Reminder: there is no relationship between inequality and social mobility

 A common argument against government spending on the social safety net is that economic insecurity makes the American economy so great. It's the fear of failure that makes people work so hard and achieve so much. These conditions create a meritocracy that results in a strong economy.

The logic is airtight but utterly inconsistent with all evidence. EPI summarizes a large OECD meta analysis of social mobility studies, finding that the United States has poor social mobility (lower number means more social mobility):

Reminder: government spending and the welfare state have no effect on the unemployment rate

Image: Unemployment rate by year according to World Bank data.

I previously addressed the common but incorrect assumption that a large welfare state necessarily results in high unemployment. Historically, there is no evidence government spending or the welfare state has any effect on unemployment; if anything, the social democratic countries have historically had lower unemployment rates than countries with neoliberal welfare states. However, the data on that page ended in 2001, so here is an update.

At the top of the page is a graph of unemployment rates of the United States and all of the developed world social democracies from 2005 to 2012 according to World Bank data. For most of this time period, the United States had the highest unemployment rate. Prior to 2008, the majority of the social democracies had a lower unemployment rate than the United States; just two of the social democracies--Sweden and Finland--had higher unemployment. Incredibly, for the duration of the Great Recession, Norway's unemployment rate never exceeded 4% and Austria managed to stay below 5%. Both countries probably remained at or near full employment during this entire time period.

Clearly, the size or structure of the welfare state has no relationship with unemployment. This is even more clear if we compare the social democracies to the neoliberal countries. This next graph compares the neoliberal group with Norway and Sweden (the social democracies with the lowest and highest unemployment rates, respectively):

Links worth reading

What have I been reading over the last month?

• Glenn Greenwald on media propaganda surrounding drone victims
• Jed Rakoff on how our criminal justice system forces innocent people plead guilty to crimes they didn't commit 
• SWAT team blows hole in chest of 2-year-old for no reason, consequence free
• Al-Jazeera on voter suppression in the United States
• Obama administration sides with employer in flagrant wage theft case
• Glenn Greenwald on American media propaganda reporting on Latin America
• Alana Semuels on National Nurses United
• Glenn Greenwald asks: How many Muslim countries has the United States bombed or occupied since 1980? ("Reflecting their single-minded obsession with demonizing Muslims...they notably neglect to note thriving gay communities in places like Beirut and Istanbul, or the lack of them in Christian Uganda.")
• Glenn Greenwald and Murtaza Hussain on the horrific conditions of post-intervention Libya

Social democracy / social security is the fiscally responsible choice

Image: The fiscally responsible save for a rainy day. (source)


UPDATED--see below [in brackets]



It should go without saying that budget deficits aren't a result of government spending, but rather the balance of government spending and government income. This becomes obvious when we look at budget deficits of the social democracies, which have far greater government spending per capita than the United States. The United States' budget deficits were 7% of GDP in 2012 (and 10.1% in 2009 at the height of the Great Recession), while Denmark's were 4%, Austria's were 3.1%; Finland's were 2.1%; Iceland, 1.9%; Sweden, 0.3%; and Norway actually ran a surplus of 13.8%. Social democracies are generally very responsible fiscally, historically running fewer budget deficits (chart 4.1) than most other OECD countries, including the United States (Austria being the exception) (click for unobscured graph):

It's important to remember that this 35 year period includes is an incredibly severe recession that affected only Scandinavia in the 1990's; for Finland, this recession was arguably worse than their experiences during the Great Depression. Despite having an extra recession, the social democracies managed to be more fiscally responsible as a whole than the rest of the developed world.

[Update, 02/19/2016: Simply tallying the number of years of budget deficits can be misleading, since a single year may have a greater deficit than the cumulative effect of many years of very small deficits. So, here's a graph of government financial net worth (government assets minus liabilities) with datapoints for 2007, 2009, 2013, and 2014--so before, during, and after the Great Recession. I've marked the social democracies in red and the United States in blue:

Clearly, the social democracies are very fiscally responsible by this measure as well.]

Not only have the Scandinavian social democracies had fewer years of budget deficits, but their rock bottom borrowing costs indicate that investors have utmost confidence in the finances of the social democracies. Markets do err, but the market for the debt of social democratic countries proves that no one seriously thinks that large social democratic welfare states pose a threat to a country's fiscal footing--simply because nobody is willing to bet their money against it.

This adds up to a compelling case that social democracy is fiscally responsible.

Scandinavians don't mind paying taxes, and neither do Tea Partiers

Image: Social democratic activists (source)


The Swedish really love paying taxes:

[A 2012] survey shows that 80 percent of the population thinks the municipal and regional governments should increase the quality of childcare, while only 15 percent think that taxes should be lowered instead. Furthermore, 93 percent believe that the local governments should increase care for the elderly, while only 5 percent favor lowering taxes. Similarly, 91 percent prefer increasing the quality of healthcare rather than lowering taxes.

Since I don't speak a Scandinavian language, more data like these have proven difficult for me to locate. But it's clear that Scandinavians really like paying taxes, and the Swedish even think very highly of their tax collection agency:

Skatteverket, the Swedish Tax Agency, is popular. In fact, it is really popular, with poll after poll showing that it is trusted and respected. A 2013 survey concluded that the Tax Agency has the second-best reputation – beaten only by the Swedish Consumer Agency – of 26 major Swedish public bodies, scoring highly for its customer service and for ‘contributing positively to society’.

‘You don’t have to like taxes, but most people seem confident that things are done fairly’, says Toivo Sjörén of market research institute TNS Sifo, which conducted the poll (link in Swedish).

By contrast its American equivalent, the Internal Revenue Service, is one of the least popular federal agencies in the United States, according to a 2013 poll.

So how has the Swedish Tax Agency managed to pull off what seems like the ultimate confidence trick – taking people’s money but leaving most of them grateful and smiling?

This feat is pulled off very simply. The Guardian wrote a neat story that interviewed the typical Sven on the street about taxes and the welfare system. See if you notice the pattern:

Why social democracy can work in a city, county, state, or country of any size

A common argument holds that social democracy cannot succeed in the United States because it is thirty times more populous than Sweden--population 10 million--the largest social democratic country (though Kerala is a social democratic state in India with 20 million residents). The reason why size is so important is never articulated--but it is nevertheless taken as obvious that social democracy is practical in a nation of 10 million, but impossible in a nation of 316 million.

There are several problems with this argument, however. From the outset, the United States has two extremely successful social democratic programs--Social Security and Medicare--so the burden of proof for this argument is enormous.

Indeed, this assumption contradicts the basic statistics behind social policy design. As I wrote previously, the major strength of social democracy is that the cost of providing services to each participant falls as the number of participants increases. Though there are diminishing returns, for social democratic-style social welfare programs, bigger is always better. The more people participating in a social democratic system, the more secure, efficient, and cost-effective that system will be. In theory, then, social democracy should function better in larger countries like the United States than in smaller ones like Denmark or Sweden.

Of course, statistics and actuarial tables occur in paper, ink, and computer models, not in the real world. Perhaps there are practical, more down-to-earth logistical or management difficulties that are incurred in administering social welfare programs when there are hundreds of millions of participants, rather than millions.

Indeed, intuition argues that large systems cannot be efficient. When a system gets larger and larger, more and more layers of bureaucracy and management are needed to successfully run that system. For an example, let's assume that every ten people need to be managed by a supervisor. For a program with ten employees, one supervisor is needed--that's one layer of management. But if there are 100 employees, then ten supervisors are needed--meaning those ten supervisors need a supervisor--and suddenly we have two layers of management. As more and more employees are needed to administer a program, more and more layers of management are needed, stifling efficiency with oppressive bureaucracy. At some point, the increasing efficiency of more enrollees is certainly overcome by the decreasing efficiency of needing to layer more and more levels of management.

But the intuition is wrong. The administrative costs of Social Security are less than 1% and those of Medicare are around 3%. Neither Social Security nor Medicare have layers upon layers of management. Medicare, for example, is administered by the Centers for Medicare and Medicaid Services (CMS). CMS is responsible for Medicare, Medicaid, HIPAA, parts of Obamacare, clinical laboratory standards, long term care facility standards, and the Children's Health Insurance Program (CHIP). All told, 100 million Americans are covered by a CMS health insurance program: Medicare, Medicaid, or CHIP. Despite enrolling 100 million people--nearly a third of the entire country, or ten times the entire population of Sweden--as well as having numerous other responsibilities, CMS only employs around 4000 people (far fewer than private sector insurance companies).

Comparing the administrative costs of Obamacare to single payer

Above: Critics of Obamacare from the right
Below: Critic of Obamacare from the left

Since this is a very long post, I wanted to emphasize at the beginning that we're most interested in two numbers: $5 billion and 27 million. Obamacare is (at least) $5 billion more expensive than single payer. And, Obamacare leaves 27 million people uninsured that would otherwise be covered by single payer. Essentially, our political system chose to pay $5 billion to prevent 27 million people from getting health insurance.
[UPDATE]--The $5 billion number comes from only start-up costs for the Obamacare website and exchanges--so only for the exchanges and only through 2014. Himmelstein and Woolhandler use CMS estimates to calculate the increase in administrative costs caused by Obamacare to the entire health care system (public and private) from 2014 to 2022: over a quarter of a trillion dollars. See full update at the bottom of this page.



This is the third and final post on how the design of social welfare programs affects their administrative cost. The first two posts (part 1, part 2) established the theoretical framework, exploring how various aspects of social policy design, like eligibility, actuarial values, economies of scale, etc, should affect administrative cost and program efficiency. Of course, theory does not always match reality, so a separate series of two posts compared the individual and aggregate costs of the American versus social democratic welfare states using real world data. This demonstrated that the theory behind program design is sound: the theoretical administrative efficiencies of the social democratic model indeed result in enormous cost savings in the real world.

Missing thus far is an example of social policy analysis using the lessons of administrative design on a real world social welfare policy. This post concludes this series on administrative cost by performing such an analysis on Obamacare. We will examine all the areas of administrative cost (and waste) covered in parts 1 and 2: universal eligibility, actuarial values, economies of scale, automatic enrollment, and other, miscellaneous administrative issues. Since we've already established that the social democratic (single payer) system is the most efficient option, we will compare the administrative structure of Obamacare to the single payer model, and how Obamacare's design makes it less efficient than single payer.

Before beginning, it's worth reiterating that Obamacare is basically the law Obama wanted, not something watered down to get conservative votes (see here and here) (and recall that every single Republican in both houses of Congress voted against the bill, minus one abstension).

Obamacare and universal eligibility
Single payer systems derive much of their efficiency from universal eligibility. When everyone is eligible, there is no need to hire legions of bureaucrats to ensure that all applicants meet eligibility requirements, or verify that all current beneficiaries remain eligible. Every step away from universal eligibility means that some system must be created and staffed by bureaucrats to ensure that only eligible applicants are able to participate, and this does not happen for free.

Links worth reading: Jacobin edition

Jeff Bryant on the (predictably) broken promises of the charter school movement

Glenn Greenwald on the American political class's lurching from supporting dictatorship, then democracy, then back again to dictatorship in Egypt

----------------------------------------


The next issue of Jacobin is due out very soon. It sure seems longer than 3 months since the last issue of Jacobin was sent out. To hold you over until the next issue, here are some of my favorites from Jacobin so far:

Megan Erickson - The Strike that Didn't Change New York
Llewellyn Hinkes-Jones - Bad Science
Pankaj Mehta - There's a Gene for That
Seth Ackerman & Mike Beggs - Don't Mention the War
Gavin Mueller - The Rise of the Machines
Penny Lewis - The Myth of the Hardhat Hawk

U6 Watch: September 2014

Vox has two articles on the labor market worth reading, both highlighting recently released data that confronts the misleading U3 unemployment rate. A drop in the U3 unemployment rate is not an entirely positive development because:

• Some of the drop in the U3 unemployment rate continues to reflect a drop in the labor force participation rate. This disproportionately affects female workers and is still vastly underestimated by policy makers and commentators.

The development of early maternal health policies in Finland

Note: This post was created to supplement a different post on the Finnish welfare state. For clarity, a long blockquote I wanted to include in that post is instead published here.

The book Birth by Design details several countries' transition to a healthcare system in which childbirth occurs in a hospital, instead of in a family's own home. Lacking hospital infrastructure, impoverished Finland had an additional, intermediary step. Before transitioning to birth in hospitals, the Finnish government expended significant effort to provide professional birth attendant services for in-home births. The the innovative strategies to that ultimately overcame the many difficulties of this process make this decades-long event a classic example of social policy design:

Social democracy succeeds on the strength of its policies, not because of cultural superiority

Image: Flickr user Visa Kopu snaps a photo of her maternity benefit (or "baby box"), sent to every pregnant mother in Finland shortly before her delivery. (source)



This series examines commonly held, racist views on social policy. Part 1 examined the racist idea that social democracy can only work in society that is already harmonious, wealthy, and egalitarian. Even a cursory look at the history of Finland in the early 1900's--desperately impoverished, war-torn, oppressed by occupying armies, society shattered by a brutal civil war--quickly makes these arguments untenable. It also exposes them as racist. Part 2 examined the racist claim that social democracy only succeeds in a homogeneous society. This claim is made untenable (in part) by the experiences of Sweden, which is--by many measures--one of the most diverse nations in Europe. Clearly, minorities are not so evil that their mere presence destroys welfare states. Rather, this view reflects our own racism; when we see statistics that the Swedish educational system is among the very best in the entire world, we assume that there cannot be any students there who aren't white.

This post--part 3--begs the question: If racial, cultural, or genetic superiority cannot account for the success of social democracy--what can?

For this post, we will focus on social democratic child welfare policies (especially infant mortality and childbirth attendance) as an instructive example.

Why do these policies work?
As I've written before, there is no question that social democratic policies are successful. The social democracies as a group have led the developed world in all quality of life indicators, particularly infant mortality and life expectancy, while simultaneously (as a group) leading the developed world in low unemployment and high rates of economic growth. There's no question that the policies work. The question is: why?

The "why" question is of the utmost importance because the conditions of the Scandinavian social democracies in the first few decades of the 1900's--especially Finland--resemble underdeveloped countries in Latin America, Africa, and Asia today. Though prosperous now, the Scandinavian social democracies had endemic poverty and catastrophic quality of life indicators in the early 1900's. For example, Finland's infant mortality rate peaked in the 1930's at a staggering 90 deaths per 1000 live births, which is comparable to the worst infant mortality rates in the world today:


At three deaths per 1000 live births, Finland currently has one of the lowest infant mortality rates in the world. Indeed, the Scandinavian social democracies today have some of the best quality of life indicators in the entire world, even though much of the rest of the developed world had a head start. Is there some reason why policies that worked so well in Scandinavia could not work in the Central African Republic or Mali?

Links worth reading: Obama's very busy week

Obama destroys lives of 70,000 people in exchange for a few votes from white people

• [O]ne longtime activist burst into tears when asked how the decision might affect his friends and family.
• To wait nine more weeks means the President has agreed to deport more than 70,000 people, more than 1,100 every day, and continues cementing his legacy as the Deporter-in-Chief.

3 more years of war in Iraq

• For those who favor air strikes: if, as most regional and military experts predict, it turns out that airstrikes are insufficient to seriously degrade ISIS, would you then favor a ground invasion?...For those who keep running around beating their chests talking about the imperative to “destroy ISIS”: will that take more or less time than it’s taken to “destroy the Taliban”? Does it ever occur to such flamboyant warriors to ask why those sorts of groups enjoy so much support, and whether yet more bombing of predominantly Muslim countries – and/or flooding the region with more weapons – will bolster rather than subvert their strength?
• Is Obama’s new plan something he genuinely believes in? Or does he recognize it’s stupid, and is just doing it for the optics? There’s a dismal precedent for the latter option: His decision to extend what he knew was a dead-end war in Afghanistan for two years because of the bellicose promises he’d made in order to look tough during his first political campaign. That time, he traded about 1,300 American lives for optics.

Economies of scale, avoiding administrative problems, and automatic eligibility: why social democratic/single payer systems are more efficient

Image: source

Update: Part 3 can be found here

Social democratic programs can provide social welfare services more efficiently--higher quality at a lower cost--than other types of public social welfare programs, as well as the private market. My first post on this issue dealt mostly with actuarial values, and for good reason. For all social welfare services--from health insurance to child care--actuarial values are of primary importance; for disability insurance and defined benefit pensions--a category that includes Social Security--actuarial values are the entire story (much more about retirement benefits in the first post on this issue, as well as here and here).

But in my excitement over actuarial values (I'm not like most people), I failed to elaborate the other factors that make social democratic programs more efficient than other program designs and the private market: economies of scale and other administrative issues, mostly centering around eligibility.

Most conservatives (even Tea Partiers) are enthusiastic social democrats

Updated (see below)



What does the American right believe in? Keeping out immigrants and cutting government welfare. What does the Scandinavian right believe in? Keeping out immigrants and...increasing government welfare?

The pitch to voters was summed up by Åkesson in the runup to last autumn’s poll, when he tweeted: “The election is a choice between mass immigration and welfare. You choose.”

Yes, the platform of the ultra-right wing Sweden Democrats' in the 2015 elections was pro-welfare. This is the same right wing party that had to withdraw a candidate when it came to light she was a somewhat open Nazi sympathizer.

It turns out that the welfare state in Scandinavia is so popular that even the Scandinavian right loves welfare. As one writer remarked, "In Sweden, Denmark, Norway and Finland, the populist right is on the march – and it is wearing the traditional battle armour of the Nordic left."

Perhaps this is an anomaly; maybe a party that has crazy views on racism and xenophobia also has crazy views on welfare. Yet welfare is popular across the political spectrum, not just the wings. Even the market-oriented, center-right parties (typified by the Swedish Moderate Party) love the welfare state:

The fact that voters discarded the Social Democrats for the Center-Right in 2006 and then re-elected them again in 2010, however, does not mean that the voters had become more conservative. Ironically, the Center-Right victory reflects the hegemony of social democracy in Sweden. For in order to win the elections, the conservative Moderate Party had to shed its free-market ideology and reframe itself as a supporter of the welfare state. After a disastrous showing in the 2002 elections, the free-market wing of the party stepped down and a new centrist generation took over. Copying New Labour in the UK they called themselves the "New Moderates" and claimed to be the "true" working class party...the New Moderates concluded they had to give up the idea of a "system shift" and admit that after decades of social democratic dominance and hegemony, they could never convince the electorate to give up the welfare state...

What is important for our present analysis is that none of the main reasons for the defeat of the Social Democrats indicate that support for the country’s generous welfare policies was declining. In fact, a recent survey shows that 80 percent of the population thinks the municipal and regional governments should increase the quality of childcare, while only 15 percent think that taxes should be lowered instead. Furthermore, 93 percent believe that the local governments should increase care for the elderly, while only 5 percent favor lowering taxes. Similarly, 91 percent prefer increasing the quality of healthcare rather than lowering taxes...

[Sweden] still has one of the world’s most generous welfare states and support for it is so great that the Center-Right has only been able to rule by becoming semi-social democrats. So the Social Democrats’ loss of political power has been accompanied by a complete hegemonic ideological victory for the basic Social Democratic welfare tenets. It is far from utopia, but also far from the damage done in the United States by Reagan and the Bushes or in the UK by Thatcher and New Labour.

If this seems strange, it's not. This is exactly what happens in the United States.

Something magical happens when welfare programs become universal. Suddenly, even conservatives love welfare (update: this idea is taken up further here). Because the entire welfare state in the social democracies is universal, the entire welfare system is wildly popular and (as we've seen above) extremely resistant to cuts. Politicians don't cut popular programs.

The opposite of this, of course, is the bulk of the welfare state of the United States. For the most part, only poor people are eligible for American social welfare programs; thus, the vast majority of voters have no interest in maintaining funding for these programs. Obviously, such programs become very unpopular. Food Stamps is a perfect example; only poor people are eligible, and earlier this year, the Republicans and Democrats debated over how many billions of dollars should be cut from the program. It's no surprise that the Republican Party wanted to cut Food Stamps, but the Democratic Party, which is supposedly the pro-welfare party in this country, also wanted to cut Food Stamps. The only disagreement was over how much to cut; the Democrats wanted to cut it by $4 billion over 10 years, but the Republicans wanted $20 billion, so they compromised at $8 billion. This is what happens when Republicans and Democrats cooperate; we should be glad it happens so infrequently.

Yet the United States' two universal, social democratic programs--Social Security and Medicare--are phenomenally popular across the political spectrum. Social Security and Medicare are extremely popular with the ultra conservative Tea Party (emphasis added):

The “revolutionary” rhetoric of the Tea Party has led some commentators to pigeonhole it as reflexively anti-government, but the concerns of grassroots Tea Partiers about representation should not be confused with blanket opposition to all federal social programs. Tea Party activists hold positive views about the government entitlement programs from which they personally benefit—including Social Security and Medicare, and also other entitlement programs they have used...Others referred to having relied on unemployment insurance after losing their jobs, or expecting to rely on Social Security in the future. These results are in accordance with the CBS News/New York Times poll of Tea Party activists, which found that about half of Tea Partiers say someone in their household receives Medicare or Social Security benefits, and that most Tea Party supporters believe these programs are “worth the costs . . . for taxpayers.” (45) As Massachusetts respondent Nancy puts it: “I’ve been working since I was 16 years old, and I do feel like I should some day reap the benefit [of Social Security Retirement benefits]. I’m not looking for a handout, I’m looking for a pay out for what I’ve paid into."

[Social Security includes several programs. The most frequently overlooked is Unemployment Insurance, wherein people who lose their job are able to temporarily collect cash benefits. This is designed to help people make ends meet until they can find their next job. This is a universal, social democratic program.]

That CBS News/New York Times poll found of active Tea Party activists:

And while the vast majority opposes the health care reform bill, 62 percent say programs like Social Security and Medicare are worth the costs to taxpayers. (The figure is even higher among Americans overall, at 76 percent.)

A 2011 poll found that a whopping 76% of Tea Partiers opposed cuts to Social Security and Medicare. The survey data are clear: American Tea Partiers love social democracy.

So the characteristics that make welfare so popular in Scandinavia are the same characteristics that make Social Security and Medicare so popular in the United States. Universal, social democratic programs are beloved by conservatives, whether they're in the United States or Scandinavia.

That is how to make the welfare state popular and resistant to budget cuts: make it universal. Even Tea Partiers love social democracy. So you're a liberal who doesn't like it when antipoverty programs get cut? As long as these programs remain non-universal, they will always be politicians' favorite targets for budget cuts. Universal social welfare programs are so popular they practically defend themselves.

Paul Rosenberg makes a similar case from a different angle using survey data on the general American population:

Combining GSS data from 2000 to 2012, and asking about Social Security and spending on “improving and protecting the nation’s health” (GSS’s closest match with Medicare), liberal Democrats thought we were spending “too little” rather than “too much” on one or both  by a margin of 87.1 percent to 2.4 percent — a ratio of over 36-to-1.  But all other groups of Americans held the same view, even conservative Republicans — just not by the same overwhelming amount.  They “only” thought we were spending “too little” rather than “too much” by a margin of 59.2 percent to 13.1 percent— a ratio of 4.5-to-1.

Yes, conservative Republicans want to expand Social Security and Medicare by a 4.5-to-1 margin. Think about how amazing this is. As Rosenberg points out, the position on entitlements of the typical "conservative Republican" is well to the left of the vast majority of Congressional Democrats, as well as President Obama, who has proposed hundreds of billions of dollars in cuts to Social Security.

Rosenberg's article is well worth reading in full. A few other points:

On the revenue side, the public increased taxes by an average of $292 billion—roughly triple the amount proposed by President Obama. Majorities increased taxes on incomes over $100,000 by 5 percent or more, and by 10 percent or more for incomes over $500,000. Majorities also increased corporate taxes and other excise taxes. Overwhelming majorities also favored raising estate taxes: 77 percent favored reverting at least to the 2009 levels, with estates over $3.5 million taxed at a 45 percent rate. These positions are generally so far left, they don’t even appear on the spectrum of discussion in Washington...the position of Republican respondents overall was still dramatically to the left of the political conservation in Washington...[Tea Partiers] were more conservative than Republicans overall, but they still come across as wild-eyed socialists compared to their D.C. representatives...

Update:
The far-right, vehemently anti-immigrant Danish People's Party has risen rapidly based on an embrace of the welfare state:

However, the Danish People’s Party is more than a successor; is also represents a metamorphosis of the new right. With the formation of a new party came the opportunity to get rid of the legacy of neoliberalism. Some elements were formally maintained in party documents such as the working programme of 1998, but in practice, the new party abandoned criticism of the welfare state and taxes, and increasingly argued in favour of improved conditions for pensioners...At the same time, it has been approached on several occasions by the trade unions lobbying for the party’s support, and it has increasingly achieved an image as a pro-welfare party usually aiming to get concessions on welfare issues, in particular for pensioners, from the Liberal-Conservative government.

The one year use-it-or-lose it provision ensures the 1033 program is working exactly as intended

Image: Police officers heavily armed with military weapons and armored vehicles train their weapons on peaceful protesters following the shooting death of a teenager by a police officer in Ferguson, MO. (source; h/t)


There's little intelligent commentary anyone can provide beyond Radley Balko's framing of the events in Ferguson within the greater overall trend of police militarization in the United States. Police are increasingly becoming an occupying military force, with military weapons turned against peaceful protesters and the communities they are supposed to be serving.

The culprit is usually cited as the Department of Defense Excess Property Program, or the 1033 program--though it is not the only federal program that provides local police with heavy military equipment. Since the 1990's, the 1033 program has provided local police departments with military equipment for confronting heavily armed drug cartels and terrorists.

My perception is that most people believe that police militarization is a mistake--a system that isn't working as intended. In other words, the 1033 program was designed to protect communities from extraordinary threats--terrorists and machine gun- and grenade-wielding drug lords--but the use of these military grade weapons on the communities they are supposed to protect is a wholly unintended, unforeseen consequence. Unfortunately, good intentions have inadvertently created a system that turns local police into occupying paramilitary forces.

This misconception needs to be corrected. Even a cursory look at the 1033 program reveals a situation that is unfolding exactly as intended by the creators of that policy. This isn't a program that is being misused in a manner never intended; everything is going according to plan.

Paul Ryan's new attempt to conceal his attack on the social welfare system

Image: Representative Paul Ryan (R-WI) (source)


Much noise was generated recently about Paul Ryan's supposed evolution on poverty. Every year, Ryan designs his ideal budget for the federal government, always calling for deep cuts to the social welfare system. In more recent iterations of his budget, he focused almost all of his enormous cuts to the social welfare system on antipoverty programs, leaving the parts of the social welfare system used by the nonpoor--like Social Security and Medicare--basically unscathed.

But when Ryan released a poverty plan last week, it featured restructured antipoverty programs--without reduced budgets. Was this an unprecedented change of heart--even a mea culpa--by the Republican wonk-in-chief? Had he reached a new understanding of poverty? Some thought so. Here, for example, is Ezra Klein's gullible write-up of Ryan's poverty plan entitled Democrats should welcome Paul Ryan's poverty plan. At the end, he concludes:

There will be charges of hypocrisy against Ryan's plan, and they're merited: his poverty plan and his budget cannot coexist in the same universe at the same time. Conservatives who spent the last few years cheering Ryan's budget are now cheering his poverty policies need to ask themselves some hard questions.

But more important than the contradictions in Ryan's plans is their progression: Ryan is refocusing himself and, perhaps, the Republican Party on reducing poverty by making the government's anti-poverty programs work better: that's a project that's both more important for the country and more amenable to compromise. Democrats should welcome it.

To his credit, Klein later interviewed a very skeptical Bob Greenstein of the Center for Budget and Policy Priorities, who douses cold water on Klein's hope for an evolution on poverty by Ryan and the Republicans. (Klein should be lauded for his willingness to post interviews with people who convincingly refute each point of his previous columns; most would instead double down.)

Greenstein argues that every word of Paul Ryan's plan is designed to sound like a reform of antipoverty programs--plans to make them work better with the same amount of funding--but are actually designed to create opportunities to gut them in years to come. Ryan's poverty plan is a Trojan horse--a vehicle secretly designed to make a reality the deep cuts to the social welfare state he envisions in his budgets.

Paul Ryan is certainly capable of this type of deceit. As I wrote previously, deceit is utterly foundational to his career. He would be a complete unknown if he hadn't cloaked all of his budget proposals in lies. Each one of the budgets he prepares every year utilizes confusing baselines or incomplete information to hide what he actually wants to do: gut the social welfare state. Ryan's consistent efforts to win support by confusing voters and pundits reveal that even Ryan knows how unpopular his intentions are. His efforts to cloak in his 2010 budget the destruction of Medicare and taxes increases on 95% of all Americans are particularly amusing. Ryan wouldn't be a major figure if he promised budgetary miracles while delivering tax increases on 95% of Americans and a hollowed-out Medicare; he's only a major figure because he promises budgetary miracles while concealing tax increases on 95% of Americans and a hollowed-out Medicare.

Just how culturally/ethnically homogeneous is Scandinavia?

Image: Cars ablaze during racially motivated rioting outside of Stockholm in 2013. Sweden is more diverse than most European countries, including the UK, France, and Germany. (source)



The first post on this issue dealt with the idea that social democracy can only occur in a society that is already harmonious and prosperous. As we saw, this view is made untenable by the experiences of Finland. The Social Democrats in Finland were first voted into power following a bitter civil war in which 1% of the population perished and a significant number died from mistreatment in prison camps; this followed nearly 700 years of occupation by foreign powers, two incredible famines, and various gruesome wars between Sweden and Russia that used Finland as a convenient battlefield. Social democracy succeeded through two wars with the Soviet Union in which a significant percent of the population died and over 10% of the population was permanently displaced from their homes. And it succeeded in spite of an economic depression in the 1990's.

This post deals with the question of race/cultural/ethnic/religious homogeneity. That a social democracy can only occur in a place that is homogeneous is a widespread view--both in popular imagination and in otherwise reputable sources. As an example of this idea in a mainstream publication, Ivy League professor of higher education Marybeth Gasman writes:

One of the speakers, Cecile Hoareau of the University of Maastricht, presented a paper pertaining to equity across Europe and as expected, according to her research, those countries with the greatest level of equity in higher education were Finland, Sweden, and Norway. These same countries have been the subjects of quite a few essays written in the United States as of late. All of these essays hail the Northern European countries as role models in both K-12 and higher education. And they are. In all of these countries, education is public, free, and high levels of equity have been achieved. These countries are proud of their success and should be. Their success leads to one central question: How can this success be replicated? While I think this is an important and admirable question and I also think that there are important lessons to learn, people tend to forget that Finland, Sweden and Norway are homogenous [sic] countries...One of the secrets of success in homogenous [sic] countries is that they are homogenous [sic].

Unlike the ignorant Internet comments that unwittingly sparked these posts, she tries to make a slightly more subtle, yet no less racist point. Scandinavian education is indeed very equitable--that is, the worst performing students don't do that much worst than the best performing students. Education inequity is a massive problem in the United States.

But the problems of Gasman's piece are many, and we'll take each of them in turn.

How far can the strength of homogeneity really advance a society?
Gasman greatly exaggerates the power of ethnic, cultural, or racial homogeneity:

Reflecting on Delpit's ideas, people are more comfortable taking care of and educating people who are similar to them in terms of race and culture. One of the secrets of success in homogenous [sic] countries is that they are homogenous [sic]. People feel comfortable with the government providing resources to the general public because the general public looks like them. Unlike these Scandinavian countries, the United States is hugely diverse and we often think that people of our race and class work harder and know best.

As discussed in the previous post on this issue, if homogeneity is so important, what do we make of homogeneous states like West Virginia? West Virginia has a population over 90% non-Hispanic white; their education system is the envy of no one. If cultural homogeneity is such a strength, why are the many US states that are over 90% non-Hispanic white not beacons of educational equity? Many African countries are well over 90% African; many Asian countries are well over 90% Asian. Clearly, homogeneity is--at best--a small part of the story.

In a similar vein, I wrote previously about the large minority groups in Kerala, a thriving social democratic state of India, and do not need to repeat those arguments here. If minorities are so toxic to welfare states, why can Kerala thrive despite having such large minority groups?

Sweden is one of the most diverse countries in Europe
For this section, we'll focus on Sweden, which is the most ethnically diverse of the Scandinavian nations. Gasman writes:

Racism masquerading as critiques of social democracy

Image: In popular imagination, Finland was always a harmonious, prosperous society. This painting by Eero Jarnefelt (Under the Yoke, 1893) captures some of the poverty and oppression of Finnish society in recent history (source; click on image for larger view).



In reading a silly article about the Finnish education system giving their students 15 minute breaks to run around outside for every 45 minutes of teaching--and how Finland's education system is the best in the world in part because of this practice, not in spite of it--it became obvious how outright racism is the typical explanation of the success of social democratic programs:

The cultural, genetic, or racial superiority of the Finns, apparently, decides their fate as the world's best primary and secondary students. Another commenter makes more of an effort to veil his racism:

This commenter at least tries to cloak his racism in the cultural legacy of slavery and Jim Crow era policies, a fundamentally racist argument utterly demolished by Ta-Nehisi Coates.

It's important to note that this point of view is usually limited to ignorant Internet comments, since it becomes quite obviously untenable with even cursory research. The PISA tests compare student achievement in different countries. Finland tops the PISA rankings, with Sweden close behind. Norway, another Scandinavian social democracy, ranks surprisingly low. Clearly, there is something special about Finnish educational policies, not their society.

Additionally, if homogeneity at a national level is so important, then it's as though the black children in Chicago's south side are so evil that they are able to negatively influence the performance of white students in West Virginia. West Virginia has a population over 90% non-Hispanic white; their education system is the envy of no one.

Nevertheless, unsupported arguments that the success of the social democracies are owed in part to their ethnic homogeneity go unchallenged in respectable publications. I wrote previously about an otherwise insightful essay on the problems of the Brazilian health care system, which begins:

In other words, universal healthcare looks very different in Brazil than it does in, say, Scandinavia. Finland, for example, provides free healthcare to all its citizens, but the country is smaller and more homogeneous than the state of Minnesota.

But the article is about issues of underfunding and physicians not wanting to practice in the jungle. Not a shred of evidence is marshaled to defend the idea that ethnic homogeneity is necessary for social democratic programs succeed. I wrote:

If cultural and ethnic homogeneity are necessary for universal social welfare programs, how are Social Security and Medicare so successful in the United States? Social Security taxes get deducted from my paychecks even though my coworkers are black, white, Asian, and Latino. My grandmother's Social Security benefits get deposited in her bank account each month even though she doesn't share the same religion as her neighbors.

Such arguments show--at best--stunning ignorance; at worst, thinly veiled racism. These views conveniently ignore Scandinavian history as well as the resounding success of social democracy in Kerala, a state in India with large minority groups.

This issue is too much to cover in a single post, so I'll break it into four parts. Here, part 1 will examine the case that social democracy can only exist in a country that is already wealthy, cohesive, egalitarian, and/or harmonious. As we shall see below, Finland is a perfect example of an oppressed, divided nation that nevertheless succeeded as a social democracy. Part 2 will take on the contention that social democracy can only succeed in a place that is culturally, ethnically, religiously, or otherwise homogeneous. Part 3 will make the case that social democracies succeed because of the strength of their social welfare policies, and for no other reason. Part 4 will tie these ideas together by comparing the quality of life indicators in the American city with the highest poverty rate--Detroit--versus those of Finland on the eve of its transition to social democracy. Conditions in present-day Detroit are indeed appalling, but 1920's Finland was a far more impoverished and divided society. If backwards Finland can transform itself into a country with the lowest infant mortality rate in the entire world, Detroit can obviously undergo a similar transition.

Obama and undocumented immigration, ctd

This article basically confirms everything I previously wrote about Obama and undocumented immigration--that he could act, but was choosing not to, and that only adversarial political pressure would make him change his mind.

Patrick L. Smith provides much-needed context on Obama's stunning ignorance and paternalism surrounding this issue:

“Do not send your children to the borders,” President Obama said in a television interview the other Sunday. “If they do make it, they’ll get sent back. More important, they may not make it.” 

I find this remark not short of disgusting for its several subtexts. Central American parents are so stupid and loveless that they must be instructed to care for their offspring. Their decisions are calculated — suspect, that is. These mothers and fathers are ignorant of the dangers facing their emigrating kids. The best place for them to be is in the environment — to which no reference — they are escaping on orders from the calculating parents.

And:

Links worth reading

Dylan Matthews article on how prisons can be phased out raises (obvious) questions about the goals of our criminal justice system

David Bernstein and Noah Isackson on how the Chicago Police Department, under pressure from the mayor's office, doctors crime statistics (part 1, part 2) (alternate title: Hey hey, ho ho, Rahm Emanuel's got to go)

Matthew Yglesias on how it's three times cheaper to simply give homeless people housing than it is to keep them on the streets--raising (obvious) questions about the goals of our antipoverty policies.

Universal Basic Income: a thoroughly researched, evidence-based policy

Image: President Richard Nixon bowling (source)


Poverty--by definition--is a person or family with not enough money. If poverty is simply not having enough money, what if we just gave people free money? Wouldn't that solve the problem of poverty?

Today, this proposition sounds completely absurd. No politician or commentator in the mainstream could even mention it and be taken seriously. This is the kind of proposal that could end a career. Yet, decades ago, this idea was so mainstream that the likes of Richard Nixon and Milton Freeman were in support of it (this is a useful reminder of just how conservative our country has become). Yes, as Nixon was escalating in Vietnam, he represented the political center by advocating a universal basic income.

The idea has many names, among them Universal Basic Income (UBI), Guaranteed Annual Income (GAI), or (as Nixon would have known it) the negative income tax. It also takes several different forms: some proposals would pay everyone the difference between their earnings and a poverty line--for example, if the poverty line was $20,000 in a year and your family only made $16,000, the federal government would write your family a check for $4,000. Others aim to keep things administratively very simple and would direct deposit a set amount of money in the bank accounts of every single citizen* (for most people, these benefits would be offset by increased Social Security taxes to pay for the program). In whatever form, a UBI is a guarantee that you and your family will never be impoverished.

A hallmark of all UBI proposals is unconditional cash transfers--that is, recipients are not expected to do anything in order to receive cash benefits. Again, this makes the program administratively very simple, but it also grants people security. That security has its own rewards (which I will elaborate on in a future post). (Even conditional cash transfers in developing countries are often considered utopian nonsense--yet they work).

It's crazy to think that a UBI would improve health or educational outcomes. And it's equally crazy to think that a UBI would not cause people to stop working. Yet that is exactly what research on UBI's has found. Decades ago, when UBI was a serious policy proposal, extensive research was done. Very well designed studies (randomized controlled trials) found downright incredible results. From a review:

The first experiment was conducted on an urban population in New Jersey and Pennsylvania between 1968 and 1972. A second experiment was conducted in Gary, Indiana to examine the effect of a GAI on single parents. A third experiment was conducted in North Carolina and Iowa to look at the effects on rural populations. The final experiment was the Seattle-Denver Income Maintenance Experiment (SIME-DIME) which had access to a much larger experimental population...

In North Carolina, children in experimental families showed positive results on elementary school test scores. In New Jersey, data on test scores was not collected, but a positive effect on school continuation rates was found. In SIME-DIME there were positive effects on adult continuing education (Levine et al. 2005: 100). These results are all the more remarkable when juxtaposed to the academic literature that shows it is very difficult to affect test scores, dropout rates or educational decisions by direct intervention.

Inconsistent attempts were made to collect health data, specifically on issues such as low birth weight which can be associated with significant deficits in later life. The Gary, Indiana study found positive effects on birth weight in the most at-risk groups (Levine et al. 2005: 100).

Kerala, India, and the moral bankruptcy of the neoliberal development project

Image: Bangladeshi sweatshop workers (image from The Institute for Global Labor and Human Rights must-read report on Bangladesh's sweatshops)


The neoliberal theory of development is that sweatshops are good. Poor countries have to leverage their only comparative advantage--cheap labor--in order to bring foreign investments into their country. Bangladesh is certainly not going to beat the first world at software or aerospace engineering, so they should focus on what they can beat the first world at: providing low skill manufacturing at third world prices. Sweat shops are evil, but they're a necessary evil. Only when enough foreign investment enters a country can countries like Bangladesh lift themselves out of poverty. This generation may not have access to an education, but maybe their children will for their sacrifices. This is the path of industrialization the United States, England, Germany, etc took and it is--regrettably--the only way. The real world doesn't care about morality; it's time for Bangladeshis to roll up their sleeves and do what needs to be done.

The problem with the neoliberal development narrative is that it's entirely wrong. A Worker Rights Consortium report found that most countries pursuing this exact policy have seen their workers get poorer, not richer. If the neoliberal development strategy actually worked, the purchasing power of workers should rise slowly, not fall. But it doesn't work. It never did.

The intentional oversights of the neoliberal model are incredible. Child labor doesn't end by workers allowing themselves to be exploited; it ends when a country's political system is motivated by voters to enact--and enforce--a ban. Occupational health and safety regulations aren't gifts of the free market; they're the result of collective bargaining and direct government intervention. Universal primary public education doesn't happen because of an influx of foreign investment; it's the result of mass movements forcing changes in government policy. What, exactly, is the mechanism by which foreign money, flowing directly into the hands of the factory owners who pay their workers 20% of a living wage, results in widespread improvements in education, utilities, or workplace safety? It's certainly not going to help the next generation get an education--not when 9-year-olds are among massive ranks of child laborers.

Neoliberal development theory conveniently overlooks stories that don't fit the model. The monetary gains of Japan's rapid industrialization was shared equitably among the entire population; they now lead the world in health and quality of life indicators. Japan's rapid industrialization didn't occur by allowing their workers to be exploited by foreign capitalists. Rather--even though rural, backwater Japan had no comparative advantage in technology or manufacturing--they realized the potential and used direct government intervention to target these industries for growth. They didn't wait for the market to take it's "natural" course; they used industrial and trade policy to benefit their high tech industries, rank-and-file workers, and to educate the next generation of engineers and scientists. Japan succeeded because of their flight from the neoliberal model, not in spite of it.

It's difficult to--as Nicholas Kristof of the New York Times does--take the neoliberal model seriously:

But while it shocks Americans to hear it, the central challenge in the poorest countries is not that sweatshops exploit too many people, but that they don’t exploit enough.

Talk to these families in the dump, and a job in a sweatshop is a cherished dream, an escalator out of poverty, the kind of gauzy if probably unrealistic ambition that parents everywhere often have for their children...

Seriously? An "escalator out of poverty"? From the Worker Rights Consortium report cited above:

On average, prevailing straight-time wages—pay before tax deductions and excluding extra pay for overtime work—in the export-apparel sectors of these countries provided barely more than a third—36.8 percent—of the income necessary to provide a living wage...prevailing wages in 2011 for garment workers in China, Vietnam, and Indonesia provided 36 percent, 22 percent, and 29 percent of a living wage, respectively. But in Bangladesh, home to the world’s fastest-growing export-apparel industry, prevailing wages gave workers only 14 percent of a living wage.

The one graph that proves that welfare (AFDC / TANF) is not a work disincentive

Image: Bill Clinton, masquerading as a liberal, signs TANF into law. (source)


TANF--also known as "welfare"--was designed with one thing in mind: laziness. Republicans and Democrats alike couldn't stand the idea of someone capable of working choosing not to work, so they established complicated rules about "work activities" (a polite euphemism for unproductive busywork) to ensure that no one on TANF was idle. They obviously assumed that the majority of people on AFDC, the program TANF replaced in 1996, did not actually need government assistance, as they created time limits: families cannot collect TANF benefits for more than 24 consecutive and 60 total months. And, no childless adult can receive any type of welfare benefit.

TANF rests on the assumption that people who don't work are idle because they want to be; the key challenge of welfare is to motivate unmotivated people into finding gainful employment. After all, anyone can get a job. (not)

But let's look at this another way. The American safety net is designed to keep people in paid employment and off welfare. The work activity requirement means you can't be idle and on welfare (and is designed to frustrate people into leaving welfare to get a job); the time limits mean you can't make a career out of your welfare benefits. This stands in stark contrast to other countries, whose safety nets are more like safety hammocks--so generous they encourage people to avoid work and live high off the government dole.

Stated differently, we must have a stingy safety net or people will become dependent on welfare and choose not to work.

But if this is true, then the United States should have more people working than countries with more generous safety nets. What if we compare the United States' employment-to-population ratio (the number of people ages 15 to 64 who have jobs divided by the total population of people ages 15 to 64) to that of the social democracies? If a stingy safety net really does encourage people to work, then the United States should have a far higher employment-to-population ratio. It does not:

The United States' welfare system is so inefficient that we could become a social democracy without spending another penny

Image: The Ford Pinto was such a poorly designed car that it was literally a death trap. Imagine if you had to choose between a Ford Pinto and a higher quality, safer car, for the same price. (source)


My previous post on the incredible inefficiency of the American welfare state showed how a median income American household must pay about 50% of their income in taxes and private spending for social welfare, while a household with that income in a social democracy would only spend about 40%--and get far more for the money. See the full piece for caveats, but it's clear that social democracy is a better deal; even though the typical citizen pays less, every single citizen gets many benefits--like paid parental leave, a month of paid vacation, a month of sick days, paid extended sick leave, child care, etc--that very few Americans get. Americans love to cry foul at 40% tax rates in Scandinavia, while remaining curiously silent about paying 25% of their income for private employer-sponsored health insurance.

But there is another way to measure the incredible inefficiency of the American social welfare system. It's not just a bad deal at an individual level--it's a bad deal at a national level as well.

The OECD collects data on how much money is spent on social welfare in member countries--both private and public spending. The verdict? The United States is comparable to the social democracies, spending 30% of GDP on social welfare. The social democracies spend 30-33% of GDP on social welfare; Norway only spends 25%. Here is the OECD's graph of their data (which I modified for clarity, underlining the USA and the social democracies (Norway, Finland, Austria, Denmark, and Sweden) in red):

(click to see graph unobscured by side bar)

Yes, we spend just as large a portion of our GDP on social welfare as Finland, more than Norway, and slightly less than Austria, Sweden, and Denmark. This may be difficult to believe, because--as I explained in the previous post--social democracies offer higher service quality and universal coverage. That they provide better services to more people with the same investment is testament to the utter folly of the American welfare system.

[Update 07/07/2014: In case you think that these numbers are some fluke* based on the unprecedentedly high cost of health care in the United States, and that--somehow--the fragmented public-private model we rely upon for health care might somehow work for child care, long term care, or some other social welfare service--a recent study found that the government-run, universal, social democratic long term care systems of Germany and Japan--despite achieving universal coverage--are far less expensive than the long term care system in the United States:

In Germany and Japan, social insurance programs are universal, support family caregivers, and allow individuals considerable flexibility in securing the services they require...when we compared public spending on long-term care, we found that spending in the United States is actually higher than in Germany even now, prior to enactment of the CLASS Act, and is only slightly lower than in Japan.

(The CLASS Act was ultimately repealed). Obviously, once private spending is counted, the American long term care system as a whole is far more expensive than either Germany or Japan's system, despite enormous gaps in the American system. Universal, social democratic systems are very efficient, no matter what the benefit.

*As if the design of the American health care system is somehow not responsible for its own cost inflation.]

Here is a chart I modified from my first post on this issue to show this incredible inefficiency more clearly. Percentages indicate the percentage of citizens covered by each benefit; "universal" indicates 100% coverage.

Another blow against the idea that poverty itself cannot explain the diminished academic performance of poor students

I'm not an expert in educational policy, so I don't have much to say about it. I wrote previously about how it's long been known that poverty is the greatest predictor of student performance, and how parents or teachers need to be scapegoated in order to justify the poverty and inequality that are the real source of the problems in the American education system.

Basically, if poverty and inequality are the real causes of poor student performance, than there is an obligation to alleviate poverty and inequality. But that's a very expensive proposition. What if there was a cheaper, more convenient explanation of poor student achievement? Who can we blame instead?

Poor parents are a popular scapegoat: If poor parents were more involved in their children's lives, impoverished students would be doing just fine in school. If only poor parents had the initiative and desire to exercise the same level of responsibility as rich parents.

Dana Goldstein explains how a major study has just fatally wounded the scapegoating of poor parents:

In the largest-ever study of how parental involvement affects academic achievement, Keith Robinson, a sociology professor at the University of Texas at Austin, and Angel L. Harris, a sociology professor at Duke, mostly found that it doesn’t. The researchers combed through nearly three decades’ worth of longitudinal surveys of American parents and tracked 63 different measures of parental participation in kids’ academic lives, from helping them with homework, to talking with them about college plans, to volunteering at their schools. In an attempt to show whether the kids of more-involved parents improved over time, the researchers indexed these measures to children’s academic performance, including test scores in reading and math.

What they found surprised them. Most measurable forms of parental involvement seem to yield few academic dividends for kids, or even to backfire—regardless of a parent’s race, class, or level of education.

Even the top tier of America's two-tiered welfare system is a really bad deal

Image: Excuse me, taxpayers--do you get a better deal living in the United States or in a social democracy? (source)
 

One of the most common arguments against social democratic programs is that the taxes needed to finance them are simply too high. But citizens in social democracies get loads of benefits in return for those high taxes. Is it worth it to pay those extra taxes? Let's find out.

This isn't a straightforward question. Many of the services all citizens of social democracies get from the government are available in the American private market--like health insurance, day care, retirement plans, etc. In other words, the United States government doesn't provide (most) people with day care services, but that doesn't mean you can't have them--you just have to pay for them in the private market. Essentially, we're asking: Who gets a better deal? A typical Dane, who gets X, Y, and Z services from the Danish government? Or a typical American, who gets X from the government but purchases Y and Z from the private market?

To start, we'll compare the costs of both systems: How much a typical Finn pays in federal and social security taxes--versus how much a typical Americans pays in federal and social security taxes, plus the cost of social welfare services purchased through the private market (ie, employer-sponsored health insurance, day care, 401(k) contributions, etc). We'll then compare what services are obtained through those investments (whether taxes or private spending), and hopefully be able to see who gets a better deal.

Excited? I hope so. Let's start with what the typical American has to pay for social welfare services.

Are American universities better than Scandinavian ones? It depends on your definition of "good."

Image: Yeah, we could probably beat them at college football. (source)


In this blog, I try not to stray too far from topics I know enough about to comment on. Educational policy is certainly an area I do not have enough knowledge to make a meaningful contribution to. But university education is an important part of social welfare, and there is one particular point I want to emphasize, as it pertains directly to my goals in this blog. Americans are quick to assume that American universities are better than Scandinavian ones. But there's really no evidence that that's the case; a major reason is that data collection, especially across different countries, is extremely difficult.

But there is another issue. What do we mean by good? What do we want our universities to accomplish? This tension is readily apparent in the debate over the value of American higher education. As with most issues, opposing camps are having two entirely separate debates, and are just talking past each other. To see what I mean, look at what happens when researchers try to measure student learning in at universities:

There are three basic ways of trying to measure how well colleges educate students.  The most obvious is to use some form of a standardized test.  That's how K-12 schools are evaluated.  Given the difficulty and controversy K-12 testing has entailed, using standardized tests for college students might seem impossible at first.  Elementary and secondary students are at least expected to complete similar courses, to learn the same rules of punctuation and applications of the Pythagorean theorem.  Undergraduate studies are far more diverse: Some students choose to spend four years immersed in Ovid, others in organic chemistry.

But there turns out to be an answer: Instead of testing discreet pieces of knowledge, test the higher-order critical thinking, analysis, and communication skills that all college students should learn (and which employers value most).  The Collegiate Learning Assessment, recently developed by a subsidiary of the RAND Corporation, does exactly that.  Instead of filling in bubbles with a No. 2 pencil, CLA test-takers write lengthy essays, analyzing documents and critiquing arguments.

Unfortunately for us, the results of these tests are kept secret; we only know the results in aggregate. Nationally, using the CLA, 36% of college students show "exceedingly small or empirically nonexistent" learning after four years of college. Yes, over a third of college students learn nothing or almost nothing in four years of college. It's little wonder universities fight to keep these scores secret.

But if some students are learning nothing (or next to nothing), who are they? Are they concentrated at rural Moo-U colleges? At grimy, urban, blue collar commuter colleges? Flagship research institutions? Or are the students learning nothing concentrated among bottom-shelf cocktail swilling liberal arts majors at all four-year colleges and universities?

Fortunately, we can get some idea from the University of Texas system. UT system CLA results are all public. The "best" UT university--that is, the one with the highest rank in the US News and World Report, and the one with the best reputation--is the flagship university at Austin. UT-Austin performed abysmally.  The institutions with the most student learning actually occurred at the "worst" UT schools: UT-San Antonio, UT-El Paso, and UT-Permian Basin, all of which are near the bottom of the US News and World Report college rankings.

It's not just the CLA. Another tool used to assess universities, the National Survey of Student Engagement, shows basically the same results--student gains are shockingly small, and student learning is utterly uncorrelated to US News and World Report college rankings.

This begs the question: if flagship universities don't exist to teach students, what are they there for?

Food stamp cuts and the liberal Democrat myth

I don't have time to write in detail on this issue, but I don't want to ignore it, either.

The Associated Press described the ultimate deal as having “a mostly symbolic cut in food stamps.” Is that accurate?

It’s not accurate, and shows you in a few words virtually everything wrong with the American media today. It shows you class bias, reporters listing as a fact something that’s an opinion, it shows you lack of empathy.

If the reporter’s own mother was losing $90 of foods a month out of an already-meager allotment, or the reporter’s son or daughter, I very much doubt that reporter would describe that loss as merely symbolic. I don’t know that reporter thinks their own breakfast, their own lunch, or their own dinner is merely symbolic. This is real money coming out of the grocery carts of real families.

Long story short: the Democrats proposed cutting food stamps by $4 billion over ten years. The Republicans proposed cutting food stamps by $20 billion over ten years. The compromise was cutting food stamps by $8 billion over ten years, while increasing farm subsidies for huge (already profitable) agribusiness corporations by $15 billion.

U6 Watch: December 2013

U6 Watch was a monthly feature I started in July 2013 to track the abysmal shape of the U.S. labor market and the distortion of labor market statistics to make it appear as though things are improving. I've since become too busy with personal responsibilities and my day job to update it each month. Fortunately, Dean Baker has you covered (at least for December), making the same points I've made in previous months:

The headline unemployment rate fell sharply to 6.7 percent in December. However, this is not good news. The drop was almost entirely due to people leaving the labor force as the number of people reported employed in December only rose by 143,000, just enough to keep the employment-to-population ratio constant.