Krugman and flimflam the next generation
Paul Krugman weighs in on the Ryan budget magic. Here is a small quote:
And so it is with the new poverty report.
Give Ryan some points for originality. In his various budgets, he relied mainly on magic asterisks — unspecified savings and revenue sources to be determined later; he was able to convince many pundits that he had a grand fiscal plan when the reality was that he was just assuming his conclusions, and that the assumptions were fundamentally ridiculous. But this time he uses a quite different technique.
What he offers is a report making some strong assertions, and citing an impressive array of research papers. What you aren’t supposed to notice is that the research papers don’t actually support the assertions.
In some cases we’re talking about artful misrepresentation of what the papers say, drawing angry protests from the authors. In other cases the misdirection is more subtle.
It started most obviously with Sarah Palin and has yet to be called what such an approach toward conversing whether in speech or the written word is: Snow Job.
Yes, folks, its that infamous phrase used by your teacher written in red pencil across the answer to your essay or the title page of your report (even though it was full of picture cut from National Geographic with the perfect cover and lovely penmanship).
Snow Job folks. Unfortunately to many in positions to say opinion or make societal effecting decisions converse in the same manor thus are absent any reference need to perceive snow.
In the silver lining department, at least Ryan had some caveats by including on Page 1 :
“The Official Poverty Rate does not include government transfers to low-income households.”
Course he then ignores it, but at least it is there. Meanwhile, wake me when he actually details exactly what he proposes and how it is going to be paid for, though I am expecting the old ” reduce rates, broaden the base” bs without any details.
not sure of your point, so i feel the need to point out
that government transfers do not “reduce poverty,” though they may relieve some of the effects of it.
people don’t want to live on welfare, and a sane economic policy would find ways to create real jobs for real wages.
this is actually a more “progressive” idea than welfare. the criminals who now run the country (i am talking about the big banks and the kochs and petersons) are more threatened by the idea of a self-confindent, prosperous working class than they are by an army of miserable people living on welfare.
Cob, I am just addressing Ryan’s paper
“Despite trillions of dollars in spending, poverty is widespread,” it reads. “In 1965, the poverty rate was 17.3 percent. In 2012, it was 15 percent.”
“The research, from a team at Columbia University, is the first to apply a version of the federal government’s new Supplemental Poverty Measure (SPM) — which most researchers and analysts favor over the “official” poverty measure — to years before 2009. Unlike the official measure, which counts only a family’s cash income, the SPM also counts non-cash benefits such as rent subsidies, tax credits, and nutrition assistance, and subtracts various expenses, such as income and payroll taxes, child care costs, and out-of-pocket medical expenses.
Since non-cash and tax-based benefits now constitute a much larger part of the safety net than 50 years ago, the official poverty measure’s exclusion of these benefits masks progress in reducing poverty. ”
Now I certainly agree with your last two sentences, but that is not the topic here. Ryan’s thoughts are that our efforts have not reduced poverty, yet he ignores what we spend to reduce poverty.
Traditional Poverty Measurement: “How the Census Measures Poverty http://www.census.gov/hhes/www/poverty/about/overview/measure.html
•Includes earnings, unemployment compensation, workers’ compensation, Social Security, Supplemental Security Income, public assistance, veterans’ payments, survivor benefits, pension or retirement income, interest, dividends, rents, royalties, income from estates, trusts, educational assistance, alimony, child support, assistance from outside the household, and other miscellaneous sources.
•Noncash benefits (such as food stamps and housing subsidies) do not count. $168/month in food stamps does not a huge amount make to be considered as a larger part which is an assumption on Ryan’s part.
“Since non-cash and tax-based benefits now constitute a much larger part of the safety net than 50 years ago, the official poverty measure’s exclusion of these benefits masks progress in reducing poverty.”
I’ll second Coberly’s point that poverty is not reduced by government largesse to the impoverished. It is simply ameliorated to some extent while not focusing on the actual causes of poverty. That’s not progress. In fact it might legitimately be described as government impeding itself from making any real progress. Stronger wage protection laws, elimination of laws making union organizing more difficult, etc. might actually lead to reductions in the poverty rate. Don’t hold your breath.
“Now I certainly agree with your last two sentences, but that is not the topic here. Ryan’s thoughts are that our efforts have not reduced poverty, yet he ignores what we spend to reduce poverty.”
It’s a good thing that Ryan is too myopic to see the value he might be able to squeeze out of the limits on government spending to reduce poverty. His problem here is that he would like to reduce or eliminate that spending, but he does not want to strengthen workers’ rights laws that might have abetter long term effect on poverty. His goal is to keep things as they are, with the poor just treading water, but unable to swim to a better place.
I think it might be you who is missing the point. Ryan could well argue that “all we spend on poverty” has not reduced poverty.
if one takes your understanding of reducing poverty he’d be wrong. if one takes mine… and his?… he would be right?
Thing is though that Ryan doe not want to reduce poverty, he wants to reduce spending on poverty and to hell with the poor.
This is what I… and Jack?…. am/are trying to point out.
no offense but it frustrates me that most people seem to think “if you don’t think the way i think, you are missing the point, or “off topic.” The trouble with that is every goddam mistake in world history has been made by failing to see that what is “missing the point” is exactly the point.
The official poverty rate is based on pre-tax income and is unaffected by, for example, the earned income tax credit. The poverty rate is lower if we measure how many people are living in poverty conditions after accounting for all government programs–including EITC, which has grown to become a key anti-poverty program in large part because it is the program most favored by conservatives. See e.g. http://conversableeconomist.blogspot.pt/2013/09/the-poverty-rate-income-and-consumption.html
I think, Ryan wants to create incentives for Americans to work and get rid of the disincentives to work, that prevents or reduces work.
And, I think, we need a lot more pro-growth policies and a lot fewer anti-growth policies from government, particularly in this deep, and now long, depression, which is making almost everyone poorer.
Coberly, when poverty is reduced, then spending on poverty is reduced.
My god Peak, you continuously set up the argument so that “promoting growth” becomes the answer. That might be OK if it weren’t a code phrase for reducing taxes on excessive incomes and taxing corporate profits (which have escaped to hiding places around the globe). You’re full of shit. It’s that simple.
How about laws that promote union representation and worker organization? What about realistic wages for people who work a full shift? How about not laying off necessary workers because it costs “too much” to run a city, state or country? Why not give up the bull shit excuse for exploitation wages, such as it costs too much? If a business can’t sell its goods or services without exploiting its workers then maybe it doesn’t deserve an existence. And most critically, how about a return to tariffs on goods from exploitation countries?
Jack, you don’t know what you’re talking about and don’t know what I’m talking about.
You’ve shown you’re not interested in reality.
And, a lot of steam sure comes out of your ears everytime you mention the rich and successful 🙂
Coberly/Jack: AGREED!!! Ryan loves poor people. The more the merrier.
PT: At the rate this country is going, when poverty is reduced WE’ll ALL be long dead and gone.
Dr. Krugman makes the point that, while welfare might not be a good way to get adults out of poverty, it helps their children not to grow up malnourished. That is, the children have a better chance of breaking out of poverty than they would otherwise.
Before retirement, I walked to and from work a mile or so almost every day and often was asked for money by people on the street. My feeling was that most of these people didn’t have very good stories and probably didn’t need the money as badly as they claimed, although I was never certain. Having government agencies responsible for vetting such people and giving them food stamps or other sorts of aid when necessary seemed a better way of handling the situation to me.
When a lot of people lived on farms, there were plenty of odd jobs that such people could do in exchange for food, but I didn’t have any such jobs to offer. Some sort of community odd-job center might be useful.
Of course anything I’ve thought of has probably been considered long ago, and I would like to think our safety-net system has been had a lot of thought put into it. Certainly things seem better than the work-houses and orphanages of Charles Dickens and O. Henry, but maybe these things run in cycles.
“Coberly, when poverty is reduced, then spending on poverty is reduced.”
that was my point. Peaks point seems to be that when spending on poverty is reduced, poverty will be reduced. which is not true.
meanwhile a cause of poverty is the banks stealing from the people.
we need laws that limit the amount of stealing that big companies can do. they have cost you more thanyou ever spent in taxes.
” think, Ryan wants to create incentives for Americans to work and get rid of the disincentives to work, that prevents or reduces work.”
This is the BS “the rich” have been selling for over a hundred years.
the new deal created “incentives to work.” called pay.
Raising the minimum wage increases the incentive to work.
Coberly, you have a lot of twisted ideas about the rich, banks, poverty, etc., along with twisting my statements.
I am unemployed. Yet I am busy every day doing things which add value to my family, my community and my country. Just because someone does not pay me for what I do, the added value is not diminished.
No, I am not a housewife, or a stay-at-home dad; I am retired. I am unemployed in a socio/politico/economic approved way. No one is concerned that I am not “incentivized to work.”
Much of what goes on and needs doing in our society will never be subsidized by “employers”, any more than housewifely things were. On the other hand many of the things that are subsidized by employers add nothing to society except to spread money around.
If it is okay to create a class of those who don’t, and are not incentivized to, work, the retired, who are none-the-less socially acceptable, we should be able to open up some space for those who have become superannuated, not by old age, but by changing times. And the sole purpose of the occupants of the new space may be simply to keep spreading the money around.
I explained before how raising the minimum wage, up to $15 an hour, is a pro-growth policy. However, without reducing regulations and taxes, the effect on growth, and employment, will be small.
For example, on the production side, we need to make it easier for small businesses to suceed, including removing and reducing regulations that prevent start-ups, slow growth, take-up some proportion of a business’s time, or raise production costs.
On the consumption side, less regulation will reduce prices, the cost of living, and raise real wages and compensation.
It should be noted, there are people who earned over $100,000 a year, went into debt to start a business, and work 80 hours a week, while other people receive a $1,000 check each month, spend it all within a week on “sex, drugs, and rock-‘n-roll,” and then panhandle the rest of the month.
Anti poverty programs are not designed to reduce the incidence of poverty. They are designed to reduce or eliminate the incidence of poor people massing in the streets. Those masses turned out to have seriously deleterious effects on economic activity when they were routinely happening prior to about the 1920s. They also provided opportunities for rallies around charismatic social activists whose proposals worried the existing political and business elites.
Anti poverty programs made it possible to enact onerous statutes against “vagrancy” which gave the authorities free rein to remove the remaining rabble via the force of law. The license provided police by these laws has been most recently and effectively applied regarding Occupiers.
The natural and likeliest outcome of these objectives is to expand access to cable TV and internet services. The key argument isn’t how many poor people there should be but what is the cheapest way to make sure they are kept out of sight and unlikely to interfere with orderly streets and shopping malls.
I neglected to add apropos of the title post by Dr. Krugman that neither he or Mr. Ryan manages to acknowledge this objective.
Jack and Cob,
Let me be more clear.
I believe that the war on poverty should be fought with jobs and higher wages. At the same time, Ryan’s paper is about attacking the small efforts we make to give people a footing from which to start.
If we allow Ryan and his ilk to eliminate that footing since it is not the answer to poverty(admitted), we will make it harder to actually fight poverty.
For some reason people think the poor are always the same people(usually “those people”) who do not move. That is not the case. Those below the poverty line are an ever changing group. Without that footing we actually make it more possible that the poor are destined to stay that way.
Just what regulations and taxes are you proposing we reduce or eliminate? Reducing taxes will necessitate reducing government spending or accepting an even greater increasing debt. Where will you cut?
I agree with you. anything I said that sounds like i don’t agree with that needs to be said better.
I didn’t think it was me twisting what you said, but you. I cannot, in spite of honestly trying, make any sense out of what you say.
You seem to understand the value of a higher minimum wage. But then you fall into a mindless rant about regulations and taxes apparently on the idea that all rich folks are benevolent and that we need no regulations to prevent crime in high places.
“the market” will not end poverty. never has. never can. it will take some planning… and taxes and regulation… to even make a start at that.
sadly there are forces that want to eliminate retirement as a legitimate way to be unemployed. that is exactly what Pete Peterson is spending his billions on. That is exactly what the “social security crisis” is all about.
except maybe not the cycles. The New Deal helped solve an old old problem that had gotten much worse. The new Republicans and their New Democrat friends are working hard to put us back in the workhouse days.
Jerry Critter, show me all the taxes, regulations, and spending, and I’ll show you where to cut to achieve a real economic recovery and strong economic expansion.
it’s really too late for you. you are the one who claims that cutting taxes and regulations will somehow grow the economy and reduce poverty. it is up to you to show that with specifics and specific arguments.
so far your arguments have not been very impressive.
and “show me first..” is a cheap debaters trick. that is not a cheap trick, but a trick of cheap debaters, and it makes you sound insincere.
Your answer to me says it all. In other words you don’t know what taxes and regulations to reduce or cut. That makes your comments worthless
Coberly, I gave an appropriate response to a ridiculous question, i.e. how would I overhaul the tangled tax system, enormous federal budget, and vast federal regulations, which no one can explain in just a few paragraphs.
Your opinion doesn’t mean anything, since you’ve shown you don’t understand the interrelationships and interactions of economic variables. You even implied it yourself it’s way over your head.
Amateur Socialist: EXACTLY!!! Bread&Circuses keeps the streets clean and riot free. Look at the middle east and central Europe. No circus and damn little bread. People get pissed.
Yes. And Mr. Ryan’s efforts to take away more bread is likely to get ugly here too. Eventually.
Pitiful Troll may someday discover that those walls around the gated communities only go so high…