Tag Archives: morality

Takers vs Doers

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Nicholas Eberstadt has the call.

A growing body of empirical evidence points to increasing dependency on state largess.

Then he enumerates [emphasis his]:

  • Over the 50-plus years since 1960, according to the Bureau of Economic Analysis, entitlement transfers—government payments of cash, goods and services to citizens—have been growing twice as fast as overall personal income.  Government transfers now account for nearly 18% of all personal income in America—up from 6% in 1960.
  • According to the BEA, America’s myriad social-welfare programs (the federal bureaucracy apparently cannot determine exactly how many of these there are) currently dispense entitlement benefits of more than $2.3 trillion annually.  Since those entitlements must be paid for—either through taxes or borrowing—the burden of entitlement spending now amounts to over $7,400 per American man, woman and child.

To pay for this, every child is born with a $7,400 debt.  Including those who will be recipients of this welfare.  Which means, as a practical matter, the other children are born with an even greater debt.

  • In 1960, according to the Office of Management and Budget, social-welfare programs accounted for less than a third of all federal spending. Today, entitlement programs account for nearly two-thirds of federal spending.  In other words, welfare spending is nearly twice as much as defense, justice and everything else Washington does—combined.  In effect, the federal government has become an entitlements machine.

Yet President Barack Obama insists that entitlements don’t sap us, they strengthen us.  He’s partially right: they strengthen those who control the handouts from these entitlements.  Politically.

  • According to the latest data from the U.S. Census Bureau, nearly half (49%) of Americans today live in homes receiving one or more government transfer benefits.  That percentage is up almost 20 points from the early 1980s.  And contrary to what the Obama White House team suggested during the election campaign, this leap is not due to the aging of the population.  In fact, only about one-tenth of the increase is due to upticks in old-age pensions and health-care programs for seniors.
  • As entitlement outlays have risen, there has been flight of men from the work force.  According to the Bureau of Labor Statistics, the proportion of adult men 20 and older working or seeking work dropped by 13 percentage points between 1948 and 2008.
  • In recent years, the biggest increases in disability claims have been for “musculoskeletal” problems and mental disorders (including mood disorders).  But as a practical matter, it is impossible for a health professional to ascertain conclusively whether or not a patient is suffering from back pains or sad feelings.  The government’s disability-insurance programs were intended to address genuine need.  On the current trajectory, the Social Security disability fund is projected to run out of money during Mr Obama’s second term.
  • The president and others describe Social Security and Medicare as “social insurance” programs rather than transfer schemes.  True, the eventual beneficiaries of these programs contribute payroll taxes to the Social Security and Medicare trust funds during their working lives.  But “insurance” programs are meant to pay for themselves; Social Security and Medicare cannot do so.

Moreover, insurance programs pay the premium payer or the payer’s designated beneficiary later, not some stranger currently.

And who’s paying for all of this?  Slightly over half, and dwindling, of those Nancy Kress called mules in her Beggars novels.  And those of our children who are picking up the debt.

Recovery

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Here, from Zero Hedge, are some graphs illustrating the ongoing failure that is the Obama Economic Recovery.

As ZH notes (his emphasis), this is

the worst in US history, having just dipped below the heretofore lowest on record.

This one shows the effervescent fluffiness of this failed recovery:

There are actually those who tout gains like this as meaningful (Federal Reserve Bank President Ben Bernanke among them*).  They speak of the Dow Jones Industrial Average, or of the S&P 500, or of some other market index as proof of the efficacy of President Barack Obama’s policies.  The indices have been doing quite well; the DJIA is at a five year high, for instance.

The indices, though, are not the real economy.  They’re just a measure of how well investors like me have been doing; they have nothing at all to do with how poorly folks who actually work for a living—or who would like to work for a living—are doing.  And that real economy is what underlies those indices.  Heads up.

*Certainly, that’s a two-year old op-ed, but I’ve seen nothing to indicate he’s altered his views—not about the (ir)relevance of stock prices in assessing our recovery, and not about any of the several other misapprehensions he included in his piece (but which are the topics of other posts).

The Cost of Price Supports

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They’re disastrous for our food costs, which harms our poor especially, and they drive the “need” for food stamps.  Here are some numbers, from a recent op-ed by Burleigh CW Leonard in The Wall Street Journal.  The parity prices for some farm products are these:

  • corn: $12/bushel vs actual market price of $7.01
  • wheat: $18.30 vs $8.33
  • rice: $42.20 per hundred weight vs $14.80
  • milk: $52 vs $21.10.

We care about parity prices because the Agriculture Adjustment Act of 1938 and the Agricultural Act of 1949 require, unless other temporary support prices  are specified by subsequent Congresses, that farm support prices be set to parity according to a formula based on farm prices extant in 1910-1914 [sic].

Notice that: farmers (read: agribusiness, who are the vast majority of our modern farm industry, not the mom and pops over whom our politicians shed so many crocodile tears) can get three times the market price of rice from those supports so they produce to their heart’s content and sell the excess to the government.

This doesn’t actually happen to a great extent, though, because of an epicycle in the government’s Ptolemeic orrery of controls: the government imposes on each farmer (agribusiness) limits on how much (rice) he can produce.  I won’t get into the inconsistent manner in which such limits get applied across farm products.  Nor will I get into the interference such controls represent in each man’s right to choose for himself what he will produce with his labor (and what price he will charge for that produce, or that labor).  (Nor will I get into the mandatory diversion of food into fuel products, which is what the ethanol mandates are.  That’s for another discussion entirely.)

It’s sufficient, here, to see that the price distortion remains.  And the “need” for food stamps remains.

Leonard is on the right track with the solution he offers:

…craft a new long-term farm bill.  Its first step should be to repeal permanent law that governs commodity price support programs.  Then the default setting for US agriculture would be a free market….

He goes too far, though.  There’s no need for a new “long-term bill.”  His proposed bill’s first step is nearly sufficient by itself: repeal the Agriculture Adjustment Act of 1938, the Agricultural Act of 1949, and associated laws.  Then take the only additional step necessary: stop instituting other price support legislation.

Watch the need for food stamps fall precipitously.

There is nothing to fear from free market competition but fear itself.

More on Becoming a Dependent

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The Wall Street Journal‘s Law Blog reports that a

federal appeals court [the First Circuit] on Thursday [last] ruled that insurance companies can be required to pay long-term disability benefits to a recovering drug addict if the person would face a significant risk of relapse by returning to work.

The Law Blog expands:

The case…involved an anesthesiologist from Massachusetts…who became heavily addicted to Fentanyl, a prescription opioid used in her practice.

[The anesthesiologist] spent about three months at a treatment center, according to her attorney.  After she was discharged, her employee benefit plan that was administered by Union Security Insurance Company cut off her long-term disability benefit payments, totaling $4,000 a month.  Her therapist and other doctors feared that she had a high risk of relapse and cautioned her not to return to work where it would be easy to access the drug, the opinion said.

The anesthesiologist justified her suit by claiming that she shouldn’t have to fall off the wagon for her claim to be accepted.  She shouldn’t have actually to be disabled in order to collect disability benefits.  Never mind that there was no certainty of relapse asserted, by her or the Court, only a likelihood.  Never mind that her condition was entirely self-inflicted.  Never mind that she could have found work—even in the medical field—other than as an anesthesiologist.

Indeed, as the Appellate Court said quite clearly, she had not relapsed, and so she wasn’t back in her disability condition.  She was, though, out those $4,000 per month, payable for an actual disability.

The Court then noted in its opinion (cynically, say I)

The plaintiff’s risk of relapse was not merely theoretical.  In perhaps the most striking actualization of this risk, the plaintiff was arrested in May of 2005—some six months after her departure from [the treatment center]—for driving under the influence of alcohol[.]

Notice that.  She was driving under the influence of alcohol, not Fentanyl.  Some risk of relapse onto the drug.

The Court also noted in justification of its ruling (again cynically, say I) that the insurance company could have inured itself from this sort of…suit…by  “writing into the plan an exclusion for risk of relapse.”

The insurer, though, hadn’t included such an explicit exclusion because at the time they sold the policy they had no reason to believe a Federal Appeals court would rule so capriciously.  After all, the Fourth Circuit already had ruled differently on an identical case:

[The] Fourth Circuit…said the denial of benefits to an anesthetist addicted to the same narcotic was “reasonable.”

Now we know better.  If there’s a possibility of a disability occurring in the future, that disability exists presently.

Another brick in the wall of manufactured dependency.

Progressive Policies and the Poor

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Thomas Sowell, writing in the National Review, had some thoughts on the impact of modern Liberalism on the welfare of blacks in the US.  I think they apply to all minorities, to whites, to our poor generally.

Severe restrictions on building housing in San Francisco have driven rents and home prices so high that blacks and other people with low or moderate incomes have been driven out of the city. The same thing has happened in a number of other California communities dominated by liberals.

And

Liberals try to show their concern for the poor by raising the minimum wage.  Yet they show no interest in hard evidence that minimum-wage laws create disastrous levels of unemployment….

And

The black family survived centuries of slavery and generations of Jim Crow, but it has disintegrated in the wake of the liberals’ expansion of the welfare state.  Most black children grew up in homes with two parents during all that time, but most grow up with only one parent today.

And

Liberals have pushed affirmative action, supposedly for the benefit of blacks and other minorities.  But two recent factual studies show that affirmative action in college admissions has led to black students with every qualification for success being artificially turned into failures by being mismatched with colleges for the sake of racial body count.

Sowell summarizes the matter starkly:

In all these cases, and many others, liberals take positions that make them look good and feel good—and show very little interest in the actual consequences for others, even when liberal policies are leaving havoc in their wake.

The party of Jim Crow may be attempting to correct its past.  It is, in fact, failing miserably.  Modern Liberals give so little thought to the 50 years of empirical evidence defining the consequences of their actions that I have to conclude that they’re well aware of those consequences.  One of those consequences, flowing from the poverty enforced maintained by their actions, is the continued dependency of our poor on the largesse of the Modern Liberals in government.

That’s not just petty ego stroke, that’s political power.