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

Three cheers for child benefits!

Let’s discuss something worth getting really excited about, the Biden/Romney child tax credit/child allowance proposals.  These proposals would make life much better for poor children and their parents.  A lot better.  Neither proposal goes as far as I would like, but they would be a real improvement and could be made more generous over time.

I will briefly describe the proposals and then discuss the political changes that may have paved the way for a major shift in social policy.

What the proposals do

To see just how exciting these proposals are, it helps to remember what is wrong with our current system of support for families with children, which is centered on a partly refundable Child Tax Credit (actually, two credits) and the Earned Income Tax Credit.  Matt Bruenig emphasizes these difficulties with the current system:

  • Our Child Tax Credit is not fully refundable, which means that children in the poorest households do not benefit from it.  
  • The Earned Income Tax Credit is only available to families with significant labor market income.  This again excludes the poorest households.
  • The current child tax credit and the Earned Income Tax Credit are paid to families once a year, when they file their taxes.  This makes it hard for families to budget.
  • With the EITC, many eligible families (around 22%) do not apply, presumably because of the complex eligibility rules.  It is likely that the same is true for the child tax credit.

The Biden and Romney proposals make full payments available to families without any labor market income.  They would reduce the number of children living in poverty by a third, and reduce deep child poverty by 50%.  They also pay families every month.  For further discussion of the proposals see this from Hammond and Orr or this by Bruenig.

The politics of child payments

Part of the reason these proposals are so exciting is that they reflect a sea change in how we think about poverty, work, government.  The poorest families were excluded from the CTC and EITC intentionally.  The purpose was (depending on your point of view) to create incentives for poor people to work, to punish the non-working poor, to avoid giving the undeserving poor an incentive to have children, and, of course, to do all these things to poor Black people, especially women.  A secondary factor in the structure of the current system was the tendency to run cash benefits through the tax code, to disguise them as tax cuts rather than just admitting they are benefits.  These ideas and impulses have shaped our thinking and limited our options for decades, yet today we may be ready to send monthly checks to poor parents – often single mothers – who do not work. 

Why might we be ready to give modest amounts of unconditional cash to poor families today, assuming we are?  What changed?  I can only guess, but here are some ideas.

Bipartisanship

Dear Judy,

I just want to let you know that I’m here for you on your problem with bipartisanship, and to apologize for not being there for you when you were struggling so with your problem with her emails.

As far as I’ve been able to determine, to date: Partisans were a subspecies of humans found mostly in the forests of middle-europe during the mid-twentieth century. I did use were, but, to be honest, it isn’t known for certain whether or not they are extinct. Skeletal remains of both male and female adults, and partial skeletal remains of what are thought to be teenagers, are still being found today. Here’s the thing, breeding pairs of partisans were known as bipartisans. Isn’t that exciting? There is no historical record, at least none that I could find on Google, of how and where they reared their young. So, this remains an unknown at this time.

I hope this helps. Again, my apologies for letting you down on the her emails thing.

Sincerely yours,

A. Viewer

Tyler Cowen does political romance on minimum wages and covid relief

James Buchanan, one of the most influential free-market conservatives of the past half century, chastised liberals (progressives) for being romantic about politics.  His work on Public Choice Theory urged us to look at “politics without romance”.

Buchanan was right.  Being overly romantic about politics can lead to serious error, but this error is by no means limited to liberals. 

Case in point:  Tyler Cowen has recently been criticizing Democratic proposals to raise the minimum wage to $15 per hour, and the $1.9 trillion covid relief/stimulus package proposed by President Biden.  In both cases, he treats complicated questions of political strategy as if they were blackboard exercises in economic theory, totally ignoring politics.

Let’s start with stimulus.  Cowen has been echoing recent arguments by Larry Summers that the covid bill is too large and may lead to a surge in inflation and/or a Fed-induced recession.  No doubt this is possible; a more prudent approach to fiscal policy might be to spend, say, $1 trillion now (to increase vaccine production and distribution, help state and local governments, etc.), and to keep the rest in reserve in case the economy stalls.  But this overlooks politics in several ways.  It overlooks the high probability – close to 100% – that if the economy does not recover rapidly this year that Congressional Republicans will block any further assistance.  This would give Republicans a good shot at gaining control of at least one house of Congress in 2022, and it would likely doom Biden’s presidency.  Similarly, it overlooks the fact that Democrats have endorsed $2,000 stimulus/relief checks, and that reneging on that promise might hurt them and help Republicans.  Does Cowen think this would be good for the country, given the current degraded state of the GOP?  Let’s not romanticize the fact that the GOP has become a threat to democracy and is thoroughly uninterested in effective governance.  Of course, Democrats could try to pass a complicated bill with triggers or automatic stabilizers.  But Democrats need to pass a bill quickly, they need to craft a bill that can be passed through reconciliation, and they only get one bite at the reconciliation apple.  They also must pass a bill that is acceptable to all 50 members of their caucus.  Criticizing the bill for falling short of economic perfection is fine if one is clear that an imperfect bill is still fully worthy of support, but Cowen lets an imaginary ideal be the enemy of the good.  This is political romanticism.

N95s

Turns out that the best weapon against the COVID-19 virus was, and still is, the N95 face mask. If this wasn’t known from the start, it should have been. We, the greatest nation on earth, the greatest nation that has ever been, were, and still are, dependent on China, and South Korea, for N95 masks. Couldn’t even get enough N95s in those early days of the pandemic for our front-line healthcare workers. During those early weeks, doubling 1,000 new daily infections meant 2,000 infections could be expected soon. We have just watched November 2020’s 67,000 become January 2021’s 260,000. Yet, we haven’t tooled up. Still, we aren’t self-sufficient for N95 face masks. Yet, we are not handing out free N95 face masks. How many lives would have been saved if we, the greatest nation ever, had tooled up and produced enough N95 masks for every one of us by last April? And, if we had required their wearing? How many front-line healthcare workers’ lives could have been saved? How many American lives would be saved if every American had access to free N95s and wore them?

Now, one year in, it seems obvious that it is better to be self-sufficient when it comes to vaccines. Looking back, it is obvious that we would have been better off to have been able to produce our own N95 masks in sufficient quantities.

https://www.nytimes.com/interactive/2021/02/05/us/covid-peak-comparison.html?action=click&module=Top%20Stories&pgtype=Homepage

Angry Bear Site Updates

Some Information

Both Dan and I have been waylaid by Medical issues. Both of us are slowly coming out of what plagues us. We both are a little bit slow in responding. Eric had Covid and is better now.

Dan did talk to the site people who run the servers and also program our capabilities which are on going. He brought to light some of the issues I have read on site and were indirectly pointed out to me. Some answers:

Site Programming Administrator

-Wanted to share (programmers talking) a little more information about what we worked on at your site this morning (29th). We upgraded your resource usage on the server and updated the site for this. The front end was snappy to begin with; however, the back end was a little slow. This should be resolved now (my addition of a reply to EM took forever this morning [30th]. Inserting this post was slow too. I will let Dan know).

-Next week (February 1st), website is migrating to a new server which should help reduce these notifications (me: those notifications that only you can see and I can not).

As Dan finds out more, I will pass it on to you in a not-so- grouchy manner.

Covid Vaccination one dose or 2 III

First, I want to discuss the evidence on effectiveness of the first dose of the BioNTech Pfizer Covid 19 vaccine. The data from few person – weeks of the phase III trial suggested that one dose was highly effective after 10 days. This is based on 4 of roughly 40 cases in vaccinated participants.

Much larger samples from the not randomized controlled just by the general population experience in Israel suggest lower effectiveness. I think the most interesting data are from the Israeli HMO Maccabi who followed a cohort of 50,777 vaccinated Maccabi members. The plot shows 7 day moving averages of diagnosis by PCR. They are very close for vaccinated and not vaccinated Maccabi members for about 14 days. This suggests that all of the many biases from the non randomized trial roughly cancel out. Then after 14 days they diverge ending up with a rate of infection among the vaccinated about 35% that of the unvaccinated.

Then they gave the second dose. Ten days later, the rate of infection among the twice vaccinated was very low

The Oregon Republican Party Issues a Condemnation

The Oregon Republican Party Issues a Condemnation

 You have to read it to believe it.  An excerpt:

Whereas history tells us that after George Washington appointed Major General Benedict Arnold to command West Point, Arnold conspired to surrender the fort to the British; and

Whereas the ten Republican House members, by voting to impeach President Trump, repeated history by conspiring to surrender our nation to Leftist forces seeking to establish a dictatorship void of all cherished freedoms and liberties….

Whereas there is growing evidence that the violence at the capitol was a “false flag” operation designed to discredit President Trump, his supporters, and all conservative Republicans; this provided the sham motivation to impeach President Trump in order to advance the Democrat goal of seizing total power, in a frightening parallel to the February 1933 burning of the German Reichstag….

That we condemn the betrayal by the following ten Republican members of Congress who voted in lockstep with Nancy Pelosi to support a second sham impeachment….

Wow.  Benedict Arnold, the Reichstag Fire: they sure know their history.  And I like the false flag bit: the people who gathered outside the capitol were patriots defending their country against a monstrous conspiracy to undermine democracy and impose tyranny, but the ones who actually went into it were Antifa rabble.

Senate Trump Committee

If ever there was a time for a Senate, and a House, Investigative Committee on anything, it’s now. The Nation needs, the world is waiting, history is begging, for such. This Nation, the world, wants and needs to know, to understand, what happened, how did it happen, and what should be done to prevent its happening ever again? What in the hell is going on in America?

Oh ‘it would be nice to find another Senator Sam Ervin, a Lowell Weicker, … before beginning the hearings.  Nice, but it’s not at all necessary. Senators Whitehouse, Durbin, Klobuchar, Blumenthal, et al will do nicely, and, anyway, the both, Ervin and Weicker, will be there in spirit; wouldn’t miss it for anything. As for the House Committee, who can ever forget Barbara Jordan? Peter Rodino? For sure, no one who ever heard and saw them. The likes of those two will be difficult, maybe impossible to find in the House in this year of our world. But, the both, too, for sure, will be there in spirit.

Unity

“Unity,” they cried. “First, we must have unity.” “Whose unity shall we have, yours or mine,” I asked?

Knowing there was a Unitarian Church nearby, I stopped by and asked the minister. This ordinate tells me that theirs is all about a god of one; a unity god. Always wondered.

Is there such a thing as unity of minds? A singularity? Called up an old physicist friend; says it’s something to do with essence, he thinks.

This unity you are demanding, can you please tell us what you mean by unity?

David Graham at the Atlantic on The matter:

https://www.theatlantic.com/ideas/archive/2021/01/why-are-republicans-being-so-divisive/617648/

ANOTHER LOOMING CRISIS IN SOCIAL SECURITY?

Dale Coberly is a writer and frequent commenter at Angry Bear Blog who is well known for his understanding of Social Security and his proposed Northwest Plan. The Northwest plan was recognized by the Social Security administration as a solution to fixing the shortfall in funding now thought to be in 2034.


An article about Social Security appeared in the Washington Post today. As written by another journalist on the Social Security beat who knows nothing about Social Security but what was told by the famous “non partisan experts.” Experts who are expert liars, “non partisan” of course, and well paid by the people who have hated Social Security.

I thought it worthwhile to try once again to give truth a chance.  In the following I put the article’s statements in quotes.  My observations follow each.

Another urgent item for Biden’s to-do list: The looming Social Security funding crisis (msn.com) by Michelle Singletary

“Biden needs to put this on his to-do list: fixing Social Security. Many young adults already believe Social Security won’t be around for them to collect. Although Social Security isn’t bankrupt, it’s certainly facing a serious shortfall in income to cover promised payments.”