Tag Archives: economy

No, the Poor Are Not Squandering Public Money on Filet Mignon

Mother Jones

Are the poor blowing their food stamps in wild bacchanalias of filet mignon and lobster thermidor? Is this something that we ought to keep a closer look on as protectors of the public purse?

You can probably figure out the answer already, but, um, no. Here are some relevant monthly figures for food spending among the poor, as collected by the Consumer Expenditure Survey:

Meat and fish: $48
Fruits and vegetables: $42
Alcohol: $15

Pretty obviously, there’s a lot more baloney and chicken breasts here than steak and lobster. And this doesn’t change a lot as you move up the income scale. The numbers above are for the poorest tenth of consumers, but they stay about the same even when you move slightly up the income ladder. The entire poorest third spends only about $323 total on food per month.

Should we encourage better nutrition and better food choices among the poor? Less McDonald’s and more broccoli? For all sorts of reasons, of course we should. But should we be worried that public money is being squandered on prime rib or fresh Pacific swordfish? Nope. There’s just no evidence that it’s happening except as the occasional scary anecdote. It’s a non-problem.

Max Ehrenfreund has more details here if you want some comparisons between rich and poor in various categories of consumer expenditures.

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No, the Poor Are Not Squandering Public Money on Filet Mignon

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Three Cheers For the California Miracle!

Mother Jones

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Oh dear. Here’s some bad news for Ted Cruz on his very first day as an official presidential candidate:

For years, business lobbyists complained about what they derided as “job killer” laws that drive employers out of California. Rival state governors, notably former Texas Gov. Rick Perry, made highly publicized visits to the Golden State in hopes of poaching jobs.

But new numbers from the U.S. Bureau of Labor Statistics tell a different story. Total jobs created in the 12 months ending Jan. 31 show California leading other states. California gained 498,000 new jobs, almost 30% more than the Lone Star State’s total of 392,900 for the same period.

Them’s the breaks. There’s no more “Texas Miracle” for either Cruz or Rick Perry. We’re in the middle of a California Miracle right now.

So how is Sodom on the Pacific pulling this off? Actually, that’s pretty easy to answer. California was hit hard by the housing bubble, while Texas wasn’t. So California’s economy took a big hit during the recession and the slow recovery, while Texas did pretty well—aided and abetted by a rise in oil prices.

Now everything has turned around. California is rebounding strongly from the housing crisis while Texas is suffering from the global collapse in oil prices. There is, frankly, nothing very miraculous about either story. It’s just the business cycle at work in a fairly normal and predictable way.

In fact, you may recall that there was never much of a Texas Miracle in the first place. It was mostly just PR bluster, as the chart on the right shows. The thick green line shows the unemployment rate in Texas compared to its neighboring states, and Texas is right smack in the middle—and it always has been. It’s better than half a dozen nearby states and worse than another half dozen. It is, sad to say, entirely average. That’s not something Texans are likely to take kindly to, but numbers don’t lie.

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Three Cheers For the California Miracle!

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If You Own a Pitchfork, You Will Grab It When You See This Chart

Mother Jones

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This statistic provides a pretty compelling snapshot of the severity of our income gap: In 2014, Wall Street’s bonus pool was roughly double the combined earnings of all Americans working full-time jobs at minimum wage.

That sobering tidbit came from a new Institute for Policy Studies report by Sarah Anderson, who looked at new figures from the New York State Comptroller and the Bureau of Labor Statistics. The average bonus for one of New York City’s 167,800 employees in the securities industry came out to $172,860—on top of an average salary of nearly $200,000. On the other side of the equation were about one million people working full time at the federal minimum wage of $7.25.

In a recent New York Times article, Justin Wolfers, a senior fellow for the Peterson Institute for International Economics, picked apart some of the uncertainties that go into creating such a calculation, and ultimately came up with a similar result:

The count of workers at federal minimum wage includes only those who are paid hourly, and so omits those paid weekly or monthly. On the flip side, the B.L.S. count is based on income before tips and commissions, and so may overstate the number of people with low hourly earnings. And while my calculation assumed that all minimum wage workers earn $7.25 per hour, in fact many earn less than this, including wait staff and others who rely on tips, some students and young workers, certain farmworkers, and those whose bosses simply flout the minimum wage law.

For all of these uncertainties, the broad picture doesn’t change. My judgment is that we can be pretty confident that Ms. Anderson’s estimate that the sum of Wall Street bonuses is roughly twice the total amount paid to all full-time workers paid minimum wage seems like a fair characterization.

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If You Own a Pitchfork, You Will Grab It When You See This Chart

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Republicans Are Making Obama Popular Again

Mother Jones

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This isn’t exactly Oprah levels of adulation or anything, but President Obama’s Gallup approval ratings have been rising steadily ever since Republicans won the midterm elections last year. He’s been bouncing around positive territory ever since the start of 2015, and today he clocks in at 48-47 percent approval.

Is this because the economy is picking up and people are just generally happier? Is it because his executive actions have made a favorable impression on the public? Is it because Republican incompetence makes him look good by comparison? Hard to say, but it certainly suggests that Democrats are pretty happy with him. As Ed Kilgore says:

Among Democrats, who are supposedly on the brink of a “struggle for the soul of the party,” and ideologically riven between Elizabeth Warren “populists” and Obama/Clinton “centrists,” Obama’s approval rating stands at 81%. And looking deeper, he’s at 86% among self-identified “liberal Democrats,” 78% among “moderate Democrats,” and yes, 67% among “conservative Democrats,” such as they are….This is another example of isolated data being somewhat limited in value, but worth a couple of dozen Politico columns.

Yep. And I’ll bet that once things get going, Hillary Clinton will poll about the same way.

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Republicans Are Making Obama Popular Again

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Chart of the Day: Even the Rich Think the Middle Class Is Getting Screwed

Mother Jones

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A couple of weeks ago Pew did a poll about government policies during the recession, but I’ve been too sick to blog about it. However, it’s stayed safely in my Saved Stuff folder awaiting my recovery, so here it is today. It’s really two charts. Here’s the first one:

Nothing too surprising about this. Generally speaking, people think the government did a lot to help out banks (bingo!), large corporations, and the wealthy. The poor and the middle class pretty much got nada. Since any poll like this is going to be dominated by the sheer number of poor and middle class respondents compared to wealthy respondents, this is about what you’d expect.

But now take a look at this table:

That’s amazing. Even those with high incomes agree that wealthy people benefited the most from government policies and that the poor and middle class got bupkis. Even Republicans largely agree that this has been the case.

This is Stockholm Syndrome writ large. Everyone—rich, poor, Republican, Democrat—agrees that in the wake of the greatest financial disaster since the Great Depression, the government mostly turned its largesse on banks, big corporations and the wealthy. Nonetheless, Republicans—the longtime party of banks, big corporations and the wealthy—have done increasingly well over the past six years. For an explanation, take your pick:

Most voters don’t understand Republican economic priorities.
Most voters don’t think Democrats would do any better.
Most voters think this is just the way the world works and there’s no point voting based on economic promises in the first place.

Whatever the reason, only about 20 percent of middle-class voters think government policies benefit the middle class. The first party to figure this out and embrace it wholeheartedly has a huge electoral opportunity ahead of it. But first, they’re going to have to ditch the rich. Can either of them ever do that?

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Chart of the Day: Even the Rich Think the Middle Class Is Getting Screwed

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Yes, Education Matters. But It’s Not the Answer to Growing Income Inequality.

Mother Jones

David Brooks has a bit of an odd column today:

For many years, Democratic efforts to reduce inequality and lift middle-class wages were based on the theory that the key is to improve the skills of workers. Expand early education. Make college cheaper. Invest in worker training. Above all, increase the productivity of workers so they can compete.

But a growing number of populist progressives have been arguing that inequality is not mainly about education levels. They argue that trying to lift wages by improving skills is an “evasion.” It’s “whistling past the graveyard.”

….Focusing on human capital is not whistling past the graveyard. Worker productivity is the main arena. No redistributionist measure will have the same long-term effect as good early-childhood education and better community colleges, or increasing the share of men capable of joining the labor force.

I don’t quite get who Brooks is arguing against here. Larry Summers is the obvious target, but Summers has been clear that he thinks education is important, both individually and for the economy as a whole. He just doesn’t think that improved education is likely to have much impact on growing income inequality, which is driven by other factors.

But Brooks never even pretends to address this. I don’t think there are any prominent Democrats arguing that education isn’t important. Pretty much all of them are on board with good early-childhood education and better community colleges, among other things. That will help individuals and make the American economy stronger.

But will it rein in growing income inequality? As long as inequality is driven primarily by the gains of the top 1 percent—which it is—then it won’t. To address that particular problem, we have to look elsewhere.

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Yes, Education Matters. But It’s Not the Answer to Growing Income Inequality.

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People On Food Stamps Make Healthier Grocery Decisions Than Most of Us

Mother Jones

The Dollar General in Austin’s gritty northeast—the neighborhood where I grew up—is a squat, warehouselike structure about twice the size of a suburban convenience store. Amid the dull flicker of fluorescent lights and the grinding hum of a compressor struggling to power a long freezer case, I’m in search of affordable and nutritious food with Melissa Helber, social-services outreach supervisor of a local food bank. The pickings are slim: We wander past two-liter jugs of Dr Pepper at the incredible price of four for $5; value-size boxes of Chocolate Lucky Charms cereal, $3.50; a wall of bagged candy, $1 each. Helber says the prices are why many of her clients shop here: The Supplemental Nutrition Assistance Program (SNAP), also known as food stamps, is stingy (about $11 a day for a family of three around here), but it’s relatively open on how recipients spend their benefits. It bans alcohol and “hot food”—say, a rotisserie chicken—but almost everything you could find in Dollar General’s grocery section, from sodas to M&M’s, is fair game.

If you’re wondering why SNAP would subsidize junk food, you’re not alone. Recently, the program has been in the headlines mostly because of Republican efforts to slash benefits. But even among its supporters, there has been a growing movement to rethink how the benefit is targeted. In a 2012 report, a high-profile group of nutrition researchers urged the US Department of Agriculture to run pilot programs to test the effect of banning junk food from SNAP purchases (PDF). In a June 2013 letter to Congress, a group of mayors, including Chicago’s Rahm Emanuel and Newark’s Cory Booker (now the junior senator from New Jersey), echoed that call.

The argument has undeniable appeal: Why should the already-frayed federal safety net underwrite Coca-Cola’s balance sheet? But the junk-food industry has fought hard to maintain the status quo, lobbying heavily against attempts to impose limits.

Instinctively, I’d find myself on the side of the reformers—anything to ratchet down Americans’ consumption of empty calories. But deeper into the aisles of Dollar General, I begin to waver. Helber asks me to consider a single mother supporting two kids on a wage of about $9.50 an hour—a typical income for the people served by her food bank, even amid Austin’s ever-soaring tech economy. Helber points out some of the hard decisions the mother would have to make. At $5, a pound of hamburger would be a solid choice—but she’d still have to get buns, condiments, and sides. By contrast, individual pepperoni pizzas are just a buck each, as is a five-pack of chicken-flavored ramen noodles.

So what about offering SNAP shoppers a carrot of incentives rather than a stick of restrictions? One USDA pilot program in Massachusetts provides a credit of 30 cents for every SNAP dollar spent on fruits and vegetables. The preliminary data shows the program resulted in a 25 percent increase in produce consumption. A similar program that doubles SNAP expenditures at farmers markets—you get $2 worth of fresh produce for every SNAP dollar you spend—has shown similar promise.

But programs like these cost money—and the prevailing debate in Washington now is about how to cut SNAP funding, not how to improve it. Those in favor of gutting the program argue that its $80 billion annual price tag is too heft. But 65 million Americans, about 1 in 5, have incomes low enough to qualify for SNAP—that is, income at or below 1.3 times the federal poverty line. Of them, around 47 million—nearly half of them children—actually get benefits. And more than 50 percent of all benefits go to households with incomes of less than half of the poverty line (about $9,800 for a family of three in 2013).

Then there’s the problem of access. Most incentive programs assume that you can easily get to a store that sells fresh produce—which you won’t find at most Dollar Generals. The USDA estimates that 23.5 million Americans live in food deserts, poor neighborhoods where the nearest grocery store is more than a mile away. (A mile might not sound that far, but for those without reliable transportation, it is: Imagine lugging home a week’s worth of food on foot, with kids in tow.)

I left the Dollar General realizing that dictating what you can buy with food stamps is the kind of thing that only sounds good to people who don’t actually have to survive on a poverty income. No one denies me the occasional candy bar or Coke; why would I feel entitled to exert that kind of control over poor people? And guess what: SNAP recipients already eat more virtuously than the rest of us. A 2008 USDA report found that they are less likely than those with higher incomes to consume at least one serving of sweets or salty snacks per day. More recently, a 2015 USDA study concluded that, adjusting for demographic differences, people who take SNAP benefits don’t consume any more sugary drinks than their low-income peers who aren’t in the program.

Given those findings, limiting SNAP families’ already-limited choices is just a gratuitous slap in the face. I say, drop the stick and subsidize carrots. There’s precious little appetite in Congress to broaden programs that give SNAP families incentives to buy vegetables; the 2014 farm bill, signed by President Obama last February, included $8.6 billion in overall funding cuts to the program over the next decade (a fraction of what SNAP’s GOP critics pined for). But the idea of subsidizing real-food purchases for SNAP households isn’t dead—the farm bill also delivered $20 million annually over the five next years to continue evaluating the already-existing pilot projects.

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People On Food Stamps Make Healthier Grocery Decisions Than Most of Us

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Renewable Fuel Pays Off

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Renewable Fuel Pays Off

Posted 25 February 2015 in

National

As Growth Energy CEO Tom Buis notes in The Hill, the Renewable Fuel Standard (RFS) has been an important driver of economic growth in the United States since its passage in 2005.

“With the RFS opening up the fuel market to new fuel sources, the renewable fuels industry has been able to deliver economic, national security and environmental benefits. We need the Renewable Fuel Standard to break the monopolistic stranglehold of Big Oil and give American consumers the choices they deserve.”

With the Obama administration finalizing the volume of renewable fuel that must be blended into our nation’s fuel supply for 2014, efforts to repeal or “reform” the RFS will only serve to harm our economy, threaten our energy security, and cost consumers at the pump.

Read the full column in The Hill.

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Renewable Fuel Pays Off

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How Screwed Are Your State’s Oysters?

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When carbon dioxide emissions from power plants and cars rise into the atmosphere, they don’t always stay there. While the majority of these emissions hang around to create the greenhouse effect that causes global warming, up to 35 percent of man-made carbon falls into the ocean. When that happens, the pH level of the ocean drops, causing a phenomenon known as ocean acidification. Some scientists call this the “evil twin” of climate change.

Over the last century, the oceans have become about 30 percent more acidic, a faster rate of change than at anytime in the last 300 million years. That’s really bad news for any sea creatures that live in hard shells (shellfish) or have bony exoskeletons (i.e., crabs and lobsters), and for coral. Fish larvae and plankton can also be affected. And since many of these organisms are food for bigger fish and mammals, ocean acidification puts the whole marine ecosystem at risk.

Of course, humans depend on these critters as well, especially in coastal communities whose economies are deeply tied to the fishing industry. In the last few years, the threat to oyster harvests in the Pacific Northwest has been well documented. But every bit of the US coastline bears some level of risk, according to a new report in Nature. The study offers the first comprehensive projection of which parts of the US coast will be worst off, and when ocean acidification could reach dangerous levels there.

Julia Ekstrom, a climate adaptation researcher at the University of California-Davis, combed through existing scientific literature for three key types of data: How ocean acidification is projected to change in different regions over the next century; how dependent individual local economies are on the shellfish harvest (the study focused only on bivalves like oysters—other critters could be the subject of future research); and social factors that could help communities adapt, like pollution controls (runoff from rivers can also affect local pH) or the availability of other jobs. That data, combined, led to the map below.

Purple indicates the time at which ocean acidification is expected to become serious enough to significantly affect shellfish (darker is sooner); red indicates how vulnerable a region would be to a drop-off in shellfish productivity. So Washington, for example, could see the impacts soon but is relatively well-prepared to handle them. Impacts to the Gulf Coast are expected much further in the future but could be more economically severe.

Ekstrom et al, courtesy Nature

The good news is that many of what could be the hardest-hit communities still have time to prepare. Then again, the outlook could be worse in some places (Maine, for example) if you conducted similar research on lobsters and other vital fisheries. Ekstrom said localized predictions like this are key to enabling communities to prepare and can also help scientists decide where to focus efforts to monitor and track acidification as it progresses.

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How Screwed Are Your State’s Oysters?

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Scott Walker’s Tax Cuts Are Coming Back to Haunt Him

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Via Ed Kilgore, this might prove to be Scott Walker’s biggest Achilles’ heel:

Wisconsin Governor Scott Walker, facing a $283 million deficit that needs to be closed by the end of June, will skip more than $100 million in debt payments to balance the books thrown into disarray by his tax cuts.

….“They need some cash,” said Todd Berry, president of the Wisconsin Taxpayers Alliance, a nonpartisan research group that examines taxes and government spending. “This is kicking the can down the road.”

For the time being, this is probably not a big deal. Walker says he’s just “restructuring” the state’s debt, and that will probably wash for now. But there’s no question that Walker’s tax cut zealotry puts him in a dilemma. If the economy continues to slog along, Wisconsin’s finances will deteriorate and Walker’s presidential chances will suffer. If the economy picks up, Wisconsin will benefit but so will Hillary Clinton. The path to presidential success often turns out to depend on the economy, and for Walker it might end up being a narrow path indeed.

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Scott Walker’s Tax Cuts Are Coming Back to Haunt Him

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