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Posted at 6:54 AM ET, 03/ 3/2011

Wonkbook: The White House gets off the bench

By Ezra Klein

4371410550_585c061ef7 (1).jpg

With the stopgap funding bill safely through Congress and the federal government given a two-week reprieve, the White House has decided to get in the game more directly: They've invited congressional leaders to sit down with Vice President Joe Biden, Chief of Staff William Daley, and budget director Jack Lew to hammer out a deal.

You could imagine a great beer commercial coming out of this: The wonks and legislators are deadlocked until someone brings in an ice-cold case of Miller Lite. Suddenly, it's all backslapping and "of course revenue should be on the table" and "you're right that government needs to spend less" and "sorry about that whole Planned Parenthood thing." And I haven't even mentioned the disco ball.

But can you imagine a great budget deal coming out of this? This is the same play the White House ran to resolve the tax debate: they waited till the last minute, when inaction was about to force unwelcome consequences, and then they gathered the players in a room with Tim Geithner and Jack Lew and had Joe Biden act as shuttle envoy to Mitch McConnell. Despite the skepticism of people like, well, me, it worked. Maybe it'll work again. But the downside here, much like the downside there, is that the White House has taken ownership over the process, and they will get much of the credit or much of th blame for whether it works and what it produces.

Top Stories

Vice President Biden will host a summit to reach a budget deal, report Shailagh Murray and Lori Montgomery: "President Obama on Wednesday intervened in a partisan brawl that threatens to shut down the government, inviting congressional leaders of both parties to sit down with Vice President Biden and work out a compromise to fund federal programs through the end of the fiscal year. The president reached out to lawmakers after the Senate approved a stopgap measure to keep the government open through March 18...In a joint news conference after the Senate vote, House Speaker John A. Boehner (R-Ohio) and Senate Minority Leader Mitch McConnell (R-Ky.) told reporters that Republicans would go no further until Senate Democrats offered a counter-proposal to the $61 billion package of cuts that the House approved in late February."

Many of the stopgap bill's cuts were based on evidence, reports David Fahrenthold: "An Agriculture Department program was supposed to bring broadband access to rural areas that didn't have it. Instead, it often brought broadband to suburbs that did. An Education Department program spent $911 million to create schools-within-schools but achieved only "modest or neutral" academic improvement... Republicans and Democrats are not in harmony about much of the federal budget, but they have now agreed that these things shouldn't be in it...Watchdog groups call it a start. But they say this move is less a display of the 'new' Washington's budget-cutting bravery than a revelation of the old Washington's inertia: These programs had survived for years, despite persistent troubles."

Ben Bernanke thinks the GOP's spending plan will cost “a couple hundred thousand jobs”: http://politi.co/hx4OkS

Bernanke also warned state and local governments against education cuts, reports Neil Irwin: "Even as state and local governments take difficult steps to balance their budgets and address long-term shortfalls in their pension systems, they should not neglect the education and training programs that are the key to the nation's competitiveness, Federal Reserve Chairman Ben S. Bernanke argued Wednesday...'In the long run...the most important fiscal issue is whether the structure and composition of the government budget best serves the public interest,' Bernanke said. 'Research increasingly has shown the benefits of early childhood education and efforts to promote the lifelong acquisition of skills for both individuals and the economy as a whole.' He added that the payoffs from preschool programs seem to be high."

Education reformers worry that Midwest union fights could endanger their efforts, reports Nick Anderson: "Various GOP proposals to narrow labor rights, dismantle teacher tenure and channel public money toward private schools raise a question: Should states work with teacher unions to overhaul education or try to roll over them?...The consequences could ripple far beyond their statehouses, polarizing what has been until now a largely bipartisan movement to fix education and perhaps complicating efforts in a divided Congress to rewrite the No Child Left Behind law. Analysts say teachers might grow leery of signing onto a school improvement agenda if they believe it will quash their rights. 'If you have someone who's proposing to do away with bargaining rights, a line has been drawn in the sand,' said Richard W. Hurd, a labor relations expert at Cornell University."

Music video interlude: The Strokes' "Under Cover of Darkness".

Got tips, additions, or comments? E-mail me.

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Still to come: The SEC is imposing limits on bank bonuses; almost ten percent of Medicare spending is fraudulent or improper; Ohio's anti-union bill is moving forward; conservative Democrats are signing on to GOP efforts to strip the EPA of its climate-regulating powers; and picture books and sci-fi converge with Goodnight Dune.

Economy

The GOP wants to kill HAMP, reports Dina ElBoghdady: "The Obama administration's main initiative to help struggling borrowers avoid foreclosure could soon be killed in the House, where many Republican lawmakers have complained about the program's lackluster results. The initiative, known as the Home Affordable Modification Program, or HAMP, aims to reduce borrowers' monthly payments to affordable levels. When it was launched in March 2009, the administration projected that it would prevent 3 million to 4 million foreclosures before it expired in December 2012. But the program is far off track, having permanently modified about 521,000 mortgages as of December."

A group of Senate Democrats are organizing against Social Security cuts: http://bit.ly/fkS6FJ

Economists worry that not raising the debt ceiling could increase interest payments, reports Ben White: "Another continuing resolution aside, Republicans and Democrats are still miles apart on a broad agreement to fund the government for another year. And an even larger roadblock could pop up as soon as next month, when the nation could hit its $14.2 trillion debt limit. If Congress does not raise the limit, the U.S. could miss interest payments on its debt and see its triple-A credit rating downgraded. Either of those outcomes, economists and money managers say, could significantly damage the economic recovery and further erode the nation’s status in the eyes of investors, especially foreign governments that own large amounts of U.S. debt. That, in turn, could lead to significantly higher interest rates as investors demand higher premiums to take on the risk of a collapse in U.S. finances."

A congressman and Senator want corporate tax reform to include changes in taxes for small businesses: http://on.wsj.com/g1oEhm

Duplicative programs aren't always wasteful and in need of cutting, writes Kevin Drum: "Sometimes it's useful to have multiple small programs instead of one big coordinated program because small programs can experiment with different approaches to see what works best instead of being stifled by a single big bureaucracy. It's also the case that sometimes it's actually more efficient to have multiple programs. A homelessness program aimed at helping municipal governments is probably best run out of an agency that already deals with municipal governments and doesn't have to reinvent the wheel just to figure out who the players are and how to do outreach. Ditto for programs aimed at church groups, nonprofits, law enforcement, etc. Streamlining is a worthwhile goal, but it's wise not to get too caught up in box-drawing exercises."

State budget slashers aren't "brave", writes E.J. Dionne: "There is nothing courageous about an ideological governor hacking away at programs that partisans of his philosophy, including campaign contributors, want eliminated. That's staying in your comfort zone. The brave ones are governors such as Jerry Brown in California, Dan Malloy in Connecticut, Pat Quinn in Illinois, Mark Dayton in Minnesota and Neil Abercrombie in Hawaii. They are declaring that you have to cut programs, even when your own side likes them, and raise taxes, which nobody likes much at all. Rhode Island's Lincoln Chafee has warned of possible tax increases too. Indeed, to the extent that Quinn received any national press coverage, he got pilloried in conservative outlets in January when he signed tax hikes."

The GOP's favorite economist, John Taylor, can be expected to keep the party line, writes Jonathan Chait: http://bit.ly/eXAwRo

The stimulus had a minimal impact, writes Casey Mulligan: "If Keynesian stimulus advocates are correct, economic growth should have been sharply reduced when stimulus spending slowed. I use real G.D.P. results from the Bureau of Economic Analysis to measure actual economic growth through the end of 2010...I do not begin the measurement until the fourth quarter of 2009, when the president’s Council of Economic Advisers declared that the stimulus law had successfully started a slow recovery. If the advisers were right, economic growth should have increased further when government spending grew still faster in the next couple of quarters, and then grown more slowly as government spending grew more slowly later in 2010...The quarters with more government spending growth tend to be those with less G.D.P. growth."

Band dork interlude: George Mason University's band plays "Killing in the Name" and "Bulls on Parade" by Rage Against the Machine.

Health Care

Almost 10 percent of all Medicare payments are improper, reports Brett Coughlin: "Nearly 10 percent of all Medicare payments are fraudulent or otherwise improper, and the government isn’t doing enough to stop them. That’s the conclusion of a Government Accountability Office report released Wednesday. The report, issued at the request of a House subcommittee investigating Medicare and Medicaid fraud, estimates that the federal government is losing $48 billion on the improper payments -- a significant amount for a program that 'is fiscally unsustainable in the long term' unless action is taken...CMS estimates that $48 billion of estimated Medicare outlays of $509 billion in fiscal 2010 went to improper payments, including fraudulent ones.'"

A bipartisan duo of Senators wants to open up Medicare's provider database: http://on.wsj.com/gkNK9v

Rep. Paul Ryan says the administration is breaking the law by not proposing Medicare reforms, reports Richard Cohen: "House Budget Committee chairman Paul Ryan (R-Wis.) is continuing to press the White House to take on entitlements, this time accusing President Obama of failing to follow a provision of a Medicare law. Ryan claims the White House owes Congress a plan for shoring up Medicare funding because the federal government is covering more than its targeted share of the program. Ryan points to a provision of the 2003 Medicare law that requires the president to act. 'The president has failed to lead, again, on entitlement reform. By ignoring their legal requirement to submit a plan that would rectify Medicare’s funding imbalance, the Obama administration threatens the sustainability of this critical program for current and future Medicare beneficiaries,' Ryan said Tuesday."

Domestic Policy

Ohio's anti-union bill is moving forward, report Amy Gardner and Michael Fletcher: "The Ohio Senate approved a bill on Wednesday that would weaken the powers of public workers unions to negotiate their contracts. The vote came as union supporters protested the measure for a second day on the grounds of the state capitol in Columbus. The GOP-sponsored bill passed the Senate by a vote of just 17-16, with six Republicans voting against it. As the roll call finished, dozens of union supporters in the Senate gallery chanted 'Shame! Shame! Shame!' Screeches and shouts echoed down the corridors of the Statehouse, where hundreds of opponents of the bill had gathered for the day's events. The bill next goes to the House, where it is expected to pass."

Democrats are delaying Congress' attempt to block net neutrality: http://politi.co/exNU1u

Fixing education means making public sector work prestigious, not demonized, writes Matt Miller: "we'll never attract the kind of talented young people we need to the teaching profession unless it pays far more than it does today. With starting teacher salaries averaging $39,000 nationally, and rising to an average maximum of $67,000, it's no surprise that we draw teachers from the bottom two-thirds of the college class; for schools in poor neighborhoods, teachers come largely from the bottom third. We're the only leading nation that thinks it can stay a leading nation with a 'strategy' of recruiting mediocre students and praying they'll prove excellent teachers."

Children's book / sci-fi classic mashup interlude: Goodnight Dune.

Energy

Some House Democrats will work with the GOP on blocking EPA climate rules, reports Andrew Restuccia: "At least one Democrat will co-sponsor Republican legislation to permanently block the Environmental Protection Agency from regulating greenhouse gas emissions. Rep. Collin Peterson (D-Minn.) will co-sponsor legislation slated to be introduced Thursday by House Energy and Commerce Committee Chairman Fred Upton (R-Mich.) and Rep. Ed Whitfield (R-Ky.), a source familiar with the legislation told The Hill. A companion bill authored by Sen. James Inhofe (R-Okla.) will be introduced Thursday, but no Democrats are expected to co-sponsor the Senate version of the legislation, the source said."

House Democrats want action on an environmentally hazardous method of natural gas drilling: http://bit.ly/fYtiBn

Closing credits: Wonkbook is compiled and produced with help from Dylan Matthews and Michelle Williams. Photo credit: White House.

By Ezra Klein  | March 3, 2011; 6:54 AM ET
Categories:  Wonkbook  
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Next: What will the Democrats say?

Comments

I know Jack Lew, Ezra. I went to high school with him. If he is the best we can do to hammer out a deal, we are screwed.

Obama's team is a cave team. They only know how to say 'yes suh' to the business and conservative interests in America. Our educational, scientific and cultural system is going to hell in a handbasket under their watch. It's pretty clear that we wouldn't have fared worse under McCain-Palin. The anti-intellectualism in America is thick enough to cut with a knife. I think I will go back and re-read Richard Hofstadter, Max Lerner and Eric Hoffer. Our civilization is nearly done.

Posted by: bert8 | March 3, 2011 8:27 AM | Report abuse

Ezra,
Could you remind me how that tax cut negotiation 'worked'? Obama negotiated some stimulus, that is now being revoked as the GOP cuts (Democratic Party) program after program after program -- citing fiscal impoverishment. Boehner just makes stuff up and brings the tag-line, "We're broke".

Obama gave up $300B a year in tax revenues from sources that were not going to be stimulative.

Seems to me, Obama didn't get a program that 'worked' -- and he didn't get the blame on the GOP.

It 'worked' for the GOP but not for the nation as a whole. Only in a world where results don't matter and acccountability means who has the best publicist and owns the nation's assignment editors can you say that Obama's negotiation led to 'success'.

Posted by: grooft | March 3, 2011 8:32 AM | Report abuse

Education reformers are wasting their time.

Nothing that happens in the classroom will matter in any school district where the out of wedlock birthrate is 60-70% (or for that matter in the whole state of MS where the STATEWIDE rate is 45%!!!)

But please argue about budgets if it brings joy to your life.

Posted by: johnmarshall5446 | March 3, 2011 9:11 AM | Report abuse

"Some House Democrats will work with the GOP on blocking EPA climate rules,"

File this one away in your future predictions bag.

If the GOP takes control of the Senate in 2012, it will fundamentally change our energy equation.

In addition to the above "fracking" controversy, there is possibly about 1 trillion euivalent barrels of oil locked up in shale in the Midwest.

Right now, both environmental laws and pricing make it uneconomical to process. Give me a sustained $100 a barrel spot price on oil, and a GOP House and Senate, and in relatively short time the US will begin to singificantly drop it's oil imports.

Notice, I'm not arguing the moral good of that, just the odds of it happening.

So if in the summer of 2012 it looks like a GOP takeover, sell every solar stock and alternative energy investment you have, regardless of who wins the Presidency.

Posted by: johnmarshall5446 | March 3, 2011 9:20 AM | Report abuse

Matt Miller needs to come to NJ. Here they AVERAGE $47000 a year in benefits. Not salary, BENEFITS. This contributes to our annual $10 Billion hole that we start the year off with. We can't tax our way out of this mess and still the union thugs in NJ like Barbara Keshishian of NJEA and Henna Rosenstein of the CWA (who replaced the disgraced Carla Katz who was sleeping with our former Governor) just don't get it.

http://www.nj.com/news/index.ssf/2011/03/nj_senate_president_sweeney_sa_2.html

$47,000 A YEAR.

And this is a Dem that heads the NJ Senate saying this.

http://www.nj.com/news/index.ssf/2011/03/nj_workers_union_says_bill_on.html


"It’s totally unacceptable. I think if that were to pass, it will guarantee that the Democrats will lose the majority," he said. "We’re shocked that Steve Sweeney, who calls himself a Democrat, would act in this manner ... He’s rolled over for the governor in every instance."

No Mr. Lavin its you who don't get that he's not rolling over for the Governor, he's rolling over for the taxpayer that's had enough.

And the union thugs in NJ can't believe that a Democrat that they thought was bought and paid for like the last 10 years of them would do something like this. How dare he!

Posted by: visionbrkr | March 3, 2011 9:54 AM | Report abuse

john

The areas where wedlock birthrate problems are rampant are probably economically depressed. Wedlock birthrate rates are JUST ONE variable that can be considered high in those areas (I am predicting that is the case).

This is because public policy (a "part" of which is education investments), are lacking in those areas. Had we spent trillions of dollars investing in these and other US depressed areas (creating businesses and jobs and educating people) instead of on wars and building up other countries we bombed into the stoneage, we all would be better off.

John, what is YOUR proposed solution to excellence in education? Or is this problem unfixable in your POV?

Posted by: lauren2010 | March 3, 2011 10:11 AM | Report abuse

How much more do they in NJ want workers to pay into health care, etc?

How much per month does health care cost in NJ for non-retired workers?

Why isn't NJ reforming state-level health care costs (reducing dr and hospital payouts, which in effect reduces their profits) in addition to asking people to pay more? Or are they? And how so?

Is NJ cutting high end taxes? If so, why should young workers pay MORE to shore up the existing pensions when it is increasingly becoming obvious pensions might go away before they themselves retire?

The real abuse is the way the medical community has a monopoly and the high costs they pass on to average workers so the elites can retire well and young.

Posted by: lauren2010 | March 3, 2011 10:23 AM | Report abuse

"This is because public policy (a "part" of which is education investments), are lacking in those areas. Had we spent trillions of dollars investing in these and other US depressed areas (creating businesses and jobs and educating people) instead of on wars and building up other countries we bombed into the stoneage, we all would be better off."

Um, we actually have "invested" trillions and trillions dollars in economically depressed areas over the years. What we see now are the results of that investment. The out of wedlock birth problem, for example, really got out of control at the same time we ramped up our "investment" into these areas.

Posted by: justin84 | March 3, 2011 10:36 AM | Report abuse

@lauren,

NJ wants to have workers pay up to 30% of their heatlhcare costs. Their current plans they're in is why they cost $47000 on average per year. They're also offering them different plans that can reduce their costs with little impact on their benefits.

The Republican Governor wants to have it start sooner than the Democratic State Senator but they both seem to agree on the percentage.

"How much per month does health care cost in NJ for non-retired workers?"


http://www.njspotlight.com/stories/10/0831/2230/

Currently 1.27 Billion and doubling to $2.75 billion within 9 years as per above link.

Part of what the Governor wants is to move medicaid to managed care. That will save some money but again only put a dent in the problem.

The problem with NJ is the pension program. Back in 2000 a Republican Govenor (see the nonpartisan in me) stupidly put in a guarantee of 9% returns per year in the pension system. When this was started there was a surplus in the pension system. Now there's a deficit. To be fair pensions haven't been funded by the state because of all the other issues but this was just dumb of Gov. DiFrancesco to do.

NJ had instituted a "millionaire's tax" (actually for those making over $400,000) I believe several years ago which Governor Christie let pass and not continue. I believe he should have let it continue because that's not our problem. If we had the tax still then we couldn't let people deflect from the real problem. Remember NJ is the highest taxed state in the country already. our propery taxes are twice the #2 state in the country. Part of that problem is that we have 600+ school boards that negotiate with teachers unions. They also have patronage gone wild here in NJ within each school board and municipality. The Govenor has attacked some (even going so far as to fire the Pascack Valley Sewage Commission) but its only a drop in what's needed.


http://www.nj.com/news/jjournal/index.ssf?/base/xclude/1296631550274940.xml&coll=3

http://www.newjerseynewsroom.com/state/gov-christie-demands-passaic-valley-sewerage-commission-detail-family-and-friends-on-payroll


Yes the NJ Medcial community also abuses the system. We need transparency in cost, benefit everything. But sadly that's not likely to happen anytime soon.

Posted by: visionbrkr | March 3, 2011 10:43 AM | Report abuse

"Wedlock birthrate rates are JUST ONE variable that can be considered high in those areas"

No the correlation is almost statistically exact. For instance DC and MS are the worst in the country in both the public schools and the OOW rate. However this makes no sense on other statistical bases, because DC is not on the whole an impoverished area.

Even in the poorer areas, it has one of the best public transport systems in any major US city. This extends to the prosperous areas of northern VA and MD, so you SHOULD be able to travel to an acceptable job, even if there are none in your immediate area.

Is the problem intractable? Yes probably, because we are now into the third generation in many cases where marriage has never occured and child rearing is viewed as "normally" a female responsibility with occasional input from biological fathers.

Immigration patterns have drastically exacerbated this, because they often entail long periods of separation between men and women, parents and chidren. Without the social stigma that used to be attached to unwed motherhood, this results in a dramatic increase in OOW rates in the immigrant communities.

Posted by: johnmarshall5446 | March 3, 2011 10:48 AM | Report abuse

"Um, we actually have "invested" trillions and trillions dollars in economically depressed areas over the years."

Um, no

The USA is neglecting its infrastructure, it is not building HSR, poor people don't have broadband, and so on, roads in poorer hoods lack curbs or repairs, whereas if you go to rich areas that is not a problem.

Even large amounts of Katrina money somehow got sidetracked and the area still looks devastated.

I also tie this problem to loss of manufacturing, after all, we can educate everyone but won't employ them unless we have jobs.

This is a big country with lots of people and roads and bridges, etc.., Just because you can look at a big number for, say, highway repairs, it doesn't necessarily mean enough is being spent. Indeed, this is a basic fault of conservative thinking, spending figures are ALWAYS TOO HIGH, even if in reality they are too small or just right. Yes, there are figures that are too high, but infrastructure and business development in poor areas aren't in that category.

Posted by: lauren2010 | March 3, 2011 12:10 PM | Report abuse

John

According to the below link, DC has the 4th highest rate of poverty in the US.

So rethink your thesis. There's a reason OOW rates are high in certain areas. I again predict those areas are poorer areas. If you dont agree, why do certain areas have such high OOW rates? Because the answer is probably also the reason education does poorly there too. OOW rates are a symptom, just like poor education stats, not a cause.

http://washingtonexaminer.com/local/poverty-rising-dc-region

Posted by: lauren2010 | March 3, 2011 12:19 PM | Report abuse

The poor in DC are poor by generational habit. As even the Examiner points out generally speaking incomes have INCREASED in the area, not decreased.

The DC metro area has the 29th LOWEST unemployment rate in the nation out of 372 areas in the rankings:

http://www.bls.gov/web/metro/laummtrk.htm

Also, as I pointed out above. The DC Metro system is consistently ranked in the top ten in the country. It is quite literally a 15-20 minute subway or bus ride from the poorest areas of DC to some of the most expensive dining and shopping areas outside of NY on the east coast. Psychologically however, it may as well be Tibet.

Rather than contradicting my point, you have reinforced it. The poor in DC are poor because of generational habits of OOW births. The opportunities are all around them.

Posted by: johnmarshall5446 | March 3, 2011 12:49 PM | Report abuse

"Um, no"

Yes, we actually have spent quite a lot of money on the poor. Medicaid by itself accounts for a trillion over the just the past three years. Throw in food stamps, TANF, ADFC, community and regional development aid, income-based education transfer, a decent portion of unemployment insurance spending, and you've got trillions over the past several decades. That you don't think the results are compelling doesn't mean there was no or little investment.

"The USA is neglecting its infrastructure, it is not building HSR, poor people don't have broadband, and so on, roads in poorer hoods lack curbs or repairs, whereas if you go to rich areas that is not a problem."

How does HSR help the poor? It's not going to be free to ride. One way from Los Angeles to San Fran is projected to cost $105. In addition, HSR requires operating subsidies, which probably means less in public funds directly available for the poor.

http://www.nbcbayarea.com/traffic/transit/High-Speed-Ticket-Price-Triples-79319952.html

How does broadband access help people escape poverty? The rich fifteen years ago did just fine without it.

The roads might suck, but fixing a few potholes isn't going to magically improve the situation in poor areas.

"I also tie this problem to loss of manufacturing, after all, we can educate everyone but won't employ them unless we have jobs."

Those manufacturing jobs won't be coming back. In fact, I'll bet over 90% of worldwide manufacturing positions will be eliminated by 2050.

"Yes, there are figures that are too high, but infrastructure and business development in poor areas aren't in that category."

Maybe Democrats should have thought about that when they were designing ARRA, and thought it useful to fix windows on an unused building, or to repave sections of highway that were in decent shape.

"Even large amounts of Katrina money somehow got sidetracked and the area still looks devastated."

Can we toss that one in the government failure column?

"This is a big country with lots of people and roads and bridges, etc.., Just because you can look at a big number for, say, highway repairs, it doesn't necessarily mean enough is being spent. Indeed, this is a basic fault of conservative thinking, spending figures are ALWAYS TOO HIGH, even if in reality they are too small or just right."

So tell me the correct amount, to the penny (or even the nearest hundred billion dollars). I can't wait to hear it.

Market transactions reveal value - public spending is just guesswork. I don't value HSR at all, and so for me the optimal amount of spending is $0.

"Yes, there are figures that are too high, but infrastructure and business development in poor areas aren't in that category."

Perhaps, but that might also be a result of other government spending iniatives, which create negative behavioral externalities and on top of that crowd out infrastructure expenditure.

Posted by: justin84 | March 3, 2011 1:10 PM | Report abuse

"So rethink your thesis. There's a reason OOW rates are high in certain areas. I again predict those areas are poorer areas. If you dont agree, why do certain areas have such high OOW rates? Because the answer is probably also the reason education does poorly there too. OOW rates are a symptom, just like poor education stats, not a cause."

High OOW rates are indeed a cause - a major contributor to the culture of poverty. The War on Poverty in turn was a primary cause of the surge in OOW rates to begin with. The War on Drugs is an important contributng factor as well.

Posted by: justin84 | March 3, 2011 1:19 PM | Report abuse

"The poor in DC are poor because of generational habits of OOW births. The opportunities are all around them."

First, the fact you were wrong about DC's poverty rate should give you pause to make any more absolute declarations of fact.

Doesn't mean you are wrong, but....

And why do you think they have "generational habits"?

What is the cause of that?

Are you suggesting a racial aspect? Nature or nurture? Which is it?

And most of the GOOD jobs around DC require degrees or political connections, and hence, a higher education. All the low paying jobs are taken, as your unemployment stats reflect. Just because you have a burger flipping job, it doesn't mean you feel you are part of the system, especially when you don't have equal representation (as in this case).

I don't think you've dug deep enough yet to determine the root cause of OOW rates in poorer areas.

Posted by: lauren2010 | March 3, 2011 2:03 PM | Report abuse

justin

If I have to explain why major projects create jobs and help people in all classes, well, there. I just explained it.

Yes, the gvmt failed NO and the area. And that is because it was corrupted by big business and politicians who preferred to spend the money on casinos and such to help their business friends rather than rebuilt the area.

The War on Poverty caused OOW rates? I suppose next you will tell me abolition made it worse too?

Providing health care, etc, for poor people is not intended nor designed to bring them out of poverty, but to meet their basic humanitarian needs. I didn't say we didn't spend money on the poor. I did imply that we treat certain areas differently when it comes to the kinds of projects and public policy (regarding job and education growth initiatives) we share with them.

Again, if we spent a trillion dollars every year on improving jobs and education in America instead of spending it overseas to protect oil shipping lines and fighting the symptoms of our oil based foreign policies, our unemployment rate would be manageable for all demographics, though we'd have to do something about manufacturing losses too.

Posted by: lauren2010 | March 3, 2011 2:13 PM | Report abuse

John you cherry-picked that article link I provided.

You missed this part:

"While economists attribute the gap partly to D.C.'s small population and changing demographics, it points to a trend in the region: the rich are getting richer and the poor are getting poorer."

DC's impoverished did NOT experience income gains as you implied. They got poorer even as the rich in that area got richer. In fact, the richer got so rich that it made the place look well to do for everyone even though that is not the case.

You obviously have never travelled through the area. If you did, you would know what I am talking about.

Read more at the Washington Examiner: http://washingtonexaminer.com/local/poverty-rising-dc-region#ixzz1FZ80VEVL

Posted by: lauren2010 | March 3, 2011 2:18 PM | Report abuse

lauren:

I wasn't wrong about the DC poverty rate. The whole article is misleading.


"But, he said, that does not mean the poor are earning more money, as evidenced by the nearly 105,000 residents in households earning less than $22,000 for a family of four.

And many are very poor. According to the D.C. Fiscal Policy Institute, 61,000 people -- 11 percent of all residents -- live below half of the national poverty line, or just less than $11,000.

The District is one of six jurisdictions that has a poverty rate higher than 17 percent. It ranks behind Mississippi, Arkansas and Kentucky and above West Virginia and Alabama."


The DC metro region has some of the most stable real estate values, one of the best public transportation systems, and one of the lowest unemployment rates in the nation. In other words it has ALL the attributes of what economists would say are necessary to break out of the poverty cycle save one quality public schooling.

What is the ONLY thing that DC shares in common with those other areas, having bad public schools? The OOW rate!

Posted by: johnmarshall5446 | March 3, 2011 2:25 PM | Report abuse

lauren:

"You obviously have never travelled through the area. If you did, you would know what I am talking about."

You couldn't possibly be more wrong if you had a McCain-Palin sticker on your bumper. LOL

Posted by: johnmarshall5446 | March 3, 2011 2:33 PM | Report abuse

Ha ha

But this link below also shows the dc poverty rate is the 4th worst in the us.

Is this link "also" misleading?

http://www.statemaster.com/graph/eco_per_bel_pov_lev-economy-percent-below-poverty-level

If you have different data, why no link?

Also, how do you know the OOW rates are not tied to the poorest in a given community?

For example, for the DC area, do you think OOW rates are also high for those above the poverty level? Or for those who have college degrees?

I would bet the higher the salary for a demographic group, the lower the OOW rates. And that, my friend, implies the opposite, as I've been proposing all along.

You still haven't pinpointed the root cause of OOW rates.

Posted by: lauren2010 | March 3, 2011 2:48 PM | Report abuse

"And why do you think they have "generational habits"?

What is the cause of that?"

The War on Poverty and a change in the overall culture that took place during the 1960s (which were probably mutually reinforcing). From 1940 until the early 1960s, the percentage of OoW births was a couple of percent of total births. There appears to have been an inflection point around 1963 or 1964 (when the percentage nationwide was at about 5%), and now we are sitting at nearly 40%.

http://www.cdc.gov/nchs/data/databriefs/db18.pdf

"Are you suggesting a racial aspect? Nature or nurture? Which is it?"

As Walter Williams has said, the welfare state is an equal opportunity family destroyer. Williams made a video on this topic several decades ago - I believe it is available on YouTube.

http://townhall.com/columnists/walterewilliams/2009/08/12/politics_and_blacks

The impact has been more severe on minorities to date, probably because minorities typically were and are poorer to begin with. As time goes on, the OoW birth problem continues to grow, and today it certainly hits all races and ethnicities. You see it in the European countries too, particularly those with generous welfare states (Scandinavia, France).

The War on Drugs has also contributed to the destruction of the family (essentially, lots of young men locked up for victimless crimes and for real crime while in the drug business).

"I don't think you've dug deep enough yet to determine the root cause of OOW rates in poorer areas."

It's a combination of culture and affordability. It should be self evident why the destruction of the family and traditional values has created significant economic and social problems.

Posted by: justin84 | March 3, 2011 2:53 PM | Report abuse

"Again, if we spent a trillion dollars every year on improving jobs and education in America instead of spending it overseas to protect oil shipping lines and fighting the symptoms of our oil based foreign policies, our unemployment rate would be manageable for all demographics, though we'd have to do something about manufacturing losses too."

We do spend a trillion dollars every year on education and job creation.

Since you keep bringing it up, defense spending largely goes towards funding American jobs. The largest line item is almost certainly compensation for service members. The naval vessels, aircraft, missiles, guns, bombs and the like are for the most part made in the USA.

Folks on the left usually talk about the military industrial complex as a support for America's economy and job market, a stealth WPA.

Bastiat goes as far as using cuts in military spending as an example (of economic fallacy) in What is Seen and What is Unseen:

--- Discharge a hundred thousand men! What are you thinking of? What will become of them? What will they live on? On their earnings? But do you not know that there is unemployment everywhere? That all occupations are oversupplied? Do you wish to throw them on the market to increase the competition and to depress wage rates? Just at the moment when it is difficult to earn a meager living, is it not fortunate that the state is giving bread to a hundred thousand individuals? Consider further that the army consumes wine, clothes, and weapons, that it thus spreads business to the factories and the garrison towns, and that it is nothing less than a godsend to its innumerable suppliers. Do you not tremble at the idea of bringing this immense industrial activity to an end? ---

http://www.econlib.org/library/Bastiat/basEss1.html

I'm with you in that we shouldn't be the world's policeman, but I'm rather skeptical that more money spent on social programs will be beneficial over the long haul.

"Providing health care, etc, for poor people is not intended nor designed to bring them out of poverty, but to meet their basic humanitarian needs."

It sort of was - the whole rationale for spending tons of money on the poor was so that they wouldn't be poor anymore. That's why it was called the War on Poverty.

Providing all basic necessities as a manner of entitlement across a population will have negative unintended consequences. For example, it becomes affordable to have children in poverty and out of wedlock, because their basic humanitarian needs will be met. As more people do this, it gradually becomes socially acceptable.

As such, this spending will perpetuate and in fact reinforce the culture of poverty, which is what poverty more or less is at this time in history.

One benefit of private charity is that it is obviously not an entitlement, and simple knowledge that the money might be cut off is in itself a powerful motivating force.

Posted by: justin84 | March 3, 2011 3:11 PM | Report abuse

lauren:

You're arguing chicken versus egg now!

It's a cycle whereby one reinforces another. As I say we are in the third, and possibly even fourth generation in some sections of DC where no one has ever married. In fact in much of DC, the concept of marriage as a prelude to child bearing is literally unknown, and at best is thought of as something that might take place years in the future after multiple children.

As someone who has spent most of my adult life in DC I can tell you most emphatically that it is not a poverty stricken area, except for those who choose to live that way.

When I came to DC the Green Line was a drawing on a map, 14th St was full of porno shops and cheap strip clubs (where you could find the mayor's car and driver outside many nights of the week) Adams-Morgan was full of burned out townhouses, the Reagan Building was a huge parking lot two convention centers had yet to be built and New York Avenue hotels served as permanent residences for the homeless courtesy of the DC government.

So incredibly much has changed in DC for the better, generational poverty remains because of bad lifestyle choices not lack of opportunity.

Posted by: johnmarshall5446 | March 3, 2011 3:38 PM | Report abuse

john

First, admit you were wrong about the poverty rate in DC. I provided two links saying the same thing. You? Nada. Zip. Just some vague notion that the first link was misleading, but darn, I then found a second link.

Second, I must be winning this debate because Justin is trying to come to your rescue.

Third, you fail to understand the depth of economic disparity in certain areas of the country or with certain kinds of people. Yes, some of the smartest and most determined will have no problem assimilating into the mainstream and find ways to get educated and find GOOD jobs, but not everyone makes it into college, either because of lack of resources, lack of smarts, or a sense of non-belonging or being left out.

Fourth, I cam from a poor family and joined the military to get my education and spent 12 years scratching my way upward for a degree. Not everyone wants to fight for this country (because of lack of a sense of belonging or ownership), and not everyone has the dough to go to college.

Fifth, I will again state that it is pretty safe bet that in the DC area, the OOW rates are lower for college educated people than non-college people, though they live in the same "area".

Sixth, I have just provided an explanation why some people might tend to get lost economically. All you have done is assert that some people are lazy or something. I don't buy it. I think groups of people get "lazy" because of CLEAR AND PRESENT economic disparities and true availability of education and economic opportunities. WHY ARE THEY LAZY? IS IT GENETIC? OR IS IT something to do with the environment they exist? SPELL IT OUT.

Seventh, I cant believe anyone believes that if we instead spent a trillion dollars annually on infrastructure projects and job programs and educating more people and finding ways to bring them into the fold, that wouldn't create many more opportunities and "lift all boats". Unbelievable to think that money is better spent overseas.

Posted by: lauren2010 | March 3, 2011 4:53 PM | Report abuse

"find GOOD jobs, but not everyone makes it into college, either because of lack of resources, lack of smarts, or a sense of non-belonging or being left out."

A good job isn't necessary to be successful. Two wage earners making $13.63/hr and working 2,200 hours per year each can crack the $60,000 barrier (I assume 44 hrs / week, 2 weeks vacation, no overtime). Solidly middle class.

Nearly anyone can make that happen - the occasional cyclical recession notwithstanding.

As for the people who fail to take opportunities because they feel bad, it's hard to be sympathetic to that.

"Not everyone wants to fight for this country (because of lack of a sense of belonging or ownership), and not everyone has the dough to go to college."

College is a bit of a barrier. I view it is primarily useless signalling, with only modest acquisition of real skills - certainly less skill development than on-the-job training. Regardless, employers like it.

"I cant believe anyone believes that if we instead spent a trillion dollars annually on infrastructure projects and job programs and educating more people and finding ways to bring them into the fold, that wouldn't create many more opportunities and "lift all boats". Unbelievable to think that money is better spent overseas."

First, I want to note that the money is largely spent here directly. The soldier fighting in Afghanistan is paid a salary and the money goes into his bank account, and his family will probably use it while he's away. Most of his equipment is also made in America. A lot of the command/support is done in America, too. As you might be able to attest, military work also helps one acquire skills. So transfering money from the military into other areas isn't necessarily the slam dunk you might think it is.

The difficulty in believing that spending will do a whole lot is that there is no correlation between spending money and aggregate outcomes. Take education. The amount spent each year goes up and up and up, and the results are unchanged.

Or consider Japan. Economic growth there has been anemic for decades, and they have spent themselves into a debt disaster with infrastructure projects. The Japanese economy has grown a mere 7.4% since 1997Q1 (the U.S. has grown 38.3% over the same time period). They've got a lot of bridges, and a lot of debt, but not a lot of economic growth.

"I don't buy it. I think groups of people get "lazy" because of CLEAR AND PRESENT economic disparities and true availability of education and economic opportunities. WHY ARE THEY LAZY? IS IT GENETIC? OR IS IT something to do with the environment they exist? SPELL IT OUT."

Again, it's the various government interventions which encouraged the emergence of the underclass. Unemployment for economically disadvantaged groups used to be very low. Economic/educational opportunities were certainly far worse several generations ago.

Posted by: justin84 | March 3, 2011 5:57 PM | Report abuse

Yes Justin

Gvmt alone is to blame for all bad things under the sun

Posted by: lauren2010 | March 3, 2011 7:07 PM | Report abuse

"A good job isn't necessary to be successful. "

For 99.999% of people, it is.A good job isn't necessary to be successful.

Data proves that the higher your education, the better off the average person will be, and the less likely they will birth out of wedlock.

Posted by: lauren2010 | March 3, 2011 7:15 PM | Report abuse

I'm not actually suggesting we tear down the military.

And there is indeed trillions dollars wasted due to these wars.

That money would be more effectively spent on building new things or educating people or healing sick people or fixing bridges instead of dropping bombs or causing injuries to soldiers or consuming vast amounts of fuel or stuffing it into defense contractor banks.

There are efficient uses of money and inefficient uses. These wars are inefficient and indeed helped cause the recession instead of preventing it.

Lastly, it's funny seeing you claim that gvmt spending is stimulative after listening to you for months claim otherwise.

Posted by: lauren2010 | March 3, 2011 7:30 PM | Report abuse

"Again, it's the various government interventions which encouraged the emergence of the underclass"

What planet do you live on?

The middle class was created by gvmt and business partnerships after WW2.

And only as we dismantle the new deal after Reagan do we see the middle class weakened.

Posted by: lauren2010 | March 3, 2011 7:34 PM | Report abuse

I am not saying spending is the solution

I am saying that certain spending is essential, and that certain other spending (like nation building and wars) are wasteful and make it impossible for wise investments.

There are other problems demanding other fixes.

If I said I was going to the grocery store to buy food, I swear you'd faint at the folly of this expense and twist some interpretation of why some other country died for buying food.

Posted by: lauren2010 | March 3, 2011 7:42 PM | Report abuse

Also funny how you defend gvmt spending, so long as it is war related.

We have indeed spent too much. But that's because, mainly republicans, have acted in concert to destroy fed revenues, strengthen our dependence on oil, work against reforms of health reforms and costs, and find ways to funnel trillions dollars to big business.

Had republicans embraced paygo as effectively as dems,and not invaded iraq, our debt would be manageable.

Posted by: lauren2010 | March 3, 2011 8:00 PM | Report abuse

"The middle class was created by gvmt and business partnerships after WW2."

Really? That's what creates a middle class? I wonder why they didn't think of that one thousand years ago. Why, just partner business and government and BOOM, prosperity!

The middle class was created by surging productivity, driven by capital accumulation, technological progress, specialization and trade.

Posted by: justin84 | March 3, 2011 11:33 PM | Report abuse

"I am not saying spending is the solution"

You just said that if we only spent a trillion more on your favored programs everyone's boat would get a good lift.

"I am saying that certain spending is essential, and that certain other spending (like nation building and wars) are wasteful and make it impossible for wise investments."

So end all taxation. Wasteful wars really won't receive much funding, I can assure you.

"If I said I was going to the grocery store to buy food, I swear you'd faint at the folly of this expense and twist some interpretation of why some other country died for buying food."

While I disagree with your macro views, you seem to have a good sense of how to manage your own life - which as a good libertarian I'm certainly happy to let you do :)

Posted by: justin84 | March 3, 2011 11:39 PM | Report abuse

"Also funny how you defend gvmt spending, so long as it is war related."

I'm not defending government spending on war. I suggest that money spent on wars largely goes into American pockets, not a black hole. Read the Bastiat link - that's much closer to my view of the effects of defense spending on the economy.

If you recall, I oppose coercive taxation. I don't believe in any funding for the military that isn't voluntary. If the defense budget is only $80 billion on that basis, so be it.

"We have indeed spent too much. But that's because, mainly republicans, have acted in concert to destroy fed revenues, strengthen our dependence on oil, work against reforms of health reforms and costs, and find ways to funnel trillions dollars to big business."

I don't like Republican statism any more than Democratic statism. I oppose the whole enterprise, except at the most fundamental levels. If you accept statism, you pretty much have to accept the fact that someone you don't like will occasionally be in charge and do things to you and your wealth you might not be fond of.

Posted by: justin84 | March 3, 2011 11:51 PM | Report abuse


Mortgage Rates have hit an all time low! For many, these rates will be the lowest we see in our lifetime. Rates change several times throughout the day, so to get an accurate quote search online for "123 Mortgage Refinance"

Posted by: davidvinci123 | March 4, 2011 4:39 AM | Report abuse

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