The world and our nation have permanent underclasses – people with little wealth and few opportunities for education or upward mobility. Their attempts to draw attention to their needs are often met with contempt or repression. Continue reading WE CAN END PERMANENT UNDERCLASSES
Category Archives: poverty
JUST SAY YES TO MEDICAID
The decision by North Carolina’s governing Republicans (every single one of them) to reject Medicaid expansion will cost the state’s residents $37 billion by 2022. That is roughly enough money to run the entire state government for 21 months. They looked at the money and just said “no”. They looked at uninsured people living in poverty and just said “no”. They looked at hospitals and doctors who care for uninsured people, and they just said “no”. And they just said “no” to unemployed workers who would have found jobs in the Medicaid expansion. Continue reading JUST SAY YES TO MEDICAID
THE ARTIFICIAL INTELLIGENCE ECONOMY
What if our economy could grow so rapidly as to greatly increase the amount of money, goods, and services that are available – a good thing, right? What if one result of that growth is that the future economy has no place for you – not so good? These are more than hypothetical questions for millions of people around the world. Businesses are making more products with fewer employees and lower wages. In the US, corporate profits have doubled since 2000 but inflation adjusted household income has dropped from $56,000 to $51,000. After tax corporate profits are up from 5 percent of American GDP to 11 percent – a record high level. Simultaneously employee compensation has dropped from 47 percent of GDP to 43 percent. Continue reading THE ARTIFICIAL INTELLIGENCE ECONOMY
NO MONEY FOR A RAISE?
Wages, taxes, the role of unions, and a new term, “income inequality” spark lively and sometimes angry discussions across our state and nation. There are people working more than one low wage job who still qualify for food stamps and can’t support a family. Others can’t find even a minimum wage job. Some of our leaders say that developing higher levels of skill and education will bring higher wages, a true statement but an unsatisfactory answer to those who are underpaid to do necessary work. The work of those who prepare and serve fast food is honest work done by honest people who deserve a living wage. The same can be said for those who mop the floors of the schools, pick the peaches that I hope to eat soon and mow the grass along the highways. Continue reading NO MONEY FOR A RAISE?
MEDICAID AND MANAGEMENT INCOMPETENCE
“What are the most important decisions that you have made in your work?” Ask that question of executives who have been successful in leading complex organizations and a clear majority will give an answer that has to do with choosing the rest of the leadership team. That is a lesson which Governor Pat McCrory is learning in the school of hard knocks while North Carolina taxpayers fund his tuition bills.
Shortly after Dr. Aldona Wos was named Secretary of Health and Human Services for the state, I pointed out that her principal qualification appeared to be the success that she and her husband had in raising money for Governor McCrory’s and President George W. Bush’s election campaigns. In a column at the time, I described her as “…a physician who has not been involved full-time in health policy or medical practice for many years…President Bush rewarded Dr. Wos by appointing her as Ambassador to Estonia. Likewise, the Governor made her DHHS Secretary and she hired a young McCrory campaign staffer, Matthew McKillip, as the Chief Policy Officer of DHHS. At age 24, he has no previous health service education or experience but he has worked for a right wing think tank and now he is leading health policy development for the state.” She proceeded to select others for the DHHS team including Ricky Diaz, a McCrory campaign staffer hired as the top public information officer. He was forced to resign after lying to the press about violations of medical record confidentiality laws.
Wos picked Carol Steckel, another conservative ideologue but one with substantial experience in Louisiana, to re-organize the Medicaid program. Steckel resigned after only eight months. Dr. Laura Gerald resigned as the State Health Director as did Dr. Rebecca King, the state’s top dentist, citing differences with Wos and the administration. Wos and the Governor publicly misinterpreted the findings of the North Carolina Auditor to create the appearance of extraordinarily high administrative costs in the Medicaid program. They used that interpretation to support their goal of privatizing Medicaid. Protests by the auditor and health professionals later demonstrated that the state’s administrative costs are actually quite moderate.
Wos changed the application and enrollment procedures for Food Stamp assistance and her new process takes months for many low income families. It is so bad that the federal government has warned the state that funding for administrative costs will be withheld if improvement is not made promptly. She implemented a new computer system for making Medicaid payments to physicians and other health care providers despite credible warnings that it was not workable, resulting in payment slowdowns that have jeopardized the financial survival of health care providers (doctors, hospitals, therapists and others) who depend heavily on Medicaid.
She is promoting an idea for addressing our troubled state mental health system by merging several quasi-governmental regional agencies into a smaller number without addressing the underlying issues about how and by whom services are delivered to living, breathing patients. Thinking that this administrative re-shuffling will improve mental health services is a bit like preventing the sinking of the Titanic by rearranging its deck chairs. It may appear that something is being done but the ship is still headed for the bottom of the ocean.
The biggest problem in this case is not with Dr. Wos. The major problem is with a Governor who has “rewarded” (punished might be a more apt description) political allies by putting them in highly responsible leadership positions for which they are unprepared. In this case the Governor chose someone who ideologically agrees with him but lacks necessary experience then he offered encouragement as she put other unqualified people in key roles. More recently he has failed to take action as a series of high level staff resigned. The debilitation of DHHS began with the appointment of unqualified personnel and that has demoralized more capable members of the department’s team.
DHHS is by far the largest and most expensive department of state government – comparable in fact to the Titanic. A ship so large cannot turn on a dime and ours is clearly in peril. Unless the Governor acts soon, DHHS will take many thousands of mentally ill and low income North Carolinians down along with some of our health care providers. It remains unclear whether Governor McCrory and Secretary Wos will go down with the ship.
PUBLIC POLICIES AFFECT OUR INCOMES
Nine of the ten US States with the highest median household incomes voted for a liberal in the last presidential election. The only outlier among the high income states was Alaska. At the other end of the income scale, nine of the ten US States with the lowest median household incomes voted for a conservative. The only outlier was New Mexico. The same tendency is apparent when all states are considered. 80% of the states with household incomes above the US median voted for President Obama. 67% of states with incomes below the US median voted for Mr. Romney. For convenience I’ll go with the conventional names and call the more liberal states “blue” and the more conservative states “red”.
Reading down the list of states by income, it is clear that the leaders are blue states with moderate to liberal policies at the state level. In general they are the states which spend more on social safety net programs and public education. They also tend toward the moderate or liberal part of the spectrum on social issues like same sex marriage, abortion, and immigration reform.
Reading up from the bottom of the list of states by income, you will find red states that spend less on social safety net programs and public education. And they tend toward the conservative end of the spectrum on same sex marriage, abortion and immigration reform.
How can these patterns be explained and what can be learned from them? Here are some ideas. By focusing their resources on assuring good public education and access to health care for everyone, including those with low incomes, the blue states develop strong work forces that attract good paying jobs. Some will argue that many jobs have moved to the low-tax environments in the red states and there may be some truth in that. It should be noted that many businesses that talk about such relocations are not only seeking low taxes. They are seeking low wages. If there has been movement of jobs to red states, it appears to have perpetuated their low wage environment rather than improving it.
The relatively liberal social policies of the blue states seem open to more people regardless of sexual orientation or immigration status; and some people looking for such openness also have the economic and intellectual means to start businesses that create economic growth. They gravitate to places where their lifestyles and freedom are respected – bringing economic growth that benefits everyone. If my thinking is wrong, then how would one explain that blue state residents clearly have higher incomes?
It is our tradition to be a nation with regional cultural differences and that will certainly continue. And it has also been our tradition to learn from each other’s successes and failures. In 1789 North Carolina created the first State operated university. Other states saw how well the idea worked and copied it. Cincinnati created the first paid fire department in the US in 1853. The idea succeeded and was copied across the nation. Today hardly anyone thinks of public universities or fire departments as liberal or conservative ideas. They are simply accepted as ideas that work well and that contribute to the success of everyone in the community.
It is time once again to look across state lines and see which public policies are producing the best results. Blue states are leading the nation in median income, educational attainment, and life expectancy. Red states are leading in poverty-related problems including divorce, adolescent pregnancy, and shorter life expectancy. Low funding of education and safety net programs are not producing good results. Restrictions on the personal freedoms to control one’s own body and to marry the person of one’s own choice do not contribute to the success of a state or its citizens.
It’s time to look carefully at what works and what doesn’t and then move ahead with public policies that enhance personal freedom and encourage success. With that attitude and all of our other advantages, North Carolina can become the economic envy of the nation. Two things are required if we are to achieve that. First, we must pay attention to the management and effectiveness of our public policies – stop tearing down public institutions and government and begin making them more creative and efficient. Second, we must study what works (whether a “liberal” or “conservative” idea) and adopt the public policies that lead to success.
There is no question about our ability or our resources. We can be as great as we choose to be. The important questions are about our willingness to abandon hard line ideologies in favor of doing the things that produce the results that we want. Those choices will be made by voters. Without the willingness to adopt successful public policies we can be thankful for our friends in Mississippi. They will assure that we don’t finish last.
YES, WE HAVE NO MAGIC
Yes, we have no magic
“I can’t really criticize the Tea Party people, because I came into the White House pretty much on the same basis that they have become popular. That is dissatisfaction with the way things are going in Washington and disillusionment and discouragement about the government.” It may surprise many readers to learn that this quotation is from former President Jimmy Carter.
At the time when we elected President Carter, trust in government was very low. We had experienced the Watergate scandal which forced President Nixon to resign from office for spying on political rivals. His schemes included an “enemies list” of opponents to be targeted with IRS audits or malicious prosecutions. His predecessor, President Johnson, made up stories about attacks on American forces in order to justify the Gulf of Tonkin Resolution that allowed him to start the Vietnam War. We also learned that the FBI had been tapping the phones of civil rights leaders, including Dr. Martin Luther King. There was suspicion that President Kennedy’s assassination was part of some conspiracy. There were plenty of justifications for mistrust of government.
“I’ll never tell a lie. I’ll never make a misleading statement. I’ll never betray the confidence that any of you had in me. And I’ll never avoid a controversial issue.” Those were promises that President Carter made. And to the best of my knowledge, he kept them. He dealt with an energy crisis by urging us to become more energy efficient. He talked about national initiatives to develop wind and solar power. His fiscal policies were disciplined, leading us away from the deficit spending of the Vietnam era and toward a balanced budget. He championed zero based budgeting which meant that no government agency would get money next year just because they had it this year. He offered leadership toward building our nation at home and keeping us out of wars.
It seems that voters want to hear about painless solutions to national problems from candidates who have magical cures for whatever ails the nation. In the very next election, the voters chose easy money and the cheerful countenance of President Reagan. He created economic stimulus by cutting taxes without cutting spending, leading us along the path to our current massive deficits and debt. He wanted to overthrow the democratically elected Sandinista party government of Nicaragua but congress forbade that. President Reagan then secretly sold arms to Iran (which had been holding our citizens hostage) and used the off-the-books proceeds to finance Contra rebel insurrection in Nicaragua. We became accustomed to disclosures of covert actions that congress never authorized. Since then, we have fought two wars in Iraq and one in Afghanistan, all paid for with borrowed money and American blood. Many Americans suspect the Bush-Cheney administration of making up the evidence for the second Iraq war, just as President Johnson did for Vietnam.
We have recently learned (through illegal disclosures) that the FBI, NSA, and CIA are running immense espionage programs, some directed at our allies and American citizens. The principal government response is to try to prevent disclosure of information rather than to honestly examine the proper role of government. Big financial institutions are suspected of improper influence on elected officials and regulators who created the opportunity for the 2008 financial meltdown – and with good reason. Deregulation of campaign finance is allowing the very wealthy and the biggest businesses to pay for massive campaigns to influence voters, often drowning out the voices of citizens, science and reason and subverting the “one man, one vote” principle.
As in 1976, when President Carter was elected, the mistrust of government is palpable; and the people are divided between left-leaning and right-leaning ideologies. Here is a more recent quotation from President Carter, “I don’t want to tell President Obama how to make a speech. He’s a much better speech maker than I am. But I think always to tell the truth in a sometimes blatant way, even though it might be temporarily unpopular, is the best approach.” That may not be the best politics but it is the best public service.
My hope is that regardless of ideology we will elect candidates who insist on integrity. Even if we disagree with their conclusions, their statements should always be factually true and above reproach, never designed to mislead us. If that is to happen, the candidates will need the courage to make voters uncomfortable by telling us things that we do not want to hear. We will need to learn, for example, how our spending for health care and defense compares to other nations and then decide how much we are willing to spend. Whatever we spend, we will have to decide who is going to pay enough taxes to collect more than we spend, so that we can begin paying down our debt. It will be our responsibility as voters to turn down any smiling faces who tell us that they have magical ideological solutions to our problems. Perhaps we have learned by now that they don’t exist. President Carter jokingly also said, “I have often wanted to drown my troubles, but I can’t get my wife to go swimming.” Candidates who mislead us with smiles and magical ideologies will drown us all if we continue to swim with them.
INCOME INEQUALITY AND A POLITICAL DIVIDE
It is said that those who do not learn from history are doomed to repeat it. We can learn a great deal from the strong historic correlation between political polarization and income inequality.
Income inequality peaked in the early 20th century when the top 1% of the population claimed about 20% of total income. Political polarization peaked around the same time as fiscally conservative Republicans and their presidential candidate, Herbert Hoover, carried the 1928 Presidential election. This was before the stock market crash but already there was rising dissatisfaction with income inequality. White southern farmers (Most blacks were barred from voting.) were pushing for increased federal regulation of banks, financial institutions and railroads that were thought to be profiting unfairly from the work of others. Organized labor gained traction among industrial workers who felt abused by their employers.
Conflict was widespread as workers banded together for higher wages and better working conditions while their employers arranged for police or private armed forces to attack strikers and organizers. In 1929, National Guard and local police intervened to end a textile mill strike in Gastonia NC, resulting in the shooting deaths of several strikers and a law enforcement officer. Bloodshed was more common in northern industrial centers.
Workers formed unions because their work was dangerous, provided no job security and they could not decently support families on what they earned. In 1912, a Socialist third party candidate garnered 6% of the popular vote for President. The “Farmer-Labor Party” gained fringe popularity along with socialist and communist movements. By 1930, the Depression was severe and FDR was elected President, subsequently passing his New Deal programs including federal economic stimulus, massive public works projects, Social Security, and strong regulation of banks. Thus began a painfully slow recovery which was not complete until the WWII effort brought full employment.
Today the share of national income enjoyed by the top 1% is again around 20% and political polarization is at its highest level since 1900. Conservatives have blamed unions for economic woes and more recently have succeeded in changing laws to make it harder for workers to organize; but labor activity is on the rise among low wage workers. Like their predecessors a century ago, they find it impossible to participate in modern society on their wages. Even among those who have jobs, hunger and homelessness are rising. Politicians respond that they would like to do something to help but they don’t have enough money. That response comes resoundingly from Republicans but also from Democrats.
Explanations of why there is not enough money ring hollow when the incomes of the top 1% continue to rise while the wages for labor stagnate or shrink. Teachers and many white collar workers are similarly affected. One factor contributing to the rapid growth of income among the wealthy while others see no increase is the more than 50% reduction in tax rates for the wealthy since their 20th century peak. Our budgets were balanced and our middle class grew to its largest size when taxes were higher. Poverty was shrinking; unemployment was low; and public education was a source of national pride.
Today, candidates from both major parties depend on the very wealthy for campaign contributions which they use to sell themselves to the general public. In 1982, the top .01% (one ten thousandth of the population) made 10% of all campaign contributions for federal elections. By 2012, they provided 40% of the contributions. Major corporations make sure that they have very wealthy people from both parties on their boards in hopes of sustaining strong influence on public policy no matter who wins an election. That is the same kind of influence which encouraged the Governor of North Carolina to send troops to break up the Gastonia strike.
Most Americans do not want a radical swing to the right or the left but they do desperately want an economy where hard work is rewarded with wages sufficient to support a family; including realistic opportunities for good education and upward mobility. We want to believe that any job worth doing is worthy of a living wage but our middle class is disappearing. We see employers back out of promised retirement plans and other benefits while using temporary employment arrangements to cut wages. People don’t join labor unions because they enjoy paying dues. They join because they believe they need protection from untrustworthy employers and because they perceive strength in unity.
We are again in a time when many adult workers cannot support a family and see little hope of upward mobility. In the early 1900s, desperate people tried desperate things. From their despair they built strong unions, New Deal jobs programs, and tax policies of the 1930s – 1950s. Their actions decreased unemployment and poverty and built our middle class. Once again, we are in a time when desperation will bring change. I wonder, this time will we read the writing on the wall before our backs are up against it?
Most data for this column is from the article “Why hasn’t democracy slowed rising inequality?” Journal of Economic Perspectives—Volume 27, Number 3—Summer 2013. It is available free on line or I will email it to readers on request.
ESSE QUAM VIDERI
The Latin phrase that heads this column is the North Carolina state motto, adopted from the Roman philosopher and political theorist Cicero. It means “To be rather than to seem”. It is a fine motto; inspiring integrity and openness in government. In The Prince, Niccolo Machiavelli taught the reverse saying, “It is not essential, then, that a Prince should have all the good qualities which I have enumerated above, but it is most essential that he should seem to have them.” Machiavelli was coaching a prince who would soon become a ruler and he wanted his pupil to understand that it is not necessary or even advisable to always behave with integrity. All that is necessary is to SEEM trustworthy.
Proponents of North Carolina’s voter ID law understood Machiavelli’s lesson well. They would have us believe that the purpose of the law is to protect the value of every citizen’s vote by eliminating voter fraud; but they never produced evidence that fraud has affected the outcome of a North Carolina election (or that fraud exits). If they had proof, they would publish it. The leaders of the Voter ID movement only need for fraud to SEEM real so they can SEEM to be protecting the rights of voters while they selectively reduce the rights of targeted groups.
Their decisions regarding which IDs are acceptable for voting discriminate against minorities, the poor and the young. A state issued driver’s license was accepted but a state issued college ID was not. A federal military ID is ok but a Food Stamp ID is not – selectively targeting the poor and the young. The photo ID requirement, which sounds nondiscriminatory, will be discriminatory in practice. The proportion of black voters in the last election who lacked a driver’s license is more than double the proportion for white voters. Those problems demonstrate that the bill is not what it seems to be. Supporters of the new law argue that the state will provide a free ID to anyone who doesn’t have one, conveniently failing to notice that poor folks generally don’t have the certified original birth certificate, passport, or alternatives needed to get the free ID. Nor do they have time and transportation for trips to license offices to complete the application process. As Machiavelli pointed out, the sponsors don’t need to BE non-discriminatory as long as they can SEEM non-discriminatory.
During the legislative session, the Supreme Court terminated one of the protections of the 1965 voting rights act. Afterward Republicans moved quickly to supplement the Voter ID Bill with schemes that target the poor, the young, minorities, and college students. Believing that the Federal Government could no longer interfere with discriminatory laws and practices, they cut the early voting period in half, making it harder for those who depend on their churches or civic groups to provide transportation to the polls. They made it illegal for those who will soon turn 18 to pre-register as voters. They banned registering and voting on the same day, making it harder for unregistered citizens to vote. The targeted populations, of course, are ones that traditionally tend to vote for other parties.
Republican majorities on some local Boards of Election are adding their own means of disenfranchising their targets. In Elizabeth City, the Republican dominated elections board has denied students at historically black Elizabeth City State University the opportunity to run for elected office. The new Republican chairman of the Forsyth County Elections Board has proposed closing the early voting location at historically black Winston Salem State University. At Appalachian State University in Boone, not only will the on-campus polling place be eliminated, there will be over 9300 voters assigned to the new polling place which has only 35 parking spaces. There are no sidewalks between the campus and the polling place, just a dirt path along a highway.
Over recent decades, North Carolina has made huge strides in voter participation, moving from 47th in the nation in 1990 to 11th in 2012. During that period, we made it easier to vote through measures like same day registration and early voting. Now the same Republicans who cut taxes for the wealthy then failed to support public education, Medicaid expansion and unemployment benefits have implemented a voter ID law which will make it harder for those they have harmed to vote them out of office. Their new law is much more than an ID law. It will have the effect of discouraging voting, especially among minorities, the poor and the young.
On the Seal of the United States is the slogan “E Pluribus Unum” – out of many, one. It is a principle which has helped our nation become great. By disenfranchising many voters the new North Carolina law makes a mockery of both “E Pluribus Unum” and the state motto. A reversed motto, “Videri quam esse” – to SEEM rather than to BE better fits the law’s supporters but it does not fit the proud and free traditions of our state and our nation.
http://www.npr.org/2013/08/16/212664895/in-rural-n-c-new-voter-id-law-awakens-some-old-fears lack of voter fraud evidence
Bush administration 5 year study turns up no evidence of fraud: http://www.nytimes.com/2007/04/12/washington/12fraud.html?_r=2&
Annual nc voter turnout http://www.ncsbe.gov/content.aspx?ID=70
Early voting and campus voting: http://www.newsobserver.com/2013/08/19/3120626/county-elections-boards-in-nc.html
http://www.thenation.com/blog/175837/north-carolina-republicans-escalate-attack-student-voting#
http://www.journalnow.com/news/state_region/article_1bedcab6-0acc-11e3-9d20-001a4bcf6878.html
NORTH CAROLINA REPUBLICAN CHECKBOOK
If you want to know what is important to people just read their checkbooks and credit card bills. They are far more enlightening than press releases or diaries. The same is true of political parties. After about seven months of total Republican control, the values of that party’s leaders have become apparent in their tax reform law and their budget.
They eliminated the tax on estates of over $5 million so that the wealthiest North Carolinians will no longer pay it when tens of millions of dollars are passed from one generation to the next; and they reformed the income and corporate taxes so that those with the highest incomes will pay less than in the past. They are sure that they reduced the State’s revenue but they are not sure by how much. Good government requires matching tax revenue with necessary spending.
After reducing the state’s income they announced that they did not have enough money to budget a salary increase for teachers. Our teacher salaries were already extremely low and may well be the lowest in the nation after another year with no adjustment. Most state employees were treated little better. Republican leaders did not consider the state’s financial obligations and the needs of our schools before they cut taxes. That is not good government.
Probably the most troubled department in State Government is the Department of Health and Human Services which is responsible for Medicaid, all of our mental health services, and many other programs. To lead this critical area, the Governor picked Dr. Aldona Wos, a physician who has not been involved full-time in health policy or medical practice for many years. She is very wealthy and has been among the largest fund raisers for former President George W. Bush and for Governor McCrory in both of his campaigns for governor. President Bush rewarded Dr. Wos by appointing her as Ambassador to Estonia. Likewise, the Governor made her DHHS Secretary and she hired a young McCrory campaign staffer, Matthew McKillip, as the Chief Policy Officer of DHHS. At age 24, he has no previous health service education or experience but he has worked for a right wing think tank and now he is leading health policy development for the state.
After only a few months on the job, he has received a 35% salary increase. That is just one example of large raises for campaign supporters while there is nothing left over for teachers or other public employees. How might those other employees feel about this?
Republican leaders said that the state does not have enough money to maintain the unemployment compensation program so they cut the maximum monthly benefit by 35% and cut the maximum length of benefits from 26 weeks to 20. As a result of the change, we lost eligibility for over $700 million in federal funds intended for North Carolina’s unemployed workers while our unemployment rate remains one of the highest in the nation.
Then they turned down the Medicaid expansion which would have been totally paid by the federal government for the first 3 years and would have been over 90% federally funded thereafter. That expansion would have covered most of our low-income working people at federal expense. Through 2019 it would have brought $15 billion federal dollars to the state and created 25,000 new jobs (mostly in the private sector). That would have helped mightily with our unemployment problem. Our middle class and poor will have to pay the federal taxes to fund the expansion but we won’t get the health care or the jobs.
The inescapable conclusion is that the Governor and legislative leaders think it is more important to cut taxes for the wealthy than it is to provide health care for low income workers and fair salaries to teachers. You can read their values in the state’s checkbook. This is particularly sad, because these are not the values of most North Carolinians; and many Republicans also disapprove. Some must be wondering how their party got away from them. In retrospect, the answer seems to be that a few very wealthy people not only bought the election with incredible amounts of spending; they also bought the soul of a once proud political party. It’s quite a set of values: Take care of your wealthy donors and reduce their taxes then pay for it by denying fair wages to teachers and other public employees and by cutting back on the public education and health services which would help the poor improve their earning power. They may preach family values but support for families is not written in their checkbook.
After doing such things, the only sure way to stay in office is to prevent those who disagree and those you have harmed from voting. That is a subject for another day.