Policy Shop

Policy as if people mattered

Libertarianism's Battle With History

(Flickr/Iazaro)
Economic libertarianism’s most amusing failing is philosophical. In particular, the non-aggression form of libertarianism so popular among the Paul clan and their followers quite straightforwardly generates the conclusion that all private property is unjust theft . Internal contradictions abound in libertarianism, but that is surely the most problematic one. As much as I enjoy the philosophical arguments, experience tells me others prefer an approach that seem less like game-playing. If you are that kind of person, then you are in luck. Karl Polanyi wrote The Great Transformation in 1944 to provide a more meaty historical and sociological takedown of the libertarian approach to the market economy. The first thing to note is that free market capitalism hasn’t always been around. If you listen to libertarians long enough, you may get the sense that laissez-faire capitalism is the natural and default way of the world. But in fact, it's a newcomer in the historical scene. All of known...

Middle-Class Blacks and Whites Have Vastly Different Fortunes

With the passing of the 50th anniversary of the March on Washington, commentators have been assessing the status of blacks in society. Matt Yglesias has a post about the black-white income gap, and how it has not budged in 40 years. Brad Plumer has a post at Wonkblog that features ten charts showing the persistence of the black-white economic gap, including rates of unemployment, poverty, and so on. The statistics provided in these posts—and indeed most statistics provided on this question—compare all blacks against all whites. This kind of comparison is worth making for certain purposes, but it also has its limitations. By itself, such group-level comparisons lend themselves to the hasty conclusion that the difference between the economic situations of blacks and whites is mainly that blacks are more concentrated on the low end of the economic ladder. When you've concluded that the black-white disparity is primarily an issue of black over-representation on the bottom and white over-...

Ten Reasons Fast Food Workers Deserve A Raise

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There is a growing, industry-wide movement to push the fast food economy to work for all involved. Today, workers have called for a national strike that is expected to cross company lines and reach dozens of cities. The fast food labor force has never been protected by collective bargaining power or labor scarcity, making their demands for higher wages and the right to organize a unique historical event. It is also a bold stance from workers made vulnerable by a frail economy, asking for benefits that reach well beyond their own household budgets to the economy as a whole. Right now, fast food companies keep employees at poverty-level wages while reaping billions of dollars in profits for their shareholders every year. Across the economy this practice drives increasing inequality, slow growth, and declining living standards. It is holding back our economic recovery and contributing to our high poverty rates and rates of working poor. Americans deserve better. The fast food workers’...

Challenging the Myths of the Libertarian Right

(Flickr/Gage Skidmore)
The emergence of Rand Paul as a leading contender for the Republican presidential nomination marks an important turning point: Extreme libertarianism has entered the mainstream of American politics. This shift has been coming for 30 years, a period of growing attacks on government as "the enemy" combined with extolling the laissez-faire idea that the free market can solve all our problems. These attacks have not emerged out of thin air. Billions of dollars have been spent by corporations, foundations, and wealthy individuals to fund a large conservative policy and media infrastructure on the right, led by think tanks like the Heritage Foundation, the Cato Institute, and the American Enterprise Institute. In recent years, though, the right has moved even further to the right, as more base Republican voters have embraced libertarian ideology and deep-pocketed funders like the Koch brothers have put more resources behind promoting this extreme worldview. Meanwhile, a new generation of...

The High Probability of Being Poor

Late last month, the Associated Press ran a report about economic insecurity that managed to gain some traction in certain parts of the political internet, and since then, again and again in certain relevant debates. The statistical bomb dropped in the first sentence of the report really says it all: Four out of 5 U.S. adults struggle with joblessness, near poverty or reliance on welfare for at least parts of their lives, a sign of deteriorating economic security and an elusive American dream. To be clear, this figure pertains to the percentage of people facing these problems at least once in their life , not the percentage of people facing them right now . Also, it should be noted that this figure cannot, by itself, be a sign of deteriorating economic security. To show things are deteriorating, you'd have to know whether this figure used to be lower than 80 percent, and we do not know that. Shortly after the AP report blew up, the Wall Street Journal's James Taranto responded with a...

Stop Worrying about Food Stamp "Fraud"

Over at the Weekly Standard blog, Jeryl Bier raised an alarm on Friday about the rise of food stamp (aka SNAP) fraud. The howler in the piece is that although the headline says food stamp fraud is up 30 percent, you soon realize that the fraud rate only rose from 1.0 percent to 1.3 percent. Bier rightly deserves a ding for a ridiculously misleading use of statistics. In response to Bier, Jonathan Cohn points out the misuse of statistics and makes the straightforward case for food stamps . That case is old but worth repeating here: food stamps stabilize households and the economy in bad economic times, pull millions out of poverty, and have very low overhead. Also, the program runs quite well! Beyond Cohn’s takedown, I think we should point out that the kind of food stamp “fraud” Bier is complaining about is not even a problem. The USDA calls the type of fraud in question “trafficking,” and it basically amounts to individually swapping out food stamp dollars for actual dollars. Despite...

Ezra Klein's Blind Spot

(Flickr/Son of Broccoli)
On Monday, Ezra Klein argued that “conventional wisdom on Washington is that corporations win every fight and everyone else—particularly the poor—get shafted" is, wait for it, "wrong, or at least incomplete." He posits that advocates for the poor have increased their influence during the Obama era, pointing to rising food stamp rolls and Obamacare as evidence. His central thesis attacks a straw man: Corporate America and the poor can both wield a lot of power at the same time, as they’re not typically locked in a zero-sum struggle with each other. If anything, it’s the middle class, or perhaps the upper-middle class, that’s been left out. Lo and behold, none other than Larry Bartels, author of the definitive Unequal Democracy: The Political Economy of the New Gilded Age, took to the Monkey Cage to rebut Klein , citing this chart: Bartels sees what Klein does not: there’s a larger economic context. Redistributing income, via food stamps or an Obamacare tax increase is not only...

False Concerns for the Poor

(Flickr/Mark Sedella)
Fast food workers have been organizing across the country for months now, and last week a series of spectacular coordinated strikes generated a deluge of media coverage . As you'd expect, the right-wing media and pundit class came out swinging against the workers with their usual mix of hateful trashing and concern trolling. The hateful trashing mantle was best carried by talking heads at FOX News who slammed fast food workers as mediocre ingrates who should be happy to have a job at all. Comments like these remind us that the right-wing does not merely hate welfare programs due to some anti-spending, anti-government ethos. They just hate the poor in general. Even poor people who, by their very description, are in jobs working hard and seeking to negotiate up their wages with their own employer receive the same vicious treatment the right-wing pretends to reserve only for "lazy welfare cheats." For those of us who don't think the working poor are subhuman garbage, this attack strategy...

How Vast Error-Prone Databases Are Trashing Our Economic Lives

Our personal information is compiled, traded, analyzed, and sold off as never before. Not only do business and government track us online, but retailers trace our cell phones through stores , and vast, little-known databases can keep us from getting jobs, qualifying for loans, and opening bank accounts. Three news reports this week highlight the growing impact of these databases on our daily lives—and the critical need for oversight to ensure that information is compiled accurately, that errors can be fixed, and that the resulting data is used fairly rather than becoming a new means of discrimination against already-disadvantaged citizens. The Consumer Financial Protection Bureau, whose director was finally confirmed by Congress after more than two years of delay, will have its work cut out for it. Consider the report in today’s New York Times finding that more than a million low-income Americans have been denied the opportunity to open bank accounts because of little-known databases...

Is McCutcheon v. FEC the Next Citizens United?

Are we ready for the next Citizens United ? Can our democracy, and Americans’ faith in government, take another body blow from the Supreme Court? An unprecedented group of organizations with nearly 10 million members and supporters—representing small businesses, working families, young people, communities of color, environmentalists, and more— have joined Demos to urge the Roberts Court not to call up this question just three years after the most infamous case of the 21st century thus far. This October the Supreme Court is set to hear a challenge to caps on the total amount that a wealthy donor can give to all candidates, parties, and political action committees (PACs) combined—known as “aggregate contribution limits.” The current limit ($123,200) is already more than twice what the average American family earns in a year—not exactly a restrictive burden on peoples' political participation. If the Court strikes down the limit, a single donor could contribute more than $3.5 million to...

Obamacare a Boon to Entrepreneurs

(Wikimedia Commons/Pete Souza.)
The most often repeated attack on the Affordable Care Act is that the law is a "job killer"—an anti-business spool of red tape that will strangle free enterprise from coast to coast. In fact, one of the biggest obstacles that entrepreneurs face when starting a new business is affording health insurance. Leaving a job where you have coverage to do your own thing has been very costly—since individuals have tended to face the highest premiums in a deeply dysfunctional insurance market. Now, thanks to Obamacare, that is going to change. Yesterday, New York officials announced dramatically more affordable health insurance options for individuals. According to the New York Times : State insurance regulators say they have approved rates for 2014 that are at least 50 percent lower on average than those currently available in New York. Beginning in October, individuals in New York City who now pay $1,000 a month or more for coverage will be able to shop for health insurance for as little as $...

The Social Network Behind Wendy Davis

AP Images/Eric Gay
It had to be orange. Pink is overused, green is for environmentalists, and purple isn’t a Texas kind of color. But orange is Texas, it’s the color of the UT Longhorns, and it’s gender neutral. Months before the special session of the Texas legislature was called, the main organizers of the pro-choice protests had already decided that their t-shirts were going to be orange. By the end of the special session of the Texas State Senate on June 25th, a sea of orange t-shirted pro-choice supporters in the capital’s rotunda were capping off Wendy Davis’ filibuster with fifteen minutes of raucous cheering. Davis became an overnight sensation because of her singular feat of courage and stamina. But her effort was the last piece of tile fitted into a much larger mosaic of people and actions that brought Texas progressives back to life. The success of the effort hinged on not just the existence of outstanding grassroots organizing and social media activism, but their integration. Grassroots...

Spitzer Is Dead Wrong on Public Financing

(Flickr/Timothy Krause)
Former Governor Eliot Spitzer announced his run for NYC Comptroller yesterday and this morning on the Brian Lehrer show, he attacked his opponent, Scott Stringer, for opting into public financing. Spitzer said , “He (Stringer)’ll be spending your money, I’ll be spending my own.” This characteristic of public financing is misleading and wrong. In fact, public financing is one of the only tools constituents have to combat the corrosive influence of money in our electoral system. New York City’s public financing system has successfully diversified the donor base and has brought in more donors of color and more small donors. As the graph below shows , the average contribution for candidates participating in public financing is a fraction of non-participating candidates. Diversifying the donor base brings more voices into electoral politics and can start to reverse the dominance of affluent interests and priorities. In the latest Atlantic survey on American values, nearly 60 percent of...

Why Small Fixes for High-Poverty Schools Aren't Good Enough

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I recently read The Future of School Integration: Socioeconomic Diversity as an Education Reform Strategy , the latest in a long line of Century Foundation books on similar topics. The authors of the book argue that placing poor kids in lower-poverty schools substantially improves their educational outcomes. More provocatively, the authors argue that these socioeconomic composition effects improve outcomes at even higher rates than traditional strategies like introducing additional funding, training, teaching strategies, and other special programs into high-poverty schools. The evidence in the book is surprisingly sparse, consisting primarily of two studies. In the first study , Heather Schwartz takes advantage of an anomaly created by the public housing system in Montgomery County, Maryland, that had the effect of randomly assigning poor public housing recipients to the county's schools. Schwartz found that the poor public housing recipients that attended lower-poverty schools...

Oregon Is Doing Free Higher Education the Right Way

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On Monday, the Oregon Senate unanimously passed a bill already passed by the Oregon House that creates a study committee to develop a pilot program for making Oregon public higher education tuition-free ( I , II ). From The Wall Street Journal : Oregon's legislature is moving ahead with a plan to enable students to attend state schools with no money down. In return, under one proposal, the students would agree to pay into a special fund 3% of their salaries annually for 24 years. The plan, called "Pay it Forward, Pay it Back," would create a fund that students would draw from and eventually pay into—potentially bypassing traditional education lenders and the interest rates they charge. The state would likely borrow for the fund's seed money, which could exceed $9 billion, but the program's designers intend it to become self-sustaining. [...] Under the Oregon plan, students who don't graduate would still pay a fraction of their incomes into the fund; the amount would depend on how long...

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