that tenants in Indiana have almost no rights, no power, and no recourse from bad actor landlords. It also highlights the impact that out-of-state investment in rental properties is having in our state… This small step will help send a message that Indiana is no longer ripe for “do-what-you want” property owners.

GIMA’s concerns about Hoosier tenants’ lack of legal recourse is shared by State Senator Fady Qaddoura. Last session, Qaddoura introduced legislation allowing renters to put their rent in escrow if a landlord did not make timely repairs to serious problems. He noted at the time that Indiana is one of just a handful of states without some mechanism allowing tenants to withhold payment of rent until repairs are completed.

Qaddoura has reintroduced that measure, together with some additions that would require out-of-state landlords to contract with real estate property managers inside Indiana.

“The philosophy here is that if you live and operate in Indiana, you’re not going to risk the reputation of your business to engage in deceptive practices on behalf of an out-of-state, negligent, corporate landlord,” he said.

Qaddoura also wants to increase state income tax deductions for tenants – currently set at $3,000.

You would think these bills would pass easily– they simply reflect a fairer balance between landlords and tenants–but this is Indiana, so of course, you’d be wrong. As a friend who knows her way around the Statehouse tells me, the Indiana Apartment Association has ruled with impunity in the General Assembly for decades, and continues to do so.

The IAA represents landlords–homegrown or not–and couldn’t care less about tenants. Particularly low-income Hoosiers who struggle to pay those escalating rents.

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