Tag Archives: jobs

Welfare, Work, and the Stimulus

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It turns out Obama’s HHS waiver of the work requirement for welfare (in the Personal Responsibility and Work Opportunity Reconciliation Act of 1996, signed into law by President Bill Clinton) wasn’t the first Obama waiver of the work requirement.  No, it’s just one more instance of the wealth redistribution in which Democratic Presidential Candidate Barack Obama believes so much.

The Congressional Research Service has a new report out, albeit one done at the behest of an Evil Republican, House Majority Leader Eric Cantor (the report can be found here or here).  This report demonstrates that the Obama Stimulus Package, drafted up shortly after his inauguration in 2009 and passed just after that also waived the requirement for work in order to get welfare.

Typically the food stamp program requires that group [“able-bodied adults” between 18 and 49 years old who have no dependents] to work or participate in a training program at least 20 hours a week to continue receiving benefits after three months. The stimulus law, though, allowed states to suspend the rule from April 2009 to October 2010—and most states did.

The CRS study showed that in fiscal 2010, the last year for which data was available, the number of food-stamp recipients in that group was at nearly 3.9 million. That’s up from 1.9 million in 2008.

Though food-stamp enrollment was already rising at the time in part due to the recession, the study noted the number in this group “increased more rapidly than the overall caseload.”

Their percentage of that caseload grew from 6.9 percent in 2008 to 9.7 percent in 2010.

This was no effort to accommodate spiking unemployment, though.  Indeed, it never was intended to—unemployment would never rise above 8% and would fall back to 5.5% by the end of 2009 with the stimulus, Obama promised us.  The waiver was, nevertheless, extended beyond 2010.

The latest CRS report noted that while the stimulus law lifted the food stamp work requirement until late 2010, the law allowing extended unemployment benefits likewise allowed most states to waive those work requirements in 2011 and 2012.

Bread and circuses.

Is AARP Tax-Exempt?

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The short answer is yes—it’s a 501(c)4 non-profit.  Follow-up question: should it continue in that status?

If the information outlined in Kimberly Strassel’s Wall Street Journal article last Friday is accurate, I suggest the follow-up’s answer should be “No.”

…AARP worked through 2009-10 as an extension of a Democratic White House, toiling daily to pass [Obamacare].  We know that despite AARP’s awareness that its seniors overwhelmingly opposed the bill, the “nonpartisan membership organization” chose to serve the president’s agenda.

71 pages of emails tell the story.  For instance,

As early as July 2009, Mr. Sloane [AARP Senior Vice President David] was sending the administration—”as promised”—his “message points” on Medicare.  Ms. DeParle [an Obama senior aide Nancy-Ann] assured him “I think you will hear some of your lines tomorrow” in President Obama’s speech—which he did.  Mr. Rother [AARP Policy Chief John] advised the White House on its outreach, discouraging Mr. Obama from addressing seniors since “he may not be the most effective messinger [sic]…at least to the McCain constituency.”  Better to manage these folks, he counsels, through the “authoritative voices of doctors and nurses.”

And

Ms. LeaMond [AARP Executive Vice President Nancy] worried that the Medicare spin wasn’t working against public criticism of the bill.  She emailed Mr. Messina [another Obama senior aide Jim] and Ms. DeParle that she was “seized” with “concerns about extended coherent, strong messaging by Republicans on the Medicare savings.”  To pull off the legislation, she mused, “we”—the White House and AARP—will need a “concerted strategy.”

And so on, including AARP internal polling passed on to DeParle and Messina that indicated AARP’s membership opposed the developing Obamacare by 98%.  This last isn’t legally relevant to AARP’s tax exempt status; it just shows how…out of touch…AARP management was with its membership.

Plainly, the aggregate of these emails demonstrates violation of the non-partisan requirement for such non-profits.

RTWT.

More About Jobs

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Last week, in a presage of the nearby future, Alpha Natural Resources, a major coal producer, announced that it would be forced to reduce production by 16 million tons of coal per year, which will force the closure of eight mines in Virginia, West Virginia, and Pennsylvania, and the elimination of some 1200 mining jobs—400 of these miners right away.

There are two reasons for this trouble.  One is long-run beneficial and is simply part of the creative destruction that a free economy goes through—quickly and with greater strength on the other side, including for those whose jobs are lost in the near-term, if the economy is free from government interference.

This reason is the improving technology that makes natural gas more cheaply extractable than coal.

But the other reason is government interference.  Kevin Crutchfield, ANR’s CEO, puts it plainly and simply at the feet of the government’s

regulatory environment that’s aggressively aimed at constraining the use of coal.

And make no mistake about it; this is a deliberate policy.  Here’s what the then-and-now Democratic Presidential Candidate had to say about coal production back in 2008:

If somebody wants to build a coal-powered plant, they can, it’s just that it will bankrupt them[.]

It’s important to note that Obama’s policies really are anti-coal—and so, intended or not, anti-job—and not just ANR’s bad fortune or failure to operate cleanly.  As Congresswoman Shelley Moore Capito (R, WV) points out,

The president’s extreme policies are crippling entire towns and making it harder for workers to find jobs.  Because of  the president’s War on Coal, thousands of West Virginia families have to worry about where their next paycheck is going to come from.

Is the EPA well-intended, but misguided?  Not a bit of it.  The timetable for meeting its new standards is virtually impossible to meet, and the standards themselves unattainable.

But it’s alright.  All those unemployed coal miners will have clean air.  Just no money for food on their families’ tables, or for rent/mortgage payments with which to keep roofs over their families’ heads.

Pity the Poor Union

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The Chicago Teacher’s Union, which is unhappy and feeling rushed.

Using the children its teachers claim to teach as hostages, the union has decided to continue its strike for more money, more job security, and less stringent individual teacher performance evaluation.  Of course, this leaves those children out of school and forces parents to lose income from taking time off from work or to incur additional child-care expenses to handle children who should be in school.  That doesn’t matter, though, to teachers whose salaries already are some 50% higher than those of the parents whose children they’re not teaching.  (On the other hand, what’s the downside for the kids, really?  This collection of teachers does poorly by the students: a 60% high school graduation rate, generally, and a 44% rate for black high schoolers.  Just 15% of fourth graders are proficient in reading.  Just 20% of the students are grade level proficient in math.)

But faced with a generous offer from the city to come back to work, the CTU declined even to vote on the offer over the weekend.

CTU President, Karen Lewis, said teachers wanted the opportunity to continue to discuss that offer.

Our members are not happy,

she said.

They want to know if there is anything more they can get,

she said.

They feel rushed,

!?  she said.

They want to squeeze more—as if their already failed performance should be rewarded.  Talk about not hurting (teachers’) self-esteem.  They feel rushed?  They always could come back to work and study the city’s offer at leisure.

In the meantime, the kids are suffering.  Or, maybe not so much.

The Federal Bank of US Taxpayer

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In a new Bernanke hair-brained scheme, the Federal Reserve Bank said last week that it is going to quantitatively “ease” by buying mortgage-backed securities from the private economy, to the tune of $40 billion worth per month.  Nearly half a trillion dollars each year.  And it’s open-ended, meaning the Fed has no plan—no idea, really—of when it might stop.

Bernanke says this is necessary.

If the outlook for the labor market does not improve substantially, the committee will continue its purchase of agency mortgage-backed securities, undertake additional asset purchases, and employ its other policy tools as appropriate until such improvement is achieved in a context of price stability.

Bernanke then said, in all seriousness,

[This move will] assure the public that the Fed will remain accommodative long enough to ensure recovery.

We don’t have a single number that captures that, but we anticipate that we’ll have to do more and we’ll do enough to make sure the economy gets on the right track[.]

In other words, he doesn’t have a clue what his decision criterion should be, but he’s going to decide, anyway.  And more so, as time goes on and his nonexistent milestone isn’t met.

And

These actions, which together will increase the Committee’s holdings of longer-term securities by about $85 billion each month [including its existing long-bond buying “plan”] through the end of the year, should put downward pressure on longer-term interest rates, support mortgage markets, and help to make broader financial conditions more accommodative[.]

There are a number of questions, though.

Why are we taxpayers being put on the hook for these private economy instruments?  If these securities are failing in our economy, why should the public have to pick up the tab?  If they aren’t failing, whence the need to take them off the banks’ hands?  What ever happened to free markets, responsibility, and accepting consequences, as well as reaping rewards?

And these questions:

The Fed has been artificially suppressing interest rates for the last three-plus years.  That suppression already has lowered my own mortgage rate from 6+% to nearly 3.5%.  What does Bernanke expect to gain from suppressing mortgage rates directly?  The inflation rate this year is 1.7% month on month, and 2% year on year through August.  The August interest rate on a one-year Treasury Note is 0.16%: he’s already suppressed interest rates to the point that we’re paying the government for the pleasure of lending it our money.  What does Bernanke expect to gain?

These artificially suppressed rates have a number of negative effects.  By distorting the market for debt instruments, the Fed is making it difficult, if not impossible, for investors accurately to assess value of the debt of borrowers—and so is making it unnecessarily difficult, and risky, to lend.  How does the Fed plan on redressing this failure?

By artificially suppressing interest rates, the Fed is actively and extensively damaging those who’re committed to, or dependent on, fixed income instruments, like bonds, for their income.  Folks like retirees.  How does the Fed plan on redressing this failure?

Savings accounts have become utterly useless—the interest rates here have been good approximations of zero for the last four years.  Savings accounts used to be an effective means through which financial institutions could accumulate funds for lending to borrowers—like home-buyers and businesses looking to expand their operations. How does the Fed plan on redressing this failure?

Our economy will recover, eventually.  And interest rates will rise.  Catastrophically, if all the money the Fed is pumping into our economy with…ideas…like this one drives inflation skyward.

On top of this, though, the Fed is creating another time bomb, one which it has no hope of controlling.  When interest rates rise, and the cost of borrowing goes up, for lending institutions as well as for borrowers, as the former search for funds to loan to the latter, those lenders still will be sitting on all those mortgage loans let at artificially low rates.  Those low rates in a healthy economy (let’s skip over the high inflation, high interest rate economy) will be far below then-market rates, and so those existing mortgages, mortgages with which the lender still will be stuck, will not be generating enough income for the lenders to continue to loan.  For up to 30 years in the mortgage market.  Can you say, “S&L bankruptcy?”

And, by the way, as Federal Reserve Bank of Richmond President Jeffrey Lacker said Saturday,

Channeling the flow of credit to particular economic sectors is an inappropriate role for the Federal Reserve[.]

Or for any part of the government.