Let's Fix This Country

How to Increase Prospects for Low-Income Kids

The commentariat is already calling the president a lame duck, as if deciding we should just drift for the remaining 1,000 days left in his second term. But when Barack Obama stepped to the podium for his fifth State of the Union address, he showed firm intent to get things done and, as expected, expressed his desire for fixing two key failings of America’s approach to education that sap the nation’s strength: lack of early education of pre-kindergarten (pre-K) kids and the poor job colleges do in finding gifted kids among the lower rungs of our society.

Pre-K

“Research shows that one of the best investments we can make in a child’s life is high-quality early education”, he said, asking Congress to “get this done”. What gave the pre-K movement a boost was the release last fall of the international PISA scores. Every three years the Program for International Assessment tests 15-year-olds around the world in reading, math and science. The U.S. results were dismaying: 26th in math, 17th in reading, 21st in science.

Kids from affluent families score higher. The problem is with children of low income households who suffer from low exposure to language and learning from the moment they are ready to talk. Poorly educated parents pass along their own shortcomings. Early education — schooling for a couple of years before kindergarten — has become a hot topic as a hopeful remedy.

Recent research at Stanford found that, because parents in more affluent families talk to their children so much more, their children at 18 months identify simple words faster than toddlers from poor households. By six months later, they had learned 30% more words. By age 3, kids from better educated parents hear 30 million more words than their counterparts at low-income households.

The claim is that a lack of early learning and exposure to reading produce a continuing setback to a child’s ability to learn in school thereafter which is typically never overcome throughout the education years, and that leads to poorer jobs or possibly unemployment. Society pays the price: higher social welfare costs, heightened crime rates, and lower tax revenue.

Those are big claims and critics point to a study by the Department of Health and Human Services that looks at nearly 50 years of Head Start, the program that attempts to broaden experience for disadvantaged kids. It concluded that “pre-school has no lasting impact on children’s future educational success”. The gains “disappeared by the third grade”.

Other studies say maybe so, but inner-city kids from low-income homes who attend pre-school exhibit skills such as self-control, planning, and cooperation, go further in school and are less likely to become pregnant as teens, and less likely and slip into crime.

If this seems like some squishy liberal concept, talk to the military, which is concerned for filling the ranks with sufficiently educated troops. Two former Chairmen of the Joint Chiefs, Generals Henry Shelton and John Shalikashvili wrote,

“it’s clear to us that our military readiness could be put in jeopardy given the fact that nearly 75% of young Americans are unable to serve in uniform… we believe that investing in our children through early education is not a Republican issue or Democratic issue. It’s a plain common sense issue critical to our National Security”.

There are a couple of long-term studies, one from Ypsilanti, Michigan, that began in the ’60s and another a decade later at Chapel Hill, North Carolina, where test groups of low-income kids were given free pre-school and were followed thereafter. Differences in how their lives turned out compared to others’ in their social groups were marked: they were more likely to have graduated from high school, to be employed, to own their homes; less likely to need social services, or to have been arrested.

Such attention to tiny kids age 3 and 4 doesn’t come cheap, but the consequences of neglect are more costly by a wide margin. So says James Heckman, a Nobel economist from the University of Chicago and fervid advocate of pre-K who lectures around the country. In 2006 he and associates did a cost benefit analysis of those in the Ypsilanti study vs. their peers — how much did society benefit, for example, in taxes on higher earnings; how much did society save in reduced costs such as safety net welfare and, for some, incarceration. Heckman calculated that the program cost $17,759 per child per year in 2006 dollars (the date of his study) but “each dollar spent at age 4 is worth between $60 and $300 by age 65”.

It is the states that are embracing early education the most. Fifteen governors, more of them Republican than Democrat, have instituted pre-K programs, with spending on early education running $400 million higher than before the 2008 economic collapse. Oklahoma is acknowledged to lead the pack with a rigorous program. Sessions have only 10 children per teacher and teachers required to have college degrees and training in early-childhood education. Oklahoma’s position is that “skimping on quality to save money could undermine the entire effort.”

Meanwhile, the federal government ruminates. The President has already urged national pre-K in last year’s state of the union, and Congress…well, we all know about Congress. House Speaker John Boehner is on record saying that the federal government getting involved in early childhood education is a “good way to screw it up”.

Pre-U


At the other end of the education spectrum are those bright teens in the pre-University years who come from low-income homes and have no idea that they could get a first-rate college education, especially at some of the best schools in the country — and fully paid for. In what can only be called a waste of human capital, only 44% of high school seniors from low-income families who score high on SAT tests enroll in a four-year college, according to a Century Foundation report. They tend to stay close to home and go to local community colleges, if at all.

Beginning in 2008, Ivy schools began blanket policies of sliding scale tuition discounts to families with incomes below a certain threshold. Harvard led off, charging 10% or less of a family’s income to households with $180,000 or less in income per year, for example. Others followed. At Yale, the bottom of the sliding scale is that families who earn less than $60,000 a year pay nothing. The premier private universities, with their loyal and successful alumni, have built up enormous endowment funds to pay for this largesse. Harvard sits atop a fund worth $30 billion.

But youths and their parents in the lower socio-economic strata have been proven in the few years since to be largely unaware of such offerings. The benefits have gone predominately to middle class families.
Chart shows percentage of students at each school who received Pell grants, the commonly used indicator that a student is likely from a lower income background.
A chart in Yale’s alumni magazine was honest enough to fess up to that school’s poor showing alongside other highly selective schools, but it has company. An article titled “Wanted: smart students from poor families” admits that 69% of the class of 2017 come from families that earn over $120,000 yearly. That squares with a Georgetown University study of the country’s 193 most selective colleges. Only 15% of students entering the 2010 freshman class were from the bottom half of the income spectrum, while 67% came from the top quarter.

In fairness, private colleges without government support must admit a certain number of “legacy” students — kids whose parents went to the school — in order to attract the contributions that make their subsidy programs possible. But the Yale article comments that economically the student body “looks like America turned upside down”.

Public colleges across the land also have subsidy programs. But to keep them alive they have had to ask wealthy and middle-income families of students to pay higher tuition because of straitened state budgets and legislators who are pulling the oars in the opposite direction. The Center on Budget and Policy Priorities reports that all but two states spend less per student — a quarter less nationally — than before the 2008 downturn.

Obama convened over 100 college presidents from all over the country in mid-January — a summit to which only those who had pledged action to help low-income students gain access to their colleges were invited. It is Obama’s intent to do what he can, absent a willing Congress, to improve chances of upward mobility for the lowest rungs of the society in a country where the rate of mobility has not declined, says a new report by Harvard’s Raj Chetty, but has long been stagnant and is now lower than that of other countries.

Colleges have largely taken a field of dreams approach; they offered the opportunity but the students did not come. The problem is a lack of awareness. Kids and their parents in pockets of Appalachia or Louisiana bayou country or small towns in Montana assume that the top schools are closed to them. The answer lies in sending information packets to high school teachers around the country — “We are looking for a few good students” — and in enlisting alumni living across the map to canvass schools in their area.

But once those bright and overlooked candidates from the bottom economic tiers are found, admissions offices will need to change their practices if the kids are to get a fair shake. Wealthier applicants effectively get preferential consideration, however unintentional, says Anthony Marx, who pioneered outreach to low-income students while revolutionizing Amherst’s admission policy when its president. He points out that well-off parents can afford SAT coaching, and to pay for taking the test more than once, and to pay for overseas travel, and their children are free to devote idle time to community service projects — all enriching their résumés and earning more points with admissions administrators. The playing field is not even. “Colleges don’t recognize, in the same way, if you work at the neighborhood 7-Eleven to support your family”, says Marx, and those are the kids that the top schools should be looking at. That aforementioned Yale alumni magazine article? It was written by a recent Yale grad who had gone to prep school and was taken with the fact that his assigned roommate at college was an Idaho pig farmer.

Jan 30 2014 | Posted in Education | Read More »

The Surveillance State Is Here To Stay

“Everything has changed”, they said after the 9/11 attacks. And indeed everything did. Congress immediately discarded a number of civil liberties in the Patriot Act, renewed with only a couple of small changes ever since. Congress then tacked onto the National Defense Authorization Act a provision for indefinitely
retaining even Americans in military prisons without trial for as little as suspicion that they might be associated with a terrorist. And, as Edward Snowden revealed last June, the National Security Agency began years ago to spy on just about everyone.

But seven months after Snowden began the release of secret documents, the President, saying that a “fresh examination of our surveillance programs” is in order, outlined in mid-January the changes he hoped to make. There was a moment of surpassing irony when he said at the conclusion of his 5,500 word talk, “the reforms that I have announced will point us in a new direction” and “this debate will make us stronger”, considering that the only reason there is a debate, the only reason for that fresh examination, is Edward Snowden, whom he would reward with prosecution under the Espionage Act were he to return.

Obama, of course, wants us to believe he had intended to make changes all the while, saying, “I indicated in a speech at the National Defense University last May that we needed a more robust public discussion about the balance between security and liberty”, but along came Snowden just a month later with an “avalanche of unauthorized disclosures” to take ownership of that hypothetical debate. In fact, in that speech, which was largely about actions abroad against the Taliban and al Qaeda and the use of drones, he makes no mention of public debate or discussion. Even if he had, that would have been said four and a half years into his presidency, with his knowing all that while that NSA spying had gone far beyond anyone’s understanding, yet he had taken no steps toward reform.

won’t hang up the phone data

Most of the rest of Obama’s “changes” amount to gestures of greater transparency and “additional restrictions” on current practices. Save for an order to no longer spy on foreign heads of states, none of the surveillance programs have been ended.

The President will not halt the most controversial issue for the America public — the bulk capture and storage of years of everyone’s phone connections — the preposterous overreach by the NSA that it claims is authorized by Section 215 of the Patriot Act. See if you can find that authorization in that section which allows the FBI’s national security branch (not the NSA), to “make an application [to certain courts] for an order requiring the production of any tangible things (including books, records, papers, documents, and other items) for an investigation” of a United States person “to protect against international terrorism or clandestine intelligence activities”. Instead of what you would expect “business records” to refer to — a company’s financial and accounting data, purchasing records, contracts, personnel files, etc. — NSA (a) reached past all that to grab data that pertains to the phone companies’ customers, and (b) obtains that not for the specific investigation of an individual person as the statute prescribes, but the phone records of the entire nation.

Concerned that “government collection and storage of such bulk data…creates a potential for abuse”, the president adopted the recommendation of the panel he appointed to move the data to an entity separate from the NSA or to leave it with the phone companies.

the cheerleaders

But Congress has already been heard from. Immediately after the speech Dianne Feinstein (D-Ca), chair of the Senate Intelligence Committee, and Mike Rogers (R-Mi), chair of the House counterpart, raced to the Sunday talk shows — Rogers to two of them. The two unabashedly root for the NSA program. The adversarial role of their oversight committees is not at all in evidence. Both have shown themselves to be undisturbed by trampling the Fourth Amendment by their advocacy of total surveillance. Rogers immediately declared the President’s plan to move the phone data out of NSA as “unworkable” and Feinstein tells us “that’s a very difficult thing”.

Neither show any sign of understanding the technology. Both know nothing further than to think that if the data rested with the phone companies, the process of tracking phone calls across the several companies would slow to a crawl with precious time lost in the face of a terrorist threat. “The whole purpose of this program is to provide instantaneous information to be able to disrupt any plot that may be taking place,” Feinstein said on NBC’s “Meet the Press, fixated in the belief that only NSA’s consolidated data warehousing is capable of speed.

Indeed, in all this time since Snowden, neither the policymakers nor the punditry nor the mediocrities invited onto television news programs exhibit any technical savvy. For example, the folks who write editorials at The Wall Street Journal betray a complete misunderstanding. The day before the President’s speech they wrote:

“The truth is the NSA needs to organize this vast pool of information about phone calls for the database to be searchable and thus usable. Making individual requests one by one is too cumbersome in urgent cases and will inevitably result in the NSA missing important connections…Instead of a single repository queried by a few professionals subject to oversight, sensitive data would be spread over an expanding number of private companies with their own interests and security gaps.

Where to begin? The data is organized and is searchable. It is not just piled up like sawdust tailings at a lumber mill. The only way it can be searched is one-by-one (and the data was used for close to 300 searches last year). One must begin by accessing the single phone number of a suspect and trace outward from there. The edit writers seem to think that an algorithm can just be turned loose to identify who is a terrorist in a sea of nothing but phone numbers, timestamps and call durations. And about those “companies with their own interests and security gaps”. They are the phone companies which have always collected and stored the phone data, apparently without mishap, and without which the NSA would have nothing.

The episode reveals government and media personages only too ready to venture their opinions without thinking to seek out a computer systems geek to explore what other possibilities there might be. As a result, their perceptions have calcified and they all simply repeat what they’ve heard others say.

the fable

Worse than ignorance is propaganda. To persuade the American public that spying on them is a good thing, four principals have now put forward the same bit of mythology, that the 9/11 attacks could have been prevented had the phone metadata system been in place because we could have found that a single call to a safe house in Yemen was from a phone inside the United States. First came Feinstein, who told this story in a Wall Street Journal op-ed. Then followed NSA chief Gen. Keith Alexander, reciting it on “60 Minutes”‘s love letter to the agency. Just recently, Mike Rogers on CNN’s “State of the Union” interview show, and now even Obama advanced this canard in his reforms speech. We have already made a mockery in this article of the claim that FBI or CIA or NSA would have zeroed in on this one call, given the infamous failure of the intelligence agencies to coordinate with each other and “connect the dots” before 9/11. It was ultimately determined that the call was made by 9/11 hijacker Khalid al-Mihdhar. What Feinstein and the others should be telling us is that he was already known to the intelligence agencies as an al Qaeda operative, he was known even to have a visa to enter the U.S., but the CIA forgot to put him on a watch list.

Considering that the facts are out there, what does this say about the deliberate spreading of misinformation by government figures from the president on down to persuade the public to accept total surveillance?

That several of Obama’s proposed reforms need Congress to amend laws, it is clear that this Congress will not oblige, beginning with the padlocked minds that sit atop the two intelligence committees. That is why we expect no substantive change and foresee a United States that has decided on permanent surveillance of all its people, leaving the Fourth Amendment as a quaint crocheted artifact to hang on the parlor wall.

it’s right there in front of you

Lost in all this ignorance is an “elegant” — to use the scientific and computer world’s appreciative term — solution that makes the problems go away and would be accepted by the public without reservation.

There is no need for everyone’s phone data to be captured and centralized by the government. It can be left at the phone companies. They would be asked to add another year or so to their data retention schedules and have already complained about this, but we’d only be asking them to get their patriot act together. And the government could compensate them (at far less cost than NSA’s redundant storing of the data).

A hint at how this would work could be before you right now. If you are a multitasking computer user, you might have several instances of your browser on your screen with each connected to a different source. That should tell you that even basic consumer computers have the ability to reach out into the world and make multiple connections.

NSA could certainly do the same, but in their case by creating software that connects to all the phone companies. When the need arises to investigate a person of interest, (and with authorization by the FISA court, its judges being on call the clock round), NSA could rapidly patch into the phone company links and — at electronic speeds — build the web of connections that we are told is so essential to protecting America from terrorists. The difference is that NSA taps into the public’s phone records only for the data emanating outward from that single target; they no longer would need possession of a massive database of billions of our phone calls.

Those thinking about this might recognize a problem: When that software encounters a target’s call to a number owned by another phone company, what then? The answer is that the software would send that request back to the NSA hub and the hub would send it on to that second phone company. The software would handle the rapid fire interconnects of calls that bridge phone companies in order to build the web of interconnects at speeds so near to NSA’s on its in house facility as not to matter.

This method was in fact proposed to NSA by its own technicians in the late 90s, as we covered in this story. It tells of that same sort of software created by a unit of NSA at a reported cost of $3 million, but spurned by an NSA that instead chose to let $280 million in contracts to big corporations who proceeded to go far over budget and sent a bill to taxpayers of over $1 billion.

Neither the heads of the congressional intelligence committees nor the president have shown any awareness whatever of the history of the road not taken that beckons now, even though it was covered recently in a lengthy Wall Street Journal piece.

pointless

Truth is, the U.S. and NSA should secretly scrap the whole program.

First, the NSA has not come up with any proof of disrupting a terrorist plot that owed to the phone metadata. When Gen. Alexander first testified before the Select Intelligence Committee, he said more than 50 terrorist attacks had been disrupted by the NSA program. He pledged to come up with “a list” in a matter of days that would support his claim. He never did. Weeks later, Sen. Patrick Leahy (D-Vt), chairman of the Senate Judiciary Committee, was handed such a list — classified of course — at a hearing last August 1. He said the list did not show that “dozens or even several terrorist plots” had been thwarted.

The panel that made recommendations to Obama found no real evidence that the phone data program had stopped a terrorist attack. Yet officials continue to speak vaguely of plots subverted by the the phone data program, offering no examples. Rogers, in that CNN interview, could not come up with any instances and resorted to saying “it stopped hundreds of thousands of FBI man-hours chasing down radicals”.

Second, after all that has come out about NSA spying on the citizenry, what terrorist in his right mind would use anything but a throw-away prepaid cell to plot the next attack. The needle has left the haystack.

That’s the casualty of NSA’s ill-considered excesses and of Snowden’s revealing them. Had NSA adopted the sensibly restrained and technologically superior methods we just reported, the spying on Americans’ phone use would not have been an issue.

Jan 29 2014 | Posted in Secrecy & Surveillance | Read More »

Supreme Court Readies Obama Smackdown

It’s clear from their questioning that the justices have already decided: Despite a practice used hundreds of times beginning with George Washington, a president’s right to make appointments during a Senate recess should be close to zero.

It was the first time the Court has considered the recess appointment clause of the Constitution and the debate largely turned on the difficulty for Congress to assemble when the document was written versus the ease of convening now.

“Congress met and they met continuously”, commented Justice Ginsburg. “And then they went on horseback back home and they were away for 6 months, even 9 months. Today, there’s nothing like that”. Congress can make it back to Washington in a day.

That observation pertains to why the Constitution gave the president “the Power to fill up up all Vacancies that may happen during the Recess of the Senate” — the key words of the clause in question. Was this literally referring only to vacancies that came about while the Senate was in recess, in the knowledge that recesses would be long? Or does “may happen” refer to all vacancies that may happen, including those accumulated from before a Senate recess? And what is meant by “recess”?

The
arguments at times were in the category of “how many angels can dance on the head of a pin”. “Every justice today was an originalist”, as Marcia Coyle of the National Law Journal put it. The justices parsed the simple clause and the meaning of words such as “happen”, and gave us a good illustration of how our vaunted Constitution often clashes with our vastly different times and leaves us twisted in knots. The ability of the government to function comes last.

cannery row

The case — National Labor Relations Board v. Noel Canning — arose when in January of 2012 an exasperated President Obama, while the Senate was in recess, filled three seats on the Board (the NLRB) that had been kept empty for over a year by Republican filibuster. Except the Senate claimed it was not in recess. To block the president from making those appointments, the Senate — with all its other members scattered to the winds — left one member behind to gavel into being sham sessions every three days. These “pro forma” sessions, lasting only seconds (29 seconds on January 6, 2012, for example), were a pretense to claim that the Senate was in continuous session, even when its chambers sat empty for over a month.

When Noel Canning’s union filed a complaint with the NLRB over a dispute with the company and the NLRB ruled in the union’s favor, the U.S. Chamber of Commerce, which calls itself the world’s largest business organization (and has nothing to do with the federal government) intervened to offer Noel Canning its lawyers. A critic of the NLRB that it views as pro-union, it had the Washington state company appeal to the right-leaning court in Washington DC, arguing that the NLRB did not have a quorum owing to what it claimed were illegitimate recess appointments.

The DC appeals court had ruled that “Recess” in the appointments clause refers only to the break between annual sessions of Congress, not to the multiple breaks our industrious Congress takes throughout the year. In this reasoning last summer’s break from the beginning of August to mid-September was not a recess. Justice Breyer offered that around 1970 was “about the first time that you have … an intra-session recess that’s longer than an inter-session [i.e., the Constitution’s annual] recess. And so now if we look from 1970 on, that’s fairly common”.

Yet, rather than confronting why these long absences are not considered recesses, Justice Kennedy was lost in the weeds of whether every pause would have to be considered a recess: “a lunch break, a one-day break … a 3-day break, a 1-week break, a 1-month break. How do you resolve that problem for us?”, he directed at Donald Verrilli, the Solicitor General arguing for the government. Not one justice ever proposed what we — out here where reality is found — would have proposed: that when everyone has left town, that’s a recess.

And as for the sham sessions, nowhere in the hearing did any of the justices challenge whether “pro forma” sessions can be considered as the Senate truly being in session when the other 99 members have flown. Instead there was fussing over whether business could be conducted during such sessions. What if that solitary sole with the gavel ”got up and asked for unanimous consent to name a post office”, asked Justice Kagan. As he or she would constitute unanimity, “the post office is named”, she said. The justices batting this around seem to be unaware of the Constitution’s rule that in the House or the Senate a majority of members is needed to “constitute a Quorum to do Business”.

It certainly seemed that Justice Kagan accepted the Senate’s premise of the validity of pro forma sessions when she said to Verrilli, “if you are going to rely on history” that allowed vacancies occurring when the Senate is in session to pertain to the recess appointments clause, and if intra-session breaks are considered as recesses, “then it seems to me you also have to look to history and the development of an equilibrium with respect to Congress’s definition of its own power to determine whether they are in recess or not”. Verrilli shot back:

“There isn’t a long history reflecting equilibrium with respect to the use of pro forma sessions in order to restrict the President’s ability to use the recess appointment power. There really is no history before 2007 of this daisy chaining of one pro forma session after another”.

Why even bother with pro forma, Kagan might as well have said when she did say, “There’s no such thing truly as congressional absence anymore”, referring to the modern day ease with which the Senate can return to Washington as if unaware that the opposite is true: the Senate is habitually absent, off on long breaks.

not activist?

Given the history, it’s a wholesale transformation to say that “may happen” henceforward refers only to vacancies arising during a recess; that the Senate can easily be made available to consider an appointment; and that the recess appointments clause is therefore no longer needed by the president.

Kagan had said “the question of how to define a recess really does belong to the Senate”. Verrilli nailed what is really happening:

“I think the problem with looking at it that way, Justice Kagan, is that that’s the end of the recess appointment power. You write it out of the Constitution, if you look at it that way, because all the Senate needs to do is stay in pro forma session”.

Verrilli’s and the Executive’s view is that it is “a matter of raw power that the Senate has the ability to sit on nominations for months and years at a time, but that is 100 miles from what the Framers would have expected”. He cited Hamilton’s belief that doing so “would be a power that was rarely exercised”. Yet in our time this has not been the case, as Kagan acknowledged: “Would you agree that Presidents of both parties essentially have used this clause as a way to deal, not with congressional absence, but with congressional intransigence, with a Congress that simply does not want to approve appointments that the President thinks ought to be approved?” Verrilli contended that “the Executive needed to be fortified against … encroachment by the legislature”, which is why the Constitution gives the appointment power to the president, not the Congress, although “with the Advice and Consent of the Senate”. Chief Justice Roberts immediately rejoinded with “Well, they have an absolute right not to confirm nominees that the President submits”.

Noel (not a typo) Francisco, whose firm represents the U.S. Chamber of Commerce and who argued for Noel Canning, even went so far as to say, “Back at the time of the founding, the senators wanted to trigger that power” — the president’s power of appointment — as if the Senate wrote the Constitution and bestowed this magnanimous gift on the presidency and did so because they didn’t want to be called back from home states by a president who had been left with no power to act.

None of this tilt toward Senate power vs. the Executive troubled the justices; no one disagreed was these assertions, which shows what’s to come. And nowhere throughout the proceedings was it ever suggested by the justices that the president should have the power to act when the Senate — potentially for years during a president’s tenure — fail to perform its constitutionally stipulated roll of offering that “Advice and Consent” rather than entirely blocking consideration of a candidate by filibuster. Nowhere was the Senate chastised in the present case for its intractably blocking the NLRB appointments that caused the case before them.

Ultimately, the only thread left by which the recess appointment clause hangs — given the nature of the justices’ challenges — is whether what was referred to as the “equilibrium” of the long and relatively contention-free history of its use is viewed as the precedent that it ought to be. In recent time President Clinton made 139 such appointments, for example. George W. Bush made 171. Far from abusing the power, Barack Obama has made only 32.

In the wake of that history, how odd if the justices uniquely deprive Obama of the right? And how will they justify writing the recess appointments clause out of the Constitution?

Jan 15 2014 | Posted in Law | Read More »

What’s Come Over America?

It would seem that Americans have suddenly adopted a stern view of our own people as irresponsible and indolent and that we’ve decided to exact harsh measures, all at once, that are causing widespread economic hardship.

Congress stripped food stamps from the farm bill and the House wants to cutUpdate: The 5-year farm bill, just signed into law, trimmed the $40 billion proposed food stamp cutback to $8.6 billion
    
back the program by $40 billion across 10 years, estimated to bump 3.8 million families off the rolls.

House Republicans unanimously rejected an increase in the minimum wage
last March leaving it over 30% below what it was in 1968. Pressure mounts to raise the hourly rate from $7.25 to $10.10, but the House seems obstinate, which will strand workers at the poverty level.

In their backlash against Obamacare, governors and legislatures in 24 states have chosen to spite themselves by refusing to expand Medicaid to over 4.9 million more of their people even though the federal government will pay 100% of the tab for the first two years and 90% thereafter (see map later).

Businesses are reducing workers to under 30 hours a week and hiring more part-timers so as to avoid the Affordable Care Act mandate that they provide health insurance for anyone working 30 or more hours.

Companies are converting employees to independent contractors for that same reason as well as to avoid paying for half of Social Security and Medicare and for other benefits mandated by law.

Sequestration has cut back government spending on social programs.

More states are considering or passing right to work laws that hurt or destroy the unions that give employees some say in their wages and benefits.

College students and recent graduates who want a job with desirable firms must first work for nothing as interns while somehow struggling with the heavy debt of student loans.

And on top of all that, Congress went home for Christmas recess having passed a budget that left out the renewal of long-term employment insurance for some 1.3 million now, and 4.9 million in total expected in 2014, affecting some 14 million when their families are counted.

they need not apply

Insidious practices have been at work to cause the serious problem of the long-term unemployed, defined as those unable to find work for 27 weeks or more. The economic collapse of five years ago has left behind a huge number still not employed as those weeks accumulate, but companies have not taken that into consideration. They shrink from hiring the long-terms because they have not found a job, thinking something must be amiss with their skills or their résumés, thus causing the problem to feed on itself. They prefer to hire someone who already has a job, which helps not at all. President Obama said it best in a December speech: “…life is a Catch-22. Companies won’t give their résumé an honest look because they’ve been laid off so long — but they’ve been laid off so long because companies won’t give their résumé an honest look”.

Companies have taken to checking credit reports of job candidates — creating double jeopardy, as if a poor score reflects on a person’s conscientiousness, when it is the long term of unemployment that has caused the poor credit record.

stopgapThe Emergency Unemployment Compensation (EUC) program was enacted during the Bush administration in 2008 to help unemployed workers beyond the 26 weeks of support that states typically provide. Given the severity of the economic collapse, the EUC tacked on 73 weeks to extend the term to 99 weeks overall. Failure to renew means that benefits revert to the state cutoffs.

As a stopgap, a bill before Congress would extend benefits for three months until a longer-lived solution can be developed, and the Senate overcame a Republican filibuster, 60 to 37, with 6 of the opposition defecting so that the bill can go forward for a regular vote.

Republicans insist that the $6.4 billion cost of the extension — hard to notice in a $3.8 trillion budget — be paid for by spending cuts elsewhere. Speaking in the Senate, an angry Jeff Sessions of Alabama said, “this bill borrows every penny of it. Just a total violation of promised fiscal responsibility. It just is”.

That fiscal responsibility didn’t seem to matter earlier. Secretary of Labor Thomas Perez said on the PBS NewsHour, “When President Bush signed five extensions there were no strings attached …Historically there’s been an understanding that we call it emergency unemployment compensation for a reason, because people are in a state of emergency”. Majority Leader Harry Reid said on the Senate floor, “We have never had so many unemployed for such a long period of time. The long-term unemployed rate is twice as high as it was any other time we’ve allowed emergency benefits to end”.


The map shows in gray the states that have refused government funds to expand Medicaid and the number of people in each who could have been given medical care.
House Speaker John Boehner says that “another extension of temporary emergency unemployment benefits should not only be paid for but include something to help put people back to work. To date the president has offered no such plan”. He has a point. The White House could see expiration of EUC coming but put forth no broader plan to go with an extension, such as skills training, or relocation assistance to help families move to where jobs are more plentiful.

disservice

Others are opposed to an extension on any terms. Senator Rand Paul of Kentucky on Fox News said that the extension does “a disservice to these workers. When you allow people to be on unemployment insurance for 99 weeks, you’re causing them to become part of this perpetual unemployed group in our economy”.

This is the view that says the long-term unemployed are not looking for work hard enough, that the insurance amounts to the government “paying people to stay unemployed”, that when government cuts off benefits, the unemployed will search harder. The Wall Street Journal goes as far as to title an editorial “How to Keep Workers Unemployed”.

There’s some truth to that, but 7% unemployed means there are still three unemployed for every job opening, per Gene Sperling, the president’s economic adviser. When Walmart opened in D.C., there were 23,000 applications for 600 jobs. The mere 2.6% of applicants who will be accepted makes getting a job at Walmart harder than getting into Harvard, which accepts 6.1% of applicants.

Another belief is that the long-term employed have been turning away job offers that do not pay enough, holding out for something better. But even the conservative Weekly Standard says, “…it is quite hard to imagine that a significant number of workers who have been unemployed for 27 weeks or longer are engaged in a halfhearted job search because they don’t want to lose the leisure time their $300-a-week check allows” — the average that recipients get. They are not teenagers, or the extreme cases that Fox News searches out, such as the ”surfer dude” they found in California idling on $200 a week. Nearly two-thirds of the long-term unemployed are between the ages of 26 and 55, a third with children to feed and clothe.

Douglas Holtz-Eakin, economic adviser to George W. Bush, now president of American Action Forum, a conservative think tank, thinks the “best solution would be better strategies for more rapid economic growth…Patching things after the fact, which is really all unemployment insurance does, really doesn’t help”. It helps today’s unemployed, which long-term planning does not. It is the familiar Republican theme: jobs and growth and lofty rhetoric about “increasing economic mobility to further the conservative vision of a fluid, dynamic society, characterized by energy, filled with citizens working to realize their ambitions”.

Well, yes, but it must be said that not one Republican in the House or Senate voted for the 2009 stimulus and its $150 billion infrastructure package and Republicans have blocked every one of Obama’s jobs initiatives since. The president wants an infrastructure bank to repair the nation’s dilapidated roads and bridges. John Boehner responds to that with his familiar theme: “It’s easy to go out there and be Santa Claus and talk about all the things you want to give away but at some point somebody’s got to pay the bill”. It would make for “the best jobs program in America”, says Ed Rendell, who was Pennsylvania’s governor in 2009, but funding requires an increase in the gas tax that has always been how we paid for roads, and which hasn’t been raised since 1993. But that’s a tax increase, and a tax increase won’t get anywhere in Boehner’s House. Back to gridlock and empty talk of jobs and growth.

wage freeze

The companion article, “What’s Not To Like?”, on this page lists the arguments why the minimum wage should not budge or the law even abolished — arguments that recur every time the subject arises — and links to this earlier piece, “Let’s Permanently End Minimum Wage Stupidity”, from last July which argues the opposite.

food fight

Some 48 million Americans rely on food stamps to feed their families at a cost to the federal government that approaches $80 billion a year. SNAP (the Supplemental Nutrition Assistance Program) now assists 15.2% of Americans compared to 8.8% in 2007 as we reported here in October.

The elimination of strict income and asset tests, making it easier to qualify, is one cause for the steep rise. But heard more often is that same belief that we saw with unemployment insurance, that government programs pay people not to work. Stephen Fincher, a Republican from Tennessee, justified his vote to drop food stamps from the farm bill by quoting the Bible — “The one who is unwilling to work shall not eat”. He thinks it is “not for Washington to steal” from us and give to others. Democrats delight in pointing to the $3.5 million in ”stolen” farm subsidies his farm properties have collected from the government since 1999.

Republicans want to impose work requirements (with no accompanying job training aid) that would drop able-bodied, childless adults from the food stamp rolls if they do not find at least a part time job within 90 days — a perversity that turns on its head being on food stamps because of not being able to find a job in these times of high unemployment.

The steep rise in recipients sparks suspicion among Republicans, while Democrats turn a blind eye to any possibility that there may be cheating. At the family level, the stakes are low. The average subsidy is $134 a month, or $4.39 per person to buy a full day’s food. The average family runs out of the monthly refill on their electronic “EBT” card by day 17.

A New York Times piece this past December was titled “Food Stamp Fraud, Rare but Troubling” and pegged the amount at only 1%. What culprits there are do not cheat to put food on their family’s table; rather they are storefront operations that pay cash for those EBT cards, which is illegal.

But read a little further and what do we find?

“The amount of money lost to underground trafficking is estimated to be 1.3 percent annually. That is down from more than 4% in the 1990s when paper coupons had not yet been replaced by electronic benefit cards…Include erroneous payments to recipients because of errors on the part of the government or outright lying on applications, and the overall loss to the food stamp program is about 4.07 percent, according to the Department of Agriculture.

That’s not a lot? The Times then assures us that it is less than other government programs, that the Government Accountability Office has estimated that Medicare and Medicaid lose nearly 10% to fraud.

Are we meant to be reassured by these numbers of vanished taxpayer money?

Still, the combination of all these hard lines drawn against the American people in a still tough economy, and all at once, leaves us to wonder whether we have lost our moral bearings.

Jan 13 2014 | Posted in Economy | Read More »

NSA in Crosshairs of Court, Congress and Obama Panel

All three branches of the government have converged to say that the NSA has taken too many liberties with Americans’ civil liberties. The president’s panel served up 46 recommendations for how better to conduct intelligence gathering while protecting our privacy, there’s a bill in Congress that makes the same proposals, one federal judge said what NSA has been doing is “almost certainly unconstitutional”, another that total surveillance is lawful (both covered below). Against this backdrop, President Obama is proposing token changes that leave the most odious
practices in place: the sucking up of everyone’s phone data and continuance of the so-called “national security letters” that allow the FBI to raid our homes and offices without search warrants.

That is contrary to the 5-man panel appointed by the president in August in the wake of Edward Snowden’s explosive revelations, which said that the agency’s storing the records of the entire population’s phone calls should cease, that the data should be left with the phone companies or with an independent consortium. Obama practice is to ignore the advice of his own commissions (viz: Bowles-Simpson).

In a widely ridiculed hagiography of NSA on “60 Minutes” in mid-December, NSA chief Gen. Keith Alexander bridled at the notion of leaving the data with the phone companies, saying

“if you don’t have the data someplace you can’t search it… different phone companies have different sets of records. And these phone calls may go between different phone companies. If you only go to one company, you’ll see what that phone company has. But you may not see what the other phone company has … So by putting those together, we can see all of that essentially at one time.

The interviewer asked, “Before 9/11, did we have this capability?”. Alexander: “We did not”.

Not true, and by allowing such assertions to go unchallenged, “60 Minutes” and others serve to keep buried that we have long had technology that could have entirely avoided the gargantuan privacy violations that NSA has perpetrated in secret for years.

Update:  Dec.30: On almost the same day we published this article, the Wall Street Journal ran this lengthly piece focused on William Binney that gives the same account of how NSA should have gone about safeguarding the country as we make plain below and have been reporting over the last 18 months.
    
First, a bit of background to make the point that Snowden’s revelations about NSA spying on phone traffic had been heard before. There was the New York Times exposé in 2005 that laid bare the Bush administration’s warrantless spying, but that was on international traffic, or so it was said. Early in 2013, in this account of the Supreme Court blocking challenges to international snooping, we reported on whistleblowers who had for years been trying to alert us that the agency was not just monitoring international traffic, but had turned its surveillance eyes and ears on the U.S. and its citizens. It told of Mark Klein, a newly retired AT&T technician who in 2006 revealed that the NSA had its own room at AT&T in San Francisco that received a splitter feed of every fiber-optic signal routed through its facilities — not just AT&T’s, but virtually those of all other telecom and internet companies. Klein knows because it was he who hooked up the connections.

Following up on that lead, USA Today reported that same year that MCI, AT&T and Sprint had all been granting “access to their systems without warrants or court orders”.

But of greatest interest in light of the president’s panel is the trio of William Binney, Edward Loomis and J. Kirk Wiebe, who all left NSA in disgust in 2001 over the waste and fraud they had witnessed. They had developed a software system with an emphasis on privacy safeguards that could analyze data from multiple sources and find links and correlations. Their system was dubbed ThinThread. The NSA had seen fit to junk it.

Recommendation number 20 from the president’s panel’s report hits upon the same approach, proposing “Software that would allow…intelligence agencies more easily to conduct targeted information acquisition rather than bulk-data collection”.

That this trio’s unit at NSA had already developed just such software undercuts Alexander’s claim that “We did not” have such a capability before 2001 as well as his assertion that NSA needed to extract and store all the phone companies’ data in a single, sprawling repository because “if you don’t have the data someplace you can’t search it”.

The group had pressed NSA to use their far more economical technology but, as Binney has said, the trio’s $3 million undertaking could not compete with a mindset that thought that to develop a surveillance capability surely NSA should sign on with heavy hitters such as SIAC (Science Applications International Corporation), Boeing and Booz Allen Hamilton in contracts totaling $280 million. That project was called Trailblazer. It would go several hundreds of millions over budget costing over $1 billion, ran years behind schedule and was cancelled.

It was succeeded by Turbulence, an apt name for the whirlwind it has reaped if that project is what is responsible for today’s brute force collection of total phone data.

How did ThinThread work? In contrast, it was a software kernel capable of reaching into remote databases to find only what it was looking for and leaving all the rest in place, rather than what became NSA’s all you can eat approach. “Why bring back a lot of stuff that you may never use?”, Kirk Wiebe would say.

Wiebe, Binney and Loomis became whistleblowers, filing with the Department of Defense inspector general a complaint of fraudulent and wasteful use of taxpayer money and illegal spying that led to an investigation that ran until 2005 — the year of the Times story. Few ever saw the IG’s classified report; a public version was 90% redacted.

When the Baltimore Sun broke the story of the Trailblazer fiasco, George W. Bush in 2005 ordered the FBI to track down the leaker. Learning of the whistleblower complaint, the FBI in 2007 raided the homes of Binney and Wiebe — at gunpoint says Binney. Later, the FBI raided the home of Thomas Drake, who had been a senior NSA official also concerned for what seemed to him as illegal spying, and he was found to be the Sun reporter’s source. As we recounted in another piece a year and a half ago about Obama’s campaign against whistleblowers, Drake faced 35 years in prison. The case was so weak that the government settled for a face-saving misdemeanor charge but Drake had been fired, had lost his pension and was ruined financially by legal costs.

This, let us be reminded, was for daring to expose government incompetence and its huge waste of taxpayer money when an inexpensive alternative was already on the shelf.

Before Snowden appeared, we quoted Binney in the 2013 article warning us that the NSA had already captured between 15 and 20 trillion communications, and was preparing to collect on the order of 5,000 exabytes (an exabyte is a 10 with 17 zeroes after it) of data. We had said:

emboldened by the enormous gains in storage technology, the NSA decided not to bother with the filtering protocols that Binney himself had devised when at the agency, but rather to simply collect everything — every e-mail, every cell and landline phone call, every credit card billing record, Facebook post, Twitter tweet and Google search of everyone in the country. To warehouse all the collected data, NSA is building a massive complex in a remote town in Utah named Bluffdale.

What we wrote then about ThinThread, what the four NSA alumni were trying to tell us, and what we only knew then to describe as “data monitoring software” in our May 2012 article is proven to be all of a piece with the huge phone metadata dragnet that Snowden exposed. News organizations, though, do not seem to have connected these same dots. They are reporting the president’s panel recommendation of phone companies retaining their data or feeding them to an independent consortium as a new approach, with no realization of ThinThread.

Were overly extravagant claims made for ThinThread? What would it be required to do? Here are the job specs:

From a remote location anywhere — perhaps a little bunker at Bluffdale, Utah, as opposed to the giant data warehouse the NSA built there — the job, after obtaining a warrant from the always-on FISA court, is to reach into the dataset of the phone company where a target’s account resides to summon all the records of calls; then, using privacy encryption all the way, electronically connect to the datasets of the same and other phone companies holding the accounts — the phone numbers — that the target called; and then continue to hop back and forth to wherever the datasets lead in the phone records tracing the numbers each account in the growing web called in turn.

Can this be done? Just ask Palantir Technologies, a company co-founded by tech-adept Peter Thiel, who founded PayPal and thought its fraud detection capabilities could be leveraged to greater purpose.

A fascinating Bloomberg/BusinessWeek article from 2011 describes Palantir as a company whose “technology essentially solves the Sept. 11 intelligence problem”. Well beyond relatively homogeneous phone records — calling number, date and time, number called, duration — government agencies have myriad databases holding information “each with its own quirks: financial records, DNA samples, sound samples, video clips, maps, floor plans, human intelligence reports from all over the world”. Palantir mines these disparate datasets to find scraps of information associated with a target and assembles them into a coherent story brought together on a screen at a remote location. This is not just a concept in the birthing stages. Palantir by 2011 was a $250 million business with a customer list including the defense department, CIA, FBI, Army, Marines, Air Force, the police departments of New York and Los Angeles, and banks looking to detect fraud.

(After this article was first posted, we chanced on a quote by Thiel, now Palantir’s chairman, matching what we say here: “Technology means doing more with less. When it comes to national security this means increasing safely while reducing violations of civil liberty”. Thiel is an outspoken libertarian, so we don’t regard his words as the usual corporate PR blather.)

NSA could have taken this route. Instead, we have NSA’s crudely indiscriminate collection of total phone data and the uge sum this has cost taxpayers over the years. There never had to be the $1.5 billion complex the NSA just built at Bluffdale, Utah, to warehouse the data.

Will the administration catch on? Gen. Alexander in an interview two months ago he said it may be several years before the United States can develop technology that would make it unnecessary for the government to amass that data in its own storage sites, revealing that even now he is unaware that Palantir-style technology exists to reach into remote data sites and extract only relevant data. And after exhibiting his yawning gap in computer literacy that Obamacare exposed, will the president, too, be blind to recommendation 20?

Jan 9 2014 | Posted in Secrecy & Surveillance | Read More »

What’s Not to Like?

”America is going through one of its periodic fits of agony over the minimum wage” is how The Economist magazine put it. The restive workers staging demonstrations at Wal-Mart and fast food restaurants have again made a federal level wage increase a prime topic that reliably summons the arguments from economists and legislators that are always heard, with each side waving the newest study cherry-picked to support its case.

The public is more united. A November Gallup poll found that 79% were for raising the rate, true even among 58% of Republicans, who have traditionally been opposed to increases. The New Year brought an increase to 1.4 million people in thirteen states, nine of them because voters had taken charge, using ballot measures to enact laws that index their wage floor to the cost of living. The minimum is now higher in twenty states than the federal level of $7.25 an hour, as a recalcitrant Congress lags behind. A proposal to raise the rate to $10.10 an hour nationwide has a slim to none chance to pass in the House. In March, the House voted down a $10 an hour proposal with Speaker John Boehner proclaiming, “I know about this issue as much as anybody in this town. What happens when you take away the first couple of rungs on the economic ladder, you make it harder for people to get on the ladder. Our goal is to get people on the ladder.”

This is one of thread of the opponents’ argument. They aver that because 80% of those paid the minimum wage are not supporting a family, according to a report by American Action Forum, the minimum is a sort of dues one pays, a ticket of admission to “the wicked world of holding a job, and … a step to another, better job”, as the Weekly Standard considers it.

Stephen Moore, of the Wall Street Journal’s editorial board, considers himself an expert, having studied the subject for decades, he has said. On Fox News with Neil Cavuto at the end of August, when fast food workers were staging one day strikes, he claimed their demands would result in “a lot less teenagers hired for those kinds of jobs” and to decisions to “substitute workers with machines and automated things”.

These assumptions rest on the belief that the minimum wage is about teenagers. Not so, says the Center for Economic and Policy Research, a liberal think tank. Only 14% are under 20, so how could the 80% claim be true?

The minimum wage issue has always been a war of dueling studies but the studies are used only to buttress preconceived views. “When you raise the price of employment, guess what happens? You get less of it,” said Speaker John Boehner in February. This has always been the reflexive answer from economists who, asked such a question, immediately see chalk lines on a blackboard — one line going up means the other must be going down.

One such economist is David Neumark of the University of California, Irvine, whose work on the subject is often quoted. He says “It’s kind of a wash. The hit to losers wipes out the gains for winners.” A higher minimum wage costs some low-skilled workers their jobs while helping those who keep them.

But newer studies have discredited these older assumptions. A technique adopted from medicine is the meta-study, where many small clinical trials are combined to produce consensus estimates. As “one of the most studied topics in all of economics”, the minimum wage’s impact on jobs is well suited to this form of analysis. The quote comes from this study from the Center for Economic and Policy Research which crunched, by our count, hundreds of studies to conclude “that the minimum wage has little or no discernible effect on the employment prospects of low-wage workers”.

One such survey, an expansion of a pioneering 1992 work, compared 318 counties along state borders where the minimum wage was increased in one state but not the other. Their examination of employment data from 1990 to 2006 in those counties found “strong earnings effects and no employment effects of minimum wage increases.” Employment levels showed little or no difference on either side of the border, whereas earnings in an area improved when the wage was lifted.

Proponents argue that, even had the study showed some loss of jobs, does it make good sense to hold everyone else at an unlivable wage to save those jobs?

Harvard economist Martin Feldstein, economic advisor under Reagan and a driving force behind George W. Bush’s attempt to partially privatize Social Security, is also concerned for teens, who constitute half of the 1.6 million under age 25 earning the minimum wage. The minimum wage is “a crude policy” that fails to distinguish between age groups, in his view. And, absent offsetting productivity gains, “higher wages … force firms to raise prices to cover their costs — which reduces the demand for the firms’ goods and services and thus reduces employment”. Lines crossing on the blackboard again, as well as that insistence that minimum wage hikes cost jobs. How then to explain how fast food chains and big retailers have kept growing ever larger despite periodic minimum wage increases? Saying “there is far more evidence that confirms that higher minimum wages do reduce employment”, Feldstein shows his preference for Neumark to the much broader evidence in those meta-studies. The Neumark view is more accommodating to the idea he puts forth in a Wall Street Journal op-ed. He proposes to integrate the minimum wage with welfare payments. He posits a woman receiving $10,000 a year in safety net benefits, which is equivalent to a job paying $5 an hour all year, who could have a better chance to find work if she could treat “half of that $5 as an offset to the minimum wage” and legally offer to work for $4.75 an hour. We couldn’t decipher that bit of alchemy, but it would seem that he just put those teenagers out of work and replaced the minimum wage with a bargaining bazaar. We can’t help ourselves from thinking of Minnesota representative Michele Bachmann saying, “if we took away the minimum wage … we could … virtually wipe out unemployment … because we would be able to offer jobs at whatever level.”

shadow subsidy

Supporters of hefty minimum wage increases are angered by the realization that they are subsidizing large, low-paying corporations through taxpayer funding of the social programs workers must fall back on to supplement their poverty-level wages. It’s a subsidy amounting to $7 billion to the fast-food industry alone, according to one study. This article offers the example of McDonald’s. Given their size, their share of that $7 billion comes to $1.2 billion, or $300 million a quarter. Taxpayers effectively paid to McDonald’s a subsidy of 20% of the company’s $1.5 billion 3rd quarter profits. Turns out your Big Mac was more expensive than you thought.

But the arguments run in circles. Returning to Feldstein, the minimum wage is “in fact a hidden tax increase” on businesses that is passed on to consumers as higher prices. But maybe we’d rather be told the real price of that Big Mac rather than be charged a hidden subsidy.

This preference amounts to a curious inversion of the usual ideologies of Democrats and Republicans. The well-to-the- right Weekly Standard
says “Liberals push for a higher minimum wage in part because a targeted alternative to helping poor working parents—such as tweaking the Earned Income Tax Credit—would cost the government money”. Isn’t the usual complaint that liberals are only too happy to spend money, and aren’t Republicans the ones who are averse to income subsidies? Yet it is Republicans who have often thought an unconditional basic income paid to every American, rich or poor, would be better than the minimum wage. Richard Nixon saw a guaranteed income as a cure for welfare. Milton Friedman, the late libertarian economist, favored it to end the intrusiveness of the welfare state, although preferring diminished amounts at higher income levels. This scheme would tap the public till and have government paying supplemental wages rather than corporations paying decent wages to their own workers. Dislike of the minimum wage seemingly leads conservatives to extremes.

doesn’t solve the problem

Another argument is that the nation’s job problems run deeper and the minimum wage is no solution, that economic policy should instead focus on job creation and growth of the economy. “If we want to help the working poor we need to help them become more productive and create more jobs”, said that Weekly Standard piece.

This pushes against an open door: no one maintains that a wage increase solves the multiple problems of unemployment, lack of skills to perform today’s jobs, displacement of workers by machines, etc. This camp says that, while better solutions are needed (never mind that nothing is in the works to develop them), the needs of people right now should be ignored because assisting them is not a total solution.

Similarly, there are those who decry increasing the base wage as income redistribution, a Democratic plot to narrow the income gap. Really? That $2.85 an hour bill languishing in Congress would add less than $6,000 a year to a minimum wage earner’s income. If you hear that called “income redistribution” in a country where there are 13.2 million households worth over a million dollars, that’s what propaganda sounds like.

All of this is beside the point — ours, anyway. This piece is mostly about arguments against hiking the minimum wage. We covered some of them plus the arguments for raising the wage in a lengthy treatment back in July, subtly titled “Let’s Permanently End Minimum Wage Stupidity” in which our key point was that this is about people’s lives. Our position was (and is) that no business should expect to depend for its existence on immorally exploiting fellow Americans. If a business can only survive by keeping its workers in poverty, then it deserves to go under. The minimum wage puts businesses to that test.

Jan 7 2014 | Posted in Economy | Read More »

Obamacare Heads for the Supreme Court — Again

A flock of companies — 84 says the Wall Street Journal — have sued the government arguing that for religious reasons they should not be required by the Affordable Care Act to provide insurance to their employees that includes Sotomayor Issues Decree: Jan 1: The stay issued by the Supreme Court justice on New Year’s Eve that temporarily relieved Catholic groups from having to provide insurance that pays for contraceptive aids shows where this case is headed. The White House has asked the Supreme Court to override this peremptory exemption from health care the law in a case yet to be decided.
coverage for contraceptives. The Supreme Court has agreed to hear a pair of such cases combined into one.

If the Court — six of whom are Catholic — decides in favor of these complaints, they will be effectively expanding on their ruling in Citizens United that corporations are “persons” and should have many of the same rights as their human counterparts. If the Court decides that corporations can have religious beliefs, it will have descended into idiocy.

The owners of both corporations in the combined case — Hobby Lobby, a chain of arts-and-crafts stores based in Oklahoma City, and Conestoga Wood Specialties, a Pennsylvania manufacturer of kitchen cabinet doors — are highly religious and offended that they should have to violate their religious principles by offering such insurance. They are of course free not to use the contraceptives themselves, and even free to proselytize their employees not to, but instead they believe they should have the right to impose their religious rules on their employees’ lives and deprive them — 15,000 of them in the case of Hobby Lobby — of this benefit. A Wall Street Journal calls this paternalism “the free exercise of religion”.

By executive fiat, and irrespective of what the law says, the Obama administration has already wrongly waived the requirement that religiously affiliated organizations such as Catholic hospitals provide such insurance, without regard to the unequal treatment of their multi-faith employees compared to those in other corporations. The White House drew the line only at commercial businesses.

But while religious sensibilities are the plaintiffs’ objection, that is evidently a weak argument to take to court. Lawyers took a different tack — that corporations can be religious.

Denver’s 10th U.S. Circuit Court of Appeals showed how far a law can be twisted to arrive at a desired outcome by basing its ruling on the Religious Freedom Restoration Act of 1993. That Act reversed a high court’s permitting an Oregon company to deny benefits to an employee for using peyote as part of a religious rite. The Act says “the government shall not substantially burden a person’s exercise of religion”, so the employee was free to partake. The 10th ruled in favor of Hobby Lobby that the Obama government was burdening that “person”’s exercise of religion, thus treating a corporation as a person and ascribing to it religious convictions.

The 7th U.S. Circuit Court of Appeals in Chicago ruled the same, that the government was imposing a “substantial burden” on a living, breathing corporate “person”.

In the Conestoga case the 3rd U.S. Circuit Court of Appeals in Philadelphia ruled the opposite. It said “secular, for-profit corporations cannot engage in religious exercise.” Bad enough that Citizens United decided that a corporation is a person and should enjoy the First Amendment’s privilege of free speech, but that does not automatically give a corporation the right to claim it is free to exercise a religious belief based on the other provision of that amendment.

A Cincinnati appeals court sided with the 3rd.

Choosing sides

In their campaign to overturn Obamacare by any means, Republicans took the side of those who objected to insurance with contraceptive coverage when this subject became a major flap several months back. On now hearing that the Supreme Court is stepping in, House Speaker John Boehner said, “The administration’s mandate is an attack on religious freedom, and I’m hopeful it will be reversed by the court”.

Whether or not the Obamacare should pay for anyone’s contraceptives is a separate argument. It is certainly a valid question whether health insurance should pay for matters not strictly related to health. But given that contraceptives are covered by the law’s insurance packages, arguing for corporate freedom to deny coverage makes for a curious contradiction for Republicans. There isn’t much of a libertarian streak in coming down on the side of a company’s restricting employees’ rights under a law to be provided with contraceptives against unwanted pregnancy. It gives the White House, in the person of Press Secretary Jay Carney, the opening to say, “The president believes that no one, including the government or for-profit corporations, should be able to dictate those decisions to women.”

The First Amendment begins with “Congress shall make no law respecting an establishment of religion, or prohibiting the
free exercise thereof”. It is difficult to see how the Supreme Court could approve of a corporation effectively establishing its religion on the heads of thousands of employees if not even Congress is allowed to do so. So the concern is that they will probably fasten on the second clause and declare that these corporate “persons” are just freely exercising their own religious beliefs, never mind the thousands affected. The Court will probably hear the case in March with a ruling to follow in June.

Jan 1 2014 | Posted in Healthcare | Read More »