Sunday, June 1, 2014

Obama, SNAP and conservative Americans


Every time someone tells me the stock market is about to take a tumble, I think I should take some money off the table.  I reallocate my portfolio from time to time. But, I worry that the bubble may burst at any moment (especially since we have seen it happen twice since the turn of the Century).

I have the luxury of such worries.  Since 2009, the major stock market indices have more than doubled.  Life is good. 

What else has experienced as nearly a dramatic increase?  Food stamps!  The government’s Supplemental Nutrition Assistance Program (SNAP) has expanded from $33.5 Billion in fiscal year 2009 to$47.6 Billion in 2013 – an increase of nearly 60%.

Meanwhile the poor have become a main topic of our national political debate.

The President has framed this year’s Congressional campaign by expressing two clear ideas.  One is correct; the other is not.

First, the proposed 40% increase to the minimum wage will not lift anyone out of poverty.  Many of the poor are permanently unemployed and earn nothing.  And, many minimum wage workers are second income earners in two income households.  In other words, they’re not poor.  Even for a 40-hour per week minimum wage worker, an increase from $7.25 to $10.10 would raise an annual salary from about $15K to $21K – a big increase, to be sure, but hardly enough to lift one out of poverty. 

Speaking of his political opponents, the President has also said, “Their philosophy is simple: You’re on your own… [I]f you’re out of work, can’t find a job. Tough luck, you’re on your own. You don’t have health care: That’s your problem. You’re on your own. If you’re born into poverty, lift yourself up with your own bootstraps, even if you don’t have boots. You’re on your own.”

And, on this score, he is correct.

Where is the conservative solution?  If you are a Christian (as many conservatives are), you “must be open-handed to your brothers”.  Is that ethic reflected in the political rhetoric we hear from conservatives in Washington?

It’s easy for conservatives to point to the flaws in the current system of entitlements for the poor.  It needs to be overhauled.

If your household income is $15K today, you are eligible to receive federal assistance with a value of about $25K through a combination of housing, Medicaid, SNAP and the Earned Income Tax Credit (EITC).



If you increase your income, you get less help from the government.  Is it any wonder that conservatives believe that liberal programs have created a “culture of dependency”?

Yet, I believe there is a conservative constituency that will support effective programs to help the poor.   That constituency will respond to solutions that appeal to their charitable instinct and are both community-based and fiscally sound.

Churchgoing Christians have demonstrated a consistent track record of charitable giving.  On average, they give more than 4 times as much to charity as non-denominational citizens. 

Here in Rochester, NY, charities that support the poor are abundant:  Catholic Charities, Foodlink and the University of Rochester Medical Center provide moral, material and medical support to the community.   Rochester Cares matches volunteers with opportunities to help.  Local churches and organizations like Voices Against Poverty live up to Christian ideals providing spiritual and financial support. 

Education reform is the focus of non-profits like e3 Rochester, the Coalition for Common Sense in Education and the Rochester Education Foundation.

But, it’s important to understand that voluntary charitable contributions will not be sufficient to provide what’s needed to support the poor.  Americans give approximately $40 Billion to charities each year.  If you spread that across the 48 Million SNAP recipients, it amounts to about $800 perperson.  Governments – local, state and federal – must participate to support any transformational effort.

It’s also important to understand that the federal government alone cannot do it.  That is not because of a lack of funds.  It is because central planning doesn’t work as has been demonstrated by the last 50 years of Great Society programs.

Helping the poor doesn’t require increasing already massive government programs. It requires thinking carefully about who is in need and how their need can best be met. In some cases, the right solution will involve the government. In others—such as a failing family culture, children caught in ineffective schools, or people permanently dependent on government —the right answer is for the government to get out of the way.

The only question is…


WHO WILL LEAD?

24 comments:

  1. Hi John
    I like your blog a lot! I've thought a lot about the problems you mentioned b/c I live in greater Cleveland and my town has many of the same issues as your city. The thing I think that might 'work' would be to decentralize the big cities. I think then pockets of success would emerge. The entire Cleveland Public School system is terrible for example. If you broke that up into several independent school systems, k-12, neighborhood based, I think at least some parts of the former aggregate system would eventually thrive. Some would get worse, but overall I think you'd go from 99% terrible to some smaller portion terrible. I also think on an even more basic level the police should be broken up, a station for each new cell. I think the cops should have to actually walk around, not just drive around, like they do in London. Last idea, I'd establish a pool of cash, at the end of each quarter I'd reward people who didn't get in trouble, and make larger rewards for people who somehow contributed to tranquility within the neighborhood. I'd cut all the govt programs that boost people up by $25k and just give them cash directly to spend. Some would waste it, but I think even with that the inefficiencies and elimination buerocratic costs would pay for itself.

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  2. Eric Poss
    Production Supervisor, Resin Coated Sand at Unimin Corporation

    John, I would offer that there probably are no conservatives in Washington, D.C. And there certainly are no conservatives left in the Republican Party. But to your central theme and conclusion: it's a pity that any attempt at open discussion on welfare reform immediately descends into allegations of insensitivity to the poor, or to single mothers, or minorities. These groups would be much better served by locals acting through churches or other civic organizations, than by a leviathan government thousands of miles away, taking from the working class to give to the non-working class, creating unnecessary inefficiency and social conflict.

    Do you read Zerohedge? Chronicles?

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  3. Paul Alexander
    Financial Advisor; VP, Investments at Raymond James, WPB, FL; 1983 Graduate U.S. Naval Academy

    Poverty in America. An interesting concept. Is poverty a relative phenomenon? Poverty in Haiti sure looks different than poverty in America. And those we view as impoverished today in America live finer than Kings and Queens centuries ago. So what exactly is poverty? My point is that there will ALWAYS be a bottom 20% in America which is how I believe .gov quantifies poverty. How do you eliminate a quintile? That bottom quintile will always exist. But I believe the bottom quintile is always rising as all five quintiles rise, not always uniformly, but as the entire spectrum of the US standard of living rises, so does the bottom quintile. So is eliminating poverty, the bottom quintile, even a rationale pursuit? Can you have just four quintiles? I think the REAL agenda is not so much the elimination of poverty but the redistribution of wealth to make the spread between the five quintiles smaller. And THAT is a whole ‘nother discussion. Oh wait..been there, done that on this blog.

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  4. Paul Alexander
    Financial Advisor; VP, Investments at Raymond James, WPB, FL; 1983 Graduate U.S. Naval Academy

    Poverty in America. An interesting concept. Is poverty a relative phenomenon? Poverty in Haiti sure looks different than poverty in America. And those we view as impoverished today in America live finer than Kings and Queens centuries ago. So what exactly is poverty? My point is that there will ALWAYS be a bottom 20% in America which is how I believe .gov quantifies poverty. How do you eliminate a quintile? That bottom quintile will always exist. But I believe the bottom quintile is always rising as all five quintiles rise, not always uniformly, but as the entire spectrum of the US standard of living rises, so does the bottom quintile. So is eliminating poverty, the bottom quintile, even a rationale pursuit? Can you have just four quintiles? I think the REAL agenda is not so much the elimination of poverty but the redistribution of wealth to make the spread between the five quintiles smaller. And THAT is a whole ‘nother discussion. Oh wait..been there, done that on this blog.

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  5. Okay, to try to answer the last question you pose in all of your very well written and thoughtful pieces, how about this.

    Enact a law that allows any American to deduct dollar for dollar up to 50% of what they owe to the Federal Government in taxes for charitable contributions they make to approved charities.
    Maybe the number should be 30%, maybe 70%.
    This way, citizens are required to be charitable. And they get to decide which organizations have the benefit of their hard earned money.
    Citizens know better than the federal government which organizations add real value to their communities.

    Many of the same issues we see happening with such large sums of money to be doled out by Washington would inevitably happen on the local level. Presidents of charitable organizations would hire their wives...or mistresses...at exorbitant salaries. We'd probably see kenels that fed stray dogs filet mignon. But people in the local communities would eventually see these kinds of things and vote with their charity-tax dollars. We don't see them when they occur on the Federal Level as easily. And, worse, when we do, there doesn't seem to be much we can do about it.

    We have lost control of our country. What I see coming out of the office of the president is unconscionable. But I just don't feel like there is much that I or others that I know who feel this way can do about it. And at the end of the day, all of the craziness happens because the Federal government has the money to spend. We need to take some of that money away, take it back. The proposal above does that but also tries to maintain and improve upon some of the good that is supposed to come out of sending money to washington.

    I'd love to hear your thoughts and hope all is well with you as things warm up up there!

    Best,
    Chris

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  6. Michael Rogers
    Senior Systems Analyst/IT Business Solutions Developer at Fairbanks Morse Engine

    There will always be a disparity between the 'haves' and 'have-nots'. It does not make it right, but it has been a reality since the dawn of humankind.

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  7. Alison Brown
    Feminist Civic & Social Organization Leader

    There has indeed always been a disparity, but it was becoming smaller in industrialized countries and now it is running the other way.
    Conservatives have this slogan about hard work being the answer, but then the market rewards companies that eliminate workers from the payroll. Besides, not having a good paying job does not mean the person in that situation is not working hard, it means that that job is not being remunerated sufficiently for the expenses of daily life. If one is on the dole, one also is working hard to make ends meet, just not as productively.

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  8. Michael Joseph Carpenter
    Graphics Validation Engineer and Indie GameDev

    @Michael Rogers

    I'm wondering about your acceptance of abject poverty and disparity and I'd like to know if you think this is a "necessary" function or an "inevitable" one?

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  9. Michael Rogers
    Senior Systems Analyst/IT Business Solutions Developer at Fairbanks Morse Engine

    Michael: likely not necessary, but likely inevitable. If wealth was distributed equally right now to every person on the planet, I would imagine it would be a rather short time before the wealth would redistribute itself to a small minority. I wish that was not the case, but we have over 10,000 years or recorded history showing this is the case.

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  10. Emily Elizabeth Windsor-Cragg
    PINDAR at The Cosmos

    "Conservative solution"? No. It'll take dovetailing from many ideological sides because classical Conservatives repudiate civil controls on wealth as if the
    State were holy.

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  11. Emily Elizabeth Windsor-Cragg
    PINDAR at The Cosmos

    Poverty is eradicated as people realize how to enlarge their supply lines by skill and relationship. Thus, education and training in thrift and effective use of resources is always appropriate to the goal of helping people help themselves.

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  12. Nikola Stojiljkovic
    Certified Magento Developer at Lead IT Ltd.

    The are no conservative solutions to any of the big contemporary problems in general and at any point of history or future. If the previous system was good, the big problems wouldn't exists.

    Of course, I'm talking about conservative solutions to problems as a general philosophical concept with "conservative" meaning: disposed to preserve existing conditions, institutions, etc., or to restore traditional ones, and to limit change.

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  13. John Christiansen
    Senior Systems Engineer

    The modern version of conservative is not "preserve legacy" vs liberal "change". Currently Conservative is "defend OUR side" vs liberal "do the right thing". That value system does not help the poor because most poor are considered 'the other side' (and even poor Conservatives are willing to suffer themselves to avoid helping 'the other side'.)

    Note: Conservatives CAN be converted to helping the poor by manipulating the definition of 'our side'. Not easy, though, especially when the people in need are other races or creeds.

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  14. Kerem Oner
    Contributor at American Patriot; OurCivics; American Thinker; LinkedIn

    What is the conservative solution? Simple...

    Laissez faire in two words. Get the government off business' backs, simplify the tax code, and ditch the useless and burdensome regulations. Then sit back and watch millions of jobs being created and prosperity spreading. Happened to the extent that it was allowed to during the Reagan revolution (until the late 1990s) and will happen every time it is tried again. Incentivize people to innovate and produce. Stop the welfare state. Have confidence in man....not the government!

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  15. Kerem Oner
    Contributor at American Patriot; OurCivics; American Thinker; LinkedIn

    Also from the posts on this thread, I am seeing that several here do not realize that growing inequality is a sign of prosperity. The wealthiest countries (where there are the most millionaires per capita) like the U.S., Singapore, Switzerland, and Hong Kong have high GINI coefficients. Why? Simple logic gives you the answer. More opportunities there are, those most capable of amassing wealth will amass great amounts of it. Is that bad? Not at all as the process of amassing wealth is also the same process that creates jobs (thereofre relative wealth) for others. That is why the nations I mentioned above have historically allowed great wealth creation and in the process have created plenty of jobs. The static economies where low GINI coefficients are encountered such as Sweden and many Western European countries, innovativeness, business formation, and productivity have generally lagged countries like the U.S.A.

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  16. Jason G. Ramage, MS, MBA, RBP
    Senior Project Manager at BAI Inc - Meeting Client Challenges with Vision and Innovation

    Non-distributive works in both directions; taxpayer money should not be funneled to favored contractors (you wouldn't believe the rates Booz Allen charges for each and every one of its employees) or companies with leaders who make big campaign donations.

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  17. Jeffery Pyle
    Senior Software Developer at Undisclosed

    Presuming "conservative" to mean non-Keynesian, non-re-distributive and non-confiscatory policies coupled with smaller government, yes, there is.

    In fact, I think I just gave the solution above.

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  18. Kerem Oner
    Contributor at American Patriot; OurCivics; American Thinker; LinkedIn

    John Christiansen, I have no idea what you are trying to say. First and foremost there is no conservative vs liberal. There is liberal vs. progressive. Liberal philosophy is one where liberty and equality under the law is cherished (in other words individualism) and progressive ideology is where the group outcomes are sought after at the expense of individualism.

    By the way, those you refer to as conservatives are far more generous than progressives - both with their money and time. Every single study done on this points to that conclusion!
    http://www.nytimes.com/2008/12/21/opinion/21kristof.html?_r=0

    And, oh, they are also happier:
    http://www.nytimes.com/2012/07/08/opinion/sunday/conservatives-are-happier-and-extremists-are-happiest-of-all.html

    And more open minded and better informed economically, scientifically, and otherwise as well:
    http://dailycaller.com/2012/04/22/science-say-gop-voters-better-informed-open-minded/
    and
    http://www.professorbainbridge.com/professorbainbridgecom/2010/06/are-conservatives-smarter-at-economics-than-liberals.html
    and
    http://www.ijreview.com/2013/10/87474-yale-professors-surprising-discovery-tea-party-supporters-scientifically-literate/

    So, what is my point? Progressivism is a cult. They make up their own realities and try to sell it to the public. As you can see, almost always that reality that they try to peddle is nothing but a false narrative. As Goebbels realized, if you tell a lie often enough, it can become reality in the minds of the masses.

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  19. Mark Vertin
    Regulatory Change Manager at Flagstar Bank

    I am not sure why you decided to use the word "conservative.” Is there a "liberal" solution?
    Regarding the original question – You know the other answer for the individual. Read, work, finish school before you get married, and get married before you have children. Choose to be happy. Choose to be thankful. Practice spiritual exercises on a regular basis.

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  20. Emily Elizabeth Windsor-Cragg
    PINDAR at The Cosmos
    Top Contributor

    Is there A solution, without regard to partisanship?

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  21. Gerry Geddings
    Living the Dream at USA
    Top Contributor

    Emily, when you have liberals like John above making statements like: "". Currently Conservative is "defend OUR side" vs liberal "do the right thing" it is highly unlikely that anything can be done without regard to partisanship. I find it amusing that it is always the liberals who resort to emotional language in a logical debate.

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  22. Jeffery Pyle
    Senior Software Developer at Undisclosed

    John,

    My first answer to your question was incomplete. Sound economic policy encouraging wealth creation is but one necessary element to reducing poverty in America (it will never go away entirely, hence a solution to poverty doesn't mean a complete elimination of poverty).

    A complete reboot of our education system is also needed. The current education system fails the poor completely. First thing to do is stop listening to the experts, politicians and special interest groups who created this mess in the first place. Second thing: Education is a state and local concern and the federal government shouldn't be involved. Third: School choice.

    BTW: The Brookings Institute noted three rules for moving out of poverty: Complete high school (at a minimum), work full time and marry before you have children. (Source: http://www.brookings.edu/research/opinions/2013/03/13-join-middle-class-haskins).

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  23. Jason G. Ramage, MS, MBA, RBP
    Senior Project Manager at BAI Inc - Meeting Client Challenges with Vision and Innovation

    No favored anything, no minority set asides, no preferential treatment for anyone. Contracting has a necessary place, but it needs to be fair, a good value and transparent. The tax code should be simplified and tax breaks should not be used to cajole businesses to locate here or there.

    Money has simply corrupted our government; I suppose it's human nature that's to blame. I can't honestly foresee a solution to the problem. I suspect so long as you can vote yourself the right to other people's money, and so long as you can use the power of your position to line your own pockets, this is the outcome that is to be expected.

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  24. Poverty is relative. Compared to the past anyone living in the US is a King! No matter if they are making nothing.
    Don't forget, non-profits! For example http://www.druckerinstitute.com/project/nonprofit-innovation-award/

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