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By capitulating to progressive-union pressure, and despite disingenuous claims that no broad-based taxes were imposed, Ocean Staters will once again bear increased burdens to pay for new taxes and regulations, more spending, and more union giveaways. Lawmakers chose to appease, rather than resist, the progressives’ job-killing, big-spending agenda.

Expanding Big-Government Programs Increases Taxes

Well, this news isn’t exactly surprising:

On New Year’s Day, the state Temporary Disability Insurance tax rate will rise from 1.1% to 1.3% of pay, according to the state Department of Labor and Training. That means someone making $50,000 per year should expect to pay $650 in TDI tax next year compared with $550 this year.

The biggest reason is that Rhode Islanders are beginning to take advantage of a 2013 change in the law that allows them to use the disability program to take time off in order to take care of other people who are injured or sick, or to “bond with a new child.” The sponsor of that legislation insists it’s a small price to pay, and she works diligently every year to make it a little less small:

Sen. Gayle Goldin, sponsor of the 2013 bill that created caregiver insurance, said Tuesday that more people taking advantage of the program is a sign that it’s working and that taxpayers are getting good value.

“It’s a very small [tax] increase to pay for a benefit that helps people when they need it the most,” said Goldin, a Providence Democrat.

Going from 1.1% of pay to 1.3% is actually an 18% increase.  What should families forgo in order to cover a benefit that people in 46 other states somehow manage to live without?

Naturally, the state’s army of spokespeople spins it as a positive:

“It is not surprising that improved income conditions would increase claims; more employed workers result in more individuals eligible, therefore, more potential users,” Angelika Pellegrino, spokeswoman for the Department of Labor and Training, wrote in an email.

That comment has two layers of deceit.  First, the program is funded by a percentage of total payroll.  More people working means more people paying into the system, which shouldn’t have to be adjusted if it’s designed well.  Of course, if Rhode Island is only creating low-paying jobs, then new tax contributions would be less likely to cover the cost of coverage.

Second, the increase in employed Rhode Islanders cannot possibly account for an 18% increase in the rate.  The number of people employed has barely budged year over year, and the number of jobs based in the state is up only 1.5%.

We should also remember that these policies pile up, including, for example, more-recently-mandated paid leave for employees.  That policy arguably froze and reverse employment increases in the state.

This 18% increase in the TDI tax is a visible warning sign for what we can’t see.  We can’t know all the jobs that would have been created or the raises that would have been given in the absence of these progressive policies. And we can’t forget that employers (and potential employers) can’t only adjust for the policies that have been passed; they have to plan for all of the new burdens their betters in the General Assembly are likely to impose every year.

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Not Quite as Unequal as Advertised

TaxProf Blog’s Paul Caron highlights an important point from a Wall Street Journal op-ed by Phil Gramm and John Early:

The published census data for 2017 portray the top quintile of households as having almost 17 times as much income as the bottom quintile. But this picture is false. The measure fails to account for the one-third of all household income paid in federal, state and local taxes. Since households in the top income quintile pay almost two-thirds of all taxes, ignoring the earned income lost to taxes substantially overstates inequality.

The Census Bureau also fails to count $1.9 trillion in annual public transfer payments to American households. The bureau ignores transfer payments from some 95 federal programs such as Medicare, Medicaid and food stamps, which make up more than 40% of federal spending, along with dozens of state and local programs. Government transfers provide 89% of all resources available to the bottom income quintile of households and more than half of the total resources available to the second quintile.

Teasing the direct wealth redistribution our government imposes on the economy out of the equation changes the picture dramatically.  Click over and look at the included chart.  Adding wealth transfers to those in the lowest quintile moves their average income from nearly zero to over $50,000, while removing taxation from the top quintile drops their average income from nearly $300,000 per year to less than $200,000.

This is a nifty trick from progressives that might just slip past folks’ notice or might be deliberately obscured.  Government takes action to correct a presumed problem but then doesn’t account for the correction in future years, so it looks as if the problem never changes.

In fact, it might appear to get worse!  In this case, for example, it wouldn’t be surprising to find that progressive taxation actually leads to a bigger difference between earned income (not including transfers).  After all, the higher taxes are, the more companies have to pay at the high end in order to produce the same take-home-pay, and the more progressive the tax structure is, the less incentive workers have to take higher paying jobs that carry more responsibility or require more investment in credentials and such, so the more pressure there will be to maintain or increase take-home pay.

If reducing the gap in earned income is really the goal (which I think it should be), then a redistributive tax structure is exactly the wrong way to go about it.

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NYC Exports the Problems of Progressivism

What is a progressive mayor to do when his city’s policies produce the inevitable problems, including homelessness?  Well, in an area of the country where the average temperature ranges from 60 to 80 degrees, the government can let tent cities emerge for a while.  In a place like Bill de Blasio’s New York City, where January’s average is 40 degrees (which any winter visitor knows can feel like it’s in Kelvin, not Fahrenheit, when the wind cascades between the buildings), that isn’t an option.

So, the city has come up with a novel solution:

From the tropical shores of Honolulu and Puerto Rico, to the badlands of Utah and backwaters of Louisiana, the Big Apple has sent local homeless families to 373 cities across the country with a full year of rent in their pockets as part of Mayor Bill de Blasio’s “Special One-Time Assistance Program.” Usually, the receiving city knows nothing about it.

City taxpayers have spent $89 million on rent alone since the program’s August 2017 inception to export 5,074 homeless families — 12,482 individuals — to places as close as Newark and as far as the South Pacific, according to Department of Homeless Services data obtained by The Post. Families who once lived in city shelters decamped to 32 states and Puerto Rico.

As Shaun Towne reports, using the interactive map provided in Sara Dorn New York Post article on the program, a handful of beneficiary families found their way to Rhode Island — one each in North Kingstown, Pawtucket, and Woonsocket and three in Providence.  The mayors of the northern three of those communities are reportedly not happy about the situation:

Providence Mayor Jorge Elorza, Pawtucket Mayor Donald Grebien and Woonsocket Mayor Lisa Baldelli-Hunt released a joint statement Thursday calling the program “an outrageous example of bad public policy.” They said it’s “irresponsible” for New York to spring needy families on other communities without warning, especially those already “working with limited resources to improve [their] residents’ quality of life.”

A cynic might quip that these mayors are only upset that they were not notified so as to ensure that their new constituents are registered to vote.  This thought leads to a more intellectually interesting problem.  The Big Apple’s program suggests a system that creates pressure for the exportation of bad ideas, including both the policies that created the unpleasant situation and the paternalism of using taxpayer dollars to compensate their victims.

Would it be possible to design a system that sends people from localities where good ideas dominate to such benighted states as New York and Rhode Island?

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Freedom… From the Progressive Point of View

Perhaps the most clarifying statement in Rhode Island politics, recently, came from one of the candidates now involved with Matt Brown’s Political Cooperative (which, despite the name, is not an alt-country band):

“Thought I may be the epitome of the American dream I cannot sit around and watch while many of my brothers and sisters are denied a shot at that very dream,″ said Jonathan Acosta, tracing his own story from “first generation American born to undocumented migrants from Colombia″ to the Ivy League.

“I believe that we are not free until we have dismantled structural inequality, developed sustainable clean energy, enacted a $15 minimum wage that pays equal pay for equal work, extended healthcare for all, provide[d] affordable housing, ensured quality public education starting at Pre-K, undergone campaign finance reform, criminal justice reform, and implemented sensible gun control,″ said Acosta, running for the Senate seat currently held by Elizabeth Crowley, D-Central Falls.

So, to Mr. Acosta, we’re not free until we’ve taken from some categories of people to give to others, limited people’s energy options to benefit fashionable technologies, forbidden employers and employees from setting a mutually agreeable value on work to be done, taken money from some people in order to pay for others’ health care (as defined by a vote-buying government) and/or put price controls on what providers can charge, placed restrictions on who can live where and what they can build, tightened the regulation of politics with limits on the donations and privacy of those who become politically active, and reduced the rights guaranteed under the Second Amendment of the United States Constitution.

If that doesn’t match your understanding of “freedom,” you’re not alone.  Indeed, by its mission, this “cooperative” is cooperating against anybody whose understanding of freedom differs, because it cannot possibly cooperate with anybody who disagrees.  You simply can’t hold a definition of freedom that doesn’t have satisfactory outcomes for the interest groups that progressives have targeted.

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Welfare-Related Advocacy Presented as News

If you hear that the federal government is changing some policy that will affect welfare benefits for millions of people, what is the first bit of information you’d want to know?  For me, the answer is what the change actually would be.  For mainstream journalists, that’s often a secondary or tertiary consideration, probably because they fundamentally see their job as advocacy, not the provision of information.

A prime example is the Columbus Dispatch and Gatehouse Media article by Catherine Candisky and Jayme Fraser about the Trump administration’s proposed rule change for food stamp eligibility appearing in the Providence Journal.  Readers have to get more than halfway through the article before finding a direct statement of what the policy does:

The proposed change would end benefits for people who receive assistance because of broad-based categorical eligibility.

The policy change would only add a requirement that state governments must actually check the eligibility of people applying for food stamps even when they are already receiving other forms of welfare.  The only people who would lose food stamps under the new rule are those who are not eligible for them now, but who receive them because states don’t check.

Of course, as a society we can have the conversation about what level of income ought to entitle a family to assistance, but sneaking beneficiaries onto the rolls seems mainly to be a way to expand the business available for government and the dependency of the people on it.

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A Better Way to Cover Americans

With the State of Rhode Island writing ObamaCare into state law with this year’s budget, it’s worth noting a proposal floating around in conservative circles and the Trump Administration, as Avik Roy articulates here:

Last week, the White House finalized a new rule that allows employers to fund health reimbursement arrangements (HRAs) that can be used by workers to buy their own coverage on the individual market. This subtle, technical tweak has the potential to revolutionize the private health insurance market. …

The administration estimates that as many as 800,000 employers — mostly smaller businesses — will choose this option, expanding health care choices for 11 million workers in the next decade. These employers will benefit from having fiscal certainty over their health expenditures. And workers will benefit from being able to choose their coverage and take it from job to job.

This is the health-care-market fix for which I’ve been advocating for years.  Everybody would get accounts, and employers could put money into them for their employees.  So could the government, as welfare benefits, and so could charities.  So could parents or even concerned members of a community after some surprise accident or illness for a neighbor.

At the same time, eliminate most mandatory coverages for health insurance so people for whom it makes sense can buy catastrophic coverage inexpensively.  That way everybody is covered for emergencies and nobody ever has a preexisting condition, because everybody has always had some sort of coverage.  At the same time, Americans would be better able to make health care decisions because they’d more often be paying directly for the services they receive and doing the cost-benefit analyses that people several steps removed from their situations can’t possibly do.

Of course, under such a system politicians attempting to buy votes would have to be more direct about it.  They’d be limited to transparently depositing taxpayer money into accounts instead of implicitly driving up costs in our opaque system by requiring insurers to cover certain benefits.  But in a fair analysis, a better, more-sustainable health care system that doesn’t distort the employment market is probably a little bit preferable to enabling corruption in politics.

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Governor Seeks to Punish Employers Via Proposed Medicaid Tax

Businesses should be applauded for hiring those most in need of work…not punished with more taxes, and certainly not made out to be the bad guy. It is misguided to think that if employees are not covered by their employer’s insurance plan, full or part time, and instead are enrolled in Medicaid, then the business should be punished.

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The Governor’s Progressive Priorities

A recent Providence Journal editorial highlights yet another indication that the administration of Democrat Governor Gina Raimondo isn’t exactly exhibiting a casual competence when it comes to the basic operations of state government. This time, the problem is the company with which the state has contracted to ensure that people in need are able to make it to their medical appointments, and the House Oversight Committee, led by Representative Patricia Serpa (D, West Warwick), is looking into it:

It has not escaped Ms. Serpa’s attention that there is a pattern of problems in state contracting. For many years, the executive branch has had trouble drafting strong contracts (without requiring an abundance of costly change orders), making sure services are properly implemented, and providing sufficient oversight once services have commenced. At the same time, the Raimondo administration has dramatically increased the number of public-relations people on its payroll.

Public-relations people on the payroll is just the start. Apparently, the governor also has plenty of time for things like this:

Gov. Gina Raimondo is all-in on a statewide bag ban and past opponents of the concept aren’t objecting.

Raimondo gave her support Feb. 14 at the final meeting of the Task Force to Tackle Plastics, an advisory board she created last July with the mission of cutting plastic pollution in the state.

That’s progressives (like socialists) for you: trying to save the world while letting those who rely on their competence for day-to-day operations suffer. The problem, at its bottom, is that people are willing to pay for certain services from government (for themselves and on behalf of others), but not so much for insider excesses and progressive schemes. So, to make way for the excesses and schemes, government has to scrimp on the things for which people are willing to pay so there’s money left over for the things for which they probably wouldn’t.

And at the end of the day, ensuring that the medical transportation vehicles run on time isn’t all that exciting.

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A Consequence of Faceless Bureaucracy Using Cold Data

Back in the sunny days before many people had even heard about the Unified Health Infrastructure Project (UHIP), let alone before it was a byword for the Ocean State’s dysfunctional government, the RI Center for Freedom & Prosperity was warning about a “dependency portal.”

The idea behind the system is that state government will consolidate the information it collects for every type of welfare benefit and program it operates.  That information would be updated in an ongoing way, and people will automatically receive any benefits for which they are newly eligible.

Of course, the flip side is that people would also automatically lose any benefits for which they are no longer eligible.  Moreover, nobody should believe that politicians and bureaucrats would not find other uses for this treasure trove of information.

Turn, now, to Elizabeth Brico’s commentary on Talk Poverty:

… after decades of collecting this data, the government is putting it to use. This information is feeding algorithms that decide everything from whether or not you get health insurance to how much time you spend in jail. Increasingly, it is helping determine whether or not parents get to keep their kids.

When someone phones in a report of suspected child abuse — usually to a state or county child abuse hotline — a call screener has to determine whether the accusation merits an actual investigation. Sometimes they have background information, such as prior child welfare reports, to assist in their decision-making process, but often they have to make snap determinations with very little guidance besides the details of the immediate report. There are more than 7 million maltreatment reports each year, and caseworkers get overwhelmed and burn out quickly — especially when a serious case gets overlooked. New algorithms popping up around the country review data points available for each case and suggest whether or not an investigation should be opened, in an attempt to offset some of the individual responsibility placed on case workers.

Admittedly, I get the impression I wouldn’t agree with some of Brico’s broader assumptions and prescriptions, but empowering a faceless bureaucratic system to intervene intimately in people’s lives based on cold data is a frightening idea on its face.

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The Center’s Perspective on So-Called “Fair Housing” Legislation

RI Center for Freedom & Prosperity CEO Mike Stenhouse offers the Center’s view on legislation that would limit landlords’ right to decide whether the way potential tenants’ will pay their rent should be a factor in deciding whether to rent to them, including a mandate to accept Section 8 vouchers:

Based on conversations with landlords I know, there is a major, legitimate, and non-racial reason why some business prefer not to accept clients subsidized by public money and all the red-tape they would have to go through. In this case, once a landlord accepts a federally subsidized Section-8 tenant, that business is now subject to a whole new array of mandates, red tape, and risks that otherwise, it would not have to worry about.

Under this legislative mandate, landlords would be subject to unfair rules by HUD, which we know from the RhodeMap RI debate years ago, does not care about private property rights. HUD has corrupted its mission of putting low-income people into appropriate housing to the point where it routinely tramples on the rights of other private property owners.

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The SEIU May Get a Child Care Reward for Its Political Support

Here’s some legislation that would be a reward for the SEIU for all of its political donations during last year’s election.  Unsurprisingly, the bill summary is misleading:

This act would expand the tiered-rate structure for the childcare assistance program to meet the federal benchmark for access to high-quality childcare for all age groups of children, with higher rates paid to licensed child care centers that have achieved higher quality ratings in “BrightStars”, the state’s quality rating and improvement system. A requirement that childcare providers must raise tuition rates for all other public or private paying families in order to receive higher state rates is removed.

The law already provides for tiered payment rates.  All this bill would do is dramatically increase the amount that taxpayers are required to pay.

Taking the taxpayer’s point of view puts another light on the section removing a “requirement that childcare providers must raise tuition rates for all other public or private paying families in order to receive higher state rates.”  Right now, the law simply states that taxpayers won’t pay more than child care providers charge their unsubsidized customers.  This bill would allow providers to charge those families who pay for their own care less.

One consequence of this change in incentives is obvious: To the extent that the market rate for child care is less than the government’s rate, providers will have incentive to fill up available space with subsidized customers unless families can pay more.  If this creates a crisis, then (from the Big Government perspective) so much the better.  The politicians will be able to cash in on the promise of giving away “free” care to everybody.

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More Regulations During a Housing Shortage Is a Bad Idea

One always has to wonder something after reading an article like the one Madeleine List wrote about legislation to force landlords to take government housing vouchers and to block their ability to find out if potential tenants have appeared in housing court before.  Was the reporter absolutely unable to find anybody to offer a contrary view?

The first argument one hears as an opposing view is that tenants who aren’t paying their own rent might not feel as inclined to keep it up or stay on good terms with their landlords.  Although this might be a reasonable concern, in some cases, it may be more of a strawman, because it isn’t the best of the three most-obvious answers.

The most practical of the other two answers is that Section 8 isn’t simply a source of income.  Accepting Section 8 vouchers requires the landlord to accept regular government inspections and other impositions.  Even if we take as a given that the government will never make inspections more burdensome than the most basic health and safety concerns that all landlords should cover voluntarily, many may simply not want to deal with that extra layer of bureaucracy.

The third obvious answer is that accepting low-income tenants comes with some risk, whether the risk is that they won’t treat the property well, that they’re on the bordeline of being able to afford the rent at all, or that the government might decide that its vouchers give it more authority over your property than was initially the case.  And risk comes with a cost.

This gets to a point about unintended consequences that legislators really should keep in mind at all times.  Imposing risk effectively raises the cost of being a landlord, either by imposing an cost in stress or by forcing them to raise rates or lower profits in order to compensate when the risk goes bad.

Raise the cost of rentals, and we’ll have fewer.  Have fewer rentals, and the natural price of the market will go up.  Raise that price, and we’ll have fewer rentals.  Rinse.  Repeat.  Housing crisis.

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Learn the Lesson, Rhode Island: Doctor Shortage

It’s anecdotal, to be sure, but add Ellen Lenox Smith’s letter in the Providence Journal to the evidence that Rhode Island has a worsening doctor problem:

Just last week, I had an appointment with my pulmonologist, who shared that out of the four doctors in his practice, only two are now left. This poor doctor is expected to take on the work of the two that are now gone along with his original patients, and they are not intending to replace those gone. I am so concerned that he will decide it isn’t worth it and leave, too.

This is not the type of medicine he planned of doing: overstretched, overtired and not able to care for his patients in the manner he was first hired to do.

Rhode Island imposes a high number of mandated coverages on health insurance, driving up the cost.  We’ve pushed nearly one-third of our population into Medicaid.  And our laws are restrictive when it comes to occupational licensing, regulations, and taxation.

This environment of massive government control puts a lot of pressure on the prices that providers can charge customers, which has an effect on how much time they can afford to spend with them, meaning that the job may not be what they wanted it to be.

We need to learn this lesson, because ideological and motivated activists are trying to push our state even farther down this road.  Market forces allow us to match up the things that people want done (and can afford) on one hand and the things that other people are willing to do (for an income they are willing to accept) on the other.

Messing with that freedom-derived balance means that something else is determining who gets what from whom.  Then, the incentives of politics will make it more beneficial to promise the moon to the getters at the expense of the providers.  Even if the current providers tough that out and don’t cross the border, we’ll inevitably see fewer new ones as time goes forward, and everybody will suffer.

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Merry Christmas From The Center!

Merry Christmas! Imagine Rhode Island as a more attractive home and destination of choice for families. We could be a state that offers financial security now and opportunity for prosperity in the future. We could have a policy culture where individuals and business are successful in increasing the overall wealth of our state’s economy, and enhancing the quality of life for every Rhode Islander.

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Confirming a Conservative Response to Poverty

Writing about public policy day in and day out, one can forget that not everybody follows every argument with close attention.  Broad philosophical points of view and underlying intentions can therefore be lost.

Just so, I almost didn’t bother reading a brief essay in which Michael Tanner promotes and summarizes his forthcoming book offering a broad explanation of a conservative policy response to poverty.  It’s worth reading, though, because he summarizes some conservative policies specifically in terms of their human objectives:

  • Keeping people out of jail can promote work and stable families.
  • Breaking up “the government education monopoly and limit[ing] the power of teachers’ unions” is rightly seen as an “anti-poverty program.”
  • Preventing government from driving up the cost of living, especially housing, will give poorer families a chance to get their feet on the ground.
  • Policies that discourage savings also discourage healthy financial habits.
  • A heavy hand in regulating the economy tends to target economic growth toward the rich and powerful.

As he concludes:

An anti-poverty agenda built on empowering poor people and allowing them to take greater control of their own lives offers the chance for a new bipartisan consensus that rejects the current paternalism of both Left and Right. More important, it is an agenda that will do far more than our current failed welfare state to actually lift millions of Americans out of poverty.

My only objection is that I’m not sure that the “paternalism of the Right” is a view that conservatives actually hold rather than a caricature that the Left spreads about us.  Of course, the fault is arguably ours, if we don’t often enough express our real intentions.

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Looking for Common Ground in Booker’s New Handout Plan

Of course, the idea of making the federal government something like everybody’s rich uncle, endowing every baby with a $1,000 savings account with annual deposits at taxpayer expense, strikes all the wrong chords for a conservative like me.  The details of legislation that U.S. Senator Cory Booker (D, New Jersey) has submitted don’t really help:

The accounts would be federally insured, and the funds could only be used for homeownership and “human and financial capital investments that [change] life trajectories,” according to the summary. …

The program would cost roughly $60 billion if implemented in 2019, a Booker aide told The Hill, and would be funded by increasing the capital gains tax rate by 4.2 points, increasing the estate tax to its 2009 level and raising taxes on multimillion-dollar inheritances.

So, the federal government would create and help fund individual investment accounts and then pay for it by increasing the cost of investing as well as taxing those who are able to change their “life trajectories” enough to ensure that their own children don’t need rich Uncle Sam.  That doesn’t sound like the most efficient policy design.

All of that said, Booker’s concept does have some similar features to my long-standing proposal for health care:  Set everybody up with a health savings account, which government could use as its Medicaid/Medicare mechanism, which employers could use to provide their health care benefits, which charities could use to offer assistance to the poor, and which would bring market mechanisms into health care.

That would be a better use of money than buying houses.  Moreover, some significant part of the funding could be found in government health care savings (as all of the funding for any new program should be found in the existing budget).

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Food Stamp Arrests Before the Holidays

Somehow the weekend of Thanksgiving and Black Friday seems an appropriate time to turn our attention to Jessica Botelho’s Turn to 10 report on arrests for food-stamp fraud:

Twenty-four people have been accused of fraudulently obtaining a combined total of nearly $50,000 in public assistance and food stamps, Rhode Island State Police announced Tuesday.

… anyone convicted of fraudulently obtaining public assistance may be sentenced to up to five years behind bars and/or fined $1,000 if the value of public assistance was more than $500.

Anyone convicted of fraudulent use of food stamps, will be ineligible to participate in the food stamp program for no less than six months and no more than 24 months.

In the scheme of things, this is pretty small-scale stuff, with an average theft of $2,040, and looking at the mug shots doesn’t give the impression of a well-off crime ring.  Probably, these folks saw an opportunity for some extra money and acted on the not-uncommon principle that a little bit of “I got mine” wouldn’t actually harm anybody.

This holiday weekend, we express our gratitude for the good things in our lives and (some of us) take part in ritualistic exercises in excess, whether at the Thanksgiving Day table or in an effort to give our children (or ourselves) a materially exciting Christmas at a discounted price.  These holidays are supposed to direct our attention to those whom we love and those whom we should help, but they often highlight our weaknesses and tendency to measure well-being by things.

These contrasting aspects of the holidays apply to those of us who need help, too.  There is no shame in doing what one can to help one’s family, and food stamp fraud might be easily forgiven for that purpose, but is that really what’s going on?  Stealing in order to fund some habit, like smoking, or to keep up on the season’s materialism carries a bit more culpability, and a drive toward taking control of one’s financial well-being should always be central.

We do our disadvantaged neighbors no favors by instilling an opportunity for fraud or temptation toward dependence, so our welfare programs should be modest and well controlled.  At the same time, we lose perspective if we blow their infractions out of proportion.

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The Dogs That Aren’t Barking

In Sir Arthur Conan Doyle’s short story, “Silver Blaze,” Sherlock Holmes cracks the case with the observation that a dog didn’t bark during the commission of a crime.  From this, he infers that the animal knew the criminal.  Perhaps that explains a phenomenon that Rick DeBlois notes in a letter to the editor:

… Rhode Islanders complain about high taxes, incompetent leadership, back-door deals, cronyism, nepotism, and all the mobsters up on Smith Hill. We complain about poor roads, poor schools and a myriad of other issues that are wrong with our state.

But when the time comes to make a change, they reelect the same old gang of incompetent fools who got us here in the first place.

To be sure, part of the problem is that the people complaining turn on each other, a conundrum now personified in the person of Republican gubernatorial candidate Patricia Morgan.  She spent years building up an admirable brand as a politician who responds to Rhode Islanders’ complaints and presses for change, but when primary voters didn’t pick her to be their candidate, she targeted the only alternative candidate with a chance to win.

The bigger, more-systematic problem, however, is all the dogs that aren’t barking… the voters who aren’t complaining.  These are folks who don’t want anything to change because they’re getting something out of the system as it is, whether it’s a do-nothing government job, a government union perch with inflated compensation, or some kind of handout (from welfare to corporate cronyism).  These voters know their masters.

Another layer of voters may sometimes growl a little, but they are easily distracted.  The insiders throw them some progressive causes, some bits of identity politics, or some Trump hatred, and they happily gnaw on those meatless bones while the crime against our state persists.

It’s a fascinating state of affairs to investigate, although one needn’t be Sherlock Holmes to figure it out.  Rather, where that character’s genius is truly needed is in coming up with a way to unravel the trap, because the complaints (and the bites) will multiply exponentially when necessary reforms begin to clear the fatal excesses away.

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When Science Comes with an Underlying Hope

An essay on NRO by Oren Cass is worth a read for the broad-ranging illustration it provides of the state of politicized science these days.  His opening vignette is perfect:

The president of the United States had just cited his work with approval during a Rose Garden speech announcing a major change in American policy, and MIT economist John Reilly was speaking with National Public Radio. “I’m so sorry,” said host Barbara Howard. “Yeah,” Reilly replied.

This was not a triumph but a tragedy, because the president in question was Donald Trump. And the action taken was withdrawal of the United States from the Paris climate agreement.

Trump had cited Reilly’s work correctly, saying: “Even if the Paris Agreement were implemented in full” using Reilly’s economic projections, “. . . it is estimated it would only produce a two-tenths of one degree . . . Celsius reduction in global temperature by the year 2100.” But as Reilly explained on NPR, “All of us here believe the Paris agreement was an important step forward, so, to have our work used as an excuse to withdraw it is exactly the reverse of what we imagined hoping it would do.”

In other words, this isn’t about science, but about belief, and in this view, science is supposed to find evidence confirming progressive assumptions.  That’s what it means to “believe in science.”

As Cass elaborates, this is especially a problem for people who profess to believe in data-driven public policy.  If their data starts to raise doubts about their policies, and rather than adjust the policies, they look for new data, the whole thing begins to seem a bit like a scam.  More from Cass:

Some check is needed on the impulse to slice and dice whatever results the research might yield into whatever conclusion the research community “imagined hoping” it would reach. In theory, peer review should do just that. But in this respect, the leftward lean of the ivory tower is as problematic for its distortion of the knowledge that feeds public-policy debates as it is for its suffocating effect on students and the broader culture. Peer review changes from feature to bug when the peers form an echo chamber of like-minded individuals pursuing the same ends. Academic journals become talking-points memos when they time the publication of unreviewed commentaries for maximum im­pact on political debates.

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The Great News About Lost Welfare Benefits

Tom Mooney presents this with negative language, but it takes a bit of squinting to see the down side:

The state’s improving employment picture may cost more than 1,000 people their food assistance benefits later this year, says the state Department of Human Services.

Since 1996, federal rules have limited “able-bodied adults without dependents” to three months of food assistance within a three-year period. But those rules also exempted people living in communities whose unemployment rates were higher than the average national unemployment rate. …

Able-bodied adults without dependents who are working or enrolled in a work-training program may continue receiving benefits beyond three months, Pina said.

Let’s restate the facts.  “Able-bodied adults” — people who should be able to work — who do not have children and who do not have a job and refuse to enter work-training programs now can only receive food welfare for three months because the economy is doing well enough that jobs should be available.  Perhaps Mr. Mooney should explain to readers why such people should have an entitlement to unlimited benefits.

Of course, this is par for the course of all reporting on welfare.  The unstated presumption is that there is never any reason not to give people anything… presumably until they enter the upper middle class.

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Panhandling Through an App

My first impulse is to recoil from the image of homeless people carrying bar codes so people can easily scan them to purchase their daily hit of good feeling:

A new social innovation project, called Greater Change, hands homeless people a QR code, similar to the kind issued for online tickets.

Passersby who wish to give money – but who may not have any change in their pocket – can scan the code using their smart phone, and make an online payment to the person.

The donation goes into an account which is managed by a case worker who ensures that the money is spent on agreed targets, such as saving for a rental deposit or a new passport.

The program also raises the specter of human-tracking, if the app grabs information about the location of each donation.

But these negative reactions probably miss the unique circumstances of the homeless, who are typically in their predicament because they have some problem that has moved beyond their control, be it addiction or mental illness.  Having donations go to some account that is allocated for purposes that will help them reduces the concern that they’ll use the money to feed their problems.  This is essentially a more flexible version of my practice of carrying around supermarket gift cards.

Of course, money is fungible, so whether it’s a gift card or a credit to a welfare account, nothing prevents the recipient from using that money to free up cash for the purchase of drugs, or whatever.  Still, incremental improvements remain improvements.

These cards would also help donors determine which panhandlers are truly needy.  Not long ago, I spotted a young guy who didn’t look especially destitute energetically soliciting funds on the street, and for some reason, I got the strong impression that he was just trying to raise enough money to buy something at the liquor store on the corner.  Such people wouldn’t have the donation cards.

To improve the program further, we should consider the extent to which government really needs to be involved.  I think, for example, of affiliate programs from banks and other organizations that have negotiated discounts for members.  Banks, for example, could have special accounts that come with these cards and restrict the use of the money.  Opening the process up in that way would help alleviate the human-tracking concern, too.

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The Value of Restrictive Welfare

I agree with much of what Paul Winfree writes in the Washington Times related to Ontario’s abandoned experiment with a universal basic income, but he misses something essential:

There are some benefits to a basic income, especially when used to replace the current welfare system. For instance, a UBI leaves recipients free to decide how to spend their benefits. Many existing welfare programs use incentives, “nudges,” and other requirements to micromanage how the poor use their benefits. The assumption is that poor people lack certain virtues or fall victim to vices to which the rest of us are immune, and the expert managers of the welfare system know better.

I’m with the economist Lionel Robbins, who called this assumption, as applied to political calculations, “morally revolting.”

What Winfree misses is the value of restrictions on welfare to the recipients.   Sure, from an economic standpoint, leaving recipients free to use the cash however they want is more efficient for the economy, including the household economy of the recipient.  However, that efficiency reduces the disincentive to rely on the government, increasing the short-term value of welfare payments versus earned income.

If I tell you I’ll give you $100 for spending the day shoveling sewage in August, you might do it if you really need the money.  But if I also give you the option of doing nothing and collecting $50, you’ll evaluate the choice based on whether an extra $50 is worth the toil.

From the community’s point of view, the weighting is the opposite.  If we have $50 just lying around doing nothing for the economy, giving it to you may have some minor benefits by putting it in circulation.  But if you’re working, the community gets not only productive labor, but also the value of you becoming independent and better adapted to the economy.

Placing restrictions on the money we give you increases its value to the community while decreasing its value to you in a way that is relatively beneficial for the community.  This would be true even if the restrictions were entirely arbitrary, but if we manage to stumble into a worthy moral principle, it’s even more so.

Unfortunately, in our public debate, economists often lose sight of less-tangible values, while advocates ignore economics.

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Fun-Sized Observations on UHIP and Out-of-State Donations

Rhode Island tourism appears to be having some success with its “fun-sized” series of ads, and the branding idea also provides opportunity for political commentary — as with Mike Riley’s quip about “fun-sized taxes.”

Surprisingly, though, I haven’t yet seen the adjective applied to the Unified Health Infrastructure Project (UHIP).  As has been widely reported, the state government is planning to spend another $156 million on the project, bringing the total up to $648 million:

In a request to the U.S. government for federal money to pay the bulk of finishing the computer system, the R.I. Executive Office of Health and Human Services this week said its new Unified Health Infrastructure Project budget “reflects the necessary personnel and contracted staff to support enterprise-wide efforts to move the system towards compliance and to address mission-critical operational concerns.”

In other words, despite two years of emergency troubleshooting since the biggest piece of the project went live, the technology still isn’t working as designed, and Gov. Gina Raimondo’s administration is planning for another year of development work, plus ongoing maintenance and operations.

So what is “fun-sized,” here — the budget or the lines of people that we’ve seen waiting for government services?  One could envision videos for both possibilities:  In one, the camera starts zoomed in on a pile of money and then zooms out to the entire cost for this non-functional software; in the other, it zooms in on a couple of people talking and then zooms out to the entire line of people wasting their day trying to correct problems with payments from the government.

Neither of those videos will be produced, though.  In contrast, Democrat Governor Gina Raimondo has a big, big campaign budget and is producing lots of targeted videosOut-of-state donations have long donated the governor’s funding stream, with non-Rhode Island donors contributing 66% of the money she raised during the second quarter of this year.

We’ll see if out-of-state interest in our governor is enough to buy her another term despite her presiding over this massive debacle (among others).

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“Real Compassion” Dispenses with Entitlement

Housing and Urban Development Secretary Ben Carson is right:

Carson told the story of a young woman who voiced her frustration at HUD for not finding her large family a government-subsidized apartment fast enough.

“In one group, a young lady stood up and she was very angry that it had taken the housing authority so long to find her a five-bedroom apartment because she had all these children and was even more angry because the dining room set had a scratch on the table. But as I was thinking about that, I said, this young woman probably has never known any other life. Her mother probably lived here and her grandmother probably lived here and she doesn’t even understand what is out there and what the American dream is all about,” Carson said at the recent Faith and Freedom Coalition “Road to Majority” conference.

“And that is one of the reasons that you will see from the new HUD, such an emphasis on self-sufficiency, because I think that is real compassion – getting people out of poverty and helping them to find the pathway. It is a double win because for each person you get out of that dependent situation, it is one less person you have to pay for and it’s one more taxpaying contributing member of society,” he added. “So this is the way we have to begin to think about these things.”

We’re altogether too comfortable with a sense of entitlement these days, and that’s across the board.  Yes, the woman in Carson’s anecdote was too comfortable with the notion that taxpayers should quickly supply her with whatever accommodations she might fill with children, but the social elite are too comfortable with the notion that they are entitled to whatever jobs they want and to have their worldview enacted into universal law.  Some established businesses are too comfortable with the notion that they are entitled to continue along without competition, and some entrepreneurs are too comfortable with the notion that taxpayers should help them rev up their endeavors.

Spiritually, we’re built for a world in which nothing is assured.  God told Adam that it would only be by the “sweat of your face” that he would eat,” and He told Cain that “you can be [sin’s] master,” “if you do well [and] can hold up your head.”  That gives us responsibility and possibility.

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Summing Up the Budget (And RI’s Problem) in One Sentence

The Providence Journal article on the Rhode Island House’s budget vote last night captures in one quotation the problem our state is struggling to overcome:

“I expect the budget to rise every year,” said House Speaker Nicholas Mattiello after the final vote, a few minutes before 10 p.m., in response to Republican complaints about overspending. “To not expect it to rise every year is not realistic.”

First, let’s go along with the premise that the state budget should rise every year.  Does it have to go up 3.9% every year, regardless of the health of the economy or changes in taxpayers’ ability to pay?  That’s the important next question.  From Mattiello’s explanation, it doesn’t seem that there is any limiting principle.  From his comments to WPRI’s Ted Nesi:

“I always look at the specifics,” he said. “The level of spending in this case was appropriate to the needs of our society.” He noted that the cost of social services continues to rise faster than other areas.

But there is no reason a budget this big has to climb every year.  If it’s possible that annual growth of 3.9% is too much, then it’s possible for it to be too high, right now.  Sadly, state leaders exhibit is no underlying philosophy.  There is only a balance of various interest groups’ power.  Raises for state employees.  Increases in welfare-related spending.  More crony deals (as foreshadowed by the increased generosity of tax credits for movie productions).

Taxpayers will only become a consideration when they do one of two things:

  1. Change their voting habits in a way that threatens entrenched politicians.
  2. Leave the state in sufficient numbers that the politicians have no choice but to reduce spending or squeeze those who remain painfully enough that they notice (and resort to #1).
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