The War on Poverty: Part I

The War on Poverty turns 50 this year, and the numbers suggest that the half-century long, multi-trillion dollar experiment has produced at best mixed results. For instance, child poverty fell slightly from 22% to 19%. The overall poverty rate also fell slightly from 19% to 16%. These gains are certainly encouraging. But considering the massive cost and the extended timescale, our progress has been startlingly small.

Moreover, these numbers (using the new Supplemental Poverty Measure) are inclusive of government benefits. So if you thought these numbers meant that the War on Poverty had succeeded in lifting 3% of Americans out of poverty and into a self-sufficiency, you’re in for a big disappointment. In fact, as even the left-leaning Center for Budget and Policy Priorities admits, “If government benefits are excluded, today’s poverty rate would be 29 percent.” When the War on Poverty began, the rate was 19 percent (see Table B-1, p. 56). Thus, we have seen a 10% increase in people who cannot support themselves without government aid. Does that seem like success?

Metrics

Many will indeed tout the 3% decline inclusive of government aid as a small success. However, even if we assume that 1) the 3% decline was directly caused by the War on Poverty and 2) that it was worth the multi-trillion dollar cost (both far from clear), holding this view requires us to accept an overly-narrow metric for success – that meeting temporary needs trumps long-term results.

Meeting temporary needs has significant value. Having volunteered at numerous shelters, I’ve witnessed first-hand the benefits that a hot meal and a roof over your head can provide. Programs like public housing and food stamps provide similar benefits to millions of needy families. But from a policy standpoint, we should judge the effectiveness of our programs by their long-term results. And as we saw above, America now has both a higher absolute number and a higher percentage of non self-sufficient poor than we had 50 years ago. Any metric that touts this result as “success” is fundamentally flawed. Rather, the metric for success should be whether we are moving the poor towards self-sufficiency and sustainability – whether we help them break the cycles of poverty in which they are too often trapped. If we care about the poor becoming self-sustaining and actually escaping their poverty, then it appears we have failed.

Our apparent failure begs the question: is our society becoming more and more poverty prone, such that the War on Poverty cannot keep up, or do some aspects of the War itself play a role in perpetuating cycles of poverty for our most vulnerable citizens? As I’ll discuss in Part II of this series, we need to examine the possibility that the poor are actually responding quite rationally to the incentives they are given – and that the incentive structure we have created is profoundly broken.

Taking the Country Hostage: The Government Shutdown

I have a visceral, negative reaction to the notion of the United States being “held hostage” by one party or another. Intuitively, it feels wrong for one party in one half of one branch of our government to shut down the whole operation. And at first, it seemed like we could lay the blame at the feet of a single party: the Republicans, and their insistence on repealing Obamacare. While there are many rational reasons to dislike Obamacare (as my last article highlighted), holding endless symbolic votes to repeal it is an exercise in futility. And yet, for a lengthy interval, it seemed as though Republicans were infinitely committed to this single issue, wasting everyone’s time and their own limited political capital in the process.

Sounds about right. What changed?
The conversation changed. As symbolized by Paul Ryan’s op-ed in the Wall Street Journal, some folks in the GOP started to wake up – they realized there were bigger issues facing the country than repealing Obamacare. As a result, Republicans essentially gave in to all of Obama’s demands – they agreed to fund Obamacare, agreed to an increase in the debt ceiling, agreed to reopen the government through December 15th, and they even agreed to reverse many spending cuts from the sequester.

In exchange, they asked Obama for the following: (1) Forget about the ACA’s unpopular medical device tax (something he admitted last Friday was not central to Obamacare and which 79 members of the Democratic-led Senate have already voted to repeal), and (2) Promise to hold future talks with Republicans about debt reduction, with no binding commitments whatsoever to take action on the issue. Obama said no.

The same week, House Republicans offered to raise the debt ceiling for six weeks with no strings attached. Obama said no.

Of course he said no. That isn’t what he wanted!
True, Obama would like the timeline for both issues (the shutdown and the debt limit) to be longer. As he stated, “It wouldn’t be wise, as some suggest, to just kick the debt ceiling can down the road.” The problem is that, in raising the debt ceiling without tax and entitlement reform, America is simply kicking a different can down the road: the debt itself.

Sure, we will eventually have to deal with the debt. But that’s a long way off.
Hardly. The government’s own Congressional Budget Office states that, if current laws remain in place, “The gap between federal spending and revenues would widen steadily after 2015.” The CBO ultimately calls our current situation “unsustainable.” Is 2015 so far away?

Before, the shutdown was about repealing Obamacare. This focus went against public opinion, had been tried numerous times with no success, and undid many positive effects of the law. Now, although the Republican Party remains divided, the part that is focused on more broad, fundamental, and structural challenges seems to be coming to the fore. And while it may not justify the government shut down, it is a vastly more important issue and an encouraging measure of just how far Republicans have shifted their negotiating position since the shutdown began.

So let’s revisit the situation at present: What is going on here, and who is taking the country hostage? In answering the following questions, we will attempt to find out.

Is it wrong for Republicans to oppose a debt limit increase?
Well, Obama didn’t think so. When asked about the debt limit in 2006, he stated:

The fact that we are here today to debate raising America’s debt limit is a sign of leadership failure. Increasing America’s debt weakens us domestically and internationally. Leadership means that ‘the buck stops here.’ Instead, Washington is shifting the burden of bad choices today onto the backs of our children and grandchildren. America has a debt problem and a failure of leadership. Americans deserve better. I therefore intend to oppose the effort to increase America’s debt limit.

Many in the GOP likely feel that they couldn’t have put it better themselves. But as he has recently made abundantly clear, Obama has since reversed his position.

It is, of course, foolish and damaging to default on our debt. But perhaps it is just as foolish to insist that we raise the debt ceiling while taking no action to combat the reason we have to keep raising it. Even liberal blogger Ezra Klein has stated that there is “a logic to the position that ‘we won’t let the government borrow more to pay its bills unless it comes up with a plan to spend less in the future.'”

Is it wrong for Republicans to support a government shutdown?
Generally, the consequences  of a shutdown are negative. People are off work, and it is likely a drag on our still-weak economy. Many people are upset, and blame Republicans. Harry Reid echoes this sentiment, stating:

What right do they have to pick and choose which part of government is going to be funded? It’s obvious what’s going on here. You talk about reckless and irresponsible, wow.

Some would argue that picking which part of government gets funding is exactly what Congress is supposed to do. As House.gov explains it, “Congress—and in particular, the House of Representatives—is invested with the ‘power of the purse,’ the ability to tax and spend public money for the national government.” The GOP holds the majority in the House of Representatives, so obviously they have some say in the government’s financial situation. The House has no obligation to pass a bill with “no partisan strings attached,” as Obama has demanded.

The House does have an obligation to work towards a solution. But this obligation cuts both ways. That is how we solved the eight government shutdowns in the Reagan years: the parties negotiated with one another. And in the last week, we have seen a House that is willing to negotiate and a President that is not.

What are the Republicans doing wrong?
The GOP has an obligation to hold a vote on a clean funding bill. This would send a clear message that the current power struggle is about ideas, not procedural tactics. If they do not have the votes, then so be it.

I also have a problem with refusing to fund things that you actually do support in an effort to force the other side to capitulate. This is extortionate, and it is dishonorable. However, I think that it is a mistake to assume that Republicans are the only side guilty of this practice.

Remember that quote from Harry Reid? He said it when asked why he opposed a GOP proposal to restore funding for sick children undergoing clinical trials at the NIH. Reid wants sick kids to get well just as much as anyone else. So why oppose something he actually supports? He is making a political point. Using human lives to make a political point is wrong, on either side of the aisle.

During the shutdown, the federal government is only spending 17% less than it would normally be.  The administration has to cut 17%, and they choose defunding last-chance experimental treatment for kids with cancer?

That’s a terrible story. But surely it’s an isolated example.
Unfortunately, it is just one of many painful and arbitrary cuts Democrats have decided to make. Things like blacking out the Amber Alert website (while leaving Michelle’s “Let’s Move” site up and running), setting up traffic cones to prevent people from pulling over to the side of the road to see Mt. Rushmore, throwing old people out of their private home, sending out patrols to close the ocean, and taking down White House visitor logs showing 155 visits by the IRS official who headed the scandal-ridden tax exempt organizations office (for the record, she now runs the office overseeing Obamacare implementation).

But I forget myself – we were discussing cuts. All of the above actually required the government to spend money and manpower.

As this kind of conduct continues to emerge, it strongly suggests that Obama and the Democrats are not committed to working towards a solution: they are being vindictive. The spirit of the shutdown can be summed up by this statement from a park ranger: “We’ve been told to make life as difficult for people as we can.” In a government designed to serve the people, that should never be the case.

What’s the takeaway?
To the (still significant) extent that factions in the GOP continue to obsess over repealing Obamacare, they are in the wrong. This defies popular opinion and is not rationally related to authorizing continuing government borrowing and spending. These Republicans could be justly said to be “holding the country hostage.”

On the other hand, the issue now being put forward – controlling government spending – is very obviously related to authorizing additional government borrowing and spending. Moreover, popular opinion is against the Democrats on this issue: 53% of voters want major spending cuts as part of any debt ceiling deal. To the extent that this is the issue under consideration, Obama has an obligation to acknowledge that the House has a say in funding the government.  Demanding money with “no partisan strings” from your opponents who hold the purse strings no longer makes any sense. It is time for Obama to negotiate.

The Obama Mandate

Reasons you have been told to like Obamacare:

  1. Obama won the last election, he has a mandate to fulfill his vision.
  2. People love it.
  3. It will save the average family money – $2500 per family, per year.
  4. The law is well thought out.

Reasons you should not like Obamacare:

  1. Be careful what you call a mandate. When someone wins an election, it does not mean that he or she now has an explicit mandate to enact every single policy they support. And we only have to look back one president to understand why. Faced with plummeting approval ratings a year after his reelection, few liberals would argue that George W. Bush had a second-term mandate for much of anything.  And yet, a year before, he had won the presidency by a similar percentage of the popular vote as Obama (four-tenths of a percent less), becoming the first president in forty years to win reelection while gaining seats for his party in both the House and the Senate, and realizing proportionately larger gains in Congress relative to Obama. President Obama’s reelection victory, like Bush’s before him, is not itself a sufficient condition to declare a mandate. True, Obamacare was a major issue in the 2012 election. However, that’s still a long way from translating a binary election result into a mandate on a specific policy.
  2. People do not love it. According to the current average of all polls on Real Clear Politics, 39.4% of people favor the law, while 51.4% oppose it.
    • Excuse #1: Partisan opposition and public ignorance are to blame for the bad poll numbers. When you use the term “Affordable Care Act,” opposition drops from 46% to 37%.  Answer: True, but misleading. Support also drops from 29% to a meager 22% when this term is substituted. And 22% approval does not a mandate make.
    • Excuse #2: Lots of respondents who answer that they “oppose” the law actually aren’t opposed, they just think that the law doesn’t go far enough. Answer: Mostly false. Polls show those who oppose the healthcare law because it “didn’t go far enough” are between 8% and 11%. Regardless of whether you would call this “a lot,” the point is that they oppose the law. Some media outlets have attempted to lump this group in with the pro-Obamacare crowd by claiming that they are de facto supporters. They are not. The logic used to arrive at this conclusion is absurd. Would civil rights activists have been “opposed” to Lincoln’s Emancipation Proclamation because it did not “go far enough?” Should activists have “opposed” women’s suffrage because they still hadn’t closed the gender pay gap? No, because rational people support necessary and positive steps that move them towards a worthy goal. And it looks like Obamacare failed to live up to that standard.
  3. It will not save you money. At least, not if you’re a typical American family. Despite being promised at least a $200 billion annual reduction in expenditures and a $2500 per family, per year decrease in premiums, the administration’s own actuaries now predict the ACA will cause an increase in spending of $621 billion over the next decade. As a percentage of national healthcare spending, that’s actually nothing to be upset over. What is upsetting, however, is how it’s been sold to us: how many fewer people would have supported the law if you told them that, rather than the endlessly-parroted $2500 in annual savings, the ACA was far more likely to increase their premiums? While it depends a great deal on where you live, calculations using HHS data reveal that premiums will go up an average of 97%-99% for young men and 55%-62% for young women who purchase coverage on their own.
  4. The law is well-intentioned, but poorly executed. Let’s start with the good stuff, because many parts of the law represent positive changes: coverage of preexisting conditions, allowing young people to stay on their parents’ insurance until age 26, removing annual and lifetime coverage limits, and closing the Medicare “doughnut hole.” In light of these positives, and recognizing that Republicans have tried a ton of times to repeal  it and failed, it is time for Republicans to give up that fight. And yet, there are many serious flaws that both parties should work together to fix, namely:
    • The employer mandate forces HUGE changes in the way businesses hire employees, creating a bias towards part-time work.  For instance, in the first six months of this year, 97% of net job creation was part time work. Keith Hall, the guy who ran the U.S. Bureau of Labor and Statistics until last year, said of his own agency’s numbers, “I’m not sure that has ever happened over six months before.”
    • If you think the above is a coincidence, consider the following report [pdf and selected chart]:
      • 20% of small businesses surveyed “have or plan to reduce hiring to get/stay under the 50 employee ACA threshold.”
      • 15% of medium to large businesses and 20% of small businesses “have or plan to adjust hours so fewer employees qualify for full-time employee medical insurance requirement.”
      • 17% of small businesses “have or plan to reduce workforce due to costs directly associated with the ACA.”
    • Even among businesses that are not firing or refusing to hire people due to the ACA, the law will increase costs and frequently cause them to drop their employees’ insurance coverage.
      • The ACA will be cost-positive or neutral for only 12% of businesses, with 88% of businesses reporting increased costs “directly associated with the ACA,” and 41% reporting an increase of 5% or more.
      • According to McKinsey & Company, “30 percent of employers will definitely or probably stop offering employer-sponsored insurance in the years after 2014. Among employers with a high awareness of reform, this proportion increases to more than 50 percent.”
    • Obamacare is neither good capitalism nor good socialism. Wherever you fall on the ideological spectrum, unless you are a simple party loyalist, you probably are not very happy.
      • For the free marketeers – sure, it fits the caricature of capitalism: huge corporations stand to make a ton of money, and the bill was designed, drafted, and implemented by an executive of the largest health insurance company in the nation, so some folks stand to get rich. But when you look past the profits, forcing people to buy things is hardly a “free market” approach.
      • For the left-leaners, specifically those who favor a single-payer system, I have yet to see anyone clearly articulate how Obamacare moves the country in that direction. Is giving tens of millions of new customers and countless billions to giant insurance companies somehow putting us closer to a public option? Is increasing the power of Big Pharma now going to make it easier for politicians to ignore their influence later? Further, imagine all the righteous indignation you would feel if Republicans had passed a healthcare law that funneled billions of public dollars into the coffers of massive corporations. Then ask yourself – how is this any different?

Now, none of this means that Republicans are justified in shutting down the government. Heck, the Syrian government is still paying its employees. Neither does it mean that the GOP should hold even more votes on repealing Obamacare. But it does mean that Democrats do not have a mandate to ignore public input and criticism as we continue to learn more about a very complicated law.

Gender Discrimination at Harvard Law School

For my next post, I thought I would discuss a recent video by the Harvard Women’s Law Association. The video alleges systemic gender disparities at Harvard Law School. As a current student of Professor Lani Guinier, who features in the video, I found the topic especially interesting.

The video points out that a lower percentage of women graduate with all levels of Latin honors, and that only 20% of the law review class of 2012 is female. This, according to disparate impact theory, is evidence of discrimination and a potentially toxic environment at HLS.

One of the main recipients of the vitriol of the Women’s Law Association is the Socratic method. The video especially singled out this teaching style as something that is “keeping women down” because it is “competition-based and individualistic.” Moreover, they claim it contributes to “a learning style and a teaching style that is male-centric.”

While I agree that the Socratic method is nearly useless as a learning tool, I think it’s important to point out that it has nothing to do with grades. You see, law school exams at Harvard are blind-graded. This means that when the professor grades an exam, he or she has no idea which student’s exam they are grading. Consequently, your responses to in-class Socratic questioning have nothing to do with your grade. So, for those classes with blind-graded exams (that is, the majority of law school classes), I have difficulty seeing any merit to the argument here.

In other classes, students write papers, and participation counts. In these instances, the professor knows who the writer is. However, in these classes, professors do not utilize the Socratic method. While there are exceptions to every rule, neither I nor any of my colleagues at HLS were able to come up with any counterexamples from our own experiences here.

Despite the fact that there is no demonstrated correlation between grades, Latin honors, and the Socratic method, the notion that the Socratic method is “keeping women down” is becoming accepted dogma even at the highest levels. When Justice Ruth Bader Ginsburg came to speak to our class this February, she and Professor Guinier discussed the need to “never call on the first person who raises their hand” because, they said, women are less likely to speak up in class than men. Justice Ginsburg, in explaining why she thought the policy was necessary, said, “Women think before they speak.” The implication, of course, was that men do not.

I believe that Justice Ginsburg meant the remark as a joke. However, I was still floored by her incredibly sexist response. I imagined Justice Scalia coming to Harvard and saying the inverse (“Men think before they speak.”) and the hell that would have broken loose. Instead, there was polite laughter.

Just like I don’t think it’s productive to blame the Socratic method without a clear link between the Socratic method and academic performance, I also don’t think it’s productive to stereotype men and women into gender roles in this way.  As a man, I feel like I don’t have a place in the discussion, even though I too find that the Socratic method leaves a lot to be desired.

What We Need

I think the Women’s Law Association is right to want to look into the issue. They’re on the right track: something about law school isn’t working. And there may well be discrimination against women at HLS.  But I think any progress on the issue is hindered by pointing to factors like the Socratic method without first establishing a clear causal link.

One potential causal factor that should be explored: even with blind grading, a professor could still potentially guess the gender of his or her students by reading their exam. Using relatively simple algorithms, it is possible for a website to guess your gender with decent accuracy based only on a writing sample. The algorithms ignore what some would typically consider “male” and “female” subject matter, and instead focus almost exclusively on differences in pronoun usage. Similarly, it seems plausible that a law professor could intuit a student’s gender by reading their exam, opening up the door for discrimination.

What would be interesting is some data. First, how do female professors grade female students? If women consistently do better in courses taught by women, then this strengthens the case for the alleged discriminatory grading. Similarly, how do women on Law Review grade female law review applicants? How many women applied to be on Law Review? (The video claimed that women were less likely to “throw their hats into the rink as often.”) Consistent with that theory, a 1997 survey by the Harvard Law Review found that fewer women than men applied to the organization, and that  “women and men who actually applied to be on Law Review were admitted at equal rates.”

An alternative question: Should we be upset about the opposite scenario? That is, if women were getting more honors than men, would this be evidence of discrimination against males? Well, that is the situation at Harvard College, UCLA and Washington University Law School, just to name a few. But I haven’t seen any videos about it.

Budget “Cuts”

For my inaugural post, I thought I’d discuss this NYT article, “Obama Budget to Include Cuts to Programs in Hopes of Deal” by Jackie Calmes.

In the article, the NYT has Obama proposing “cuts” to Social Security / Medicare. However, these aren’t cuts at all, but a mere .2% reduction in the rate that spending INCREASES. For example, these “cuts” would have Social Security growing 5.9% over the next decade, rather than 6.1% (source). Don’t get me wrong, I think it’s a good idea. But when your country is running record deficits every year, has a debt-to-GDP ratio of 1:1, and a 5.9% increase is called a “cut,” you start to wonder a little.

In return, Obama asks for more tax increases. Three months since last tax increase = too long, apparently. Calmes claims that January’s tax increases were levied on “wealthy individuals” and “the affluent.” However, HuffPo reported that the deal raised taxes on a full 77% of American households. For context, a worker earning $50k now pays another $1k in taxes, relative to 2012. Don’t terms like “wealthy” and “affluent” lose their meaning when they’re applied to more than 3/4 of Americans?

Obama deserves applause for proposing a change to a more realistic measure of inflation, the chained C.P.I. Apparently, however, some Democrats are “infuriated” that entitlements might not continue to grow faster than actual inflation. Kudos to the prez on this one.

The president is also proposing spending increases for helping states give free pre-k education. I would hope these programs aren’t modeled after the failed Head Start program, on which we continue to waste billions despite the administration’s own Health and Human Services study confirming its inefficacy. It’s too bad he couldn’t spend it on a program that actually worked, like this one that he cut funding for while he delayed release of a Department of Education study showing that it workedIt’s disappointing to see the administration miss this chance for data-driven policy.