The Rent Is Too Damn High!!

Remember the candidate who ran for Mayor of New York some years back whose single-issue political party and campaign slogan were both “the rent is too damn high”?”

What made me think about him was a recent meeting I sat in on, with Senate candidate Marc Carmichael and a couple of local experts on housing. Marc wanted to be brought up to speed with what has become a significant national issue: the cost of housing (and especially the lack of housing for low-income renters) and the range of national policies that might address the problem. (The Republican candidate for U.S. Senate, Jim Banks, has been too busy waging culture war against abortion and trans children to bother with legislation that might actually help people; Carmichael actually wants to “do the job.”)

Marc wasn’t the only one who learned a lot in that meeting. I did, too. So I was interested in a recent publication by the Brookings Institution titled “Ten Economic Facts About Rental Housing.”

The publication reports what most of us know: rental housing has become considerably less affordable over the past several years. We have low vacancy rates and high rent inflation, resulting in housing costs that strain the budgets of lower-income households.

The very low unemployment rate and recent strength in wages makes clear that housing instability in the U.S. is, in large part, a structural problem, one that will not be fully solved by a strong economy. Fiscal support for federal housing benefits is inadequate, eligible households wait years for benefits, and the number of single individuals experiencing homelessness has risen. Any effective solution will require policy actions by lawmakers.

Brookings research shows that approximately one-third of U.S. households rent, although the share of renters varies considerably by age of the head of household, ranging from 21 percent of households headed by someone 65 and older to 58 percent of households headed by someone ages 25 to 34. Renting also varies depending upon the head of household’s education, income, and race or ethnicity.

The paper identifies the ten facts that influence housing costs, and the link includes explanations of each. The explanations are well worth pondering, and if you want to gain a broader understanding of these complex issues, I encourage you to click through and read the entire report. But here, in brief, are the factors Brookings identifies:

  • 1. Households are more likely to rent if the household head has no college degree, is in a lower income quintile, or is Black.

  • 2. One-third of rental units are single-family rentals.

  • 3. Rental vacancies have returned to pre-pandemic levels, while multifamily housing starts have leveled off.

  • 4. Rental housing vacancy rates are highest in the Southeast.

  • 5. Rental price inflation is declining to pre-pandemic levels.

  • 6. Rent inflation looks similar across U.S. metropolitan statistical areas.

  • 7. For renting households with low earnings, rent is consistently more than one-third of their total expenditures.

  • 8. Federal housing assistance consistently falls short of housing needs.

  • 9. Single adults are driving the rise in unsheltered homelessness.

  • 10. Families wait years to receive a housing choice voucher.

A number of these structural causes are related to policy choices at both the state and federal levels. Housing assistance is part of America’s tattered and bureaucratic social safety net–and the failure of that assistance to materially address the problem is one more “data point” that should be considered in a much longer-range discussion about the holes in that net. That said, there are clearly areas where a renewed focus on actual governance would ameliorate at least some of the problems renters face.

At the end of the day, voters need to recognize the differences between culture warriors and policymakers–between candidates focused on the often-boring, day-to-day “grunt work” of actual governance, and the antics of the rabid Christian Nationalists who have neither the knowledge of nor interest in the mundane but incredibly important details of economic and social policy.

The embarrassing television ads being run in Indiana’s primary contests tell me that–at least on the Republican side–candidates are confident that voters fail to recognize that distinction–or, for that matter, the distinction between genuinely local issues and those requiring a national response.

In November, Americans will choose between serious candidates who are willing to educate themselves on the issues and committed to actual governance–to doing the job– and performative buffoons like Banks whose messaging is intended to inflame and divide– the culture warriors who have absolutely no interest in the complexities of the day-to-day issues with which so many Americans struggle.

It is said that in Indiana, an R next to a candidate’s name is sufficient to elect a turnip.

I am cautiously optimistic that this year will be different.

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It Isn’t Just Tax Rates…

If voters ever wrest America’s government away from the Keystone Kops who are currently hijacking it, we might see a return to thoughtful policy discussions.

By “thoughtful,” I mean good-faith debates over the best way to approach various governmental tasks, conducted by people who actually understand the role and operation of government–and want it to work.

In other words, people other than Matt Gaetz and Marjorie Taylor Green and their ilk.

As readers of this blog know, I spent 21 years teaching classes in Law and Public Policy. Those classes explored both government’s policy processes and the legal and constitutional framework that constrains those choices. Ever since 2016, and the election of a buffoon whose entire administration was blatantly and proudly ignorant of both, I’ve missed the exploration of genuine policy differences –and the approach taken by public servants like former Senator Richard Lugar, who often referred to policy differences as “something about which people of good will can disagree.”

I thought about the current absence of “good will” when I read this paper issued by the Brookings Institution.The paper addressed the thorny issue of taxes, and how the American tax system distinguishes between–and differentially taxes– sources of income.

As the paper begins,

In a famous conversation, the author F. Scott Fitzgerald is credited with saying that “the rich are very different than you and me,” to which Ernest Hemingway replied “Yes, they have more money.”

Our work highlights another key difference: the most affluent Americans not only have more income; they receive it—and pay taxes on it—in vastly different ways than the rest of us.

For policy makers concerned about long-term fiscal shortfalls and high levels of economic inequality, our work reinforces the notion that raising the tax burden on the wealthy requires a special focus on how those households gain wealth and skirt taxes. We highlight four ways to effectively raise taxes on the wealthiest Americans.

The research focuses on an issue that serious policymakers understand, but that all-too-often is missing from public conversations about taxes. Those conversations tend to feature politicians appealing to voters with unrealistic promises to reduce the “tax burden” or eliminate certain taxes. ( Worse, when most voters think about taxes, they focus primarily on tax rates–and a not-inconsiderable number of Americans fail to understand the way  marginal rates work. They think the highest marginal rate is applied to the taxpayer’s entire reportable income.)

The Brookings report focuses upon a related element of the tax system: the different ways in which we tax income generated differently.

Most Americans receive almost all their income through wages and retirement income (pensions, 401(k)s, social security, and individual retirement accounts). The most recent available IRS data (2014) shows that wages and retirement income made up 94% of adjusted gross income (AGI) for households in the bottom 80% of the income distribution. Even for households in the 98th to 99th income percentile, wages and retirement income accounted for 71% of AGI.

At the very, very top, though, these sources are less important, accounting for just 15% and 7% of the income of the top 0.01% and the top 0.001% of households, respectively. These households  receive most of their income from investments (interest, dividends, and especially realized capital gains) and businesses (including sole proprietorships, partnerships, and S corporations). These items constituted 82% of income for the top 0.01% and 88% for the top 0.001%, compared to just 7% for the bottom 80% of households.

These patterns are robust over time and data sources. And in practice, the tilt toward capital income at the top is even larger than these figures suggest because AGI does not include the massive unrealized capital gains and very sizable inheritances that accrue to many affluent households.

The researchers proceed to suggest changes to the tax code that would have the effect of reducing the disparities that have contributed to our current gilded age, and I encourage you to click through and see whether you agree or disagree with their particular policy recommendations.

My point in highlighting this study, however, isn’t to endorse–or rebut–particulars.

This research –and similar investigations of the economic realities of American governance–is a welcome reminder of the way lawmakers should conduct policy debates: examining the evidence (what are we doing now, and what are the outcomes of what we are doing?); highlighting problems that such examination discloses (here, the widening gap between the rich and the rest); and considering policies that might solve or ameliorate those problems.

Budgeting and taxation are complicated issues about which people of good will can differ. But instead of people of good will–and thanks primarily to gerrymandering,–we have elected profoundly ignorant (and arguably crazy) people who think they were sent to Washington to destroy the federal government.

I miss policy…

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The New Segregation

Indiana’s children return to school this month, and the accompanying headlines remind us that Hoosier legislators have massively increased the availability of what they call “school choice”–otherwise known as educational vouchers.

Given that expansion, a look at the research is timely.  “Choice” always sounds positive, until you look at some of the ways that choice is exercised. A recent report from the Brookings Institution focused on that question.

Brookings began with the numbers: 7% of the nation’s schoolchildren are currently enrolled in charter schools, and 9% attend private schools. Between 3 and 5% are being homeschooled. And as researchers point out, a number of public school systems also allow parents to enroll their children in any school in the system.

While the implications of school choice for educational quality and equity are hotly contested, scholars generally agree that in most circumstances choice contributes to racial and socioeconomic school segregation. In most places, charter schools worsen levels of racial school segregation. Furthermore, a large body of research shows that families demonstrate racialized preferences for schools. Most of this scholarship implicitly or explicitly attributes the link between choice and segregation to anti-Black racism, particularly among white and Asian families.

Researchers noted that the way school choice policies are designed plays “an important, but not well-studied, role in shaping families’ school choices.”

In this particular study, researchers examined the effects of policy design on school choices in North Carolina’s Wake County Public School System (WCPSS).

Between 2000 and 2010, Wake County operated an innovative socioeconomic desegregation plan that used school assignments and a targeted or “controlled” choice program to pursue a more socioeconomically and racially integrated school system. Working with the district, we identified the set of schools that the district allowed incoming kindergarteners to select from, the transportation options the district provided to each of these schools, and families’ ultimate choices. We use these data to study how WCPSS shaped the choice sets of incoming kindergarten families and how families’ school choices ultimately served to reproduce a racially segregated school system.

This study was thus confined to the choices available within a public school system. That said, it’s findings were obviously suggestive for “choice” programs like Indiana’s–programs that actively encourage parents to opt for theoretically-public charters or for private (overwhelmingly religious) institutions.

The study reinforced the interrelated nature of America’s racial issues (horrors! CRT!!): researchers found that residential segregation “significantly constrained WCPSS’s desegregation initiative.”

Back when voucher programs were first proposed, well-meaning proponents argued that school choice would allow children from overwhelmingly Black inner-city districts to attend–and integrate–majority-White schools. Both Black and White children would benefit from increased diversity.

Great goal. It didn’t work out that way, and one reason it didn’t was underlined by another Brookings finding:

If you give families segregating options, they’ll take them.

As we noted above, WCPSS’s controlled choice program offered all families school options with a wide range of racial compositions—ranging from predominantly white to predominantly Black. This meant that families had access to either segregating or desegregating school choices.

Researchers found that White and Asian parents presented with an integrating or segregating choice opted for the segregating choice. “In comparison, Black and Latino families’ enrollment decisions were unrelated to schools’ racial makeup.”

Researchers concluded that anti-Black racism shaped how parents navigated the choices they had.

From our work and a number of other studies, we know that many Asian and white families avoid schools with large Black student populations when given the opportunity…. Some degree of school choice has long been viewed as a necessary component of desegregation efforts given the significant historical evidence that families (and white families, in particular) leave districts taking aggressive desegregation action. And of course, even WCPSS’s relatively light-touch curation of schooling options for families ultimately proved untenable. In 2009, voters in the county elected school board candidates who promised to end the desegregation initiative and return to neighborhood-based school assignments—a promise the school board followed through on the following year.

The Brookings study joins several others that have found education vouchers increasing rather than decreasing racial segregation.

Actually, the most depressing conclusion from this research isn’t confined to education: it is the stubborn persistence of widespread racism in American society.

I know several people who originally supported “school choice” because they believed that it would allow poor parents to enroll their children in schools serving more affluent communities–schools able to offer students a better educational environment.

Subsequent research has dashed those hopes of better academic outcomes. The Brookings study joins other research in confirming that–in addition to failing educationally– vouchers simply allow Americans to “protect” their children from people who don’t look like them.

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Meanwhile…

On the Late Show, Stephen Colbert has a recurring comedy bit he calls “Meanwhile.” Not part of the opening monologue, it’s a collection of brief–usually weird or ironic– items culled from the news of the day.

But “meanwhile” also has application to those of us who are fixated on contemporary threats to America’s Constitution and democratic norms. While we worry about the increasingly bizarre behavior of our fellow-Americans who live in a fact-free reality of their own devising, we ignore or just miss the daily challenges posed by technology–everything from the way social media is altering attention spans, to the mounting inability of the nation’s utilities to cope with the damage being done by climate change, to the rush to turn our highways over to self-driving vehicles.

That last item–the (debated) imminence of self-driving cars– is just one element of another under-appreciated threat: the loss of millions of jobs, and the issue of how we will handle the transition to a world where most labor (not just manual labor) is performed by machines. An enormous amount of research suggests that, sooner or later, AI–artificial intelligence–will replace a significant percentage of tasks that now require human performance.

It is easy to “pooh-pooh” those predictions, and to dismiss the likelihood of significant social disruption, by pointing out that someone will have to produce and program those machines, and noting that past technological progress has created as well as destroyed jobs. The cheery optimists insist that nothing is certain, so why worry? (Tell that to the estimated five million people who make their livings driving…)

The Brookings Institution has weighted in. In a paper aptly  titled “Preparing for the (non-existent) future of work,” the researchers write,

We analyze how to set up institutions that future-proof our society for a scenario of ever-more-intelligent autonomous machines that substitute for human labor and drive down wages. We lay out three concerns arising from such a scenario, culminating in the economic redundancy of labor, and evaluate recent predictions and objections to these concerns. Then we analyze how to allocate work and income if these concerns start to materialize. As the income produced by autonomous machines rises and the value of labor declines, we find that it is optimal to phase out work, beginning with workers who have low labor productivity and job satisfaction, since they have comparative advantage in enjoying leisure. This is in stark contrast to welfare systems that force individuals with low labor productivity to work. If there are significant wage declines, avoiding mass misery will require other ways of distributing income than labor markets, whether via sufficiently well-distributed capital ownership or via benefits. Recipients could still engage in work for its own sake if they enjoy work amenities such as structure, purpose, and meaning. If work gives rise to positive externalities such as social connections or political stability, or if individuals undervalue the benefits of work because of internalities, then there is a role for public policy to encourage work. However, we conjecture that in the long run, it would be more desirable for society to develop alternative ways of providing these benefits.

You can download the entire paper at the link.

The likelihood that much of world’s work will eventually be done by machines that don’t get sick, don’t need benefits, and can work 24/7 is part of what leads me to support a Universal Basic Income– an “alternative way” of providing a social infrastructure.

Analyzing America’s current polarization provides another argument for a UBI.   As political rhetoric makes clear, policies intended to help less fortunate citizens can be delivered in ways that stoke resentments, or in ways that encourage national cohesion.  Currently, we’re stoking resentments. (Consider public attitudes toward welfare programs aimed at impoverished communities, and contrast those attitudes with the overwhelming majorities that approve of Social Security and Medicare–universal programs to which virtually everyone contributes and from which virtually everyone who lives long enough  benefits.)

I’ve previously observed that we don’t hear angry accusations that “those people” are driving on roads paid for by my taxes.  Beneficiaries of programs that include everyone (or almost everyone) are much more likely to escape stigma. If work disappears for a significant percentage of our population, an approach that doesn’t require lawmakers to pick and choose who deserves help would be far less likely to tear the country further apart.

Of course, the armed and dangerous Americans who currently live in crazy-town may make attention to these “meanwhile” matters irrelevant. They involve questions of governance that they disdain, because they involve how best to achieve the common good, and they have absolutely no interest in helping anyone but themselves.

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The Trump Court

I’ve been on the email list of the Brookings Institution for a number of years. It was–and is– an excellent source of thoughtful, balanced policy analyses, and it provided me with valuable background for my classes when I was teaching Law and Policy.

Over the years, I’ve become accustomed to the language and style of Brookings publications–very consistent with that of academic discourse and a variety of other highly credible, scholarly resources. (Not like the snark you often get here.) So I was bemused–to put it mildly– by the opening paragraphs of a recent essay. 

“We hold that Roe and Casey must be overruled. The Constitution makes no reference to abortion, and no such right is implicitly protected.” With those chilling words an illegitimately obtained Supreme Court majority tore up the lives of Americans & the Constitution in the Dobbs opinion authored by Justice Samuel Alito. The votes for this opinion were only available because Merrick Garland was wrongly blockaded at the end of the Obama administration and Amy Coney Barrett hypocritically jammed through at the end of the Trump one.

The Alito opinion comes in the midst of congressional hearings exposing the sickness of Trump’s style of governance—Trumpery, as we term it in a new book. The Dobbs opinion also exemplifies Trumpery, and its features provide a useful framework for understanding just how bad the opinion is. The Court should be known from here on out as the Trump Court.

Perhaps the single most defining characteristic of Trumpery is its disdain for the rule of law. The Alito opinion in the Dobbs case has that in spades. A central tenet of Supreme Court jurisprudence is stare decisis, the idea that once the Supreme Court has ruled on something, it is settled law and is entitled to permanence, even if later courts may disagree with it. That is particularly true where you have a decades long established precedent like Roe.

It is certainly true that past Courts have overruled settled precedents when it has become blindingly obvious that they are unjust and/or inconsistent with contemporary science and mores–Plessy v. Ferguson and Bowers v. Hardwick come to mind. But the thrust of the quoted paragraph is accurate; until the elevation of theocratic jurists intent upon the destruction of jurisprudence equating  liberty with a significant degree of personal autonomy, precedents were accorded a high level of deference.

The essay proceeded to compare the current iteration of the Supreme Court to Trump’s incessant assaults on democratic norms– assaults that the January 6th Committee hearings are meticulously documenting.

As we are being painfully reminded in the Jan. 6 hearings, that assault over time undermined and weakened the executive branch and Americans’ faith in it. Alito and the five justices who joined with him are sending the Supreme Court down that same slippery slope.

The authors make a point that I have made repeatedly in the wake of this deeply dishonest decision–it didn’t just take aim at abortion. It was a point that Justice Thomas acknowledged in his concurrence:

“in future cases, we should reconsider all of this Court’s substantive due process precedents, including Griswold, Lawrence, and Obergefell.” Americans’ right to contraception, to make consensual choices in the bedroom and to same-sex marriage are all up for grabs. How long before states are also free to re-criminalize premarital sex and interracial relationships?

There are other parallels: Trump was shameless, and the authors point out that–like Trump–Alito displays absolutely no embarrassment about the rampant dishonesty of his opinion, dishonesty that was necessary in order to reach a result he personally favored. Nor does this Court care about the social consequences of a predictably divisive opinion. Alito wrote “We cannot allow our decisions to be affected by any extraneous influences such as concern about the public’s reaction to our work.”

Of course, concern about public reaction is one reason for the doctrine of stare decisis, which aims to avoid abruptly upsetting long-settled rules and expectations. Intensifying social divisions was also a Trumpian trademark, and as the authors note, “this opinion smacks of a similar approach.”

It’s hard to disagree with the authors’ conclusion that this decision–one of this term’s string of shocking and damaging departures from settled jurisprudence– will decimate  what is left of the legitimacy of the Supreme Court.

Although it was news to Alabama’s current Senator, the U.S. has three branches of government. Unfortunately, none are currently functional.

We have a gridlocked Congress, immobilized by lawmakers putting fealty  to party over loyalty to country; an Executive whose agenda is obstructed by that Congress; and now, a rogue Court disdained and distrusted by a majority of citizens.

That’s a description of a failed state.

No wonder the language employed by Brookings these days is less restrained.

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