Poverty Up; Health & Social Problem Worse
Andrew Sullivan points to Ron Brownstein on the Census Bureau report on income, poverty and health insurance coverage in 2008 to find that on every major measurement…
…the country lost ground during Bush’s two terms. While Bush was in office, the median household income declined, poverty increased, childhood poverty increased even more, and the number of Americans without health insurance spiked. By contrast, the country’s condition improved on each of those measures during Bill Clinton’s two terms, often substantially. [...]
That leaves Bush with the dubious distinction of becoming the only president in recent history to preside over an income decline through two presidential terms, notes Lawrence Mishel, president of the left-leaning Economic Policy Institute. The median household income increased during the two terms of Clinton (by 14 per cent, as we’ll see in more detail below), Ronald Reagan (8.1 per cent), and Richard Nixon and Gerald Ford (3.9 per cent). As Mishel notes, although the global recession decidedly deepened the hole-the percentage decline in the median income from 2007 to 2008 is the largest single year fall on record-average families were already worse off in 2007 than they were in 2000, a remarkable result through an entire business expansion. “What is phenomenal about the years under Bush is that through the entire business cycle from 2000 through 2007, even before this recession…working families were worse off at the end of the recovery, in the best of times during that period, than they were in 2000 before he took office,” Mishel says.
I first came upon that census report via John Dickerson in The Slate Political Gabfest. Dickerson was struck by the increase in the poverty rate, to 13.2%, which is the first statistically significant annual increase since 2004. The definition of poverty used for the poverty rate, he explained, is $22,000 for a family of four; $17,000 for a family of three; $14,000 for a family of two.
Think about that for a second. 13.2% of Americans, more than 1 in 10 of us, make that little money.
But it was income inequality (which did not go up from 2007 to 2008) that appears to be why Dickerson paid particular attention to the census report. His example was this WaPo piece that asked 100 Washingtonians from all walks of life what they made. There you can compare Grover Norquist to Sonia Sotomayor or the police chief to the panhandler or Marion Barry to…
I was struck by Dickerson’s observations because back in April I sent the Gabfest folks an email pointing to the book, The Spirit Level: why more equal societies almost always do better. In it two British academics, Richard Wilkinson and Kate Pickett, find that almost every modern social and environmental problem — ill-health, lack of community life, violence, drugs, obesity, teen pregnancy, mental illness, long working hours, big prison populations — is more likely to occur in a less equal society.
The chart at the top of this post is from the book (click for a larger view). Jeff Ritterman, M.D., has read it. He observes:
In the Gilded Age of the robber barons, income distribution in the U.S. was very unequal (see the graphic below). This was one of the causes of the Great Depression. FDR’s New Deal can be interpreted, in large measure, as a program to reverse income inequality.
In a stunningly short time, called the Great Compression by economic historians Claudia Goldin and Robert Margo, America underwent a significant redistribution of income. While historians offer a variety of explanations for the Great Compression, what is clear is that income was much more fairly distributed.
This relative equality produced the middle class America that I grew up in. Of course, there were rich and poor people, but nothing like the extremes of wealth and poverty that we see today. This middle-class America lasted until the late 1970s, when the trend toward greater inequality began to accelerate.
Today, we are faced with the same degree of income inequality as existed during the Great Depression. We can take our cue from FDR. It’s time for another great compression.
I got an email back from Jefferson Pestronk, a now former Gabfest intern, thanking me for my thoughts and assuring me that “Emily, John, and David read every email that comes in to the Gabfest and really value the feedback they receive from all the loyal listeners.” I’m guessing they’ll talk about the book when it’s released in the U.S. on December 22.
Today the topic of income redistribution is red meat for the Palin crowd. But if Wilkinson and Pickett’s research holds up, greater equality holds the key to life expectancy, decreased infant mortality, improved child well-being, reduced obesity, lower homicide rates, decreased school dropout rates, lower teen pregnancy, increased levels of civic trust, improved voter turnout, decreased drug abuse, lower incarceration rates, decreased rates of mental illness, and improved social mobility based on merit.
For more on The Spirit Level, go to Wilkinson and Pickett’s Web site.
70 Responses to “Poverty Up; Health & Social Problem Worse”
[...] about Andrew Sullivan as of September 13, 2009 Poverty Up; Health & Social Problem Worse – themoderatevoice.com 09/13/2009 Andrew Sullivan points to Ron Brownstein on the Census [...]
Joe:
I was frankly stunned by the information in your post, especially : “Today, we are faced with the same degree of income inequality as existed during the Great Depression.”
Since one of the sources is Lawrence Mishel, president of the “left-leaning” Economic Policy Institute, I am curious to see whether those who disagree with these findings will—in addition to, I am sure, pointing this source out and anecdotally disputing the stats–provide facts and data to contradict or discredit your post.
In the back of my conscience I am hoping they will, as I really believe this is shameful.
Thanks, Joe, for this article. It seems that the saying about rising tides lifting all boats does seem to hold true…just not in the way it's generally used. When I see numbers like this article shows, it makes me hope that those who think those of us who want to help the poor rise from poverty and strengthen the middle class because we think the rich undeserving of their great wealth will understand that that is not the case. Progressives don't think this at all, we merely feel that a healthy and huge middle class is actually better for everyone, for those at the top and the bottom of the economic scale. These numbers seem to bear that out. Raise the tide, yes! But that means not leaving those at the bottom behind.
[...] This post was mentioned on Twitter by TMV andVincent Murphy. Vincent Murphy said: Poverty Up; Health & Social Problem Worse – The Moderate Voice http://bit.ly/RMyu5 #poverty #news [...]
Yeah, terrific post. I'm going to link this way from my own blog, which will bring you an additional 2 readers perhaps. The graph with the Great Compression is particularly remarkable.
FWIW, I just checked the demographics in my birth town in rural Louisiana. 40% of families there are below the poverty level.
What else would you expect from the changing demographics of the U.S. More than 20 years ago, Ben Wattenberg pointed out that the families capable of providing the best homes for children are having the fewest children while the families least capable of caring for children have the most children. To avoid the negative impacts of unlimited illegal immigraiton and a growing underclass, the middle and upper middle class families are having fewer children while illegal aliens and the welfare class keep having children.
Another point to be made is that if the U.S. had the demographics of Sweden or Norway, the U.S. would be better off while maintaining every else the same. Also, all of the countries listed are small compared to the U.S. A better comparison would be other countries with populations of more than 250 million and countries less than 70% white.
“FDR’s New Deal can be interpreted, in large measure, as a program to reverse income inequality.”
Oh for crying out loud. I have no idea what that graph actually plots, but it does show the “great compression” happened more than a decade after the New Deal, curiously around the time we entered World War II.
As for the rest of it, it's a rather breathtaking jump from correlation to causation. I note that in the FAQ posted on equalitytrust's website, this is the gist of virtually all the questions, and the answers are no more than a hand-wave. The poor couldn't possibly be poor because they don't work as hard, didn't spend the time in school to pick up the skills needed for better jobs, or immigrated from countries where the opportunities to develop higher-paying skills didn't exist; in fact that's such a crazy idea we need not even entertain it. Let's get on with what we all know to be the conclusion: the answer is the magical one-two punch of more taxing and spending.
However, could someone please explain why more taxing and spending doesn't seem to be working?
Lots of issues in Dr_J's comment. I agree with him that one cannot immediately conclude that the proper response to the inequality is for the federal government to redistribute. That could be the case, but more argument is needed. However, many of the ideas that Dr J presents don't hold up either without more argumentation. If the poor are poor because they don't work as hard, why did they start getting lazier around 1987? Same with: why did they decide to not pick up skills or to immigrate right around 1987? Of course something like immigration from specific nations COULD have picked up in the mid to late 80s, but we'd have to have evidence this is true.
My own total speculation is that this was the period in which the U.S. economy re-shaped itself from a manufacturing base to a service / knowledge base. From WWII until the mid 80s, millions of people with basic high school diplomas could get a decent paying job. But starting around the 80s, it's those jobs which have disappeared. Now, people end up more in low paying service jobs (Wal-Mart, the nation's largest employer comes to mind as it spread around the nation right around this time) or well-paying but highly educated positions. So I'm suggesting that people didn't stop picking up skills: They acted the same way they always have regarding education, but the good jobs they used to be able to get left.
But that's speculation as well, so people should feel free to point out that this hypothesis doesn't work with the timeline either.
The analysis cited in this post is breathtakingly bad. Jeff Ritterman, M.D. really thinks that the Gilded Age caused the Great Depression? The Depression has been analyzed by lots of economists for decades, but I'm not aware of any who attribute it to the distribution of income.
As another commenter has noted, the “index” plotted on the vertical axis of the diagram is completely unspecified. It is entirely possible that the weights attached to each item in the index were chosen in order to generate the desired correlation with income inequality. That is not an unknown practice in such studies.
Does any sensible person seriously think that the only thing keeping the U.S. from achieving Japanese crime rates and obesity levels is our comparative income inequality? What about the obvious reverse causation running from social dysfunction to poverty? What about the comparative influx of relatively low-wage immigrants into the U.S. over time compared to Japan or the Scandinavian countries? The same households simply do not stay mired at the bottom of the U.S. income distribution–there is ample evidence on this point.
FInally, the sample of countries in the graph as shown omits all the world's poor countries and its fastest-growing countries. I wonder if you can guess what their inclusion might do to that lovely correlation line.
I think thats a pretty good speculation there, and likely is a good part of the reason. Also one has to consider globalization, and the technology age. The rest of the industrialized world has caught up with us to a large degree and the rise of the economies in Asia have surely impacted our manufacturing sector and blue collar jobs. Technology just escalates this as manpower is less in demand.
To which I would add five more factors:
1) Weak Unions that have been unable to force their employers to share the profits from the technological gains in their paycheck or in time off. (Cheap Labor Conservatism)
2) A flattening of the management structure which prevents employees from moving up the corporate ladder.
3) An automobile based society which makes it very difficult for those without access to an automobile to function like full members of society. ( Hard to get a job in the suburbs, hard to shop at BJs/Costco/Sams Club/etc…)
4) NAFTA, It has destroyed small scale farming in Mexico, sending hundreds of thousands into the cities and creating a wave of immigration into the US that is destroying any leverage that labor may have had. (Cheap Labor Conservatism)
5) H1Bs which does the same thing to the technical classes in the US. (Cheap Labor Conservatism)
No Don, NAFTA didn't destroy small scale farming in Mexico. When NAFTA passed in 1994, the price of corn had already fallen 75% from what it was in 1974 as agriculture turned to mechanization and economies of scale. The writing had been on the wall for small farmers for years.
Similarly, to the extent the income gap in America has been widening, it's because the productivity gap has been widening. The best paying jobs in our economy require a higher order of skills than the best paying jobs did a few decades ago, and too many people are caught under-skilled. They're paid less, relatively, because they're less productive. The solution is not to force someone to pay more for lower productivity, but to help these workers raise their productivity.
Education is the one remedy on Wilkinson and Pickett's site I agree with. Unfortunately you can't in the same breath call for stronger unions, since teachers' unions are way too powerful in our education system.
“Jeff Ritterman, M.D. really thinks that the Gilded Age caused the Great Depression? “
It's just another round of myths and whining. I suppose someone desperate will try to extend this somehow to health care, our current “racist” as well as insufficiently egalitarian system, et cetera.
Insisting on revival of the 1960s is retarded as well as long obsolescent (like living in the Detroit automaker bubble — which is still alive and well, and related to that, the presence of city unions and bad city government in the case of Detroit and its failing school system, among other things).
“Andrew Sullivan”
Is he going to whine and lisp about this predicament on the Diane Rehm show (on NPR), too?
“to the extent the income gap in America has been widening, it's because the productivity gap has been widening”
This book, written by a sane Democrat in the 1990s, discusses it, and even quotes liberal political writers (more than economists!) such as Robert Reich and Lester Thurow to support his description of the way things are now. It's not a 1950s and 1960s with no foreign competition, a world of people paid excessively to tighten bolts on assembly lines (one bolt-tightener is about as good as any other), but now a global market place, where there's a vast disparity in individual productivity and ability to earn compensation, and where unskilled and low-skilled work that can be done cheaply in other nations will be done there or for comparable rates here in the USA, or not at all.
(The following book also discusses the failure of trying to have government substitute for the family.)
http://books.google.com/books?id=gxYdofJnAmkC&d…
I got a copy of Wattenberg's “The Birth Dearth” years ago. (A more contemporary work is Phillip Longman's “The Empty Cradle.”) While the activists insist on being ignorant of the truth, since 1960 the fertility rate in nearly all the world has plummeted (not limited to the OECD nations) and many nations already are below replacement level fertility. The UN as well as other organizations knows that a major problem most of the world is going to face this century is that of population aging and even population (and economic) decline.
“When I see numbers like this article shows, it makes me hope that those who think those of us who want to help the poor rise from poverty and strengthen the middle class because we think the rich undeserving of their great wealth will understand that that is not the case.”
Everything has to be kept in proper context.
We'll never have absolute equality, or the approximation of it under totalitarian command-and-control regimentation (even if some lib Dems still believe in it and want it for us, exempting them from the results, of course).
I wouldn't have faith in anyone nowadays at Census or elsewhere to do any up-to-date research into poverty (including its definition and establishing an up-to-date real-world federal poverty level, which I've been interested in for quite some time). This is the Census that is likely to be manipulated and corrupted next year by the likes of ACORN and activists in the Bureau, similar to gun control or to global warming lunatics corrupting the Centers for Disease Control and Prevention, etc.
I would have no faith that any current government agency would properly derive an income (or wealth) equality or inequality (deviation) measure based on a log-normal distribution of income (or wealth) or another real-world measure rather than a plain Gini coefficient, which is divorced from reality and which is misused.
I have no faith in any of the notorious people in Washington now to make the distinction between the inequality resulting from the premium on education and skills and great disparity in productivity now versus an obsolescent state of affairs decades ago, and inequality in undeveloped nations that arises from cultural failure, “failed states” as functionining societies, or from despotism as well as corruption and other ways people abuse each other.
I fear that we're too likely to see people in Washington behaving as the likes of these people,
http://ourfinancialsecurity.org/issues/
with even more sinister threats of extra-national (global) extension of government economic mischief.
(We won't see reform in Michigan, either)
http://www.businessleadersformichigan.com/files…
Washington makes the people at Responsible Wealth non-threatening, by comparison.
The poor couldn't possibly be poor because they don't work as hard, didn't spend the time in school to pick up the skills needed for better jobs, or immigrated from countries where the opportunities to develop higher-paying skills didn't exist; in fact that's such a crazy idea we need not even entertain it.
It's definitely not the first, because poor people work harder than anyone else in society, at jobs that are consistently harder physically and that call for massive levels of emotional and psychic endurance as well.
Lack of education, or lack of the right kind of education, is definitely a factor, but then again what's the point of recognizing that if you're going to oppose most if not all public spending to change it?
It's definitely not the first, because poor people work harder than anyone else in society
Do they? In some cases, certainly. But jobs that pay well often do so because they demand more time, and you don't get to shut them off for evenings and weekends. Not everyone is willing to make those trade-offs.
Moreover if that income graph is based on IRS data, that's reported by household rather than individual. The top 20% of households actually has more individuals in it than the bottom 20%, nearly twice as many wage earners, and more hours worked per wage earner to boot. These statistics are tricky to do properly, so a graph with a mysterious label like “Share (in %)” is hard to interpret fairly.
What's the point of recognizing that if you're going to oppose most if not all public spending to change it?
School funding is the one class of spending I generally vote for, but it would be a lot easier if I saw more responsibility and accountability in the system I'm funding. The New Yorker article I linked above about teachers unions' surreal (and largely successful) campaign against accountability was especially discouraging.
Fourteen Years of NAFTA and the Tortilla Crisis
Since the South-East is predominantly right to work States, one would assume that having either no Unions or very weak unions their school systems would be superior to those of the North which have strong unions.
US Chamber of Commerce – Education Report Card
Best High Schools: State by State Statistics
Funny, I don't see any Southern States at the top of that list…
So maybe we can stop arguing that Unionization is a major factor in poorly run schools…
Now knowing that many Corporations have committed crimes over the years and have abused the privileges incorporation gives them, when are you going to call for the elimination of the Publicly Traded Corporation?
But jobs that pay well often do so because they demand more time, and you don't get to shut them off for evenings and weekends. Not everyone is willing to make those trade-offs.
I'm kind of dumbfounded here. I don't know what kind of jobs you imagine poor people work at that can be shut off evenings and weekends.Cleaning offices and hospitals? Making beds and cleaning rooms in a hotel? Custodial work? Working in a restaurant kitchen? You think work like that can be turned off on evenings and weekends? Not to mention the fact that many, if not most people who fall below or hover just above, at, or near the poverty line have to work more than one job to have any chance of making ends meet, *and* not to mention the fact that many families classified as working class fall into that group only because the adult members of the family are working multiple jobs and would fall into poverty if they did not.
The major difference in what “working hard” means for poor people and upper middle class to wealthy people is that the latter get to do their extra hours in a comfortable office or in the club car of a suburban train or in their office at home, and the former get to do those extra hours in the same place they do every other hour — in a hot kitchen, in the bus or train station scrubbing floors, or maybe in an illegal sweatshop assembling widgets or dolls or toys.
School funding is the one class of spending I generally vote for, but it would be a lot easier if I saw more responsibility and accountability in the system I'm funding.
I'm glad, but I have to tell you that it's easy to call for more responsibility and accountability from teachers (which is, I am guessing, the class of school employees you have in mind when you talk about responsibility and accountability) and forget, or never realize in the first place, that in the vast majority of school districts, teachers do not get even a minimal amount of support from the system they're working in to do their job responsibly — and yet by far most of them DO. In fact, many of them go well beyond just meeting their responsibilities.
I know this from personal observation, having been in the NYC school system for about a year. I was training to be a teacher through an alternate certification program, and I had to leave the program because I could not find a teaching job. That in itself is extraordinary in a system that needs teachers as badly as NYC's does. But that's the least of it. During my months of student teaching and classroom observation, I did not see a single teacher who was not dedicated, responsible, hard-working, and passionate about doing whatever it took to enhance learning. Even my supervising teacher, whose classroom I worked in, whom I could not stand to work with because she was a total control freak and would not let me do any teaching on my own, was a gifted teacher. She had problems delegating and managing adult assistants, but she was a very good teacher. And these were the most difficult of difficult students to teach — inner city kids with, in many cases, anywhere from terrible to profoundly tragic home lives and personal histories, filled with anger, and having multiple learning deficits. I don't know how she did it.
I do think the growing income gap is a problem, but I agree with previous commenters that the omission of the fact that causality is not shown in this post is striking. I can't prove it (causality is notoriously difficult to prove) but it seems to me to be just as likely (if not more so) that it is the social ills that are causing the income disparity, rather than the other way around. That's not to say that we shouldn't do anything about the social ills or the income disparity. Both are problems, and they are probably related, but I don't have much confidence that redistributing income is going to have a great impact on social problems.
“Of course something like immigration from specific nations COULD have picked up in the mid to late 80s, but we'd have to have evidence this is true.”
Fair enough. http://www.dhs.gov/xlibrary/assets/statistics/y… (page 13 of the PDF) shows that “Persons Obtaining Legal Permanent Resident Status” from Mexico was almost 3 times larger in the 90s than it was in the 80s. And that's only counting legal immigration (I don't know if the numbers in the Census Bureau income illegal immigrants or not). I think it's fair to say globalization has had an impact on our income distribution, as lower-skilled workers are coming up against increased global competition for their jobs.
I agree that causality hasn't been demonstrated (which is why one should read the actual book), but I don't think we can dismiss it easily either. I've said this a bunch of times now, but most humans are indeed social animals. It's often not the exact things we have that we measure ourselves by, but how we fit in with those around us. When we feel like we aren't getting a fair deal, many, many of us choose to drop out or get angry, etc.
“What's the point of getting this degree, it's not like someone like me is going to ever be hired.” And so on.
Later we come along and say, reasonably, “well, he never got that education he needed like others, so that's what's caused his low income.” By itself, this could be true, but it was the perception of no hope which made him choose not to get the education.
That's the problem with simplifying the debate down to who works harder. The famous/infamous “invisible hand” of the market encompasses way more than just hours worked. It involves making good and productive decisions. Society benefits when I make a good risk/benefit decisions (like starting a successful small business). And so it rewards those decisions. If I decide to invest my money in something less productive and/or more risky, I'm likely to lose money and have to work harder to make up the difference. So the debate over “who works harder” I think misses the point.
In general I'm a free market supporter (not a popular position these days), but I have to agree with both Dr. J and Kathy that education is one of the keys here. The labor market doesn't work well unless everyone starts with reasonably equal opportunity. I can't look at a high school with an over 50% drop-out rate and think that those kids have anywhere near the opportunity that others have. I'm glad we've found common ground on this. Better education is likely to decrease the income gap (in the good way–not the way the recession has), as well as address some of the social problems. So, regardless of where you fall on the causality issue, that's a win-win.
Don, if you want to prove NAFTA caused a problem, you need to analyze what happened with it versus what would have happened without it. Studies that have done this carefully if anything embarrass us liberal trade advocates in the other direction: NAFTA's effects have been generally positive but far more modest than we might have hoped.
In the case of small farmers, they had been getting less competitive for decades–both in the US and in Mexico–and many have disappeared in both places. You cannot plausibly claim it wouldn't have happened without NAFTA.
So maybe we can stop arguing that Unionization is a major factor in poorly run schools…
If you'd like to exonerate unions, it's not enough to show that there are some states with even bigger problems in their schools (which you only made a start at), you need to show unions aren't culpable elsewhere. If you read that New Yorker article, you will find that hard to do.
The famous/infamous “invisible hand” of the market encompasses way more than just hours worked. It involves making good and productive decisions. Society benefits when I make a good risk/benefit decisions (like starting a successful small business). And so it rewards those decisions. If I decide to invest my money in something less productive and/or more risky, I'm likely to lose money and have to work harder to make up the difference. So the debate over “who works harder” I think misses the point.
But doesn't that kind of beg the question of what makes a small business successful? In other words, you say the “invisible hand” of the market rewards those decisions that produce success. But by the time the success comes, the decisions have been made already. How does the “invisible hand” know in advance that the decisions will be successful?
This is not intended snarkily. The “invisible hand” concept has never made sense to me.
I don't know what kind of jobs you imagine poor people work at that can be shut off evenings and weekends.
Well, take bus drivers here in San Francisco. Terrific people as a rule who deal with more traffic frustration than I'd wish on anyone. They work their shift, they go home, they're done. What's more, their union has negotiated lax enough attendance requirements that they can simply blow off work 10% of the time (in other words, more than a whole month out of the year–in addition to scheduled vacation) with no consequences. As a result scheduled buses often don't appear, since there's no one to drive them.
So compared with my 60-hour weeks, they don't seem to be working that hard. And to be fair, it's a stretch to call them “poor” as the average salary is $70,000.
In the vast majority of school districts, teachers do not get even a minimal amount of support from the system they're working in to do their job responsibly.
I agree, and what we give them instead is a lot of micromanagement. California dictates all sorts of things about how teachers can do their jobs, and the No Child Left Behind program has layered a whole new set of requirements on top of that. It's all insane, yet it could all be quickly straightened out if we just started measuring results. I find opposition to doing so (and it comes loudest from teachers' unions) simply inexcusable.
The uncertainty about the ultimate success of a new venture can be daunting. Small-scale entrepreneurs may put their life savings on the line in hopes of success. When they do succeed, they join the ranks of the rich, and become objects of envy. When they fail, they either rejoin the ranks of ordinary workers or try to finance another venture. The “Invisible Hand” metaphor is Adam Smith's way of describing how entrepreneurs' quest for wealth is likeliest to end well if they are good at discerning what customers will want before the customers themselves are offered new choices. There is no predetermination in the concept.
California dictates all sorts of things about how teachers can do their jobs, and the No Child Left Behind program has layered a whole new set of requirements on top of that. It's all insane, yet it could all be quickly straightened out if we just started measuring results.I find opposition to doing so (and it comes loudest from teachers' unions) simply inexcusable.
Well, Dr J. I certainly cannot speak knowledgeably about California, but here in New Jersey, and also in New York State, we have this thing called “standardized testing.” Teachers spend the entire year teaching the material that's on the tests, so that the students can pass the tests, so the school can report those results to the state and the federal government and thus get the funding that will be denied them if the test results do not reach a certain percentile. This process is what is known as “measuring results.” So you see, we do have “measuring results.” The results are scores on standardized tests. I realize it doesn't tell you much about what or whether students have learned, but it IS a measurement of results.
How does the “invisible hand” know in advance that the decisions will be successful?
It's a good question that I'd approach from the demand side. In a well-running market, demand creates supply, as if by magic. If you go to the store hoping to buy rice, they have it. Need an affordable place to live? You won't find your dream castle for nothing, but you'll have a range of choices at a range of price points. Want illegal drugs? Visit the right corner of town, and it turns out a bunch of criminals have gone to extraordinary trouble to make some available.
This all sounds simple, but gathering all the data on who wants what and how much they're willing to pay and who can be engaged to produce it and when it will appear and how much it will cost is extremely complex. When a central agency tries to take it all on, they never do it well. You get bread shortages in stores. You get rent control giving existing tenants a sweet deal, while people who need a place to live can't find one at any price. Some things get priced too cheap and they run out. Other things are priced too high, nobody buys them, and they go to waste.
The invisible hand doesn't “know” anything in advance; its advantage over the central agency is flexibility. When people start to need things (or when someone anticipates people will start to need things), suppliers can react quickly to provide them. When there's a bumper crop of avocados, or an unusually lean harvest, prices adjust quickly to throttle demand so it matches supply. When someone starts a business with a good idea that meets people's needs well, they get rewarded. When someone starts one with a bad idea that no one wants, they quickly are forced to close their doors, and the people and capital freed to find something useful to do.
Given a finite number of people and money to put to work, where to allocate resources for the greatest overall benefit is a daunting, almost hopeless problem. Until you distribute the problem to millions of people and let each of them solve a little piece of it. That's the secret of the invisible hand.
I don't have to prove anything, other's have done it and basically NAFTA has been a disaster for Mexico… If you have any doubt…
And that says it all…
You're asking me to prove a negative, it can't be done… But I am eagerly waiting for you to apply the same standards to Corporate America.
Generally speaking when it comes to social policy in the US proximity to the Canadian Border can be used determine it's quality. The closer a state is to the Canadian border, the likelier it's school system, health care system and welfare system is to be good to high quality, and the reverse is also true, the further one is from the Canadian border, the more screwed up a state will be.
So you see, we do have “measuring results.” The results are scores on standardized tests.
Right…but how about measuring the teachers' and the administrators' results?
I think sandymchoots did a good job of describing what is meant by the “invisible hand”. I did not mean to say that one can decide to start a successful business (as opposed to deciding to start an unsuccessful one). I mean to say that one can decide to start a business that is run well and has a good business plan, which would lead it to be successful. Therefore, the entrepreneur's skill at providing a good or service that people want (and therefore, by definition, improves their lives, at least as far as the customers are concerned) is rewarded, regardless of how many hours he or she works.
As for teacher's unions. I think there is a difference between supporting teachers and supporting teachers' unions. Teachers' unions don't represent all teachers. They only represent the ones that are employed. If the teachers' union had the interest of all teachers and students in mind, what would they have against some of them being replaced by better ones?
I think teachers are great, and I understand why most of them support their union, but that doesn't mean I have to think teachers' unions are great.
Don, what that article says is “it will be hard to ignore how much in Mexico has not changed under Nafta.” That suggests unfulfilled hopes, but it isn't evidence of a disaster. Again, you have to compare what happened with NAFTA to what speculations about would realistically have happened without it, not best-case scenarios people hoped for or even that politicians promised.
You're asking me to prove a negative, it can't be done…
Huh? That was the negative you asked me to agree with. You claimed to have proved it with some argument about right-to-work, remember? “Maybe we can stop arguing that Unionization is a major factor in poorly run schools,” you said. Now you're saying it can't be proved at all?
Relax, it's quite provable, you just have to show some other problem matters more. We only have 50 states, and hey, I'll settle for the one I linked the article about.
When a country exports 2.4 million people in a ten year period, and has as it's major source of hard currency, the remittance of those people, you have a disaster on you hands…
How many would have emigrated without NAFTA?
You claimed that Unionization leads to bad school systems, I pointed out that most of the states with weak or no unions have worse school systems than the states with strong unions. Looking at the educational outcomes, one would be tempted to say that school systems with strong unions produce better results than those with weak unions.
When a right-to-work state has a better educational system than Massachusetts, Minnesota or Vermont, you may have an argument against Teacher's Unions, but so far you don't.
A lot less… Subsidized US corn would not have destroyed the local farming industry in a mere ten years.
You claimed that Unionization leads to bad school systems, I pointed out that most of the states with weak or no unions have worse school systems than the states with strong unions.
And you might well come to that conclusion if you're not going to investigate any more deeply than that.
The fact remains California schools are struggling in no small part because of our teachers' unions. As in New York, it's virtually impossible to get rid of poor teachers, yet teacher quality is the number one determinant of how well students do.
But hey, feel free to stick with your latitude theory, I'm sure it will lead to great ideas for improving our schools. Starting, presumably, with relocating them north.
A lot less…
How do you know?
That IS measuring the teachers' and the administrators' results, lol. The teachers whose students all pass the test get to keep their jobs. The teachers whose students don't do so well on the tests are laid off or fired. It works very well. No one ever needs to ask *why* the students didn't do so well, or whether firing the teacher will address the answer to that “why.”
Kathy, that's rather different from what the New Yorker claims. According to them, teachers are virtually never fired.
Dr J, you absolutely astound me. You can look around you at the actual world that exists outside your door and conclude that the “invisible hand” of the market is working this way?
All I can say, for now (because I'm sort of truly tongue-tied at the moment) is that when I was being evicted and had no money to move anywhere, and couldn't find any job at all, even one that paid crap, the “invisible hand” of the market did not “sense my need” — even though, I hasten to add, I was hardly the only one to whom these things were happening. I lived in fear (terror, really) of being homeless, of having to sleep on a bench or live in a homeless shelter, until I decided to try applying for Social Security Disability (because my disability, clinical depression, is a significant part of what makes it so difficult for me to hold a job), and was blessedly fortunate enough to be approved without having to appeal. Now I am getting a monthly check, and will continue to get a monthly check, indefinitely — not huge but enough to pay my rent and have a few hundred left over for essential or important expenses — and I will (hopefully) never have to worry about being evicted again. In addition, in two years I will qualify for Medicare, and when I reach retirement age, in three years, my SSD check will automatically convert to retirement benefits. The amount will not change (except for cost-of-living adjustments), but I will not have to re-apply.
It wasn't the “invisible hand” of the market that did this for me, Dr J. It was the government. And I thank God that the country I live in still has some semblance of an understanding that government is good, not bad, and that it's there (or should be) to help people when the “invisible hand” of the free market lets them down.
Thank *God* for government. All praise for government. I celebrate government. I cannot praise government highly enough.
Okay, maybe I was wrong about that. I know that many teachers feel a lot of pressure to get their kids' test scores up, so presumably there are consequences when that doesn't happen, but perhaps the consequences have more to do with promotions or whether the teacher gets the supplies she needs, or whatever.
There is still the broader question of whether standardized test scores are the best way to measure teacher performance or educational success in general, *if one defines educational success as having something to do with learning.* If it's just about looking good and pushing the kids through, then never mind.
You didn't comprehend a single word I wrote to you, did you? The “Invisible Hand” metaphor has nothing at all to do with enabling people to live rent-free. I foolishly took your request for help in understanding the concept as a sincere one, but you don't seem interested at all in reconsidering your own views.
It would save you a lot of back-and-forth with people like Dr. J and me if you would stop thanking “government” for paying your rent and thank “taxpayers” instead. If you're old enough to be nearing Medicare eligibility, you're too old to believe in the Tooth Fairy.
And before you start tarring me with the brush of “angry mob member,” let me point out that nothing I've written says that you should or shouldn't get your rent paid by others. All I'm asking is that you stop pretending that it's not being paid for by your fellow citizens, and start comprehending the economic system that generates the income that your deity, the government, taxes in response to your prayers.
Not my theory, Senator Patrick Moynahan's theory.
California has Unions, and Schools that are not performing up to standards, ergo it's the fault of the Unions.
Mississippi has no Unions, and Schools that are not even close to performing up to standards, ergo it's the fault of the ???????.
Since there are no Unions to blame in Mississippi, Alabama, Louisiana, Georgia, South Carolina, Florida could we actually proceed to determine what is their cause of failure? Funding? Demographics? Bad Management? Crappy Curriculum? Poorly Trained Teachers?
… and thank “taxpayers” instead
One of which was me for many years. And while I was paying those taxes I was paying into the Social Security system that now, when I need it, is helping me. That's government, and it's a good thing.
if you would stop thanking “government” for paying your rent and thank “taxpayers” instead.
Yes, Sandy, that is how government of the people, by the people, and for the people works. The government IS the people. We choose the people who make the government so that the government can carry out what *we* decide the priorities should be. Government is not there to make a profit. Government is there to serve the people that created it and maintain it. Government is there to provide the infrastructure for life, liberty, and the pursuit of happiness, to promote the general welfare of the people and to implement policy in service of the public good. Taxes are how we pay for that. It's a cliche by now, but apparently people like you still need to be asked: Are you fond of your local police, fire, and garbage pick-up services? Are there public schools where you live?
I'm truly sorry that you are so stung by my unreasonable and stubborn failure to “reconsider my own views” upon your explanation of the “invisible hand” of the market. In fact, I already was familiar with the concept; I simply don't see that it works the way you and others like Dr J are convinced that it works. Is there some reason why you feel that it is more incumbent upon me to “reconsider” my views than it is incumbent upon you to reconsider yours? They are no more or less valid than mine are.
You can look around you at the actual world that exists outside your door and conclude that the “invisible hand” of the market is working this way?
You asked for an explanation of the model, Kathy, and that's how the model works. How reality works is liberals see a market in action, declare the proceedings insufficiently fair, and insist the government start steering it. Politicians pass laws on the basis of what will make the best sound bites and which lobbyists are crossing their palms, leaving the system more wasteful and less fair than when they started. “Ha, see?” the liberals crow, “I told you free markets didn't work.”
What markets don't do, what no one ever claimed they do, and where I support government intervention, is charitable redistribution of the sort you describe in your story.
You will also find your TV set won't fix your breakfast. That's not what it's for, and criticism that it fails to is misplaced.
“Thank *God* for government. All praise for government. I celebrate government. I cannot praise government highly enough.”
“Government is there to provide the infrastructure for life, liberty, and the pursuit of happiness, to promote the general welfare of the people and to implement policy in service of the public good”
[head in hands] To say the least, along with your refusal to face some realities, this view of yours is radical as well as post-modern.
All that's missing is your insisting on a new Preamble to the Constitution with lots of flowing rhetoric to further “justify” what you are writing here that the (naturally, federal) government “should” do.. Or you could be as extreme as the Nutty Law School Prof who claimed that the Preamble (which is not law in any way whatsoever), the Declaration of Independence, and “pursuit of happiness” should lead to a federal judiciary ruling finding that everyone in the USA has the right to a federally (i.e., taxpayer) guaranteed minimum income.
Of course, all of this is extremism divorced from reality, but in modern and especially post-modern times, it has had a few enamored of such things.