Policy Shop

Policy as if people mattered

Brinksmanship and the Return of Financial Crisis

A government shutdown once again loomed, and familiar deadlines and ultimatums flew around Washington. And Congress just used the threat to loosen the rules created in the wake of the financial crisis, a victory for Wall Street banks in their constant and well-funded campaign against reform. The rules they have targeted are designed to reduce the risk of another financial meltdown, like the one that drove us into the Great Recession and could have been much worse. Though the repeal has been styled by some as a technical amendment, nothing could be farther from the truth. Think about the best way to decide legislative policy in the devilishly complex and risk-laden area of derivatives. These are the financial contracts that brought down AIG, the event that triggered the crisis. You might imagine careful deliberation and debate, leading to a thoughtful vote in Congress in which elected representatives must stand up and be counted so that they could be held responsible for a difficult...

A Modest Proposal: The Universal Christmas Bonus

Wikimedia Commons/Square87
L ast year, Paul Ryan passed along this made up story: This reminds me of a story I heard from Eloise Anderson. She serves in the cabinet of my buddy Governor Scott Walker. She once met a young boy from a poor family. And every day at school, he would get a free lunch from a government program. But he told Eloise he didn’t want a free lunch. He wanted his own lunch—one in a brown-paper bag just like the other kids’. He wanted one, he said, because he knew a kid with a brown-paper bag had someone who cared for him. Insofar as the point of this story is to push against free lunches in school, it's obviously a rather craven sentiment. The opponents and critics of free school lunch are an odd bunch. They seem to think it's basically alright to send over 90 percent of children to these big welfare programs called public schools, but that feeding them while they are at these welfare schools is over the line. It's not hard to see what's going on: public school is so commonplace and nearly...

Detroit Moves to the Next Phase

(AP Photo/Carlos Osorio, File)
The largest municipal bankruptcy in history has come to a close in Detroit after a year of proceedings, ending in a flurry of compromise. Yet there was plenty of conflict in the last year, far more than could have been predicted. In November 2013, Detroit became the largest city in the country to file for bankruptcy. When the proceedings started, the negotiation of the settlement—and that is really what the bankruptcy became—was a discussion between an emergency manager, from a law firm dedicated to the financial sector, and the financial sector. The people tried to get a seat at the table, but the emergency manager had a monopoly on the information and for the first four months of the process his was the only story available. The people were long on outrage and short on evidence. That all changed when the public became empowered to express its views based on data and analysis. Raw emotion and outrage was the most important factor, but engaging on the issues was essential as a way...

How to Reduce the Voting Gap

Demos
This post originally appeared at Demos.org Over the last three decades, research suggests, the class bias of the voting public has increased dramatically. In the 2012 election, there was a 33 point gap between the turnout rate of the highest bracket ($150,000 or more) and the lowest bracket ($10,000 or less). My article explores the implications of this gap, but it’s also important to know the causes. Demos.org Registration: The first part of the problem is registration. One study finds , “state voter registration laws pose a substantial barrier” to the mobilization of low-income voters. We can see this in the Census data from the 2012 election (below). Among eligible voters in the highest bracket 87.1 percent were registered in 2012, compared with only 63.2 percent of those in the lowest bracket. This registration gap certainly plays a role in turnout inequality, and unnecessary burdens don’t help. Worse, many states are currently purging their voter rolls , which primarily affect...

SCOTUS to Texas: Go Forth and Discriminate Against Your Citizens Starting Monday

Wikimedia Commons
The Supreme Court said Saturday that, for the first time, it is allowing a voting law to be used for an election even though a federal judge, after conducting a trial, found the law is racially discriminatory in both its intent and its impact, and is an unconstitutional poll tax. It is not only not a good look for the court, it is an abdication of the federal responsibility to protect every American voter from racially discriminatory voter suppression. These continuing voter restrictions are the worst attack on Americans’ voting rights since Reconstruction led to the Jim Crow era. We are in the middle of the storm that Justice Ruth Bader Ginsburg described in her Shelby County dissent. Studies show that recent restrictions on voting were more likely to be introduced and adopted in places that saw increased political participation from lower-income people and people of color. Voting in Texas starts Monday, and the new law only allows seven forms of acceptable identification, including...

A Wild Week for Voting Rights

J ust a month before the election, voting rights have been on a wild ride. The Supreme Court began its term by reinstating voting restrictions in Ohio and North Carolina after federal appeals courts put these laws on hold for unfairly burdening voting rights, particularly for people of color. But last night, the Court took action to stop Wisconsin’s voter ID requirement from going into effect only weeks before Election Day, and a federal court struck down Texas’s voter ID law after a trial on the merits, ruling for voters in both cases. So while voters in North Carolina and Ohio face more burdensome voter restrictions, voters in Wisconsin and Texas will not be disenfranchised by unconstitutional discriminatory photo ID requirements in November . Here’s what happened in each state. In the two states where voter disenfranchisement will continue, same-day voter registration was rolled back. Last week the Court stayed the 6 th Circuit order and allowed Ohio’s cuts to early voting to...

Congress Didn't Pay a Lot to Go to College: Today's Students Shouldn't Either

Building photo: Architect of the Capitol - Dome: Carol M. Highsmith/Library of Congress
Architect of the Capitol This article originally appeared on the website of Demos . O ne of the oldest attack lines in politics is that a candidate or elected official is “out of touch” with the American people. The phrase, deployed often and by both parties, is often used to outline how a statement, voting record, or ideology is on the minority side of public opinion. In other cases, it’s used to target legislators who have served several terms, inferring that their tenure in office has left them too cozy and unresponsive to the needs of constituents. In the case of both Mitt Romney and John Kerry , it was used to infer that the very life experiences of a candidate left them out of touch with those of the “everyday American.” It’s designed to remove any and all appearances of empathy from the equation. In some cases, it’s actually true. Look no further than the cost of higher education. This week, the Senate was expected to (but looks like it no longer will) vote on a bill to allow...

The Top 10 Percent of White Families Own Almost Everything

Chart: Demos - Photo: Rui Vieira/PA Wire (Press Association via AP Images)
This article was originally published by Demos. T he Federal Reserve released the 2013 Survey of Consumer Finances on Thursday. The overall wealth distribution picture is grim and getting worse: The top 10 percent of families own 75.3 percent of the nation's wealth. The bottom half of families own 1.1 percent of it. The families squished in between those two groups own 24.6 percent of the national wealth. The present wealth distribution is more unequal than it was in 2010, the last year this survey was conducted. Specifically, the top 10 percent increased their share of the national wealth by 0.8 percentage points between 2010 and 2013. The bottom half and middle 40 percent saw their share of the national wealth fall by 0.1 and 0.7 percentage points respectively. These wealth figures bring to mind a 1955 Red Scare era educational film , which presses at one point: In order to have a proper appreciation of the American economic system, we must know how the national income is divided in...

The Fire This Time: America's Withdrawal From the Fight Against Racism Guarantees More Fergusons

(AP Photo/St. Louis Post-Dispatch, J.B. Forbes)
(AP Photo/St. Louis Post-Dispatch, J.B. Forbes) A protester shouts as she moves away from a line of riot police in Ferguson, Missouri, on Wednesday, Aug. 13, 2014. (AP Photo/St. Louis Post-Dispatch, J.B. Forbes) This article originally appeared on the Policy Shop website of Demos . I remember the stunned reaction of so many Americans back in the summer of 2005 when legions of poor black people in desperate circumstances seemed to have suddenly and inexplicably materialized in New Orleans during the flooding that followed Hurricane Katrina. Expressions of disbelief poured in from around the nation: “How can this be happening?” “I had no idea conditions were that bad.” “My God, is this America?” People found themselves staring at the kind of poverty they thought had been largely wiped out decades earlier. President George W. Bush seemed as astonished as anyone. He made an eerie, oddly-lit, outdoor appearance in the city’s French Quarter on the evening of September 15 to announce that...

What Drives Credit Card Debt?

Americans cumulatively have $854 billion in revolving loan (mostly credit card) debt, according to the Federal Reserve. The amount has actually declined since the Great Recession, as credit card issuers tightened their lending standards, borrowers became more cautious, and strong and effective consumer protection laws went into effect, producing substantial savings for households. Still, $854 billion is no small matter, and its source is worth considering. Why do some people stagger under a mountain of credit card debt, paying high interest rates on their outstanding balances and never seeming to come out ahead, while others rarely if ever carry debt for long, despite pulling out their plastic on a regular basis? That’s the question I set out to answer in a new study , which compares two groups of low- and middle-income households with working age adults. The households are statistically indistinguishable in terms of income, racial and ethnic background, age, marital status and rate...

The Single Mother, Child Poverty Myth

I see it often claimed that the high rate of child poverty in the U.S. is a function of family composition. According to this view, the reason childhood poverty is so high is that there are too many unmarried parents and single mothers, and those kinds of families face higher rates of poverty. The usual upshot of this claim is that we can't really do much about high rates of childhood poverty, at least insofar as we can't force people to marry and cohabitate and such. One big problem with this claim is that family composition in the U.S. is not that much different from family composition in the famed low-poverty social democracies of Northern Europe, but they don't have anywhere near the rates of child poverty we have. A number of studies have tested this family composition theory using cross-country income data and found, again and again, that family composition differences account for very little of the child poverty differences between the US and other countries. Testing this...

Food Stamps Don’t Keep Wal-Mart’s Prices Low, They Keep Its Profits High

“ The same company that brings in the most food stamp dollars in revenue —an estimated $13 billion last year—also likely has the most employees using food stamps.” The name of the mammoth food stamp-reliant company is no secret: Wal-Mart. As journalist Krissy Clark notes in Marketplace’s valuable new series “ The Secret Life of the Food Stamp ,” Wal-Mart benefits from food stamps in multiple ways, as taxpayers both underwrite the company’s food sales and also subsidize its payroll costs. There is no doubt that food stamps (and a host of other public subsidies from Medicaid to home heating assistance to the Earned Income Tax Credit and beyond) reduce Wal-Mart’s employment costs substantially. A study released last year by staff of the U.S. House Committee on Education and the Workforce found that a single 300-employee Wal-Mart Supercenter may cost taxpayers anywhere from $904,542 to nearly $1.75 million per year. Consider that the working people who turn to food stamps to supplement...

America's Class System Across The Life Cycle

I am not usually one for a long charticle, but occasionally it's worthwhile to step back and summarize what we know. Here, I tackle America's class system, across the life cycle. 1. Poverty Spikes Stress in Children It starts in the womb . It never lets up . 2. Income Inequality Means Enrichment Inequality More money, more activities. 3. Rapid Schooling Divergence Although there is essentially no observed class-based difference in the cognitive abilities of children in their first year of life, that ends quickly . 4. Logical Consequence of Divergence: Drop Outs Little to no enrichment activities, cognitive abilities stunted by poverty-related stress, and years of falling behind does what you would think it does . 5. Further Behind Than Ever Come College Time These figures probably understate the severity of the gap as well because those on the low end who’d score the worst probably never bother to take the SAT anyways. 6. Traditional College Students: Rich Kids The richer your parents...

Why Paul Ryan Is Wrong to Blame Black Culture for Poverty

Watching Paul Ryan try to figure out the poverty question has been a fascinating spectacle. It began with his secret poverty tour, a tour so secretive that it was covered in the major national newspapers. The next event was the release of his big report on the condition of the welfare state, a report so riddled with inaccuracies that even the economists he cites favorably claim he has misrepresented their work . And now today, we are treated to a sneak peak at what all of this political theater has led him to conclude about the causes of poverty : black culture is making people lazy. Of course, he doesn't use "black," opting instead for its friendlier synonym "inner city": We have got this tailspin of culture, in our inner cities in particular, of men not working and just generations of men not even thinking about working or learning the value and the culture of work, and so there is a real culture problem here that has to be dealt with. As an initial matter, it is still kind of...

The War Against Early Voting Heats Up

The ink is barely dry on the report from President Obama’s election administration commission and states are already disregarding its blue-ribbon recommendations, namely around early voting. The endorsement of expanding the voting period before Election Day was one of the strongest components of the bipartisan commission’s report. But yesterday Ohio Secretary of State Jon Husted released a new voting schedule that deletes both pre-Election Day Sundays from the early voting formula. Under the new rules, people can vote in the four weeks before Election Day, Monday through Friday from 8:00 a.m. to 5:00 p.m., and on the final two Saturdays before Election Day. The Sunday erasures come in conflict with the “souls to the polls” black church-led campaigns to take their congregants to vote after worship services. When Husted dropped Sunday from the early voting period in 2012 it landed him in court, where a federal judge ultimately forced him to reinstate Sunday voting. In 2008, over 77...

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