A Partisan Nonpartisan Blog: Cutting Through Confusion Since 2012
Alex Jutca blogs about his conversation with Greg Mankiw over lunch in “Mankiw on the Economy, Fed.”
This comes to me by way of Scott Sumner and Adam Ozimek. Adam speculates here about what would have happened if Greg had been named Chairmen of the Fed–an interesting alternate history, since Greg reports that he was on the shortlist.
Link to HuffPost LIve Segment “Owning Our Debt”
I am still a novice at TV and video appearances, and so stumbled over some of my words and had some trouble with my lighting, but I thought this segment of HuffPost Live went well. I had a chance to talk about debt, electronic money, Federal Lines of Credit and my idea for a Public Contribution Program. My main goal was to get across the substance of my Quartz column “What Paul Krugman got wrong about Italy’s economy,” including my reply to Paul Krugman’s response, which you can see in my post “Noah Smith Joins My Debate with Paul Krugman: Debt, National Lines of Credit, and Politics.”
The segment was inspired by Robert Solow’s essay “Our Debt, Ourselves.”
My other appearance on HuffPost Live is here:
I also had one TV appearance on CNBC’s Squawkbox:
Finally, I have had two radio interviews, whichj allowed me to explain electronic money and Federal Lines of Credit much better than I could on HuffPost Live:
This column gives a better overall picture of my economic policy stance than any other single post so far. From the conclusion:
Franklin Roosevelt famously said:
The country needs and, unless I mistake its temper, the country demands bold, persistent experimentation. It is common sense to take a method and try it: If it fails, admit it frankly and try another. But above all, try something.
We at such a moment again. The usual remedies have failed. It is time to try something new. Any one of these proposals could make a major difference. In combination, they would transform the world.
I like the name my editor, Mitra Kalita, gave to the link itself, as well:
In the storified tweets of this “Twitter Round Table on Consumption Taxation,” don’t miss the idea of ensuring that most consumption taxes can actually be collected even in a world of tax havens by having some level of earnings taxation that goes into escrow to pay consumption taxes that are documented by a smart card. In principle, the funds could come out of escrow at the point of sale, but I think it would encourage more saving and investment if people instead received a large tax rebate at the end of the year from their escrow account. One good aspect of this is that it gives people less incentive to evade the tax on spending.
Charitable donations should also result in a rebate, since they are not consumption. And the funds in the tax escrow account should be transferable and bequeathable. The point is to put a floor under the amount of revenue the government gets up front.
By the way, to read this Twitter conversation, you need to understand a little about a value added tax (VAT), which is a form of consumption tax common in many countries. The big administrative advantage of a value added tax is that it is collected all along the way during the production of goods, instead of having one big point of taxation that would be a big temptation to tax evasion. Here is a link to the Wikipedia article on value added taxes.
Most of the popular discussion about tax fairness focuses on how much money people make. But it has always seemed to me that it is when people spend money on themselves that they incur whatever debt to society the principles of taxation ought to imply.
The essence of this argument is that it is only at the moment of consumption spending that I appropriate money for myself. Until then, I am only acting as a steward for those resources whose ultimate use has not yet been determined. And if I give money to my children, it is only at the moment of consumption spending that my children actually appropriate money for themselves.
For the rest of the argument, click through to Steven Landsburg’s essay “What I Like About Scrooge: In Praise of Misers.” Here is a short excerpt:
If you build a house and refuse to buy a house, the rest of the world is one house richer. If you earn a dollar and refuse to spend a dollar, the rest of the world is one dollar richer—because you produced a dollar’s worth of goods and didn’t consume them.
Postscript. Most of the tricky issues that remain after saying this much fall under the heading of defining “consumption spending.” But I maintain that income is much harder to define than “consumption spending” is.
There is one more point to be made about aggregate demand. If I am going to spend money on something sooner or later, I am being more helpful to society if I spend the money during a recession than if I spend it during a boom. But it would be even more helpful if during the recession I gave it away to take care of the poor (which would also add to aggregate demand, and alleviate suffering). When the economy is at the natural level of output or above, there is no social value in adding to aggregate demand, since that creates inflationary pressures that need to be counteracted. The benefit to those I employ is balanced out by the harm to those left unemployed because of the measures that will be taken to avoid inflation.
As I read in the Wall Street Journal about the failure to come to some agreement to resolve the fiscal cliff, I thought again about these words:
We can always count on the Americans to do the right thing, after they have exhausted all the other possibilities.
I have often heard these words attributed to Winston Churchill. But a web search for the source took me to the quoteinvestigator.com article on this quotation, which indicates this is a folk quotation. Many people have had a hand in inventing it, but there is no evidence that Winston Churchill participated in that invention. Still, I hope it is true.
For the record, my proposal for dealing with the long-run budget issues that are the heart of the disagreements between Republicans and Democrats is the system of “public contributions” laid out in my post “No Tax Increase Without Recompense.” This public contribution system would help make sure that the poor and afflicted are taken care of while reducing the footprint of the government in society.
Several people have asked me where they could learn more about the economics of taxes. David Agrawal (a Michigan Ph.D. who is now at the University of Georgia) pointed out to me that Raj Chetty, one of the top experts in the world on the economics of taxes and redistribution, has put his lectures on taxes and redistribution online.
I liked what Bill Clinton said about the national debt at the 2012 Democratic Convention. (Here is a transcript of his speech.)
Now, let’s talk about the debt. Today, interest rates are low, lower than the rate of inflation. People are practically paying us to borrow money, to hold their money for them.
But it will become a big problem when the economy grows and interest rates start to rise. We’ve got to deal with this big long- term debt problem or it will deal with us. It will gobble up a bigger and bigger percentage of the federal budget we’d rather spend on education and health care and science and technology. It — we’ve got to deal with it.
I like this passage in his speech because he is careful to discuss the fact that interest rates are temporarily low, something I discussed in my post “What To Do When the World Desperately Wants to Lend Us Money.”
I found Noah’s argument in his post “Japanese Poverty: Who’s to Blame” intriguing. For comparison, see what Bill Dickens has to say about the poor in the U.S. in “Bill Dickens on Helping the Poor.”
This New York Times op/ed by David Leonhardt, “Who Gets Credit for the Recovery” is excellent in its discussion both of politics and of the long-run economic policy issues at stake in this election. Notice the prominence David gives in the article to the pattern Carmen Reinhart and Ken Rogoff found of especially long slumps after serious financial crises in guessing that a full recovery is on the way in the next few years. I wrote about how the Reinhart and Rogoff finding should affect our judgment of Barack Obama’s performance in short-run fiscal policy in an earlier post. David makes a good case for the importance of Barack’s long-run economic policies.
I don’t want to endorse his slant as an advocate, but Martin Feldstein gives a useful description of the “fiscal cliff" in his new Financial Times column "The US is unlikely to avoid ‘fiscal cliff.’” Here is his opening line:
The United States is rapidly approaching the “fiscal cliff,” a dangerous combination of increased taxes and decreased government spending scheduled for January 1 that would reduce the budget deficit by five percent of GDP between 2012 and 2013.
5% of GDP is a huge change.
Quartz has made the fiscal cliff one of their “obsessions.” You can see Quartz’s articles on the fiscal cliff here.
Note: The original link is now broken. The best replacement I could find is Scott Sumner’s extensive quotations here.
Sweden went through some large swings in economic policy highly relevant for U.S. economic policy debates. The full story is important. Here is Anders Aasland’s version. (I think “aa” is an acceptable spelling of an “a” with a circle over it.)
Thanks to Scott Sumner for highlighting this Anders’s essay. Scott notes: “Aslund neglects to mention things like Stockholm’s congestion pricing scheme.”
Economists use utility functions to represent many aspects of people’s preferences. Even when an economic model has been simplified to (in some sense) have only one good–let’s call it “consumption”–the curved, concave shape of a utility function like the one above can be used to represent any of the following:
If there are two goods–lets call them “consumption” and “leisure,” the curved, concave shape of the part of the utility function that depends on consumption can be used to represent how the need to work to be able to afford more consumption changes as the amount of consumption one is doing already increases–whether that increase in consumption occurs from the passage of time or because of luck. I mention the many things that concave utility functions are used to represent because it is not at all clear that the utility function one should use to represent one of these things should look the same as the utility function one should use to represent another. In this post, I want to focus on just one thing a concave utility function can be used to represent: how people feel about inequality.
I want to emphasize that finding a good utility function to represent how people feel about inequality requires asking about people how they feel about the situation of the rich and the poor. There is no guarantee, for example, that you could ask about someone’s attitudes toward risk and get a good read on how they feel about inequality.
Yoshiro Tsutsui, Fumio Ohtake (both of the University of Osaka) and I arranged to collect data on a rider to the February, 2005 University of Michigan Survey of Consumers that asked directly about people’s feelings about the situation of the rich and the poor. The sample was the same sample as that used for the University of Michigan Consumer Confidence numbers–a sample intended to be representative of the adult U.S. population. This post gives a preview of some of the results from an academic paper we are working on, ably assisted by Daniel Reck and Fudong Zhang. It follows up on what I said about the poor and the rich in my first post “What is a Supply-Side Liberal?” In this post, I am taking the overall philosophical perspective is that of Utilitarianism, as developed by modern welfare economics using a social welfare function.
Yoshiro, Fumio and I wanted to ask questions that got at the key issues while minimizing reactions based in a shallow way on political ideology. To the extent these questions are about redistribution, the intent is to get at only the benefits of redistribution, as distinct from the costs of redistribution (say through tax distortions).
We began by asking
It is often said that one thousand dollars is worth more to a poor family than to a rich family. Do you agree?
90% of all respondents agreed. Then we went on to ask questions to probe how much more $1000 is worth to a poor family than a rich family. I won’t give the whole sequence of questions here. Let me just choose two questions that are especially revealing about what the typical adult American thinks. When we asked
Think of two families like yours, one with half the income of your family, the other with the same income as your family. Which would make a bigger difference, one thousand dollars to the family with half your family’s income or four thousand dollars to the family with an income like yours?
66% of all respondents thought the $1000 to the poorer family with half the income would make a bigger difference than $4000 to the richer family. (Everyone who had disagreed from the outset with the idea that $1000 is worth more to a poor family than to a rich family was counted as thinking the $4000 to the rich family would make a bigger difference.) When we asked
Think of two families like yours, one with half the income of your family, the other with the same income as your family. Which would make a bigger difference, one thousand dollars to the family with half your family’s income or eight thousand dollars to the family with an income like yours?
66% of all respondents though the $8000 to the richer family would make a bigger difference than $1000 to the poorer family with half the income. Focusing on the middle opinion, I read this evidence as saying that the median adult American thinks that $1000 to a poorer family with half the income would have about the same impact on that family’s life as an amount of money somewhere between $4000 and $8000 to the richer family. Stretching the interpretation a little more, I am going to take the utilitarian perspective and talk about this median view as “inequality aversion” and as an indication that most people think there would be some benefit to redistribution, though the costs might sometimes–or even often–outweigh the benefits. I do think that view represents the views of those in the middle of the political spectrum.
How can we represent these views in an inequality-aversion utility function? To make the numbers a little easier, let me lowball the degree of inequality aversion a little, and act as if $1000 to the poorer family with half the income had exactly the same life-impact as $4000 to the richer family. Let me also simplify by assuming that those ratios hold regardless of the initial income level. With those simplifications, some moderately advanced mathematics implies that the utility function must be of the form
U© = A - B/C
where A and B are some positive numbers and C is the level of consumption spending of an individual or family of a given size. The reason A and B are not determined is that we need some yardstick. It is easy to forget, but almost all measurement requires the choice of some arbitrary yardstick. The exact length of an Earth day is an accident of how our solar system formed and the geological era we are in, but we used it to develop units of time. Similarly, a kilometer was originally intended to by a 1/40,000 of the circumference of the Earth. In addition to the size of units of measurement, we also often need arbitrary starting points. Our measures of longitude start at 0 at Greenwich, England, which has to do with historical accidents of geopolitical and scientific power and influence at the time the system of latitude and longitude was chosen.
Fortunately, no economic logic depends on the values of A and B. The value of A doesn’t matter because for economic decisions because in any decision it is the comparison of how well-off one is under two or more possible situations that matters. When comparing any pair of options, the difference in utility between those two choices will leave “A” cancelled out. This is analogous to the fact that the path from Ann Arbor to the Detroit Metro Airport would be the same even if, in an egocentric change, Ann Arbor were the starting point for longitude instead of Greenwich, England. And the path from Ann Arbor to the Detroit Metro Airport would also be the same if Kabul, Afghanistan were the starting point for longitude. The value of B doesn’t matter because using one value of B rather than another is like the choice to measure distances in miles rather than kilometers, or in inches rather than yards. The real-world answers are going to come out the same.
For convenience–and only for convenience, since it doesn’t matter–I have chosen A=0 and B=1 for the graph at the top of this post. It may seem odd that utility is then always negative for this functional form, but utility being represented by a negative number is literally meaningless except in relation to what 0 utility means. With A=0, a utility of zero is material bliss–the maximum utility possible. So negative utility simply means that one has fallen short of material bliss.
Marginal utility is the slope of the utility function. It tells how much extra utility there is from a little more consumption. Even before choosing A=0 and B = 1, we can say that marginal utility here is
Marginal Utility = U’© = B/[C squared]
Notice how A has already dropped out. After choosing B=1, marginal utility becomes
Marginal Utility = U’© = 1/[C squared]
This means that doubling consumption C will reduce marginal utility to one quarter of what it would have been at the lower level of consumption, so $4000 at that higher level of consumption means only as much as $1000 at a consumption level half as big. What this shows is only that the utility function (with its associated slope, marginal utility) is doing OK at representing what we designed the utility function to represent: $1000 to a poorer family with half the income meaning the same as $4000 to a richer family.
It is my contention that bringing the discipline of mathematics to discussions of redistribution is useful in informing the debate about redistribution. Let me give just one example. Looking at the utility function at the top of the post, the slope shows how much a little extra money means to someone at each level of consumption. The difference between the slope at different levels of consumption shows how much benefit there is from redistributing from a richer to a poorer individual or family–a benefit that then needs to be weighed against the costs–for example costs to freedom from the compulsion of taxes, or costs from people’s efforts to evade and avoid taxes. If one thinks of a consumption of 1 as representing the middle class, a consumption of 4 as representing the rich and a consumption of ¼ as representing the poor, one can see that there is a much bigger difference in the slope for the poor minus the slope for the middle class than the difference in the slope for the middle class minus the slope for the rich. So with a utility function that has the slope depend inversely on the square of consumption as here, there are much bigger gains from redistributing dollars from the middle class to the poor than there are from redistributing dollars from the rich to the middle class.
Detroit Metro Times mockup of the card for my Federal Lines of Credit Proposal
This is an update of my post “Miles’s Best 7 “Save-the-World” Posts, as of July 7, 2012”– a title with a bit of gentle self-mockery at my own presumption. This time, inspired by the U.S. presidential campaign, I want to think of my most important policy recommendations as a kind of shadow political platform. I have neither the odd talents, the drive, nor the sheer stamina required to be a political candidate. But if I were a political candidate, this is the platform I would run on.
Let me organize some key posts for each policy area. Within each policy area, I have arranged them in a recommended reading order. Many of the proposals are the proposals of others, but if I put a post in this list, it is something I have signed on to, with whatever caveats are in my post.
There are three areas where I don’t have as much in the way of specific proposals (with the one exception of Charter Cities), but the posts hint at an approach. I have signaled these by using the word “perspectives” in the area heading.
Until I do another update, you will be able to access this post at any time by the “‘Save the world’ posts” link at my sidebar. Or you should be able to reach it by using the searchbox further down on the sidebar.
In this post, Noah Smith argues that the price of Japanese government bonds (JGB’s) is still high (which is the same thing as saying the interest rate on Japanese government bonds is still low) despite the size of the Japanese government debt because people believe that the Japanese government will raise taxes in the future.
Towards the end of his post, Noah raises the possibility of negative real interest rates as another way to deal with the debt. This seems quite possible to me. If confidence in the willingness of future Japanese governments to raise taxes falls, then the price of JGB’s will fall and their interest rates will rise significantly above zero. In that situation there would be more room for the Bank of Japan (BOJ) to push interest rates on JGB’s down toward zero again (and equivalently, push prices of JGB’s up) to stimulate the Japanese economy. If that stimulus raises inflation to the 2% per year rate that the Bank of Japan has said it wants, then real interest rates could easily be -2% (a nominal interest rate of 0 minus inflation of 2%) for quite some time.
An important bit of background is that the Japanese government seems to be able to do quite a bit to twist the arms of insurance companies, regional banks and pension funds to get them to continue to hold JGB’s, as Noah argues in his earlier post “Financial Repression, Japanese Style.” And the pension funds in turn don’t give workers many choices about how to invest. That is the core of Noah’s answer to the obvious question of why anyone would ever put up with low real interest rates for JGB’s when higher real interest rates are available on foreign assets.
Question from tommlu
Hi. I’m an undergraduate in my senior year, and I was wondering if you could any topics for an economic thesis, particularly in the area of taxation. Let me say that I am unconvinced that taxes has an effect on economic growth in the short run or the long run. There’s no doubt that taxes create a disincentive to work, but is that effect really so large as to decrease overall economic activity (productivity, demand, income,). If you could offer any suggestions for me, I would love to hear them. Thanks.
Answer
To me, the more interesting question is the long-run question. Here, I think there is something very useful you could do in an undergraduate thesis. Tax and benefit systems of different countries are complex enough that it is not easy to research all the details to compare how different tax and benefit systems lead to different effects. (I have seen this done more comprehensively for tax and benefit policies that would affect retirement decisions than for tax and benefit policies for younger workers). Doing thorough case studies of the tax and benefit systems of various countries and looking for the predicted effects would be a great service. For example, do many of the French take August off because of the details of their tax and benefit system? Is there something about Germany’s tax code and benefit code that helps explain why so few German women work? Don’t forget advanced Asian economies, such as Japan.
You would have the most impact if you concentrate first and foremost on providing clear summaries of how the tax and benefit codes of different countries work and what the details are. I know I would learn a lot from that. I think most economists would.
What I am suggesting might have been impossible before Google Translate, but nowadays, your computer will give you a translation that is probably good enough to figure out most of what is going on.
I, Mitt Romney, have been reading my cousin Miles’s new blog in the last few days instead of watching the Republican Convention, and I’ve had a political conversion experience. It’s annoying Miles didn’t start sooner. It’s a little late in the game for me to be changing my political philosophy yet again, to Supply-Side Liberalism, but I guess one more political transformation won’t hurt. I am already through the Republican primaries, which gives me room to maneuver. And although my magic Etch-a-Sketch that wipes out everything I have ever said in the past looks like it could give up the ghost of its last bit of magic charm at any time, I think if I use it right now, it will still work once more. It is also annoying that there are a lot of policies Miles hasn’t even talked about yet, but I’m getting the sense that it’s closer to where I was at when I ran for Senator and for Governor in Massachusetts than where I have been lately, so I’ll fill in the gaps that way.
The only trouble is, here I am waiting to go out there and give my acceptance speech and there is no time to work up a new speech. Maybe a little creative reinterpretation will do the trick. All right, here goes, I’m shaking the magic Etch-a-Sketch to erase everything I’ve said before, and I’ll figure out as I go along how to reinterpret the words of my acceptance speech to be consistent with Supply-Side Liberalism. OK, no more time, I have to go out there…
Mr. Chairman, delegates. I accept your nomination for President of the United States of America.
I do so with humility, deeply moved by the trust you have placed in me. It is a great honor. It is an even greater responsibility.
Tonight I am asking you to join me to walk together to a better future. By my side, I have chosen a man with a big heart from a small town. He represents the best of America, a man who will always make us proud - my friend and America’s next Vice President, Paul Ryan.
In the days ahead, you will get to know Paul and Janna better. But last night America got to see what I saw in Paul Ryan - a strong and caring leader who is down to earth and confident in the challenge this moment demands.
I love the way he lights up around his kids and how he’s not embarrassed to show the world how much he loves his mom.
But Paul, I still like the playlist on my iPod better than yours.
Not much content there I need to worry about. If I can just win this election, I’ll have four years with Paul at my side to bring him around to my new way of thinking.
Four years ago, I know that many Americans felt a fresh excitement about the possibilities of a new president. That president was not the choice of our party but Americans always come together after elections. We are a good and generous people who are united by so much more than what divides us.
When that hard fought election was over, when the yard signs came down and the television commercials finally came off the air, Americans were eager to go back to work, to live our lives the way Americans always have - optimistic and positive and confident in the future.
That very optimism is uniquely American.
It is what brought us to America. We are a nation of immigrants. We are the children and grandchildren and great-grandchildren of the ones who wanted a better life, the driven ones, the ones who woke up at night hearing that voice telling them that life in that place called America could be better.
They came not just in pursuit of the riches of this world but for the richness of this life.
Freedom.
Freedom of religion.
Freedom to speak their mind.
Freedom to build a life.
And yes, freedom to build a business. With their own hands.
This is the essence of the American experience.
We Americans have always felt a special kinship with the future.
When every new wave of immigrants looked up and saw the Statue of Liberty, or knelt down and kissed the shores of freedom just ninety miles from Castro’s tyranny, these new Americans surely had many questions. But none doubted that here in America they could build a better life, that in America their children would be more blessed than they.
Boy, what I had in this speech works great, as long as I interpret it in a way that is opposite to what I said about immigration policy before I used my magic Etch a Sketch backstage. What Miles said in “You Didn’t Build That: America Edition” works perfectly. Even the Statue of Liberty reference works great now that I am strongly pro-immigration.
But today, four years from the excitement of the last election, for the first time, the majority of Americans now doubt that our children will have a better future.
It is not what we were promised.
Every family in America wanted this to be a time when they could get ahead a little more, put aside a little more for college, do more for their elderly mom who’s living alone now or give a little more to their church or charity.
Every small business wanted these to be their best years ever, when they could hire more, do more for those who had stuck with them through the hard times, open a new store or sponsor that Little League team.
Every new college graduate thought they’d have a good job by now, a place of their own, and that they could start paying back some of their loans and build for the future.
This is when our nation was supposed to start paying down the national debt and rolling back those massive deficits.
This was the hope and change America voted for.
It’s not just what we wanted. It’s not just what we expected.
It’s what Americans deserved.
You deserved it because during these years, you worked harder than ever before. You deserved it because when it cost more to fill up your car, you cut out movie nights and put in longer hours. Or when you lost that job that paid $22.50 an hour with benefits, you took two jobs at 9 bucks an hour and fewer benefits. You did it because your family depended on you. You did it because you’re an American and you don’t quit. You did it because it was what you had to do.
But driving home late from that second job, or standing there watching the gas pump hit 50 dollars and still going, when the realtor told you that to sell your house you’d have to take a big loss, in those moments you knew that this just wasn’t right.
But what could you do? Except work harder, do with less, try to stay optimistic. Hug your kids a little longer; maybe spend a little more time praying that tomorrow would be a better day.
I wish President Obama had succeeded because I want America to succeed. But his promises gave way to disappointment and division. This isn’t something we have to accept. Now is the moment when we CAN do something. With your help we will do something.
Now is the moment when we can stand up and say, “I’m an American. I make my destiny. And we deserve better! My children deserve better! My family deserves better. My country deserves better!”
So here we stand. Americans have a choice. A decision.
I think that text about what has happened during the Obama administration still works. I liked that line “I wish President Obama had succeeded because I want America to succeed” before and I still like it now. And I still like that line “But his promises gave way to disappointment and division.” As for “division,” President Obama really has been fomenting anger at the rich, when both Miles and I agree that the rich are very important for the economy, as he wrote in “Why Taxes are Bad” and that post that really started to turn me around 180 degrees: “Rich, Poor and Middle Class.” In that post, Miles was wrong about where I was at when I started reading his blog, but now he has convinced me. I am so grateful for that magic Etch-a-Sketch.
Now for the Neil Armstrong reference and my bio. I won’t have to change any of that.
To make that choice, you need to know more about me and about where I will lead our country.
I was born in the middle of the century in the middle of the country, a classic baby boomer. It was a time when Americans were returning from war and eager to work. To be an American was to assume that all things were possible. When President Kennedy challenged Americans to go to the moon, the question wasn’t whether we’d get there, it was only when we’d get there.
The soles of Neil Armstrong’s boots on the moon made permanent impressions on OUR souls and in our national psyche. Ann and I watched those steps together on her parent’s sofa. Like all Americans we went to bed that night knowing we lived in the greatest country in the history of the world.
God bless Neil Armstrong.
Tonight that American flag is still there on the moon. And I don’t doubt for a second that Neil Armstrong’s spirit is still with us: that unique blend of optimism, humility and the utter confidence that when the world needs someone to do the really big stuff, you need an American.
That bit “when the world needs someone to do the really big stuff, you need an American” was over-the-top. How did that get in there? Shakespeare, and even Jesus, weren’t Americans! But they did big stuff indeed. At least the open immigration policy I am now committed to will guarantee that a large fraction of all the people in the world who do big things become Americans.
That’s how I was brought up.
My dad had been born in Mexico and his family had to leave during the Mexican revolution. I grew up with stories of his family being fed by the US Government as war refugees. My dad never made it through college and apprenticed as a lath and plaster carpenter. And he had big dreams. He convinced my mom, a beautiful young actress, to give up Hollywood to marry him. He moved to Detroit, led a great automobile company and became Governor of the Great State of Michigan.
My Dad’s generation really was impressive, including my Dad’s first cousin Camilla Eyring Kimball, who married Spencer W. Kimball. And Camilla’s brothers and sisters earned a lot of college degrees when that wasn’t common early in the 20th Century, including Henry Eyring, who became a world-renowned chemist. And boy am I glad Camilla’s husband Spencer W. Kimball did the hard work of praying to get that revelation from God giving the priesthood to blacks. That was one of the best days in my life when I heard about that.
We were Mormons and growing up in Michigan; that might have seemed unusual or out of place but I really don’t remember it that way. My friends cared more about what sports teams we followed than what church we went to.
Religion is one area where I am not going to go along with Miles. I still believe in Mormonism, which is a lot different from the religious views Miles expressed in “Teleotheism and the Purpose of Life.” And I’ll take my sure confidence in an afterlife over Miles’s attempts to console himself in “The Egocentric Illusion” about the absence of an afterlife any day. And I know there are miracles in the world today. What else do you call my magic Etch-a-Sketch? But religion is one area where, in America, it is OK to disagree. And if I take out the religious details, those posts had good positive views in other ways. OK, must keep going:
My mom and dad gave their kids the greatest gift of all - the gift of unconditional love. They cared deeply about who we would BE, and much less about what we would DO.
Unconditional love is a gift that Ann and I have tried to pass on to our sons and now to our grandchildren. All the laws and legislation in the world will never heal this world like the loving hearts and arms of mothers and fathers. If every child could drift to sleep feeling wrapped in the love of their family - and God’s love – this world would be a far more gentle and better place.
Mom and Dad were married 64 years. And if you wondered what their secret was, you could have asked the local florist - because every day Dad gave Mom a rose, which he put on her bedside table. That’s how she found out what happened on the day my father died - she went looking for him because that morning, there was no rose.
My mom and dad were true partners, a life lesson that shaped me by everyday example. When my mom ran for the Senate, my dad was there for her every step of the way. I can still hear her saying in her beautiful voice, “Why should women have any less say than men, about the great decisions facing our nation?”
I wish she could have been here at the convention and heard leaders like Governor Mary Fallin, Governor Nikki Haley, Governor Susana Martinez, Senator Kelly Ayotte and Secretary of State Condoleezza Rice.
As Governor of Massachusetts, I chose a woman Lt. Governor, a woman chief of staff, half of my cabinet and senior officials were women, and in business, I mentored and supported great women leaders who went on to run great companies.
I grew up in Detroit in love with cars and wanted to be a car guy, like my dad. But by the time I was out of school, I realized that I had to go out on my own, that if I stayed around Michigan in the same business, I’d never really know if I was getting a break because of my dad. I wanted to go someplace new and prove myself.
Those weren’t the easiest of days - too many long hours and weekends working, five young sons who seemed to have this need to re-enact a different world war every night. But if you ask Ann and I what we’d give, to break up just one more fight between the boys, or wake up in the morning and discover a pile of kids asleep in our room. Well, every mom and dad knows the answer to that.
Those days were toughest on Ann, of course. She was heroic. Five boys, with our families a long way away. I had to travel a lot for my job then and I’d call and try to offer support. But every mom knows that doesn’t help get the homework done or the kids out the door to school.
I knew that her job as a mom was harder than mine. And I knew without question, that her job as a mom was a lot more important than mine. And as America saw Tuesday night, Ann would have succeeded at anything she wanted to.
Like a lot of families in a new place with no family, we found kinship with a wide circle of friends through our church. When we were new to the community it was welcoming and as the years went by, it was a joy to help others who had just moved to town or just joined our church. We had remarkably vibrant and diverse congregants from all walks of life and many who were new to America. We prayed together, our kids played together and we always stood ready to help each other out in different ways.
And that’s how it is in America. We look to our communities, our faiths, our families for our joy, our support, in good times and bad. It is both how we live our lives and why we live our lives. The strength and power and goodness of America has always been based on the strength and power and goodness of our communities, our families, our faiths.
That is the bedrock of what makes America, America. In our best days, we can feel the vibrancy of America’s communities, large and small.
All of that still sounds great. I like the emphasis on community. Now I think I pivot to criticism of Obama. Let’s see here…
It’s when we see that new business opening up downtown. It’s when we go to work in the morning and see everybody else on our block doing the same.
It’s when our son or daughter calls from college to talk about which job offer they should take….and you try not to choke up when you hear that the one they like is not far from home.
It’s that good feeling when you have more time to volunteer to coach your kid’s soccer team, or help out on school trips.
But for too many Americans, these good days are harder to come by. How many days have you woken up feeling that something really special was happening in America?
Many of you felt that way on Election Day four years ago. Hope and Change had a powerful appeal. But tonight I’d ask a simple question: If you felt that excitement when you voted for Barack Obama, shouldn’t you feel that way now that he’s President Obama? You know there’s something wrong with the kind of job he’s done as president when the best feeling you had was the day you voted for him.
The President hasn’t disappointed you because he wanted to. The President has disappointed America because he hasn’t led America in the right direction. He took office without the basic qualification that most Americans have and one that was essential to his task. He had almost no experience working in a business. Jobs to him are about government.
On the size of government issue, I think Miles has a political winner in his proposal in “Avoiding Fiscal Armageddon” to call for a constitutional amendment limiting government spending to less than half of GDP. If the Democrats resist it, they’ll be admitting that they plan sometime down the road to run more than half of the economy through government. If the Democrats go along, America will have a crucial constitutional protection against encroaching government in the future–now that would be a legacy.
I learned the real lessons about how America works from experience.
When I was 37, I helped start a small company. My partners and I had been working for a company that was in the business of helping other businesses.
So some of us had this idea that if we really believed our advice was helping companies, we should invest in companies. We should bet on ourselves and on our advice.
So we started a new business called Bain Capital. The only problem was, while WE believed in ourselves, nobody else did. We were young and had never done this before and we almost didn’t get off the ground. In those days, sometimes I wondered if I had made a really big mistake. I had thought about asking my church’s pension fund to invest, but I didn’t. I figured it was bad enough that I might lose my investors’ money, but I didn’t want to go to hell too. Shows what I know. Another of my partners got the Episcopal Church pension fund to invest. Today there are a lot of happy retired priests who should thank him.
That business we started with 10 people has now grown into a great American success story. Some of the companies we helped start are names you know. An office supply company called Staples - where I’m pleased to see the Obama campaign has been shopping; The Sports Authority, which became a favorite of my sons. We started an early childhood learning center called Bright Horizons that First Lady Michelle Obama rightly praised. At a time when nobody thought we’d ever see a new steel mill built in America, we took a chance and built one in a corn field in Indiana. Today Steel Dynamics is one of the largest steel producers in the United States.
These are American success stories. And yet the centerpiece of the President’s entire re-election campaign is attacking success. Is it any wonder that someone who attacks success has led the worst economic recovery since the Great Depression? In America, we celebrate success, we don’t apologize for it.
We weren’t always successful at Bain. But no one ever is in the real world of business.
That’s what this President doesn’t seem to understand. Business and growing jobs is about taking risk, sometimes failing, sometimes succeeding, but always striving. It is about dreams. Usually, it doesn’t work out exactly as you might have imagined. Steve Jobs was fired at Apple. He came back and changed the world.
It’s the genius of the American free enterprise system - to harness the extraordinary creativity and talent and industry of the American people with a system that is dedicated to creating tomorrow’s prosperity rather than trying to redistribute today’s.
Wow, not only is this part of the speech great, after watching the videos Miles assembled in his post “Milton Friedman: Celebrating His 100th Birthday with Videos of Milton,” I realize that I am saying the sort of thing Milton would say if he were here.
That is why every president since the Great Depression who came before the American people asking for a second term could look back at the last four years and say with satisfaction: “you are better off today than you were four years ago.”Except Jimmy Carter. And except this president.
This president can ask us to be patient.
This president can tell us it was someone else’s fault.
This president can tell us that the next four years he’ll get it right.
But this president cannot tell us that YOU are better off today than when he took office.
That part of my speech was always pretty carefully worded. And it really hasn’t been fair of Obama to blame his predecessor Bush for the Great Recession. It was a collective failure on the part of many people. The kinds of experiments Miles talked about in “Dr. Smith and the Asset Bubble” make it look like human beings are naturally prone to create asset bubbles when they interact in asset markets. And the high leverage in the way we do mortgage finance made a bubble in housing so much worse for the economy. If only someone had listened to Robert Shiller and Andrew Caplin about how to do housing finance before it was too late to avoid the financial crisis. Miles’s post “Reply to Matthew Yglesias: What to Do About a House Price Boom” makes me realize that I need to bring Shiller and Caplin into my administration, if I can persuade them to come on board. There is a lot to think about there, but I have to get back to my speech:
America has been patient. Americans have supported this president in good faith.
But today, the time has come to turn the page.
Today the time has come for us to put the disappointments of the last four years behind us.
To put aside the divisiveness and the recriminations.
To forget about what might have been and to look ahead to what can be.
Now is the time to restore the Promise of America. Many Americans have given up on this president but they haven’t ever thought about giving up. Not on themselves. Not on each other. And not on America.
What is needed in our country today is not complicated or profound. It doesn’t take a special government commission to tell us what America needs.
What America needs is jobs.
Lots of jobs.
Getting more jobs is one thing I know how to do now. The problem with the Democrats’ Keynesian stimulus measures was not that they wouldn’t work, but that a big enough stimulus of that sort would explode our national debt. Miles’s idea of Federal Lines of Credit gets stimulus without much ultimate addition to the national debt. All of Miles’s posts on Federal Lines of Credit listed in “Short-Run Fiscal Policy Posts through August 23, 2012” make a pretty good case, so I think I can sell the idea. It is great that no one has any preexisting political opinion about Federal Lines of Credit because the idea is so new. And some of the other ideas for fiscal stimulus besides Federal Lines of Credit aren’t bad either, like the ideas in “Leading States in the Fiscal Two-Step” and “What to Do When the World Desperately Wants to Lend Us Money.” And if we empower the Fed to buy a wide range of assets like the Bank of Japan can, and I appoint members of the Fed who are comfortable with what Miles says in “Balance Sheet Monetary Policy: A Primer” and “Trillions and Trillions: Getting Used to Balance Sheet Monetary Policy” it looks like we can get a huge amount of stimulus from monetary policy, too. From Miles’s post “Wallace Neutrality and Ricardian Neutrality” and some of the other things I saw when I followed some of the link trails, it sounds as if it would help a lot to appoint a few Market Monetarists to the Fed when I get the chance. Ben Bernanke needs to be pulled in that direction more and pulled less in the direction of the monetary policy hawks, as I can see after having followed the link in “Brad DeLong’s Views on Monetary Policy and the Fed’s Internal Politics.” It would be pretty interesting to appoint Brad DeLong to the Fed, but my fellow Republicans will give me enough trouble just for working to give the Fed the authority to buy a wider range of assets, so I had better not try to appoint Brad. Back to my speech:
In the richest country in the history of the world, this Obama economy has crushed the middle class. Family income has fallen by $4,000, but health insurance premiums are higher, food prices are higher, utility bills are higher, and gasoline prices have doubled. Today more Americans wake up in poverty than ever before. Nearly one out of six Americans is living in poverty. Look around you. These are not strangers. These are our brothers and sisters, our fellow Americans.
His policies have not helped create jobs, they have depressed them. And this I can tell you about where President Obama would take America:
His plan to raise taxes on small business won’t add jobs, it will eliminate them;
Reading “Is Taxing Capital OK?” and “Corporations are People, My Friend” made me wish all over again that I could just eliminate the corporate tax altogether, but even if I’m elected president, that will be too hard politically.
His assault on coal and gas and oil will send energy and manufacturing jobs to China;
I wish this weren’t here in the speech! What am I going to do? Somehow Miles’s Tweets about the need to kill coal got through to me–especially that argument that coal is almost all carbon and so burns to create a huge amount of carbon dioxide. It really puts me in a bind. The magic Etch-a-Sketch wiped out my pro-coal speeches. But here I am again sounding pro-coal. Maybe if I do enough to foster nuclear energy, the fracking revolution in natural gas and research to bring down the cost of solar energy, the market will take care of killing coal for me. Oh, well, even if it is bad policy, I probably needed to sound pro-coal to have a chance in some of those swing states anyway. My conversion to Supply-Side Liberalism didn’t make me a political saint.
His trillion dollar cuts to our military will eliminate hundreds of thousands of jobs, and also put our security at greater risk;
His $716 billion cut to Medicare to finance Obamacare will both hurt today’s seniors, and depress innovation - and jobs - in medicine.
I still like having a strong military, though thinking of the military as a jobs program is a little odd. I guess that statement was OK. On the $716 billion cut to Medicare, I wonder if now that he’s my running mate, the Etch-a-Sketch magic extended far enough to wipe out Paul’s previous statements about cutting Medicare?
And his trillion-dollar deficits will slow our economy, restrain employment, and cause wages to stall.
Oh rats! That sentence sounds like bad economics to me now. Doesn’t it work mostly the other way? Low aggregate demand leading to deficits? At least most people will just hear this sentence as “deficits are bad,” which–other than technical slippage between “deficits” and “long-run effect on the national debt”–is basically true when there are plenty of ways to stimulate aggregate demand without a big increase in the national debt.
To the majority of Americans who now believe that the future will not be better than the past, I can guarantee you this: if Barack Obama is re-elected, you will be right.
It is not great to have the “Obama will be bad” statement after those weak sentences, but I do think that, since my conversion to Supply-Side Liberalism, I will be better than Obama.
I am running for president to help create a better future. A future where everyone who wants a job can find one. Where no senior fears for the security of their retirement. An America where every parent knows that their child will get an education that leads them to a good job and a bright horizon.
And unlike the President, I have a plan to create 12 million new jobs. It has 5 steps.
The main thing I am going to do in the short run for jobs is Federal Lines of Credit and empowering the Fed and appointing some Market Monetarists to the Fed, rather than the 5 steps I have written into the speech. But I don’t see any reason why I can’t create 12 million new jobs with those tools. Let me think of the 5 steps I have written into the speech as long-run economic policy.
First, by 2020, North America will be energy independent by taking full advantage of our oil and coal and gas and nuclear and renewables.
As I was thinking before, I can do a lot to foster the fracking revolution in natural gas production, the next generation of safer, largely waste-free nuclear reactors and research for cheaper and cheaper solar power. I hope that kills coal, or I am going to feel a little guilty.
Second, we will give our fellow citizens the skills they need for the jobs of today and the careers of tomorrow. When it comes to the school your child will attend, every parent should have a choice, and every child should have a chance.
I am glad I have this in my speech. Better schools are a great way to help the poor, and school choice is a great way to get better schools, as Miles said when he flagged Adam Ozimek’s post in “Adam Ozimek: School Choice in the Long Run.” For the public schools that lots of kids will still be going to, I like Miles’s ideas in Magic Ingredient 1: More K-12 School–not just lengthening the school year, but making sure that with high school graduation students can have the credentials for a wide range of jobs. The affront to freedom and harm to the poor from the excessive licensing requirements that Miles talks about in “When the Government Says ‘You May Not Have a Job’” really make me angry. And those restrictions are terrible for economic growth too.
Third, we will make trade work for America by forging new trade agreements. And when nations cheat in trade, there will be unmistakable consequences.
Freer trade will help a lot. And there is something odd about China buying so much of our national debt. Is that really even a good idea for them?
Fourth, to assure every entrepreneur and every job creator that their investments in America will not vanish as have those in Greece, we will cut the deficit and put America on track to a balanced budget.
What happens to the national debt really is an issue. Having ways to stimulate the economy without ultimately adding much to the national debt will help immensely there.
And fifth, we will champion SMALL businesses, America’s engine of job growth. That means reducing taxes on business, not raising them. It means simplifying and modernizing the regulations that hurt small business the most.
Regulations are like a hidden tax. Even if someone could persuade me that big corporations need more regulation (and I’m not stupid, I understand the “too-big-to-fail” problem), I would still think we can do with less regulation for small businesses.
And it means that we must rein in the skyrocketing cost of healthcare by repealing and replacing Obamacare.
Here I am just fine. Miles’s proposal in “Evan Soltas on Medical Reform Federalism: In Canada” to take the money from abolishing the tax exemption from employer-provided health insurance and give it to the states as block grants to provide universal coverage somehow in each state is just the ticket. We’ll have a lot of different experiments in the different states. I thought my health care reform plan in Massachusetts worked pretty well, but not so well that it should have been rolled out as a one-size-fits-all national program in Obamacare without any further experimentation. Here I can have a principled opposition to Obamacare based on humility. I had a great health care plan, but Obama made the mistake of not allowing other plans their day in court with a state-level real-world test. The posts Miles indexed in “Health Economics Posts through August 26, 2012” provide plenty of ideas to try that Miles shamelessly borrowed from other smart people.
Today, women are more likely than men to start a business. They need a president who respects and understands what they do.
And let me make this very clear - unlike President Obama, I will not raise taxes on the middle class.
Whew, on this one, I think I can just squeak by through claiming (over furious objections by some in my own party, I’ll bet) that Miles’s great proposal in “No Tax Increase Without Recompense” isn’t really a tax increase, since the extra taxes imposed can be fully cancelled out by the tax credit for public contributions to decentralized nonprofit efforts to make America better. That dodge will make impossible arithmetic possible, as the need for government spending is reduced by those decentralized efforts. I’ll have to work up to this one to get it past my fellow Republicans in Congress, but the political capital I’ll get from all the jobs created by the extra aggregate demand from Federal Lines of Credit will go a long way toward making that possible. I am not sure 10% of income over $75,000 a year per person will be enough given all of the things that need to be done, but whatever it takes, I’ll try to push it through Congress.
As president, I will protect the sanctity of life. I will honor the institution of marriage. And I will guarantee America’s first liberty: the freedom of religion.
I am glad my speech was written to talk about abortion policy in code here, using “sanctity of life.” With my magic Etch-a-Sketch wiping out all my previous statements, maybe I can go back to where I was when I was running for office in Massachusetts. And I can’t think of a better way to “honor the institution of marriage” than to do everything possible to foster marriage rights for gays. It’s good to be on the right side of that issue again. Thank you, Etch-a-Sketch! I think I’ll wait until after the election to go there, though. There are some Republicans who would stay home on election day if I came out for gay marriage between now and then. And who could be against freedom of religion? And as far as the coded meaning goes, medical reform Federalism will probably solve the issue the Catholic Church had with Obamacare.
President Obama promised to begin to slow the rise of the oceans and heal the planet. MY promise…is to help you and your family.
I have been worrying a lot about global warming ever since reading what Miles had to say about that at the beginning of “Avoiding Fiscal Armageddon,” but I think this attack on Obama is totally appropriate just as an attack on his grandiosity. (Come to think of it, Miles shows some of the same kind of grandiosity, but I’ll forgive him for that in view of the number of ideas I’ll be stealing.) That line “MY promise…is to help you and your family” is better than I thought, in view of that paper of Miles and his coauthors that I stumbled on that found that in personal choices, people value “the well-being of you and your family” more than anything else.
I will begin my presidency with a jobs tour. President Obama began with an apology tour. America, he said, had dictated to other nations. No Mr. President, America has freed other nations from dictators.
Every American was relieved the day President Obama gave the order, and Seal Team Six took out Osama bin Laden. But on another front, every American is less secure today because he has failed to slow Iran’s nuclear threat.
In his first TV interview as president, he said we should talk to Iran. We’re still talking, and Iran’s centrifuges are still spinning.
I know Miles agrees with me about the importance of keeping Iran from getting nuclear weapons from what he said at the very beginning of “Avoiding Fiscal Armageddon.” In any case, this is something I feel strongly about.
President Obama has thrown allies like Israel under the bus, even as he has relaxed sanctions on Castro’s Cuba. He abandoned our friends in Poland by walking away from our missile defense commitments, but is eager to give Russia’s President Putin the flexibility he desires, after the election. Under my administration, our friends will see more loyalty, and Mr. Putin will see a little less flexibility and more backbone.
We will honor America’s democratic ideals because a free world is a more peaceful world. This is the bipartisan foreign policy legacy of Truman and Reagan. And under my presidency we will return to it once again.
I don’t see any problem with what I had in my speech here. But Jonathan Rauch’s talk that Miles flagged in “Jonathan Rauch on Democracy, Capitalism and Liberal Science” gives me the idea that I can send a strong pro-freedom message by awarding Jonathan Rauch the Presidential Medal of Freedom if I can just get elected.
You might have asked yourself if these last years are really the America we want, the America won for us by the greatest generation.
Does the America we want borrow a trillion dollars from China? No.
Does it fail to find the jobs that are needed for 23 million people and for half the kids graduating from college? No.
Are its schools lagging behind the rest of the developed world? No.
And does the America we want succumb to resentment and division? We know the answer.
The America we all know has been a story of the many becoming one, uniting to preserve liberty, uniting to build the greatest economy in the world, uniting to save the world from unspeakable darkness.
Everywhere I go in America, there are monuments that list those who have given their lives for America. There is no mention of their race, their party affiliation, or what they did for a living. They lived and died under a single flag, fighting for a single purpose. They pledged allegiance to the UNITED States of America.
That America, that united America, can unleash an economy that will put Americans back to work, that will once again lead the world with innovation and productivity, and that will restore every father and mother’s confidence that their children’s future is brighter even than the past.
That America, that united America, will preserve a military that is so strong, no nation would ever dare to test it.
That America, that united America, will uphold the constellation of rights that were endowed by our Creator, and codified in our Constitution.
That united America will care for the poor and the sick, will honor and respect the elderly, and will give a helping hand to those in need.
No problem in that passage. It is going to be easier to afford that strong military with the public contribution program I am stealing from Miles’s post “No Tax Increase Without Recompense,” though I may have to adjust the rate from what he said. And that public contribution program will do a lot more to take care of the poor and the sick and to honor the elderly than we do now. I just need to be careful not to cut back on direct government programs until we are really confident that the decentralized efforts from the public contribution program are taking care of things in specific areas. Miles’s reminders in his post “Will Mitt’s Mormonism Make Him a Supply-Side Liberal?” of the Book of Mormon’s teachings about the duty to help the poor stiffen my resolve on that front.
That America is the best within each of us. That America we want for our children.
If I am elected President of these United States, I will work with all my energy and soul to restore that America, to lift our eyes to a better future. That future is our destiny. That future is out there. It is waiting for us. Our children deserve it, our nation depends upon it, the peace and freedom of the world require it. And with your help we will deliver it. Let us begin that future together tonight.
In my post “Rich, Poor and Middle-Class” I wrote
I am deeply concerned about the poor, because they are truly suffering, even with what safety net exists. Helping them is one of our highest ethical obligations. I am deeply concerned about the honest rich—not so much for themselves, though their welfare counts too—but because they provide goods and services that make our lives better, because they provide jobs, because they help ensure that we can get good returns for our retirement saving, and because we already depend on them so much for tax revenue. But for the middle-class, who count heavily because they make up the bulk of our society, I have a stern message. We are paying too high a price when we tax the middle class in order to give benefits to the middle-class—and taxing the rich to give benefits to the middle-class would only make things worse. The primary job of the government in relation to the middle-class has to be to help them help themselves, through education, through loans, through libertarian paternalism, and by stopping the dishonest rich from preying on the middle-class through deceit and chicanery.
In his correspondence with Bryan Caplan, Bill Dickens gives a good picture of what government efforts to help the poor currently look like. The distinction between the suffering of the poor and the struggling of the middle class is clear in Bill’s description. Bill is arguing against Bryan’s desire to reduce support for the poor. He argues persuasively that since the Clinton-era Welfare Reforms, government efforts to help the poor have been appropriate.
Note that because of the nature of the argument with Bryan, Bill does not address here the question of whether more should be done to help the poor. There are two terms in what Bill writes that may need some explanation: “memes” and “leaky bucket.” Here is a link for “memes.” I didn’t find a good link for “leaky bucket." "Leaky bucket” is a metaphor economists use for the idea that a government policy intended to help the poor often has unintended side effects: (1) the poor acting in ways that make it more likely that they will get help and (2) those who are better off acting in ways that make it more likely that they won’t be asked to help.
Since Bill’s argument is long, let me give you some of the highlights of what Bill writes to Bryan:
So this is the crux of it. You subscribe to two central right-wing memes: government coddles the poor and won’t make them face the tough choices everyone else does, and welfare recipients are overwhelmingly lazy and undeserving. Anyone with firsthand experience dealing with a wide range of the poor or those receiving government assistant (with the later being only a small subset of the former) knows these two things to be false.
Overwhelmingly those on public assistance were full of regret and/or a sense of hopelessness that they are fated to their condition. They know they should have worked harder in school, they know they should be working to support their family, they know it would be better if their children’s father was there to help support their kids. There is no shortage of hectoring from society, welfare caseworkers, family members, and the media. Consider that even before the passage of TANF most women on welfare worked at least some during every year (on or off the books). Most welfare mothers are not drug abusers or alcoholics (when they have been tested only a tiny fraction fail). A lot had their children with a husband or boyfriend they had hoped to marry. A lot of the AFDC caseload cycled on and off welfare as people made repeated attempts to return to work (attempts that were often stymied by lack of adequate child care - one of the most common reasons for returning to welfare was being fired by a low wage employer for missing work when child care arrangements fell through).
Over and over when I talk to people about government income support programs I’m told that they have no objection to giving money to the truly needy, but that they don’t like supporting lazy bums who don’t like to work. When I tell them that overwhelmingly government support goes to families (usually single women) with children they don’t believe me.
Now let’s consider the case of a bucket that was probably too leaky and needed to be replaced. As you know I was converted by my experience with Clinton’s welfare reform task force to the belief that AFDC needed to be time limited. Over and over I heard young women tell me that they didn’t think much about having a baby because that is what people in their world did. “You get to be 16, you get yourself a baby and you get yourself a check and an apartment.” AFDC as a career choice was a serious problem back then. But even as we went around preparing the welfare reform we heard over-and-over again that the word was out that welfare was going away and you were going to have to do something else now. Starting in the early 90s - long before TANF actually limited benefits to 2 years - AFDC caseloads started dropping and ultimately dropped enormously.
People know they make bad decisions. They often know when they are making them that they are bad. Telling them that they are being stupid isn’t news to them. Find ways to change the system to help them make better decisions and I’m all with you. Take money away from children because their mothers and fathers made bad choices I’m very disappointed. Overlook all the people who are receiving aid not because of bad choices, but bad luck and I’m more than disappointed - I’m angry.
… I’m not “outraged” by people who don’t want to pay taxes to support the government transfer system. A few of them may be selfish and/or racist jerks. There are few enough of them that I could care less. I believe that most people with that view are misinformed about who gets government transfers, how the programs are administered, the amount of the benefits, and how much of their taxes go to such programs. I think the vast majority of people, if they knew the facts, would not object to paying taxes for the system.
To me, given what I know, what Bill says has the ring of truth to it. But I would be interested in any evidence anyone has that contradicts what Bill says, especially anything that contradicts the passages I have quoted.
