Relevant and even prescient commentary on news, politics and the economy.

Welfare Reform Horror in Mississippi

Bryce Covert and Josh Israel report

Last year, 11,717 low-income residents of Mississippi applied to get a meager government benefit to help them make ends meet. The state’s welfare program, part of federal Temporary Assistance for Needy Families (TANF), gives a maximum of just $170 a month to a family of three. These applicants had applied hoping to get at least that crumb of cash assistance.

But out of the pool—more than 11 thousand—only 167 people were actually approved and enrolled in the program, according to state data obtained by ThinkProgress. Every other applicant was denied or withdrew, resulting in an acceptance rate of just 1.42 percent. Statistically speaking, it’s more like a rounding error.

Read their whole post (which also notes that 20% of single mothers in the USA have zero cash income).

I don’t have anything to say. Clearly nothing can be done to address this horror while Republicans are in power in Mississippi and the Federal Government.

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I haven’t read the Bret Stephens Column on Climate Change

and I’m not afraid to admit it.

I have read more than 700 words of tweets about it.

I have two thoughts on the meta discussion.

First Jonathan FBD Weisman is a remarkably unpleasant person.

In this twitter comment thread he repeatedly typed “you didn’t read the column” in response to criticisms of his criticism of critics of the column. He accused people he didn’t know of intellectual dishonesty based on his reading of their tweets.

He is a reporter. His claims of fact are supposed to be based on evidence. I think his certainty based on nothing demonstrates that he can’t do his job. This aside from the fact that he is being very very rude to customers.

Oddly, I have found Weisman’s reporting to be credible and interesting (I keep track of my thoughts on him because of his profane quarrel with Brad). I am alarmed to find I have trusted the claims of fact of someone who makes claims of fact with reckless disregard. I guess his editors restrain the recklessness which twitter allows. I will continue to treat his reporting as normal NY Times reporting (which I tend to trust).

Second Jonathan Chait is very very hard on conservatives (yeah a shocker). He wrote

… an approach that makes sense if your highest priority is limited government, and you are attempting to reason backward through the data in a way that makes sense of a policy allowing unlimited dumping of greenhouse-gas emissions into the atmosphere. That is a tic of American conservative-movement thought — the conclusion (small government) is fixed, and the reasoning is tailored to justify the outcome. Nearly all conservatives argue this way, and if the Times is going to have conservative columnists — which, in my opinion, it should — they’re going to engage in this kind of sophistry.

I note that the conclusion doesn’t follow. If “Nearly” all but not all conservatives argue this way, the New York Times could probably hire one of the few who doesn’t. My problem (which I posed to myself before reading Chait’s post) is to name a conservative who doesn’t argue that way. If not Bret Stephens who ?

Can you think of a non sophist conservative ? Is there anyone who draws conclusions based on reasoning and evidence (rather than choosing reasoning and evidence based on the conclusion) who is a conservative in good standing with the conservative movement ? I can’t come up with a name.

Now I haven’t read anything by Bret Stephens. Maybe he is the one. But the discussion of his first NY Times column makes me think I should look elsewhere. But where ? I repeatedly have the sense that I have found a reasonable and reasonably honest conservative, but then he* breaks with the movement (sometimes because he was fired for heresy).

*yes all of them are men: Bruce Bartlett, Josh Barro, John Cole.(others I have forgotten).

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Democrats Win One

The US Federal Government isn’t shutting down. Also it seems that Republicans almost totally caved to Democrats in the deal

Kelsey Snell at the Washington Post

Schumer and House Minority Leader Nancy Pelosi (D-Calif.) boasted that they were able to force Republicans to withdraw more than 160 unrelated policy measures, known as riders, including those that would have cut environmental funding and scaled back financial regulations for Wall Street.

Democrats fought to include $295 million to help Puerto Rico continue making payments to Medicaid, $100 million to combat opioid addiction, and increases in energy and science funding that Trump had proposed cutting. If passed, the legislation will ensure that Planned Parenthood continues to receive federal funding through September.

Manu Raju and Ted Barrett at CNN

In the proposal, there are no cuts to funding for Planned Parenthood, a demand from Democrats.
Funding for the National Institute of Health is increased by $2 billion and there is additional money for clean energy and science funding.

Negotiators also agreed to make a permanent fix for miners health insurance and to provide $295 million for Puerto Rico Medicaid. There is also disaster aid package that includes funding for California, West Virginia, Louisiana, North Carolina. There is increased funding for transit infrastructure grants and to fight the opioid epidemic, and year-round Pell Grants were restored.

Also no money for the wall.

Note that Democrats fought (and won) for the people Trump falsely claimed he would represent — for miners, Opioid adicts (now very many are rural Whites) Louisiana, West Virginia and North Carolina. Republicans, who are only populists during election campaigns, tried to deregulate Wall Street.

This looks like a (half year) budget better than I could have hoped.

Bullies fold when challenged, and Donald Trump is a pathetic negotiator.

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Waldmann Vs Waldman (finally)

I am generally very very impressed by Paul Waldman at the Plum line blog (for one thing I admire the lack of Ego he demonstrates by writing for a blog subtitled “Greg Sargent’s take from a liberal perspective). Waldman is reliably brilliant (so is Sargent).

Now finally I find something he wrote with which I disagree. In the generally excellent “President Trump Appoints Tax Fairy to Key Economic Post” Waldman wrote

The point isn’t that tax increases help the economy and tax cuts hurt it, but rather that tweaking the tax code has very little effect at all. You might get a modest economic bump from tax cuts, but it won’t ever create enough growth to pay for them, as Republicans always insist their next tax cut will do. Democratic economists know this, which is why they don’t think changing the tax code — even in a progressive direction — is a particularly urgent priority.

He is demonstrably wrong. I am a Democratic economist and I think that changing the tax code in a progressive direction is a particularly urgent priority.

I think this is just a case of sloppy writing (yeah I know, look who’s typing). By “economists” Waldman means “economists thinking about GDP growth”. This is unfair to economists. Very few of us are obsessed with GDP and, I think, almost none of us are sincerely indifferent to the distrubution of national income (I am guessing that people who claim they are do so because they know their view that the rich should be richer is unpopular).

Many economists who work in public finance are obsessed with the income distribution and, obviously consider changing the tax code their life’s work. There are excellent reasons to suspect that a more progressive tax code would cause dramatically higher welfare.

I have another objection (after the jump)

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7 Islands and 3 Branches

Jeff Sessions said “I really am amazed that a judge sitting on an island in the Pacific can issue an order that stops the President of the United States from what appears to be clearly his statutory and constitutional power,”

There has been considerable discussion of the phrase “an island in the Pacific”. With that phrase, Sessions made it clear that he considers Hawaii to be a second class state — not a real American state like Alabama. I have no doubt at all that he believes this largely because a majority of residents of Hawaii aren’t white. Our Attorney General is deeply racist and only sometimes able to hide this fact.

A Justice Department spokesperson added insult to insult by saying that Hawaii is indeed an island in the Pacific. This is true. Also Bora Bora is an Island in the Pacific. But Judge Watson didn’t issue his order while sitting on Bora Bora or the Island called Hawaii. he was sitting on Oahu, not Hawaii. The US State of Hawaii is an archipelago including 7 large islands only one of which is the island called “Hawaii” in the Pacific.

Sessions personally displayed spectacular geographic ignorance saying “I wasn’t diminishing the judge or the island of Hawaii, that beautiful place, give me a break.”

None of this is very important. What is important is that Sessions challenges the authority of a judge to declare an executive order to be unlawful. ““I was just making the point that’s very real: one judge out of 700 has stopped the President of the United States from doing what he believes is necessary to protect our safety and security.” Sessions has abandoned his claim that his view of what appears statutory and constitutional should count for more than a judges — that an attorney should be able to over rule a judge. Now he claims that the President’s judgement should count more than any (single) judges view of what the law says.

Judicial proceedings start with a single judge (whose judgments can be appealed). Plaintiffs do not have direct access to panels of judges. As noted by Hobbes roughly 370 years ago, the law without a judge amounts to mere ink on paper. Sessions’ clearly stated view is that the President should not be subordinate to any law or statute whatsoever. If no single judge can even temporarily stop him, the law can’t stop him. If no single judge can issue a preliminary injunction or a decision, then no panel of judges can hear the case.

Sessions declares that the USA is, and should be, an absolute monarchy.

He is an enemy of the constitution.

However, he has not committed treason (which requires making war not just declaring it) and has not committed another impeachable offence (he did commit perjury during his confirmation hearings and, of course, should be impeached, convicted, removed from office and, I think, disqualified “to hold and enjoy any Office of honor, Trust or Profit under the United States”).

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The Blood of Christ

I recently saw a rather alarming poster advertizing a blood drive

bloodofchrist

The title is “donate blood and follow your artistic inclinations” which, given the image, I interpreted as “donate blood and faint, so that you are inclined head down just like the recently crucified Christ. You will be resurrected too (by some fluids not the holy spirit).”

Oddly, it seems the advertizing agency didn’t notice the potentially alarming relationship between the image and a (rather rare) side effect of blood donation. They also didn’t consider the literal meaning of “inclinazione” when writing about an extremely inclined figure.

Closer reading reveals that The One True Catholic and Apostolic Church is, in a sense, paying for blood. “Donors” receive discounts on tickets to the vatican museums.

This raises an issue related to economic theory and justifies an AngryBear post. “Tranfused Blood, Serum Hepatitis, and the Coase Theorem” is a fundamentally important article about market failure in the presence of asymmetric information. The authors noted that it is much cheaper to buy blood than to convince people to give it. But the bought blood isn’t as good, being more likely to contain hepatitis virus. The point is that if someone gives with the intent to help, they care about the quality of their gift, and follow instructions to not donate if, for example, they self inject drugs. People who sell include many who care only about the money. Since the donor (or seller) knows more about the donor’s behavior and risk of hepatitis infection than the blood collectors, the market fails.

This is a really important article (or an early cite of an earlier really important article — Google Scholar gets weak going back to 1974).

But, it seems to me, that the One True Catholic and Apostolic Church has found a trick — a way to pay and select. The point is that intravenous drug addicts etc may be desperate for money and eager to sell blood for cash, but they are not so desperately eager to get discounts on tickets to art museums to be willing to lie and endager others to get them. Even the relatively art loving heroin addict will probably want to save the money rather than buy even discounted tickets to an art museum.

So paying with a “merit good” (don’t ask me to define or even type without scare quotes) can be a rational strategy to use the market even in this case of asymmetric information.

I do not have a rationale for bringing up crucifixion, when trying to convince people to let other people stick sharp things into them.

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To me the common assertion about health care reform reform and tax reform makes no sense

Various people have argued that Republicans decided to repeal and (very partially) replace Obamacare before moving on to tax reform, because Obamacare repeal (aka the American Health Care Act aka AHCA) would make it easier to permanently cut tax rates. To me this makes less than zero sense. The argument is that, since AHCA includes tax cuts, tax reform would start from a lower base, so it would be easier to write a tax reform bill which doesn’t add to the deficit after 10 years. It is, in fact, necessary that bills not add to the deficit after 10 years for them to be passed using the budget reconciliation process which makes them invulnerable to filibusters.

However, I don’t see how preceding tax cuts make new tax cuts budget neutral. No one has explained how the exact same tax reform bill could be passed using reconciliation if it followed passage of the AHCA but not if it preceded passage of the AHCA. I know of no one who has argued that the CBO score of the effects of tax reform would be markedly different, or even argued that the sign of the change in the score would be favorable.

Rather the argument seems to be that with the AHCA tax cuts and the tax reform tax cuts, rich people will pay lower taxes than with the tax reform tax cuts alone. This is obviously true and has nothing to do with the order in which the bills are signed into law.

Jonathan Chait has been a prominent proponent of the view which makes no sense to me at all.

The next source of money is repealing Obamacare. The connection between the two issues might seem obscure, but it matters technically. The Republican plan to repeal Obamacare would eliminate all the taxes that were raised to help pay for the benefits — about $1.2 trillion over the next decade. This would lower the baseline of tax revenue, meaning that Republicans would need to design a tax code that raises $1.2 trillion less in revenue in order to be “revenue-neutral.” That makes it crucial for them to repeal Obamacare before they cut taxes.

I can cut and paste his argument. I can read it. But I can find no sense in it at all. Yes if taxes have been cut by $1.2 trillion, then a revenue neutral tax reform needs to raise 1.2 trillion less. But nothing whatsoever justifies Chait’s use of the word “before”. I can’t refute his argument, because I can’t detect it.

This matters, because it now turns out that Donald Trump is one of the people who have been convinced (presumably by Paul Ryan not Jon Chait).

“We haven’t failed — we’re negotiating, and we continue to negotiate, and we will save perhaps $900 billion … we have to do health care first to pick up additional money so that we get great tax reform.”

This argument too makes no sense (very much less surprising in the case of Trump than of Chait). For the reconciliation process, money can’t be picked up with one bill and spent on another. Each bill taken alone must not increase the deficit after 10 years. Now reactionaries consider the AHCA to include great tax reform, since it includes reductions in taxes on high incomes. But this doesn’t make further reductions easier. The order in which the bills are passed doesn’t matter.

In fact, the AHCA makes tax reform more difficult. The reason is that the AHCA benefit cuts are even larger than the tax cuts. So the maximum allowed fiscal 2027 deficit would be smaller if the AHCA were law. A bill which combined health care reform reform and tax reform could include even larger tax cuts than simple repeal of the ACA tax increases and be passed using reconciliation.

I honestly don’t get it. I’m sure I’m missing something. I am also sure, 100% sure, that, even if passage of the AHCA were to make it easier for the GOP to pass a tax reform bill, this wouldn’t be because the AHCA includes tax cuts or deficit reduction.

update: minds think alike.

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Crazification Factor Smashed

Kung Fu Monkey has a sad. Paul Ryan has totally crushed his crazification factor

h/t Kerry Eleveld

This issue has made Paul Ryan into the most unpopular politician in the country. At the start of the Trump administration he had a 33% approval rating, with 43% of voters disapproving of him. Now his approval has plunged to 21%, with his disapproval spiking all the way up to 61%.

I count this as a new event, because Ryan is very famous and 82% is respectably close to 100 %

But mostly, because I want to post this here

blue-eyesA

blue-eyesB

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Blinded by the Right — Literally

Patrick Ruffini tweeted a graph showing a break in the trend of health care cost inflation with the ironic comment “The “Affordable” Care Act sure has bent the cost curve.” In the graph he posted, it is broken not bent.

ruffini2

h/t @ChrisDeLong_

The trick is that the graph starts in 1996 & includes college tuition and software, so the huge change looks tiny.

In comments, it is clear that other people can’t see what is right in front of their eyes (good thing the ACA covers eye exams).

Jon Chait helps out by graphing inflation not the price level and leaving out other goods and services with huge changes.

chaitonruffini

I just asked Fred. I look at the ratio of health care PCE chained indes to the overall PCE deflator. Chait shows a huge decline in overall inflation, which isn’t relevant. Here is an (admittedly annual graph) which sure looks bent to me

fredonruffini

Ideology prevents people from seeing what’s right in front of their eyes.

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On @UnlearningEcon

Unlearning Economics is a person somewhere on planet earth. He or she has been debating with Simon Wren-Lewis and Nick Rowe (on twitter). Brad DeLong joined the discussion.

But what about me. Elisabetta Addis (we’re married) just returned from Palermo. I was eager to talk with a physically present human being having not done so all day. First I said “Hodor” (and had to explain). Then, looking for a topic, I said, “Unlearning economics is someone who is debating”.

She said “incredibile” and showed me her smart phone. On the small screen I could read (barely) the post by unlearning economics which I was planning to discuss.

OK now we are reading the post so that we can discuss it.

The world is highly connected. The 21st century is very strange.

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