Monthly Archives: January 2012

Governor Corbett Wrong on Food Stamps

In Miguel de Cervantes’ classic novel, “Don Quixote,” the titular character rides off into battle against several windmills he believes to be giant beasts. His hapless sidekick Sancho Panza watches helplessly as the crusader launches his ferocious assault on imagined monsters.

Similar images come to mind when discussing Governor Corbett’s new policy regarding the Supplemental Nutrition Assistance Program (SNAP), more commonly known as food stamps. The Corbett Administration recently announced that it would bar people under 60 with more than $2,000 in savings or other assets (home, retirement benefits, and one car not included) from collecting food stamps. A higher limit would be set for seniors. This was all done under the guise of clamping down on fraud.

Yet a closer examination reveals these vague claims of fraud to be more akin to Quixote’s imaginary monsters than to any real threat to taxpayers. A Department of Agriculture report on how well the states administered their food stamps program shows that no fraud claims were established in 2010. In fact, the costs of agency errors far exceeded that of non-existent fraud, raising the question of whether an asset test could have unforeseen costs. It is widely accepted – except, of course, by the Corbett Administration – that the additional training, paperwork and document verification accompanying this policy change will mean higher administrative costs. An increase in agency errors resulting from the added bureaucracy could have a similar effect.

But the cost is not only monetary. Food stamp usage has increased as a result of the Great Recession and its aftermath, which dislocated workers and wreaked havoc on families’ finances. Yet putting a limit on the amount of savings and assets one can hold punishes people that choose to save for the future, encouraging them instead to deplete their reserves.

The Corbett Administration claims this will stop people from taking advantage of the system. But food stamps are already limited to those with low incomes, and food stamp payments are low enough only to help people, not to provide for them entirely. Pennsylvania ranks in the bottom tenth of the nation as far as average state food stamp payment amounts go – below even Texas. The average monthly benefit for a Pennsylvania household ($262.61 in 2010) would only go so far in covering that average household’s grocery bill. The Department of Agriculture’s estimates that monthly food costs for a family of four range from around $550 to $800 per month, depending on how old the children are. And those estimates are for the spending plans it labels “thrifty” and “low-cost.”

Losing such aid would hurt not only the recipients, but businesses and the economy as well. Food stamps help prop up demand, preserving jobs in grocery stores and the trucking and warehouse services they employ. The spending done by workers in those preserved jobs, in turn, ripples through the economy. Moreover, food stamps are the most effective form of economic stimulus, since they are given to cash-strapped individuals who usually spend them immediately. A Moody’s Analytics study found that food stamps generated $1.73 for every dollar spent.

So one could be excused for feeling a bit like Sancho Panza as he watches his leader gallop off full-speed at a windmill. Perhaps Quixote truly believes in the imaginary beasts he seeks to slay, or perhaps he has some inkling of the absurdity of his quest. No matter – the result is the same.

The Ron Paul Presidency You Will Never See

What do the following have in common?

  • Limits on the amount of money corporations can spend on political candidates
  • Government regulations and testing to make sure children’s toys are not contaminated with lead
  • Environmental Protection Agency standards ensuring clean water
  • Laws protecting workers against sexual harassment in the workplace
  • Laws protecting whistleblowing offshore oil workers from retaliatory firing
  • Public schools

The answer? These are all things Ron Paul opposes.

Before I go any further, let me make one thing clear: I respect Ron Paul personally. I think it is wonderful that he has remained true to his principles, and not conveniently changed his views for political gain. I admire his ability to unflinchingly take unpopular stands and break rank with his nominal party (I say “nominal” because although Paul is technically a Republican, it would be more accurate to describe him as a Libertarian). I like that he has brought obscure economic ideas into the public spotlight for debate. And, not for nothing, he also seems to me to be a genuinely honest guy.

So for that, I respect him. Of course, I also think he is generally unelectable and would make an awful president. This is the point at which I expect some people will stop reading and immediately begin pondering ways to decry this post as a vast conspiracy of big business, big government, and the media. But before that happens, let me just ask that this post be judged on its accuracy, rather than any emotional attachments to Paul’s candidacy.

Bizarrely, some Ron Paul supporters point to the fact that Paul was elected to Congress as evidence of his electability, regardless of the fact that he represents a district of only 651,619 Texans. To put that into perspective, that is about 0.2 percent of the United States population.

A more common claim is that his second and third place finishes in New Hampshire and Iowa, respectively, support his electability. Of course, Rick Santorum finished second (or first, perhaps) in Iowa, but I have yet to hear someone tell me with a straight face that they think Santorum is electable, largely for the same reason that I think Ron Paul is unelectable: once the public takes Paul’s views to their logical conclusions, they will shy away.

Perhaps the Santorum comparison is unfair. After all, Rick Santorum’s views are extreme and out of touch with public opinion. Banning abortion under any and all circumstances? Bombing Iran? That’s crazy talk. Any Paul supporter will tell you that he wants to pursue commonsense reforms, like rolling back our overreaching military and cutting a bloated federal government.

Things start to break down when the discussion goes beyond these generalities into specifics. Paul’s libertarian utopianism envisions a country in which private industry self-regulates itself at almost every turn. Should the government ensure that citizens have clean drinking water? Or that every child has access to a public education? Most Americans think so, even if they advocate some sort of reform of the current system. But Paul eschews such things. This is an ideology based not in small, efficient government — but, rather, in no government (or, as close to no government as you can get).

The problem is that following his positions to their conclusions produce grim results in the real world. Unemployment benefits would end for thousands of people, causing a large contraction in demand in the economy, helping derail a fragile economy and causing greater hardship for the unemployed. Failure to raise the debt ceiling (an action against which Paul voted) would have caused enormous turmoil, and the first ever American default, exacerbating, rather than alleviating, the current economic situation. As it happened, the near-failure caused the first ever downgrade in America’s credit rating.

Many Americans agree that the Pentagon should share the sacrifice of spending cuts, but Paul’s advocacy of large-scale shuttering of overseas military bases is dangerously naive. Despite the harsh lesson America has learned about its own limitations over the past decade, it remains the global hegemon, and a stabilizing force. An Economist article notes the possible unintended consequences of military cutbacks in Europe:

The thinking behind the “rebalancing” looks flawed for several reasons. The first is that far from being on oasis of stability, EUCOM’s 51-country region covers some pretty flammable trouble spots, among them Georgia’s border with Russia, Kosovo’s border with Serbia and Turkey’s border with Iraq and Syria. Israel is also within EUCOM. There are less conventional security threats too, from terrorists moving between safe havens to cyber attacks.

The second is that—quite apart from possible flashpoints in its own region—Europe is closer to many of the fights that American forces may be committed to in the future than bases in the United States.

The third is that the new strategy places great emphasis on military-to-military co-operation with other countries. The best way of enhancing that is for American soldiers to train with their counterparts from other nations. General Hertling says that after training, the command’s second priority is to enter into effective partnerships with the many different countries in its region. “By sharing ideas, tactics and procedures,” he says, “you build trust with partners.” During the final readiness exercise before deployment to Afghanistan, the 172nd trained with troops from nine other countries, the same ones, notes the general, whom they would later find themselves fighting alongside.

And that article is talking about President Obama’s comparatively modest rebalancing of American forces. Paul advocates a much larger drawdown, which would inevitably gut NATO, and further weaken our military capacity and lessen global stability.

The thing is, people can get behind the generalities of his platform. They (rightly) do not think we should be overreaching in two simultaneous ground wars. But, more than that, I think people can get behind the Ron Paul persona. Americans love to identify with the underdog and the straight-talker, and Paul has both in spades. His unpolished speaking style has a genuine, endearing feel to it that many Americans take to heart. He’s that kindly old gentleman that could well be your own uncle (albeit, your slightly crazy old uncle).

And, indeed, polls of Republican primary voters show Paul ranks highly in questions about his personal character and human interactions. Voters say he stands up for what he believes in and is honest, and that counts for a something when faith in government (and Congress in particular) has fallen to new lows. Indeed, right now he is polling fairly well among independents.

But throw him in the general election and that will all change. His views will not only be revealed as outside the mainstream, but will also leave him open to attacks from both the right (on defense and social issues) and the left (on economic and labor issues). President Obama’s current edge in the polls when hypothetically matched against Paul would quickly expand.

Yet, for a moment, let us imagine a world in which Ron Paul wins the nomination and the presidency. What then? Well, as president, he would have little control over enacting his particular agenda and would face a Congress that has absolutely no interest in moving his legislation. The right would bristle against his demobilization, while the left would staunchly oppose gutting entitlements like Social Security and Medicare. His average man persona would be of no help in dealing with Washington’s power brokers.

You thought the gridlock of the past few years has been bad? A Paul presidency would be a million times worse.

Economic liberalization and free trade agreements, which one might hope for from a libertarian candidate, would languish. This seems counter-intuitive, considering Paul’s ideology, but his voting record in Congress (against free trade agreements) shows that the strictures of his views lead him to the belief that free trade results from less government intervention, not from agreements with foreign nations. While wonderful in theory, this, of course, is utterly unrealistic.

Stymied by Congress and his own beliefs, Paul’s biggest effect would be through his appointive and veto powers, the latter of which he would undoubtedly use with relish.  Congress, not up to the task of overriding his vetoes, would sit by helplessly as little to nothing becomes law. The de-stimulative effect of vetoed federal spending would shrink the economy (sorry, no more unemployment benefits for you, never mind that your job search keeps turning up nothing), possibly even pulling it into a double-dip recession, like the austerity-laden Europeans. Courts and federal agencies would be filled with people that believe the job they are being paid to do should not exist in the first place, and that the federal government has little role in anything at all. So, in sum, little would get done, but the effects would be long-ranging.

I appreciate Ron Paul’s character, his dedication, and his role in bringing alternative economic ideas to the public debate (no matter how incorrect I believe that they are). All of that makes him a man that I would love to sit down and have a nice, pleasant dinner with. What it does not make him is a good president.

All Politics is Local: The Shape of Narberth

Turn off of Haverford Ave. in Narberth, PA onto Avon Rd., and you may not realize you have just stepped over the invisible boundary dividing the borough from Lower Merion Township. Surprised, you think that this could not possibly be the case! The borough lies to the north, south, and west of you — yet where you currently stand is a peninsula of Lower Merion, surrounded on three sides by a sea of Narberth (for the sake of making this point, we will conveniently ignore the fact that it is Narberth that is the island within the sea of Lower Merion).

Map of Narberth

Looking at a map of Narberth makes it clear: it appears as if a wedge has been removed from the eastern side of the borough. Why is this?

Well, as the old saying goes, “All politics is local” — and, in this case (it would seem), personal. As I was told the other day by Narberth Borough Manager Bill Martin, the Narberth residents lobbying for a separate borough and drawing up the maps delineating their town’s boundaries simply did not like the gentleman who lived in the area in question. So when the time came, they just drew him out of the town.

A humorous story, yes. But also a lesson to those who prefer to ignore history and politics — they directly affect your everyday life, right up to something as simple as your mailing address.

The Diniverse News Roundup Arrives!

For the past couple months, I’ve been running an informal ‘news roundup,’ in which I shoot out an email with links to interesting articles. Until now, the recipient list has mostly been limited to people from my address book that I thought would be interested in reading about relevant local, state, national, and global issues. Emails have been erratic, based mostly on whenever I can find the free time to compile a quick list of links and send them out.

Now, however, I would like to open up the Diniverse News Roundup to any and all interested individuals. It will still probably be fairly erratic (daily sometimes, weekly others), but, hey, it’s a free and easy way to keep informed and read articles you might otherwise never see. If you would like on the listserv, just email and say so! And no worries, if you want off at any point in the future, all you have to do is ask.

States, Stimulus, and Saving Jobs

One of my recent blog posts (“Balancing Budgets: The Government is Nothing Like a Family“) stimulated a lively discussion about the effects of budget-cutting on the economy. As I noted in that post, large-scale austerity measures (cutting spending and raising taxes in order to balance the budget) have the perverse effect of actually causing deficits by depressing the economy further if the economy is not yet strong enough to withstand the fiscal tightening. Widening deficits add more to the debt and amplify demands for more austerity, which then leads to further depressed economic activity, and a vicious cycle ensues. This is  not an argument against deficit reduction, but rather against deficit reduction while the United States economy (and the global economy, as well) is still incredibly fragile.

Yet there is another aspect of the debate over stimulus and austerity that many Americans tend to overlook — the fact their government has been slashing spending and raising taxes to balance budgets, only at a state and local level. Forced by balanced budget provisions in most state constitutions, these government entities have undertaken the kinds of measures many conservatives are clamoring for at the federal level. The result has been a drag on both national and state economies.

This week’s Economist (Jan. 7-13, 2012) had an excellent article on the effects of state austerity packages on the national economy. From that article:

In 2009 and 2010 this austerity offset much of the expansionary effect of federal-government stimulus. Even in 2011, according to a Goldman Sachs estimate, government spending cuts reduced America’s GDP growth by half a percentage point. State and local governments bore most of the blame: they have been responsible for nearly 600,000 government jobs going since the recession’s end.

State and local governments trimmed 16,000 jobs in November—down from 45,000 in May but still a negative number. Yet the worst appears to be over. And just as local austerity amplified the previous economic decline, its end should reinforce the recovery.

A November 2011 study by the Keystone Research Center shows the huge impact Governor Corbett’s 2011 budget cuts have had on Pennsylvania’s economy:

From September 2009 to September 2010, Pennsylvania outpaced most other states in job creation, ranking fourth in the number of jobs created and seventh by job growth percentage. Between April 2011 and September 2011, we shifted into reverse and are now headed in the wrong direction. A wave of public-sector job losses has driven job growth in the Commonwealth into the bottom 10: 47th measured by the change in the number of jobs and 43rd measured by job growth percentage.

It is also interesting to note that the same people calling for fiscal tightening at the federal level also decried the “failure” of the stimulus package. That the stimulus package passed by the United States Congress in 2009 did not suddenly rocket the entire economy out of the recession is not an admission of its failure. The stimulus performed a much-needed role by helping states plug their deficits as tax receipts plunged, preventing an even larger tightening. As the Economist notes, state cuts “offset much of the expansionary effect of federal-government stimulus,” which allows the package’s opponents to get away with the claim that the stimulus had no effect.

It is difficult to run on a political platform of ‘things would have been much worse if we had not passed the stimulus package,’ but nonetheless there it is — things would have been much worse. Without aid to the states, cuts would have been deeper and tax increases greater, deepening the recession. And yet, still, talk of immediate austerity, balanced budget amendments, and the “failure” of economic stimulus somehow persist.