Thursday, December 16, 2010

Boehner's Tears and His Actions

Timothy Egan, over at The New York Times has a great post up talking about John Boehner's teary-eyed profile on 60 minutes. Beyond the double-standard that would have disallowed Nancy Pelosi to withstand a sob-fest when she became Speaker of the House, there is also the question of why John Boehner cries so much:

"'Making sure these kids have a shot at the American dream like I did is very important,' [Boehner] said, choking up."

Egan then does a great job of listing all the things that are designed to help people have a shot at the American dream, but that John Boehner has voted against. Time and again Boehner's actions, his votes, have been obstacles to people achieving something greater.

To me, this is the great challenge to America in the 21st century. The slow erosion of social safety nets and the lock-step aversion of the Republican party to consider new social safety nets will allow the rate of disparity to continue apace.

I doubt John Boehner will cry when presented with the statistics that show a consolidation of wealth at the highest tiers of earners. It's easier to get teary-eyed at the abstraction of the American dream, then to dry your eyes and help make it a reality for people.

UPDATED: h/t to Matt Yglesias for pointing out this peice in The New York Times by David Leonhardt. Mr. Leonhardt makes a point I couldn't quite put to words and does so eloquently:

It's easy to look at the current debate and see an unavoidable trade-off between this country's two economic traditions - risk-taking and security. but I don't think that's quite right. I think it is ultimately as misplaced as those worries about Social Security and Medicare equaling Bolshevism.

Guaranteeing people a decent retirement and decent health care does more then smooth out the rough edges of capitalism. Those guarantees give people the freedom to take risks. If you know that professional failure won't leave you penniless and won't prevent your child form receiving needed medical care, you can leave the comfort of a large corporation and take a chance on your own idea. You can take a shot at becoming the next great American entrepreneur.

To me, this is precisely why we need social safety nets. In most policy debates we are given this false choice between individual ingenuity and government coddling. Leonhardt hits on the point quite nicely that some sort of economic backstop can free people to take the big swings and aim for the fences.

18 comments:

Colin said...

Well yes, if you define terms where big government means compassion for the poor, then Boehner doesn't care about the poor. And, apparently, neither do I. Such a position is intellectually dishonest, and almost beneath contempt.

I yield to no one in my compassion for the less fortunate, and the very reason I hold the beliefs I do is because I think thier implementation would benefit the poor. There is no greater force for improving the status of the poor than free markets, as has been demonsrated over and over in recent decades around the world. The implication that my philosophy is anti-poor is sickening.

But I'll indulge Egan's column, if only because it is so ridiculous and easily refuted. Some points:

* With regard to his contention that high medical bills knocks people out of the middle class, I question how big of a problem this is, with only 2.4% of families reporting any medical debt in 2007. But even if I accept the premise, I would still blame the government for the sky-high medical bills we find, which are a direct result of our overreliance on insurance that is promoted by the tax code and the advent of Medicare/aid. I can expand on this if you'd like.

As for credit cards, perhaps Egan prefers that the poor had no access to credit cards at all? Because really that is the only alternative. Credit cards charge interest rates commensurate with risk, and if they can't charge high rates for customers with high risk they have to exit the business.

* Egan notes that half of Americans don't pay any income tax, but so what? Does he think they would be better off if they did pay tax? After all, the reason so many don't pay taxes is due to tax cuts under Bush, with the percentage of zero tax liability households back in 2002 at 25%, and then spiking to 35% after the tax cuts were passed.

* Yes, Boehner voted for major free trade agreements, which are regarded literally by 93% of economists as a good thing. Trade does not result in job gains or losses but a shift in employment composition towards higher paid jobs. The best way to help people displaced by work, meanwhile, is not a government handout but a vibrant economy, which government expansion does not help.

* Boehner's vote against S-CHIP should be applauded.

* The minimum wage serves to price people, almost invariably marginal workers, out of employment. This is econ 101. If you raise the cost of something, in this case labor, you get less of it. How that helps the poor I have no idea. This is a classic example of something that makes the left feel good about themselves while actually harming those it is intended to help. Glad that Boehner voted against it.

* As for FDA drugs, this is admittedly a more difficult call. On the one hand, drug companies needs profits to continue the flow of new drugs. On the other hand they are screwing themselves by signing cheap drug deals with foreign countries and disproportionately relying upon the USA as their profit center.

* When did handing out corporate welfare and saving GM become compassion for the working stiff? Should any company about to go bankrupt be bailed out? What is the standard? I can't get over the leftist incoherence that rages at corporations and then opens the checkbook when they are in distress.

Colin said...

* With regard to Egan's grandmother being saved by Medicare, that is a sad commentary on Egan. Am I to presume that absent Medicare his family would have consigned the grandmother to some horrible existence and/or untimely death? Maybe that is why the left favors these government programs, because they think that everyone else is as cold hearted as themselves.

* Lastly, I really wish the left would engage in some introspection every once in a while. Welfare, public housing and public schools have all served the poor terribly, yet the left only sees the problem as insufficient funding and/or power. Virtually every thing they have ever done with the ostensible goal of helping the poor has backfired. Yet this deters them not at all.

Colin said...

Well, it seems the first part of my post disappeared. Short version:

Egan's column is a joke. It only works if you first define big goveernment as compassion for the poor. If you are against big government and government programs, then you are by definition anti-poor. This is insulting and intellectually dishonest.

Nevertheless, I will indulge Egan's rant, if only because it is so ridiculous.

* With regard to half of households not paying income tax, what is Egan's point? Would they be better served if they paid more tax? After all, one big reason so few pay tax is due to the Bush tax cuts, with the percentage of zero liability tax households spiking from 25% to 35%.

* Egan decries Boehner's votes for free trade, but literally 93% of economists agree that free trade is a good thing. It promotes better paying jobs, which last I checked is also good. The best means of helping those displaced, meanwhile, is through a vibrant economy, which government programs do nothing to promote.

* The minimum wage only serves to raise the cost of employment and price marginal workers out of the labor market. This is econ 101. It's a classic example of the left promoting policies that make them feel good about helping the poor while actually hurting them.

* Why is the bailout of GM applauded? Because it helped working stiffs? Is that the new standard? Should every company in danger of bankruptcy be bailed out? It is utterly incoherent of the left to rage at corporations and then open the checkbook for them when the going gets tough.

* In 2007 less than 3% of households reported any medical debt, so I have a hard time thinking this plays a big role in knocking people out of the middle class. Even so, the problem of high bills can be attributed to the overreliance on insurance and the rise of Medicare/aid that the left has promoted. As for crdit cards, what would Egan prefer -- no access to credit cards? After all, high interest is needed to compensate for the high risk -- welcome to the real world.

* As for S-Chip, I defer to Michael Cannon.

Jason said...

- Absent Medicare, I would expect his family would have stepped in to support her, as many families do. However, that puts a burden on the family, which could stifle innovation and entrepreneurship. I would imagine a poorer family may have been required to consign their grandmother to a horrible existence because they were barely making enough to meet their needs, let alone adding an elderly woman to the mix in need of healthcare. Quite the contrary, people on the left want society to be less cold-hearted in conjunction with individual commitments. Again, you present a false choice.

- These programs have all backfired? Providing people with homes, with education backfires? It is not a perfect system, to be sure, but in the absence of public schools, who would educate poor children? In the absence of public housing, where would the poorest people live? You're a big fan of choice, and yet you argue for the elimination of one of those choices and provide only the promise that the markets will provide.

Colin said...

To me, this is precisely why we need social safety nets. In most policy debates we are given this false choice between individual ingenuity and government coddling. Leonhardt hits on the point quite nicely that some sort of economic backstop can free people to take the big swings and aim for the fences.

Interesting theory. If this is true, it should mean that Europe, with what is usually acknowledged as a more comprehensive social safety net, should be more entrepreneurial than the US, where people live in fear.

Except that isn't true, as this graphic shows. Entrepreneurial activity in the US is estimated at 11.3% of GDP. Among the European countries the highest I can see is France at 6%. More evidence which casts doubt on this theory can be found here.

Furthermore, this talk of Medicare and Social Security guaranteeing someone a decent retirement and health care makes me wonder if Leonhardt has any inkling about the fiscal futures of both programs, as both are well on the road to ruin. I can only wonder how much richer this country would be if people could keep the money that goes to Medicare and SS and invest it for their own health care and retirements.

Jason said...

Another false choice. We must be have our current American model or the European model, so you say. Casual causal relationships belie a more complex issue.

The counter point could be posited, if social safety nets and government programs truly smother entrepreneurship, then how is it France, with a much derided social welfare system, has the second highest percentage of GDP from entrepreneurs at 6%?

As to Medicare and Social Security, that the future is a concern, does not discount their successes in the past. Nor does it suggest the solution is to abandon the programs.

As this study shows, how the individual does after years of saving really depends on when they retire.

Colin said...

Absent Medicare, I would expect his family would have stepped in to support her, as many families do. However, that puts a burden on the family, which could stifle innovation and entrepreneurship.

This doesn't make sense. Someone has to pay for the grandmother. If it isn't his family it has to be someone else's. The piper must be paid. How does imposing new taxes promote entrepreneurship and innovation?

I would imagine a poorer family may have been required to consign their grandmother to a horrible existence because they were barely making enough to meet their needs, let alone adding an elderly woman to the mix in need of healthcare.

Then you presume that people are too greedy to contribute to charities for people in such situations and must be compelled by government to provide for the less fortunate. That's a very pessimistic view of people.

These programs have all backfired? Providing people with homes, with education backfires?

Well, yes. Public housing has been a disaster. Do you think that the poor were well-served by placing them in urban hellholes such as Carbrini-Green (which, praise be to Allah, had its final resident moved out last week), which has become synonymous with all sorts of social disorder? How is that compassion? Shouldn't the goal be to make housing as affordable as possible? And yet the government typically serves to raise housing prices through land-use regulations (height restriction here in DC for example) and an explicit policy of trying to ensure that homeowners don't suffer a loss in the value of their housing. Completely ridiculous.

It is not a perfect system, to be sure, but in the absence of public schools, who would educate poor children?

Not a perfect system is an understatement. Absent public education I imagine parents would send their kids to private schools, as is done in much of the third world. If parents there strive to educate their children, why wouldn't parents here in a much wealthier country do the same? Again, this seems to take a dim view of people.

At the very least we could move to a voucher model for education. After all, parents do not feed their children at government-run grocery stores or clothe them from government-run clothing stores, why should they rely upon government-run schools to educate them? And yet the left typically fights against education vouchers tooth and nail.

You're a big fan of choice, and yet you argue for the elimination of one of those choices and provide only the promise that the markets will provide.

Why wouldn't I? The market provides cheap goods everywhere else. This, in a nutshell, is the case for limited government: the government tends to do things quite badly while the market tends to do things quite well. Given that reality, why wouldn't you want the government as small as possible and the market given as much room to operate as possible?

Colin said...

The counter point could be posited, if social safety nets and government programs truly smother entrepreneurship, then how is it France, with a much derided social welfare system, has the second highest percentage of GDP from entrepreneurs at 6%?

How is that a counter-point??? If I argue that social safety smothers entrepreneurship, and France has an entrepreneurship rate nearly half that of the US, that would quite obviously seem to support my argument!

As to Medicare and Social Security, that the future is a concern, does not discount their successes in the past. Nor does it suggest the solution is to abandon the programs.

What are their past successes?

As this study shows, how the individual does after years of saving really depends on when they retire.

What are you getting at?

Colin said...

Jaysus, it seems my original response has disappeared again. To summarize:

Egan's column is a joke, that is both insulting and intellectually dishonest. He simply defines compassion for the poor as support for big government. If you are against the big government agenda then you don't support the poor. Nevertheless, I'll indulge his rant if only becuase it is so ridiculous. Some points:

* He slams Boehner's votes for free trade, and yet literally 93% of economists agree that free trade is a good thing that helps to boost wages. The best help for those displaced by trade, meanwhile, is a robust economy, which government programs do nothing to promote.

* The minimum wage is a device that artificially raises the cost of employment and prices it out of the labor market. Those most affected tend to be marginal workers such as the poor. Really, that is econ 101. It is simply a way for the left to feel good about helping the poor when really they have harmed them.

* In 2007 less than 3% of families reported medical debt, so I have a hard time believing this is a leading cause of families being knocked out of the middle class. But even if I accept the premise, the most obvious culprit for high medical costs are the third payer problem which has been fueled by the tax code and Medicare/aid. I am happy to expand upon this if you like.

* As for half of all incomes not paying tax, what is his point? Would they be better served if they did pay taxes? And let's remember that this is partly due to the Bush tax cuts, with the number of zero tax liability households spiking from 25% to 35% after the 2003 tax cuts.

* Why is the bailout for GM being applauded? Is it because they employ working stiffs? Does every corporation on the verge of bankruptcy deserve a bailout? What are the rules? And its utterly incoherent that the left rages at corporations and then opens the checkbook when they hit the skids.

Jason said...

- Without safety nets like Medicare or Social Security no one has to pay.

- This article in The New York Times would suggest people aren't as charitable as you think they are.

- What happens if you can't afford private education? What happens if you don't make enough money to buy a home or pay rent? You don't have an answer to these questions. By the way "Charities" are not an answer. It's a dodge, leaving poor people beholden to the whims of rich people's generosity.

Colin said...

Without safety nets like Medicare or Social Security no one has to pay.

I don't understand what this means or what you are getting at.

This article in The New York Times would suggest people aren't as charitable as you think they are.

No, it simply says that those making over $75K give less as a percentage of income than those making under $25K. I can think of at least two possible reasons for this:

* Upper income earners also pay higher taxes, so they also probably feel they have done their bit for helping the poor. Indeed, one of the most pernicious effects of the welfare state is that it helps sever the connection between people and the less fortunate by making them think that their taxes are de facto charitable contributions and no more action on their part is required. This would explain why Europeans, who typically face higher taxes than Americans and have larger welfare states, donate far less to charity than Americans.

* Upper income earners may also be more likely to be left wing (I read the other week that the only demographic among which Obama's approval rating has not declined since inauguration is among grad school holders). Leftists are also pretty cheap when it comes to charitable donations (Joe Biden is a notorious example, only donating 1.44% of his salary to charity in 2009).

What happens if you can't afford private education? What happens if you don't make enough money to buy a home or pay rent? You don't have an answer to these questions. By the way "Charities" are not an answer. It's a dodge, leaving poor people beholden to the whims of rich people's generosity.

First off, saying that charities is a dodge doesn't make it so. Second, since when are the rich the only people that donate to charities? Third, if you cant pay rent, I would suggest moving in with a family member. People do it all the time.

I would also note that the left bears much responsibility for the lack of affordable housing through their crusades for rent control -- which as some economists have noted is the best way of destroying a city's housing stock short of aerial bombardment -- and a thicket of regulatory hurdles that raise the cost of housing construction.

As for private education, many private schools are cheaper than public schools (if you look at per pupil expenditures). Getting government out of the business of running schools would free up a lot of money to be spent on private education. There is also homeschooling -- indeed, these students regularly outperform their public school counterparts. Again, I would also note that some of the poorest people in the world pay for private education, so it stands to reason that this could also be accomplished in a much richer country such as our own.

Lastly, I have also noted that I am open to vouchers, which the left has fought against time and again.

Colin said...

Without safety nets like Medicare or Social Security no one has to pay.

I don't know what you are getting at here.

This article in The New York Times would suggest people aren't as charitable as you think they are.

The article simply shows that those making over $75K contribute less as a percentage of income than those under $25K. I can think of at least two explanations for this:

* Higher income earners also pay higher taxes, and may very well think that through their taxes to support the welfare state they have already done their bit for the poor. Indeed, this is the one of the most pernicious effects of the welfare state, which helps sever the connection between people and the less fortunate. This would also explain why Europeans, who have both higher taxes and more elaborate welfare states, donate much less to charity than Americans.

* It is also possible that people in higher income brackets are more likely to be leftists (indeed, I read the other week that the only demographic in which President Obama's support has not declined is grad degree holders, holding steady at around 62%). Liberals donate significantly less to charity than conservatives (google it -- both George Will and Nick Kristof has columns on this). Joe Biden is a notorious example, donating a mere 1.44% of his salary to charity last year.

What happens if you can't afford private education? What happens if you don't make enough money to buy a home or pay rent? You don't have an answer to these questions. By the way "Charities" are not an answer. It's a dodge, leaving poor people beholden to the whims of rich people's generosity.

First off, simply asserting that charities is a dodge does not make it so. Second, since when were the rich the only ones who donate to charity?

If you can't pay rent you can usually stay with a family member. People do it all the time.

The better means of avoiding this problem is promoting cheap and affordable housing, which means undoing leftist initiatives such as rent control -- which some economists have said is the most destructive force for a city's housing stock short of aerial bombardment -- and paring back the thicket of regulations that push up the price of construction.

As for private education, it often costs less than public school (if you look at per pupil expenditures). If government got out of the business of running schools it would free up a lot of cash for private school tuition. I have also noted that poor people in third world countries often have their children privately educated, so it stands to reason that if they can do it people in a much richer country such as our own can do it as well. Lastly, there is homeschooling, which might actually be a better option given how often homeschoolers outperform their public school counterparts.

Colin said...

Without safety nets like Medicare or Social Security no one has to pay.

I don't know what you are getting at here.

This article in The New York Times would suggest people aren't as charitable as you think they are.

The article simply shows that those making over $75K contribute less as a percentage of income than those under $25K. I can think of at least two explanations for this:

* Higher income earners also pay higher taxes, and may very well think that through their taxes to support the welfare state they have already done their bit for the poor. Indeed, this is the one of the most pernicious effects of the welfare state, which helps sever the connection between people and the less fortunate. This would also explain why Europeans, who have both higher taxes and more elaborate welfare states, donate much less to charity than Americans.

* It is also possible that people in higher income brackets are more likely to be leftists (indeed, I read the other week that the only demographic in which President Obama's support has not declined is grad degree holders, holding steady at around 62%). Liberals donate significantly less to charity than conservatives (google it -- both George Will and Nick Kristof has columns on this). Joe Biden is a notorious example, donating a mere 1.44% of his salary to charity last year.

What happens if you can't afford private education? What happens if you don't make enough money to buy a home or pay rent? You don't have an answer to these questions. By the way "Charities" are not an answer. It's a dodge, leaving poor people beholden to the whims of rich people's generosity.

First off, simply asserting that charities is a dodge does not make it so. Second, since when were the rich the only ones who donate to charity?

If you can't pay rent you can usually stay with a family member. People do it all the time.

The better means of avoiding this problem is promoting cheap and affordable housing, which means undoing leftist initiatives such as rent control -- which some economists have said is the most destructive force for a city's housing stock short of aerial bombardment -- and paring back the thicket of regulations that push up the price of construction.

As for private education, it often costs less than public school (if you look at per pupil expenditures). If government got out of the business of running schools it would free up a lot of cash for private school tuition. I have also noted that poor people in third world countries often have their children privately educated, so it stands to reason that if they can do it people in a much richer country such as our own can do it as well. Lastly, there is homeschooling, which might actually be a better option given how often homeschoolers outperform their public school counterparts.

Colin said...

Without safety nets like Medicare or Social Security no one has to pay.

I don't know what you are getting at here.

This article in The New York Times would suggest people aren't as charitable as you think they are.

The article simply shows that those making over $75K contribute less as a percentage of income than those under $25K. I can think of at least two explanations for this:

* Higher income earners also pay higher taxes, and may very well think that through their taxes to support the welfare state they have already done their bit for the poor. Indeed, this is the one of the most pernicious effects of the welfare state, which helps sever the connection between people and the less fortunate. This would also explain why Europeans, who have both higher taxes and more elaborate welfare states, donate much less to charity than Americans.

* It is also possible that people in higher income brackets are more likely to be leftists (indeed, I read the other week that the only demographic in which President Obama's support has not declined is grad degree holders, holding steady at around 62%). Liberals donate significantly less to charity than conservatives (google it -- both George Will and Nick Kristof have columns on this). Joe Biden is a notorious example, donating a mere 1.44% of his salary to charity last year.

What happens if you can't afford private education? What happens if you don't make enough money to buy a home or pay rent? You don't have an answer to these questions. By the way "Charities" are not an answer. It's a dodge, leaving poor people beholden to the whims of rich people's generosity.

First off, simply asserting that charities is a dodge does not make it so. Second, since when were the rich the only ones who donate to charity?

If you can't pay rent you can usually stay with a family member. People do it all the time.

The better means of avoiding this problem is promoting cheap and affordable housing, which means undoing leftist initiatives such as rent control -- which some economists have said is the most destructive force for a city's housing stock short of aerial bombardment -- and paring back the thicket of regulations that push up the price of construction.

As for private education, it often costs less than public school (if you look at per pupil expenditures). If government got out of the business of running schools it would free up a lot of cash for private school tuition. I have also noted that poor people in third world countries often have their children privately educated, so it stands to reason that if they can do it people in a much richer country such as our own can do it as well. Lastly, there is homeschooling, which might actually be a better option given how often homeschoolers outperform their public school counterparts.

Kyle said...

"If government got out of the business of running schools it would free up a lot of cash for private school tuition."

Are you saying that if we lowered property taxes and didn't pay anything into schools, that would free up enough money in people's wallets to send their kids to private schools? In 2000 the average cost of a private elementary education was $3,267 a year. Take for example my parents (own 40 acre farm). They pay around $1,500 a year in property taxes. Your figures just don't compute. Even if state aid and federal aid was completely cut and income and sales tax were lowered for those amounts it seems far from paying for their 2 kids to attend a private school.

Home schooling should be looked at as an alternative you say? Lots of parents can't even make ends meet with both parents working, and you want one of them to be forced to stay at home to educate their children.

Public schools are far from perfect, but I am proud of the education I received at mine and wouldn't have changed where I attended even if I could have afforded private school.

Colin said...

Yes, there is no doubt that for most people the amount paid in taxes in any one year is less than the amount spent by the government educating their children. However, it is not as though one ceases to pay taxes when one's children finish their K-12 education, or begins paying taxes when the children are first enrolled. Therefore the cost of education is best measured against a lifetime of paying taxes. If governments no longer operated schools -- where their performance is typically inferior to that of private counterparts -- it would pave the way for permanently lower taxes, and thus more money for tuition.

Instead of sending money to the government, which then returns it to me in the form of education, why don't we just cut out the middleman and have consumers spend it themselves?

Public schools are far from perfect, but I am proud of the education I received at mine and wouldn't have changed where I attended even if I could have afforded private school.

Far from perfect is an understandment for many public school children, particularly here in DC. Beyond a sub-par education, these children also face violence, with more than 900 911 calls reporting violent incidents at the addresses of D.C. public schools in the 2007-08 school year.

Maybe you wouldn't have changed schools if given the opportunity. Good for you. But not all of these kids go to schools they like -- shouldn't they have a choice?

The one area where school choice predominates in American education is college and grad school. Is it mere coincidence this is also the same area where the US excels?

Kyle said...

some school choice...poor people don't get to go to college and those students that do almost everyone requires some form of government assistance to do so....is that really the example you want to use since from reading your previous posts it is clear you are opposed to all forms of government assistance?

Colin said...

A few points about college education:

* Government tuition assistance programs serve to drive college costs higher. The more money we shovel at higher ed, the more costs increase. This is the same logic behind why home tax credits benefit the seller instead of the buyer, as it helps drive up prices (a $5K tax credit for everyone means prices can be raised by $5K). You can find more detail on this here.

* Not every college is super expensive, and at least one study has found that success correlates more with SAT scores than which college one attends:

They find that school selectivity, measured by the average SAT score of the students at a school, doesn't pay off in a higher income over time. "Students who attended more selective colleges do not earn more than other students who were accepted and rejected by comparable schools but attended less selective colleges," the researchers write. They also find that the average SAT score of the schools students applied to but did not attend is a much stronger predictor of students' subsequent income than the average SAT score of the school students actually attended. They call this finding the "Spielberg Model" because the famed movie producer applied to USC and UCLA film schools only to be rejected, and attended Cal State Long Beach. Evidently, students' motivation, ambition, and desire to learn have a much stronger effect on their subsequent success than the average academic ability of their classmates.

* College has become more of a credentialing exercise than the attainment of useful knowledge, and it is absurd that college degrees are now required for positions such as administrative assistants (which makes joining the labor market more difficult for the poor and pushes more people into college, thus driving costs). There is good reason to think that we can thank the Griggs v. Duke Power court case for that.

* If someone is poor, they can take out a loan to go to college. Scholarships also exist and many colleges offer need-based assistance.

* Again, instead of handing over money to the government via taxes and then having it given back to assist with tuition, why not get government out of the tuition business and lower taxes?

* Do you think higher education would be improved or worsened if colleges functioned in similar fashion to K-12, with 100% government funding and operation, tuition paid via taxes and students restricted to one college based on where their parents owned a home?