Public Policy and Governance – Page 59

An Approach That Deserves Emulating

A recent report in the Indianapolis Star focused on the lack of affordable housing in Indianapolis and the state.

The research had been done by SAVI, a program of The Polis Center at IUPUI that partners with United Way of Central Indiana. SAVI is an online community information system that provides data to government agencies and organizations, and maintains a website making that data freely accessible. (The paper no longer has the resources to independently research such matters.)

In Indianapolis, there are only six affordable rentals for every 10 extremely low-income households, and .there are virtually no vacancies in that category units, making it hard–if not impossible– for extremely low-income households to find an available unit.

Since 2017, the city has supported the construction of 3,842 units of affordable rental housing and 887 permanent supportive housing units by private and nonprofit developers, according to an IndyStar analysis of city data. Permanent supportive housing units are a type of housing for formerly homeless people that includes social services and often cover rent with housing vouchers.

Of the affordable rental units, no more than about 744 are reserved for and required to be affordable to very low-income individuals, who are those making $32,000 for a one-person household or $41,000 for a three-person household.

The city has also supported the creation of 333 affordable homes for lower-income households to own.

That still leaves a shortage of 33,600 homes.

Indiana’s legislators evidently took time out from their obsessions with women’s reproduction and CRT to pass a bill last session creating a new statewide affordable housing tax credit. The city believes that will boost local government’s ability to build low-income housing using the federal low-income housing tax credit program.

The lack of low-income housing and the growth of homelessness are hardly new problems, here or elsewhere. Municipal governments and CDCs (Community Development Corporations) all struggle with the issue, recognizing that the lack of housing feeds into a number of other social ills, especially crime, so I was fascinated to read about an approach being taken by Kansas City that seems promising.

Kansas City began with an intervention aimed at the most dire manifestation: homelessness.

In order to help alleviate homelessness—and to improve the cleanliness of the city—Kansas City’s Public Works department is collaborating with local nonprofits to create new jobs for some people who are unhoused. The employees of the Clean Up KC initiative were paid to pick up litter from underserved inner-city areas for three months. It’s been crucial—not just for keeping the city cleaner, but for improving chances that they find housing, for which employment is a major criteria. At the end of the program, many have moved into housing, and a new cohort of workers will start a new pilot soon.

The approach being tried by Kansas City recognizes the inter-relationship of social problems, and of the challenges faced by folks who have fallen on hard times–or never known any times that weren’t hard.

Crucially, finding housing is often easier with employment, as it’s more appealing for private landlords and sometimes on a list of criteria for public housing. As part of the program, the nonprofits also helped the workers navigate the housing system. “A goal of this is helping them to create a sustainable, successful life,” Parks-Shaw says. “And you can’t do that without housing.”

Research has shown that investments in programs to help people who are unhoused reduces spending for cities—and taxpayers—on healthcare and emergency department visits.

The obvious question about this particular approach is: what happens to these people when the program–and employment–end?

For the program graduates, there may the opportunity for full-time employment. Kansas City’s Full Employment Council will provide the additional training and certification needed to work for the city on a permanent basis. “I see this as a win-win for our unhoused individuals, and a win-win for the city at a time when we’re struggling to fill positions and meet the needs of our community,” Parks-Shaw says.

That paragraph reminded me of long-ago proposals addressing joblessness by making government the “employer of last resort.”

In Kansas City, providing employment through government addressed much more than homelessness; not only did formerly homeless people find housing, but workers removed litter and piles of trash from city streets, enhancing the municipal environment.

If America ever emerges from the cold civil war and focuses on solving public problems, Kansas City may provide an approach to emulate.

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Choices

I recently came across a Facebook post that perfectly summed up America’s continuing failure to make sane public policy consistent with the country’s founding premises. It pointed to the absurdity of far-right definitions of “freedom”:

You can regulate a human body, but not a coal plant. You can regulate the speech of a teacher, but not the money-as-speech of a corporation. You can coerce a child to pray in school, but not keep guns out of the classroom.

“You” are American lawmakers.

The post attributed these truly insane results to the Supreme Court, and the Court certainly deserves a considerable part of the blame, but so do the lawmakers who play to–or are part of– the Rightwing fringe.

The Indiana legislature is a good example. In the wake of the Dobbs decision, our legislative overlords took hardly any time to ban abortion, but has struggled–and frequently failed– to regulate environmental hazards. The state has the most miles of rivers and streams too polluted to swim in, and we also lead the country in toxic emissions, among other deficiencies. The legislature’s focus on culture war issues routinely takes precedence over concerns for public health, and lawmakers’ concern for the rights of farmers and utilities just as routinely outweighs concerns about the environment.

Our Hoosier lawmakers have a long history of telling teachers what to do–from older efforts aimed at prescribing how they should teach reading to periodic instructions about “character” education, to the more recent efforts to keep them from teaching about the less laudatory parts of our history or recognizing the existence of LGBTQ citizens. These persistent efforts have not been matched by efforts to restrain the influence of corporate dollars.

And don’t even start me on the Indiana General Assembly and guns. The pious hypocrites who continually try to shoehorn God into public school classrooms–and failing that (due to that pesky First Amendment Establishment Clause) support the vouchers that siphon money from Indiana’s public schools and send them to private religious schools–continue to make firearms more easily available, most recently by ignoring law enforcement testimony and public opinion and eliminating the need to obtain a permit.

The hypocrisy is overwhelming.

The same “freedom fighters” who were outraged by mask mandates during the pandemic see no inconsistency with mandates to carry a pregnancy to term. They claim the “God-given right” to be free of a minor inconvenience that would protect their friends and neighbors, but are perfectly willing to interfere with medical science and the bodily autonomy of women.

Lawmakers who are solicitous about protecting factory farms from “onerous” regulation show considerably less concern about protecting the environment and the health of their constituents, despite evidence that those farms are massive polluters.To focus on just one element of that pollution, researchers tell us that industrial livestock farms produce up to 1.37 billion tons of manure annually—and that that’s 20 times more fecal waste than the entire U.S. human population, posing serious pollution risks to water and air.

The Indiana lawmakers who insist upon protecting the untrammeled, unimpeded right to own guns–including weapons more appropriate for war than personal protection–are blithely unconcerned with the havoc and death those weapons cause.

IN AN AVERAGE YEAR, 931 PEOPLE DIE BY GUNS IN INDIANA. WITH A RATE OF 14 DEATHS PER 100,000 PEOPLE, INDIANA HAS THE 19TH-HIGHEST RATE OF GUN DEATHS IN THE US.

In Indiana, 61% of gun deaths are suicides and 36% are homicides. This is compared to 61% and 36% respectively, nationwide.

The rate of gun deaths in Indiana increased 30%↑ from 2009 to 2018, compared to an 18%↑ increase over this same time period nationwide. In Indiana, the rate of gun suicide increased 24%↑ and gun homicide increased 49%↑ from 2009 to 2018, compared to a 19%↑ increase and an 18%↑ increase nationwide, respectively.

Across the nation, deadly attacks on schoolchildren are accelerating. The same legislators who are willing to tell education professionals how to teach and what to say remain unwilling to require even minimal background checks as a condition of buying the lethal weapons increasingly used to mow down the children in those classrooms.

There are, obviously, many other examples of misplaced legislative zeal.

The basic question citizens need to confront is: what is government for? What sorts of rules should government have the authority to impose, and what matters are properly left to each individual?

Our system was founded on the principle that Individuals should be free to pursue their own ends–their own life goals–so long as they did not thereby harm the person or property of someone else, and so long as they were willing to accord an equal liberty to their fellow citizens.

Hoosier lawmakers continue to get it backwards.

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The Party’s Over

Okay. I was waiting for the spectacle to conclude before commenting on the ongoing sh*t show in the House of Representatives, but I can no longer restrain myself.

Let me begin with points made by observers more astute and informed than I am.

After day one, Robert Reich wrote that we are witnessing the “mindless hostility of a political party that’s lost any legitimate reason for being. For all practical purposes, the Republican party is over.”

The party line became confused, its message garbled, its purpose unclear. It thereby created an opening for a third and far angrier phase, centering on resentment and authoritarianism…

Today’s Republican base is fueling hate. It is the epicenter of an emerging anti-democracy movement.

What we are seeing played out today in the contest for the speakership of the House involves all of these phases – what remains of the small-government establishment, the cultural warriors and the hate-filled authoritarians – engaged in hopeless, hapless combat with each other.

In the Washington Post, Matt Bai focused on McCarthy’s multiple deficits.

During the Boehner era, which now seems like some distant eon when woolly mammoths roamed the Earth, the future of the Republican Party was said to belong to three of his younger colleagues. They called themselves the “young guns,” but a better metaphor now would be the three little pigs.

The pigs were Cantor, Ryan and McCarthy. The first two left when the “MAGA wolf” blew their houses down.

Unlike the other two, who got by on guile and smarts, McCarthy’s gift was his easy charm. No one was going to mistake him for a Mensa candidate, but he was fun and flexible.

If McCarthy emerges with the title by ceding effective control to the crazies, he will be neutered. As Bai points out, appeasement of extremists never works . Acquiescence to irrational demands just encourages more irrational demands.

As McCarthy’s humiliation continued through day two, Reed Galen of the Lincoln Project wrote (no link)

This is not a clash of ideals on what kind of tax policy or health care is best for our country. It is a bare-knuckle brawl for power – and given Democratic control of the White House and Senate, all the GOP can do is cause chaos — it is a brawl that is not going to end well for America.

Do you, reading this email, think letting Lauren Boebert fire the Speaker on a whim is a good idea? What about letting MTG, Gaetz, and others have their own private lawsuit power? That’s what the crazies are asking for in their “negotiations.” Not policy. Not representing their constituents. Personal power to take this thing off a cliff and try to hang it around Joe Biden’s neck.

If there is any doubt about that desire to take America off a cliff, one holdout was quoted as saying he wouldn’t vote for McCarthy without a commitment to shut the government down rather than raise the debt ceiling. He defined that commitment as “a non-negotiable item.” If that isn’t insanity, it’s a close relative.

Josh Marshall of Talking Points Memo has observed that–while every Republican Congressperson isn’t the same as Jim Jordan or Matt Gaetz– virtually all of them rely on a coalition of voters that supports Jim Jordan and Matt Gaetz. Today’s GOP is a “balkanized party made up of elected officials who either are Jim Jordan or aren’t willing to cross Jim Jordan.”

As if the chaos, dysfunction and sheer insanity on display aren’t worrisome enough, Robert Hubbell has highlighted an even more ominous development.

McCarthy made a smidgen of progress that may have secured an additional vote or two on Wednesday evening. But that progress came at a deeply disturbing cost that should concern every American. The details of the agreement negotiated by McCarthy are complicated and obscure—deliberately so because they involve a “treaty” between two dark money PACs that fund GOP candidates for the House. The fact that the election of a constitutional officer—the Speaker of the House—is being brokered by dark money PACs is an insult to the rule of law and an open wound on democracy…

To use a technical term, the agreement “stinks to high Heaven.”

At the end of day three, it turned out that even this unprecedented intervention by the GOP’s dark money donors wasn’t enough to move the lunatic caucus. As I write this, there have been eleven votes, and the House still has no Speaker.

Disarray is too mild a description. We are watching the death throes of an American political party. The question now is: what comes next?

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Meanwhile….

As House Republicans noisily demonstrate their utter lack of interest in governing, other parts of the federal system continue to operate. The Fed, for example, continues to battle inflation.

In a lengthy October essay in the New York Times, Ezra Klein provided an overview of the causes of inflation and the choices policymakers face when trying to control it.

Inflation often begins as a mismatch of supply and demand. But if people get accustomed to prices rising, then inflation becomes about expectations. And so the task of ending it grows fuzzier: You need to use policy not just to manage the economy but also to alter psychology. The arid language of economics obscures the brutality this demands. You need to hit the economy hard enough to cow everyone who makes decisions within it.

Because that’s what prices are: decisions. Those decisions, even when mediated by algorithms, are made by people trying to predict the decisions other people will make. When people start to believe that other people are raising prices, they will raise prices. If they think other people are raising prices even faster, they will raise prices even faster than that. “How can you persuade people to expect differently?

One way is by increasing supply., but that usually can’t be done quickly. Another is by cutting demand by raising interest rates–but that makes it harder to borrow money or afford homes, and inevitably throws people out of work.

Klein reminded readers of Paul Volker’s approach to “stagflation” in the 1970s.

Volcker forced a recession so deep that the entire psychology of the American economy changed. Today he is celebrated for his steel. Powell invokes him as inspiration. In a speech at a Fed conference in Jackson Hole this summer, he mentioned Volcker twice and said, of the intended rate hikes, “we must keep at it until the job is done,” presumably a reference to Volcker’s memoir, “Keeping At It.”

Using interest rate hikes to manage inflation operates like a sledgehammer: it reduces demand, but also cuts supply.

When people lose their jobs, they stop producing the goods and services the economy needs. When mortgage rates spike, developers build fewer houses, despite the fact that high housing costs are often caused by too few houses. When borrowing money becomes expensive, people stop borrowing it and cease to make the investments that create future productivity.

Klein documents the various ways in which interest rate hikes disproportionately harm the poor and the jobless, and says that it would be “nice to have a policy that targeted the rich rather than the poor and did so in a way that didn’t hurt long-term investment.”

He asserts that “such a policy exists.” It’s a progressive consumption tax.

Here’s how it works. Instead of reporting your income to the I.R.S. and being taxed on that, you report your income minus your savings, and you’re taxed on that. That’s a consumption tax: Your taxable income is what you spend, not what you save. Congress can make it progressive by adding a hefty standard deduction and applying a much higher tax rate to people making much more money, just as we do now.

The economist who proposed this approach wasn’t concerned about inflation. He thought rich people’s spending wasn’t just wasteful, but harmful. Whether one accepts his definition of “harmful” or not–I’m dubious–Klein points to a truly useful aspect of a progressive consumption tax: it can be dialed up and down to respond to different economic conditions.

In a time of recession, we could drop taxes on new spending, giving the rich and poor alike more reason to spend. In times of inflation, we could raise taxes on new spending, particularly among the wealthy, giving them a concrete reason to cut back immediately and to save and invest more at the same time.

Ideally, adjustments could also be made automatic.

Perhaps for every percentage point increase in unemployment above 5 percent, the tax rate would fall by three points, and for every percentage point increase in inflation above 3 percent, it would rise by four points. Other rules could apply for periods when unemployment and inflation moved together. The tax code would become responsive to the economy by default, rather than only through new acts of Congress.

Given the GOP’s semi-religious objection to taxes, and the current domination of the House by people who can barely spell “economic policy,” let alone leave their preoccupations with culture war issues long enough to consider the operation of the economy, I don’t hold out much hope for passage of a progressive consumption tax in the near future, but it’s an intriguing idea.

We should file it away with other good ideas that await a (hoped-for) return of political sanity and lawmaker interest in actually governing.

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The Definition Of Insanity

No–despite the title of this post, it isn’t about the insanity of the GOP’s meltdown over Kevin McCarthy’s inability to round up votes to make him Speaker–that will have to wait for a resolution. (Meanwhile, pass the popcorn…)

This is about one of America’s insane public policies.

A few years ago, research for a book required me to look more closely at the federal budget than I had previously done–especially at our bloated defense expenditures, but also at the persistence of various subsidies that may (or may not) have been prudent in the past, but clearly are counterproductive in the present.

One of those continuing subsidies supports the fossil fuel industry to the tune of twenty billion dollars a year. (That’s the conservative estimate–others put the number even higher.)

It’s bad enough that the government is continuing to support the use of an energy source damaging to the planet at a time when those funds should be incentivizing a transition to green energy. It is absolutely unconscionable that our tax dollars keep flowing to an industry that is enormously–embarrassingly, obscenely–profitable.

An industry that is also shameless.

I’ve previously defined the Yiddish word “chutzpah.” It is the word that first came to mind when I read the following. (Okay, the actual first words that came to mind were too filthy to employ in this blog.)

Fresh off posting the highest quarterly profit in its history, the U.S.-based fossil fuel giant ExxonMobil sued the European Union on Wednesday in an attempt to stop the bloc from imposing its recently approved windfall tax targeting major oil and gas companies.

The Financial Times, which first reported the new lawsuit, noted that the challenge takes aim at the European Council’s “legal authority to impose the new tax—a power historically reserved for sovereign countries—and its use of emergency powers to secure member states’ approval for the measure.”

“The new tax is due to take effect from December 31 and will apply a levy of at least 33% on any taxable profits in 2022-23 that are 20% or more above average profits between 2018 and 2021,” the newspaper explained.

In a statement, Exxon spokesperson Casey Norton insisted the company recognizes that sky-high energy costs are “weighing heavily on families and businesses” but claimed the tax would “undermine investor confidence, discourage investment, and increase reliance on imported energy.”

Excuse me if I don’t sympathize. The tax would cost Exxon an estimated $2 billion through the end of next year—in other words, a fraction of the company’s 2022 profits.

Europe has experienced a mounting cost-of-living crisis, and passage of the windfall profits tax was intended to generate revenue to provide financial support to households and companies struggling with high energy costs.

Oil and gas companies like Exxon have been accused of exploiting global energy market chaos spurred by Russia’s war on Ukraine to hike prices and pad their bottom lines.

Ya think?

Exxon previously announced that the company had generated profits of $19.7 billion between July and September. That exceeded the profits of any other quarter in the company’s history.

Further evidence of corporate greed: the company has announced it will raise its dividends and expand its share buyback program, and it raised the pay of several of its top executives. (It increased the annual salary of CEO Darren Woods from $1.70 million to $1.88 million for the coming year.)

So–while consumers in Europe and the U.S. continue to struggle with elevated prices at the pump and with the inflation to which those elevated prices have substantially contributed, Exxon and its peers in the fossil fuel industry have chosen to reward their wealthy investors rather than contribute a small part of their bloated profits to the amelioration of problems they have helped to cause.

This revealing conduct joins the evidence that continues to emerge, showing that Exxon deliberately lied for years–actually, for decades– about what the company’s scientists knew about the climate crisis and the central role of fossil fuels in creating that crisis.

Congress probably can’t punish Exxon for those years of lies, but there is no excuse for continuing to subsidize an industry that continues to profit handsomely from knowingly harming the environment and spitting on the common good.

The windfall profits tax that Exxon wants to evade would cost the company a fraction of its profits, and an even smaller fraction of what American taxpayers fork over annually to the fossil fuel industry.

Continuing those subsidies makes about as much sense as handing a gun to the guy who came to rob you. it’s the definition of insanity.

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