Discussions of Mormons and Mormon life, Book of Mormon issues and evidences, and other Latter-day Saint (LDS) topics.

Saturday, April 09, 2011

Caring for the Poor--and Why I Pulled the Plug on a Failed Post

I rarely do this, maybe the 3rd or 4th time in my years of blogging on several blogs, but yesterday I pulled the plug on a rapidly written post that I sorely bungled. I bungled it, in my opinion, by not giving enough explanation to avoid having several people draw unintended and unnecessary offense. Sorry to those of you who posted 11 comments in the six hours that it was up. To the majority of you who were upset and angry, your comments weren't wasted. I did take it to heart and realize I had conveyed meanings utterly unintended. Here's the background to the hastily-written post, for those who care, with what I hope is a more proper way of presenting my thoughts on the issue of caring better for those who are in need.

After visiting some friends doing research at a university and inquiring not just about their research but about their workload, I came away quite surprised at how difficult university life has become since my days in academia. Acceptance rates for research proposals have plummeted. The challenges of obtaining funding are more painful than ever, resulting in arduous hours and frequent disappointment. I asked a professor friend why it's so hard now. Whether you agree or not, he said the stimulus program had been part of the problem. That was not what I expected at all. He explained that when Congress started dishing out billions of extra dollars to stimulate the economy, there was a flood of new money going to universities and research institutions, which resulted in a surge in hiring of staff. Now those new mouths need to be fed with a shrinking supply of funds. Thus, professors have to write more and more proposals with declining acceptance rates. The good intentions of the stimulus program created an imbalance that is now causing long-term pain, in his opinion. Perhaps that's related to the kind of pain we've seen here in Wisconsin, with years of overspending now catching up to us (or, according to one perspective, failure to raise taxes fast enough), leading to unpleasant consequences with no easy answers.

During the same week, I had visited a national park and encountered another lesson in the long-term pain that can arise from the unintended consequences of well-intended actions. I finally learned the reason for all the "Do Not Feed the Animals" signs in our parks. A detailed explanation from the National Park Service indicated that humans feeding the other animals in the park often leads to their death. Apart from the poor nutrition and harmful foods we might give, a potentially bigger problem is that animals who get fed by humans may teach their young to feed that way instead of learning what it takes to survive in nature. When the tourists go away in winter, those animals that learned to look to humans for food may die a slow death of starvation. Kind intentions can sometimes have unkind consequences.

I was considering the issue of unintended consequences and especially the problems that can occur when government bureaucracy steps in to solve a problem, as allegedly reflected in the short-term effects of the stimulus program or the long-term effects of the War on Poverty, where financial incentives were somehow created for children to be raised without fathers, arguably contributing sharply to the decay of families (also see Thomas Sowell's argument that it increased dependency instead of lifting people out of poverty). So often there are unintended consequences, especially when impersonal systems tackle the unique needs of individuals. What is meant to help, if done poorly, can make things worse.

In drawing insights about unintended consequences from the care of wild animals, I am in no way insinuating that any of you are like them any more than I am. Ditto, tame readers, for the parallel drawn to wild professors.

My post didn't tell the university perspective I had been considering or adequately present the issue of unintended consequences and the need to consider the unique needs of each individual when caring for each other. Some of you assumed (or wanted to assume?) that I was saying that the poor are like animals that we shouldn't feed. No, absolutely not. Some turned it into a racial issue. Gag. I am all for vigorously caring for the needy. I mean that sincerely. It is our mandate from God, in fact. I am close to a number of people in extreme circumstances and understand a part of their endless frustrations and desperation. We may all be there one day or at various stages in our lives. Indeed, we are all needy and beggars before God, relying on His goodness constantly, admit it or not. Our goal, as brothers and sisters, is to help each other, to do more for each other, and to do it in love. One need not be in good economic health to be part of God's work in helping others--we can serve with our might or our mites.

Of the various ways out there to help, some can be impersonal and even harmful due to unintended consequences. Some can lift and provide help when and where it is needed. Government programs sometimes do that, and it's great when it happens. Church programs sometimes don't, and it's sad when that fails. But each of us can do better and can do more. In each case, we should seek to do what really helps others in the long term. What makes us feel good and look good isn't always what is needed most. That takes more work, more listening, and sometimes a lot more investment of time and money.

I feel that the principles of the LDS Welfare Program, as discussed in my aborted post, are consistent with these thoughts. The LDS Welfare Program includes the concepts that the long-term benefits of individuals and families are key, with unique needs being considered in prayer and love. Doesn't always happen, but those are the principles and they are inspired ones. There isn't a Kafkaesque bureaucracy to deal with nor vast tomes of code regulating what can and can't happen (but there are constraints, realities, and some rules). There aren't endless forms to fill our and long lines to stand in (though results and expediency vary). The goal is not to create dependency but to create independence and self-esteem.

It doesn't always work, but I've seen it work well, wonderfully well. I've seen good people in trying circumstances receive generous and personalized help from people who know and love them, helping them to get back on their feet and cope with the ongoing trials of mortality with more hope than before. I've seen it lift givers and recipients and help them both feel more part of a family of God's children. Yes, I've also seen and participated in failed or botched efforts also. And like some of the people we've handed money to, we've seen good intentions fall flat. I'm thinking, for example, of a man last year who told me with a big smile that he was going to use the money he had just received to buy crack cocaine--it was an extreme case that was really my fault for being rather foolish; it was right to help, but I should have helped him in a better way. I'll tell the story one day because it's a surprising part of a longer tale wherein God kindly applies another classic 2 x 4 to my forehead, a store that I must share--don't ask why now. (I might call it "Finding Moses.")

We need to help the poor, and we need systems and programs to deal with challenges. However, we can't rely on systems; we can't rely solely on others to do the work. Each of us as individuals has talents, abilities, and perhaps material resources that we can apply at various times in our lives to help those around us. When someone is struggling, we cannot always assume that the bishop or the government has it all taken care of. There are still financial constraints and other barriers that can limit what they can do. If we open our minds and listen to the promptings of the Spirit, we may find that we can and should do something extra for someone we know or perhaps a stranger. It can be amazing to watch what a little kindness can do to lift someone else. Sometimes a simple word of advice and encouragement, like the man who literally lifted a finger in my previous post on bighorn sheet, is what is needed. Cash, on the other hand, has its merits, and now is a good time to be generous: once it loses its value, it does nobody any good. (But also invest a portion in commodities or other things that will retain value when the dollar tanks. And building a good food storage can be one of the kindest things you can do for the needy of the future.)

I believe when done prayerfully, seeking revelation on how to help, the risk of doing harm instead of good is greatly reduced. That applies to bishops managing the welfare program as well as each of us managing what resources we might have. Doing real good is not easy, but should be our task and goal.

Frankly, often the best way to help someone who is hungry is to give them a fish. You can feed a person for a day by giving them a fish--not bad! On the other hand, if you teach that man to fish and get him hooked, you can help lead that man to a life of heavy debt (boat, gear, etc.), heavy drinking (the basis for ice fishing), and long-term marital trouble (gone every weekend). A nasty boatload of unintended consequences. Now is that what you really wanted to do?

Anyway, sorry for the misunderstanding from my recent now-yanked post, and thanks for your patience. Now let's get out there and do some lasting good

Update: As an example of a bad way to help the poor with possible unintended consequences, consider the minimum wage program. Read the 1996 Joint Economic Committee report on the minimum wage. Though intended to help the poor, there is a credible case that it's real result is to destroy jobs and opportunity, the thing the poor need most. The poor tend not to have jobs. How many of them would be helped if we set the minimum wage, to say, $100 an hour? A lot of poor people wouldn't suddenly become well off. More poor people and many high-school and college students would suddenly become unemployed. Let's create jobs, or allow the market to create jobs, rather than telling employers they can't hire people unless they can afford to pay a certain wage. Well, that's just my crazy idea. It must feel good to pass a minimum wage law and think you are now raising salaries for millions of needy Americans, but the reality may be that you're raising barriers.

Update, April 12, 2011: See also "The Minimum Wage: Washingtons Perennial Myth" by by Matthew B. Kibbe and Minimum Wage Hikes Deserve Share of Blame for High Unemployment by Dennis Mitchell, with a great Economics 101 video by Orphe Divounguy.

83 comments:

Dan said...

Jeff,

This is a much better post, but I'm not sure now what you're trying to say. You still seem to want to criticize governmental welfare, but then later you admit good happens within that program, and that bad happens with the church program as well.

But I'm glad you are pushing the caring for the poor belief. For all the good it has done the poor over the past 70 some odd years, I don't know what you have against government social programs. You yourself note that there are no programs, within the church or out, that are perfect, or without bad consequences. I think Jesus would say that it doesn't matter how we help the poor.

cadams said...

Dan it seems like you didn't read or understand his idea about unintended consequences. You might start by reading the Sowell link.

Jeff Lindsay: said...

No, Dan, I think it matters very much how we help the poor. I was probably too wordy to make that clear.

Some forms of help don't really help in the long run. That's my opinion. I prefer help that is personal and tailored to the needs of people, with love and compassion behind it and a long-term goal of lifting people, advancing their education and capabilities and ability to stand independent.

NathanS said...

Jeff, I didn't read the original but as often is the case, you make good point here and your answer to Dan brings it into clearer focus. I suppose I would have understood the original,too, but now we'll never know.

walterreade.net said...

Jeff,

Your first post made plenty of sense . . . except maybe to those who choose to go through life offended.

Stan Beale said...

I think you missed the mark in one area and did not mention a trap in another.

First The War on Poverty created programs like Head Start, Job Corps, Vista, Legal Services for the Poor, Upward Bound, Work Study progams for financially disadvantaged students, Community action programs etc. It had nothing to do with "encouraging the breakup of families." The program usually accused of the latter is AFDC (Aid to Families With Dependent Children) which was established in 1935.

The latter was a program that gave monetary support for children in impoverished situations. Quite often that meant that a woman did not have a male to provide support, so thus the encouragement of males to leave the family so the woman could get money. There were other criticisms of the program including the dependency argument, but a lot of it was simply racist (cartoons of black wefare queens and William Shockley's dysgenics).

Second, the huge problem of anecdotal history and unintended consequences is not dealt with. You can almost always find exceptions to a program or policy. The question is when a person uses anecdotes, are they examples of a real problem or just examples of a few exceptions? Too often they are used to defend a conclusion not backed by real data.

austin.archibald said...

As Murray Rothbard wrote in For A New Liberty:

While a strict deterrent is far better than an open welcome and a preachment about the recipients' "rights," the libertarian position calls for the complete abolition of governmental welfare and reliance on private charitable aid, based as it necessarily will be on helping the "deserving poor" on the road to independence as rapidly as possible. There was, after all, little or no governmental welfare in the United States until the Depression of the 1930s, and yet — in an era of a far lower general standard of living — there was no mass starvation in the streets. A highly successful private welfare program in the present-day is the one conducted by the three-millon-member Mormon Church. This remarkable people, hounded by poverty and persecution, emigrated to Utah and nearby states in the nineteenth century, and by thrift and hard work raised themselves to a general level of prosperity and affluence. Very few Mormons are on welfare; Mormons are taught to be independent, self-reliant, and to shun the public dole. Mormons are devout believers and have therefore successfully internalized these admirable values. Furthermore, the Mormon Church operates an extensive private welfare plan for its members — based, again, on the principle of helping their members toward independence as rapidly as possible.

Note, for example, the following principles from the "Welfare Plan" of the Mormon Church. "Ever since its organization in 1830, the Church has encouraged its members to establish and maintain their economic independence; it has encouraged thrift and fostered the establishment of employment-creating industries; it has stood ready at all times to help needy faithful members." In 1936, the Mormon Church developed a "Church Welfare Plan, . . . a system under which the curse of idleness would be done away with, the evils of a dole abolished, and independence, industry, thrift and self-respect be once more established amongst our people. The aim of the Church is to help the people to help themselves. Work is to be enthroned as the ruling principle of the lives of [p. 149] our Church membership."7 Mormon social workers in the program are instructed to act accordingly: "Faithful to this principle, welfare workers will earnestly teach and urge Church members to be self-sustaining to the full extent of their powers. No true Latter-Day Saint will, while physically able, voluntarily shift from himself the burden of his own support. So long as he can, under the inspiration of the Almighty and with his own labors, he will supply himself with the necessities of life."8 The immediate objectives of the welfare program are to: "1. Place in gainful employment those who are able to work. 2. Provide employment within the Welfare Program, in so far as possible, for those who cannot be placed in gainful employment. 3. Acquire the means with which to supply the needy, for whom the Church assumes responsibility, with the necessities of life."9 Insofar as possible, this program is carried on in small, decentralized, grass-roots groups: "Families, neighbors, quorums and wards and other Church organizational units may find it wise and desirable to form small groups for extending mutual help one to the other. Such groups may plant and harvest crops, process foods, store food, clothing and fuel, and carry out other projects for their mutual benefit."10

...

There is no finer model than the Mormon Church for a private, voluntary, rational, individualistic welfare program. Let government welfare be abolished, and one would expect that numerous such programs [p. 151] for rational mutual aid would spring up throughout the country.


Read the whole thing here: http://mises.org/rothbard/newlibertywhole.asp#p142 and text search for "mormon" to find the relevant section.

Anonymous said...

Great post. To me, you are saying that you can't make sweeping generalizations about programs. Each individual or family has unique circumstances, so one program might help them, but have unintended bad consequences for another family.
The more we as individuals try to help people individually, the better.
I recently was helping someone who is a young married mother with poor all around skills. I agreed to meet her at a McDonalds near her studio apartment in an extended stay motel (her rent is bigger than my mortgage). It is good for her to be around other mothers who can model parenting or be a support. However, she called up and said it was raining so she couldn't walk there.
I almost offered her a ride, but then realized that it was more important for her to feel that she could take care of herself and her child and get to where she needed to go. Plus, she needs to be able to make friends, but if she always needs a ride she becomes a charity case rather than a peer.
We met the following day. It was a little thing, but I hope she can have practice and become capable of taking care of her own life and the benefits it can bring.

Mike S said...

I agree that we should help the poor. And I do think that the Church can often do this more effectively than the government.

That is why it pains me to see the Church spend $3 billion on a shopping mall. Put in perspective, they have spent only about 10% of that over a 25 year period - or around $13 million a year - on humanitarian needs. And this includes fast offerings, etc. that we give.

I would like to see the numbers reversed - spend billions on helping people and millions on commercial ventures.

Ben said...

Saw the first post and thought it was good, but see how some people could have misinterpreted it. My wife and I did not. The "give a man a fish... Teach a man to fish" example is what came to my mind as I read it. Unfortunate that you had to rewrite, but I do understand some of the offenses.

Nevertheless, I think your point is valid and it's good to have this kind of thinking out there. Certaianly, shutting down the government welfre system would be bad for many, many people. Hwever there may be ways in which government officials can start to think about thingrs differently in order to help people on a more lasting basis. The fear of instituting the welfare system in the beginning was that it would create a "permanent lower class.". That doesn't always happen, but does more than anyone would like. The solution is not clear cut or obvious, but it's good to not accept the status quo as a perfect solution because it is not.

Anonymous said...

I don't know many particulars on Church expenditures but many times, speaking in general rather than necessarily in Church situations, expenditures are essentially seed money (investments) that allow for greater giving in the future.

I think the life of John Huntsman (Sr.?) is one example. Decades ago, in response to an earth quake in Romania, he spent $100,000,000 of his own money building concrete housing for the homeless there. He obviously spent a lot of seed money on building a commercial enterprise that could make him enough money to be able to afford that.

I suppose a lot of people stereotyped him as a selfish rich person while he was building that wealth and a lot more even after he spent so much so generously. But it was wisdom in the Lord that he was guided in his business affairs in such a way as to be able to afford what he could afford. Anyone that can afford to give that much probably first did more investing than giving.

I don't expect the Church to be as good in business as John Huntsman was - nor do I suppose this shopping mall was all about making money - but I am not bothered. My guess is that this investment in downtown Salt Lake City will in some way prove to be wisdom in the Lord - if not proven in this life, proven when someone asks the Lord about it and we see how things would have been.

NathanS said...

"Certaianly, shutting down the government welfre system would be bad for many, many people."

Unless we first did away with the regulatory burdens government imposes that makes self-sufficiency very expensive and otherwise somewhat difficult or impossible to obtain. And secondly, assist people in transitioning to self-reliance.

Of course, to sweeten the deal for those that would lose their regulatory related employment some monetary policy changes may be needed. For example, the Fed could be required to give financial incentives to mortgage holders to forgive real estate loans to people that lose their jobs.

We might need a few more pieces of the puzzle for completing the picture of government benefiting most that are now dependent on welfare by getting out of the welfare business but don't you suppose it would be possible?

Anonymous said...

Great post Jeff.

One little point. Heavy drinking and ice fishing really do not have a connection.

Also, the point about about teaching a man to fish is very relevant. However it is too easily said. To be a good or adequate fishermnan takes years and years of study and practice. It is a lifelong practice.

Anonymous said...

What happened to the welfare program? That $13 Million a year charity given by the Mormon church includes fast offerings, Deseret Industries, Bishop's storehouses, canneries; everything. I don't see how it can be so small a number. In Canada and Great Britain where the church must publish its budget, there's no humanitarian giving at all, except from a fund specifically donated to by Mormons for humanitarian giving called 'humanitarian giving', or some such, and a fraction of it isn't dispersed.

Your church pretends to do good while failing, miserably to do so.

Christian Wright said...

This "13 million a year" number being tossed around is very misleading. Yes, if you look at the 2009 welfare services fact sheet (http://www.providentliving.org/pdf/2009_WELFactSheet_English.pdf), the Church gave $327.6 million in cash donations from 1985 to 2009, an average of $13.7 million a year. However, this does not include the value of material assistance ($884.6 million from 1985 to 2009, or an average of $36.9 million a year), and it does not include donated labor (763,737 days in 2009). There is also a fact sheet for 2010 (http://providentliving.org/pdf/2010_WELFactSheet_English.pdf), and while it does not break down humanitarian aid by cash donations and material assistance, it reports $1.3 billion in humanitarian aid given from 1985-2010, which works out to approximately $87.8 million for 2010, depending on how the $1.3 billion figure is rounded.

Cash donations are only a part of the Church's giving, and the Church is in a unique position to render material assistance as well as to mobilize the donated time and talents of its members. A "13 million a year" figure misrepresents what the Church does through Welfare Services. It also betrays an assumption that the value of the Church's humanitarian aid lies solely in how much money the Church gives away. Simply giving the poor money is not the only way to help them, and it is probably not the best way to help them, either. Besides, the leaders of the Church have repeatedly urged members to increase their fast offerings and other charitable giving. If we want the Church to do more in the area of humanitarian aid, it is up to us to increase our donations of time and money.

GDMNW said...

You cannot offend a man who will not be offended.

As for welfare, it's very sensitive, especially if you are currently receiving welfare.

But surely it is important to highlight the key point here.

Give a man a fish and he is a poor man with a fish.

Teach a man to fish and he is no longer a poor man.

I think that's the most important part of that saying. If you do anything to help someone and after a time they are are still poor then it makes sense to change the way you help them as you aren't achieving your goal.

Here in the UK we have growing numbers of people who have not supported themselves for three generations.

Being poor isn't about your material circumstances, it's about who provides your material circumstances, looking at how much money a person has is deceiving.

I know many unemployed persons who are financially better off than I am. It's not about the money, it's about work and all of the social advantages that comes with that, health and education being the big two. Supporting yourself and your family promotes your health and opportunities in many areas.

I'm glad that sign finally sunk in.

Jeff Lindsay: said...

I was part of the thousands of southern Mormons who showed up in Homestead, Florida after it was wiped out by a hurricane. The Church's role in bringing in people and supplies was enormous. Might have been very little cash given in that process, but there were large shipments of supplies, massive manpower, and tons of humanitarian good provided. That kind of thing happens in many other venues. If you want to belong to a church that takes the welfare of others seriously, this is a great choice. And let me check . . . yes, we still have openings for membership or even just donated service.

Rusty Southwick said...

There really wasn't anything wrong with the original post, Jeff. People looking for ways to be offended will always find them. A recent problem from the past decade or so — particularly in political rhetoric — is that people don't often recognize the distinction between an innocent analogy vs. a direct comparison. Becoming oversensitized as we have as a society, the simple analogy has now been tightened to carry the meaning of equating, even though it wasn't what the author was conveying. We read more things into what is said. We seem to have a desperate need to want things to mean something that upsets us so that we can criticize it. This is the lazy way of engaging in discourse. Take offense at the first possible sensitive area, and then we can feel justified in not responding to the core message.

Dan said...

Jeff,

I guess without getting specific as to which forms of help you have a problem with, we're not going to know what the problem is. Riffing generally against government aid is rather amateurish, in my opinion. If you think there are specific problems, then you should mention them, and we'll find a way to fix it.

What do you think of Social Security? Is there a problem with a society setting aside money from your own paycheck to have when you retire? It seems like a really good idea. It is actually amazing because you cannot touch that money until you retire, and it is fixed, thus you can't just take it all out and abuse it. Sounds like a great minimum standard of retirement for the citizen workers of this country. Are there problems with it? Of course there are. No system is perfect.

Or Medicare? Do you have a problem with it? It's actually cheaper than if seniors and disabled people had to pay out of their own pockets (which will be Paul Ryan's plan, btw). Is the price going up? Yep. We continue to rely on the latest and greatest, thus increasing the cost.

Or Food Stamps? They are proven to be the best stimulant to the economy ($1.84 for ever $1)

Or Unemployment Benefits? They are the second best stimulant to the economy.

Or government subsidized student loans? Speaking of teaching people how to fish...

How well do you think the church will run those programs if the church were suddenly put in charge of all of them? Do you not think that the church ought to have highly competent, knowledgable people to run such programs? Would you pay them? Or are they volunteering their time?

How about housing projects? Subsidized housing to the poor...I guess we could let them build their own little shanty towns, slums, and it's up to their own efforts to find decent homes. Works just fine in India, right?

And finally, how was life before the 1930s for the poorest Americans? How long was their lifespan?

Jeff Lindsay: said...

Of course, we have a lot of great competition from other religions when it comes to service. We're still small fry, but hoping to keep growing in impact.

Jeff Lindsay: said...

Dan, I mentioned and gave some links on the compassionate minimum wage program. Let's start there. It was working with that program in D.C. that turned a young Marxist economist into a conservative, suddenly aware of how government help actually works. That awakened Marxist was Thomas Sowell. So help me see how that form of helping the poor actually helps the poor--in the long run.

Jeff Lindsay: said...

But on the other hand, the purpose of this post is not to get into the effectiveness of government programs but to encourage more effectiveness in our own work, so I'm not sure I want to get into a big debate on the failure of Social Security or other programs here. But if you have some new insights on the wisdom of minimum wage since I raised that issue already, I'm interested.

Dan said...

Jeff,

Just read your update on minimum wage. I knew I had this debate before, so I checked wikipedia, and sure enough, here is a study:

"In 1992, the minimum wage in New Jersey increased from $4.25 to $5.05 per hour (an 18.8% increase) while the adjacent state of Pennsylvania remained at $4.25. David Card and Alan Krueger gathered information on fast food restaurants in New Jersey and eastern Pennsylvania in an attempt to see what effect this increase had on employment within New Jersey. Basic economic theory would have implied that relative employment should have decreased in New Jersey. Card and Krueger surveyed employers before the April 1992 New Jersey increase, and again in November–December 1992, asking managers for data on the full-time equivalent staff level of their restaurants both times.[57] Based on data from the employers' responses, the authors concluded that the increase in the minimum wage increased employment in the New Jersey restaurants"

How about that. the minimum wage increase in New Jersey increased employment in New Jersey...

Dan said...

Jeff,

In searching a bit more, I found this of interest

http://en.wikipedia.org/wiki/Basic_income

And it seems to have proponents across the ideological lines...

Quantumleap42 said...

This reminded me of a certain South American country I had to opportunity to work in a while ago. I happened to get there right after the entire financial system of the country had a meltdown and the government was desperately trying to keep people happy and preventing them from rioting. One of the things the government tried was to dish out copious amounts of welfare money. The problem was that the very same people who would not lift a finger to work or even attempt to find a job would still go and wait for several hours, or even for several days, for the government to give them their handout. These were people who would be "too sick" or "have a bad back" and could not even work their own garden, but suddenly found the strength and stamina to stand in line, outside, in the middle of the summer, for several hours, on the chance that the government would just hand them a couple hundred pesos.

I also happened to be there during a presidential election, and there were people whose only criteria for who they voted for was which political machine gave the better barbecue (yes, that's right. They determined who they would vote for based on who served the best ribs on the way to the voting booth).

Now not everyone was like that, and there were some people who were in desperate need of help, and the actions of the government literally stopped them from starving to death. But while it helped them right then, the structural and institutional problems were still there, which meant that there would always be people who where on the verge of starvation and in constant need of help. And all the other people who were quite honestly, downright lazy, well, they never learned their lesson and only helped perpetuate the problem. This was compounded by the fact that no politician or political machine was interested in actually fixing the structural problems because it was the structural problems that allowed them to have and maintain their power.

So while there are those who truly need some help, a blanket approach of throwing out money, while it may save some, will only help perpetuate the problem that the money was intended to solve. Perhaps the best (and only way) to solve the problem is to approach each case individually (like Jeff suggested). The only problem with this is that it would require an immense amount of commitment from society in general and individuals involved. Still it would solve the problem, and I think that is precisely the approach being taken by the Church.

Papa D said...

Christian Wright, thanks for saying one thing I would have said without your comment. Those who harp on the cash-only part of the LDS Church's humanitarian aid are either extremely ignorant of the overall giving the LDS Church does or are intentionally focusing on the one area they can distort in such a way to cast the most negative barbs at the LDS Church as possible. It is a mis-leading, twisted, ridiculous argument when presented in isolation.

Very good post, Jeff - on a very, very, very complicated topic. My take-away is that you are saying we need to help people who need help in the moment they need help, but we also need to try to find a way to help them in the long run that allows them, whenever possible, eventually to become self-sufficient, not need our help any longer and, thus, turn around and help others.

Seems like the best approach to me, and I say that as someone who has had to accept Church assistance in the past.

Anonymous said...

No one should be surprised to discover that modest, well-timed increases in the minimum wage can actually increase employment. People like Thomas Sowell will tell you half the story (the part about how increased payroll costs can force businesses to lay off employees) but not the other half, namely, that workers who are making more money tend to buy more stuff, which can lead to businesses hiring more employees.

The increased sales can then help city and county and state governments bring in more sales tax revenue, which can result in new infrastructure development, building projects, and the like--which means more good jobs for people, feeding a positive cycle of prosperity. Not to mention reducing the number of potholes in the roads, providing nice parks for the kids to play in, etc., etc.

Anonymous said...

Pretty much anything that puts money into the pockets of poor- to mid-wage people increases economic activity, helping the economy quite a bit. Because poor- to middle-income spend that money, giving money to businesses, etc. Sigh. A minimum wage does increase business activity on the demand side, lifting everyone's boats.

Jeff Lindsay: said...

Dan, the Card and Krueger study has been thoroughly discredited. It's dead wrong. Payroll data actually support the opposite conclusion from their flawed study. See http://www.sonoma.edu/users/c/cuellar/econ421/neumark.pdf for starters. Also read the Joint Economic Study cited in my post in an update added shortly after I wrote the main body of the post.

We should be surprised if minimum wage laws provide real gains in employment. Money doesn't just sit idle until wise politicians force businesses to spend more than they need to. The money they have to overspend for entry-level labor is money they can't spend on other jobs, bonuses, advertising, expansion, etc., all of which goes somewhere and plays a role in the economy. The issue is whether the role it plays is efficient. There is also the issue of whether government has any legitimate role setting market prices for labor or other things. Unless the politician setting the wages or any other prices is omnipotent and knows what the ideal price for labor or any other item should be, there is a likelihood that the action misallocates resources and harms the economy.

Hopefully you can see that setting a minimum wage of $400/hr would not result in new wealth for all low-income workers, but vastly fewer jobs and many destroyed businesses. But for workers who only deliver $5/hr of value to an employer, a minimum wage of $8/hr means that the employer is motivated to not hire the worker that otherwise might have been gladly hired. Supply and demand can fairly determine prices for labor as it can for other items, and artificial levels set by bureaucrats, however compassionate, result in oversupply or shortage and impede the flow of information that is communicated by the mechanism of price.

I'd love to see more teenagers able to have meaningful work experiences in the summer or in part time jobs, but raising minimum wages only makes that harder. Go ask your local grocer or fast food outlet what a $20/hr wage would mean for high school jobs.

Dan said...

Jeff,

I'm clearly not going to convince you when you're quite deeply imbedded with the Townhall types. Suffice it to say that the minimum wage works much like unionization, which also pushed for a supposedly "artificial" wage, or in other words, a wage that management didn't really want to give workers but were forced to give workers whether they liked it or not. I won't belabor (pun intended) the point too much that the unionization of our workforce and the push for minimum wage standards in this country did not destroy capitalism. In fact, from the 1940s to 1999, our country has seen amazing economic growth, truly astounding growth. Who knows why economists like your Townhall dude can't see reality very well, but I am quite sure I remember unemployment numbers during the Clinton years being historically low, economy booming, and everyone doing very well. Don't know about you, Jeff, but I still see teenagers at dead end McDonald's jobs. I know I worked at such jobs (Burger King) when I was in high school in California. And they had to pay me probably more than my labor was worth! gasp! You're using utterly ridiculous numbers (absolutely no one is talking about a $100 or $400 minimum wage, so why even bring up something so ridiculous?) and expect to be taken seriously. If the theory is that an increase in minimum wage equals to an increase in unemployment, then why have we had such a strong, low unemployment economy for so long in our country? Hell, even the 8.8% we're dealing with now is relatively low compared to other countries in the world. The assertion that an artificial minimum wage disrupts the economic supply and demand model may look good on paper, but it's not something that is very real in actual reality.

Finally, I cannot see your link. It doesn't work for me.

Jeff Lindsay: said...

The link to a PDF file discussing the Kruger study is http://www.sonoma.edu/users/c/cuellar/econ421/neumark.pdf. That should work. Thanks!

Didn't realize I was embedded with Townhall types. Don't subscribe, don't use the website.

Stan Beale said...

Jeff,

I know your background is not politics. So, I am sorry if this sounds pedantic.

Your citation about minimum wages is political manure. Frankly much of what Conress produces falls into this category, whether it be controlled by Democrats or Republicans.

In 1996 any joint committee was controlled by the Republicans as they had majorities in both Houses. Thus a GOP staff would draw up reports that would favor GOP positions. In this case the Republicans did not favor a minimum wage (the opposite would be true if Democrats controlled it).

Let us look at who is cited as sources:

The Employment Policy Institute: A tax free group created in 1990 to oppose the minimum wage. Its founder, Rick Berman is a lobbyist for food, beverage and tobacco interests. The EPI (not to confused with the legitimate Economic Policy Institute) shares offices with Berman's lobbying company.

Neumark and Wascher: They are legimate scholars. However their conclusions in the 1995 study was based on data provided by (suprise) the EPI. Unlike the Card and Krueger study where the data was open for peer review, the EPI material, in the immortal words of Gomer Pyle suprise, suprise, was not made available.

The National Center for Policy Analysis is a right wing think tank funded in large part by the Scaife Foundations (funds numerous conservative foundations e.g. Heritage Foundation); Koch and Bradley Families (see Wisconsin supporters of Governor Walker). Its fundamental reccomendations include lowering taxes on the wealthy as well as reducing and privatising Social Security and Medical care.

About the only way you can trust reports like these is if you have independent verification by responsible sources. The only Congressional source I have faith in is the CBO (Congressional Budget Office). It fights quite well in trying to keep itself independent and fair.

Both sets of Scholars revisited their works later. Card and Kruger's new study reaffirmed their earlier study that a rise in minimum wage lead to equal or higher employment. Neumark and Wascher confirmed some of the former's findings, equivicated on others, and held to some of their former positions (though not as vehemently).

To give you an idea why some seem so cynical about what Congress produces, the Congressional Record is a good example. As a Senator or Congressperson ends speaking they usually ask for permission to revise and extend their remarks. What does this mean? If you are drunk,your staff can later can go back and change your remarks to seem like that of a sober Mormon Bishop. In the House you only have a few minutes to speak, so an extension of remarks may have merit. Unfortunately, it can also include Aunt Maude's Gooseberry pie recipe which the Congressperson's aide and clip out and send to Aunt Maude or a rant extolling the virtues of Generals Jack D. Ripper and Buck Turgison to send to the VFW for Veteran's Day.

Dan said...

Jeff,

http://www.irle.berkeley.edu/workingpapers/222-10.pdf

As you can see from this study, there is not a negative effect on employment of low-wage workers when minimum wage was increased.

http://oregonstate.edu/instruct/anth484/minwage.html

That shows that accounting for inflation, the highest federal minimum wage was in 1968, at $10 per hour in today's numbers. Amazingly, the unemployment rate in 1968 was 3.4. How could it be with such a high minimum wage that unemployment was so low? Maybe if we increase the minimum wage today to $10 an hour, we might just find the unemployment rate drops back down to 3.4 ;)

Sorry dude, the vast majority of economists over the years studying this were wrong. It is known to happen. It is so in this case.

Dan said...

Thomas Sowell is a Townhall contributor, and his comments are pretty much in line with them. In fact, he has compared Obama with Hitler, not once

http://www.nationalreview.com/articles/225695/idols-crowds/thomas-sowell

but twice

http://www.investors.com/NewsAndAnalysis/Article/537967/201006211813/Is-US-Now-On-Slippery-Slope-To-Tyranny-.aspx

Maybe those kinds of views tug at your heart, but they make him not a credible source...

Dan said...

oh, and it seems he's in favor of military coups:

http://www.nationalreview.com/articles/220788/dont-get-weak/thomas-sowell

"When I see the worsening degeneracy in our politicians, our media, our educators, and our intelligentsia, I can’t help wondering if the day may yet come when the only thing that can save this country is a military coup."

Anonymous said...

"Sell all your possessions and give the money to the poor." Now there's some interesting financial advice!

"Where your treasure is, there will your heart be also." I guess my heart must be in my IRA. Which is OK, I suppose, because I, unlike so many others, do not even pretend to be a Christian.

Fortunately, the guy who said this stuff is not held in very high regard nowadays. Some prophet by the name of Thomas Sowell seems to have taken his place.

Anonymous said...

Back to Mormon Church giving--"material assistance"? 3 some-odd dollars per member? Donated labor? another dollar or so. I bet all of that is outside the 10% tithing.

Wonderful that the individual members contribute. Shame on the LDS church for doing so very very painfully very little.

Anonymous said...

If your employees can't buy your product who do you sell to? If people can't make enough money to live on their lives are miserable, and so are everyone else's. No one wants to live in a third-world country. This post is shortsighted and cruel and just plain vicious. Plus, quoting Thomas Sowell? Dumb dumb dumb dumb.

Anonymous said...

Concerning "giving" -- as a retired LDS woman serving as an "at-home" humanitarian missionary for a year, I donated 8 hours per week, which would be the equivalent (at Idaho minimum wages) of $2,900. There were always several other missionaries plus numerous volunteers at the same facility, not to mention many folks who brought in the humanitarian kits, quilts, etc., that they had made at home.

"Donated labor another dollar or two?" Really?

Felicia Follum said...

A agree that there are often unpredictable consequences; however, I strongly support government programs such as WIC and AmeriCorps (and a large variety of others). I do think that much of helping the poor should take place through the church (Protestant, catholic, and lDS etc.) and individuals. But since nothing is without failure, I think that the Government will always need to step in and help.

Many of the problems today are originally from consequences of ignorance and hatred rather than the negative consequences of helping too much and trying to do good. Some examples include homelessness (in 2004, 70% of the homeless population in my town were Vietnam vets), the Indian reservations (obviously caused by racism and ignorance) and the ghettos (again caused by ignorance). These are all examples of people acting poorly, the church however can act in positive ways and from a Christian perspective has God on their side. I guess I understand that helping others can go wrong and I agree that some ways are better than others, but if the churches and wealthy individuals cant fix the problems, some one has to even if the government does not have the same ability to help individuals, which would be ideal.

Here are some of my previous responses and explanations of my comment…

http://graceisqueer.weebly.com/separation.html Separation poster

http://sckrlgn.blogspot.com/2010/11/what-if.html Christian organizations with positive impact poster

http://sckrlgn.blogspot.com/2011/01/real-solution.html An example of what would be the ideal of charity (in my opinion)

http://feliciafollum.blogspot.com/search/label/Native%20Americans Native American Social Justice posters

On a side note
I posted here a couple weeks ago and am still searching for people from the LDS church to respond to some of my research about the church. I have posted mostly ideas that are confusing from a protestant background along with questions about the Book of Mormon and other topics related to the church. There are also a couple photos I have taken of Temple Square.

http://sckrlgn.blogspot.com/search/label/Mormons

Anonymous said...

Other anonymous, it's wonderful that you serve your fellow humans. That's your labor though that your church is taking credit for. None of the tithing dollars that you give to them are used. It's extra. As far as the LDS church itself will state its reasonable to assume that zero tithing dollars and very few other dollars are used for charity.

Stan Beale said...

I know you do not have a background in politics, so pardon me if I sound a bit pedantic.

The reality is that this Joint Committee report is really a pile of offal, That statement is true of most reports like this one.

In 1996 the Republicans controlled both Houses and thus controlled all committees. The staff of the majority prepares reports like this that back up whatever is the policy of the party in power. In many cases they just adopt materials provided by the lobbyists that represent that particular point of view. No matter which party is in power, that is the general rule. The GOP has been against the minimum wage and you would expect any such report in 1996 to also take that position.

If we take a look at the sources for this report it becomes even clearer.

1. The Employment Policy Institute is a 501k group founded in 1990 by a lobbyist, Richard Berman, for the food, bevearage and tobacco interests. In fact, it shares office space with Berman's lobbing firm. Beware looking it up, as there is nother earlier (1986) EPI (Economic Policy Institue) that is very pro labor--do not confuse them.

2. The National Center for Policy Analysis is a far right "think tank" funded by the usual suspects: Richard Skaife (Clinton had Vince Foster Killed); the Bradley Family Foundation (anti union, anti minimum wage, anti-equal pay for women, supporters of Governor Walker of Wisconsin); The Koch Family Foundation (same ideas as Bradley). Both patriarchs of the Koch and Bradley families were long time members and supporters of the John Birch Society.

3. Neumark and Wascher (NK) are considered reputable Economists but the work you cite has been destroyed academically. The problem was (NW) got their data from the lobbyist funded EPI and, unlike CK, it was unwilling to release the data for peer review.

Frankly, those who know politics are very reluctant to use these documents as real sources without adequate and careful vetting.

In actuality both CK and NW licked their wounds from devastating criticism, went back to make more sophisticated studies with much better data collection. The second studies basically reaffirmed their earlier findings, though NW had to back off the stridency and magnitude of their findings.

The huge problem we have now is that the GOP (Tea Party Express Variety) is dead serious about two related policies: ending the minimum wage and eliminating or severely limiting child labor laws. Maine has legislation pending, for example, of making training wages last 180 days, increasing the hours minors can work, and allowing minors to work until 11:00 PM.

These issues have to be debated carefully with good data and research, not political pap put out by any party. Forty years ago I would have been more concerned about crud from the left, today the party of birthers, tenthers, Beckerheads death panels and Second Amendment Solutions seems to be the key problem.

Jeff Lindsay: said...

Stan, how much does one have to know about politics to understand the business reality: if I make labor more expensive, the demand will drop. How can artificial barriers such as a mandatory elevated wage actually lead to more employment? It dries up low-end jobs and keeps many people from getting the work experience they need to move forward.

I'm out there working with business leaders, from CEOs to start-ups, and often see the impact of government help. Companies flush with cash are afraid to hire because the costs that the government imposes and the risks of hiring someone coming from all the "worker-friendly" regulation and law makes it too costly to hire people that they would otherwise want to hire.

I'm sure economists can come up with massaged data to argue both sides of any issue, like which way does gravity pull the anvil that I drop from the window. But the force of the gravity to anyone holding an anvil is downward. In terms of numbers employed, the force of artificially higher wages to anyone shelling out cash for their business is downward.

Dan said...

Jeff,

"if I make labor more expensive, the demand will drop."

No it won't! Labor was made far more expensive through labor unions, child labor laws, shortening working hours, minimum wage laws, and yet since the 1940s, our country experienced probably the greatest economic growth in the history of the world. That's because economic principles are not like the laws of physics. They're far more complex, and topsy turvy than the relatively simple laws of physics.

Anonymous said...

If you make labor more expensive then the laborers can buy stuff and you have a functioning middle class. When labor is too cheap, you've got no one to buy anything because they don't have any money, the middle class dissolves, and so you're living in the third world. It's simple, really. There's a demand part of the supply and demand equation. Without demand, there is no need for supply.

Stan Beale said...

Jeff,

Dan is correct. "Real World" ecomics is a lot more complicated that simply applying some "laws." Three examples come to mind.

1.In 1991 Congress passed a tax on luxury yachts because "the rich can afford it." In so doing they forgot the sage observation of Leona Helmsley, "We (the rich don't pay taxes. Only the little people do." That act destroyed the American Yacht building industry as the wealthy simply went overseas to buy yachts built there.

2. Ronald Reagan believed in the "Laffler Curve." Its basic tenets went "the more you lower taxes, the more money in the economy, the more people are hired, tax revenue will actually increase." Well, it made a nice diagram and the wealthy got a good tax break, but it did not work. Reagan had to raise taxes.

3. George Bush believed that businesses should regulate themselves and they would do a better job than the government (backed by various free market economic theories). What did we get? Enron. Arthur Anderson. Bernie Madoff.The Housing Fiasco.

The pont I tried to make earlier is that care and thought have to go into policies, not simple knee jerk responses. In terms of the minimum wage, Congress needs to ask several questions all centering on a cost benefit analysis. Do the benefits of having or raising a minimum wage outweigh the costs? Yes, there are benefits (e.g. as minimum wage goes up so does the pay for other jobs).

I find the ultimate irony for members of the church is this. Women are encouraged to be SAHM by Church leaders but the Friedman, Libertarian, and Randian members of the Church would like to drive down wages so mom has to work.

Michael said...

Stan Beale,

Real wages aren't driven down by libertarian free market applications. They are driven down by the government monopoly of the money supply and interest rates.

If you look at the purchasing power of the dollar, it has eroded significantly since the Federal Reserve was created.

Also, the Laffer Curve has NOT been discredited. It doesn't count if George Soros says it's been discredited.

Your example of the yacht tax is very instructive of how government taxation can destroy an entire industry. Thank you for bringing that up! :)

Michael said...

Also, Stan, I need to point out that your lambasting of "free market principles" doesn't make sense when applied to fiascos like Enron, Bernie Madoff, etc.

Why?


Simply because those issues and problems were a result of a very close and incestuous relationship of business and GOVERNMENT. Those businesses, like GE today, or General Motors, have a very very close relationship with government. It's all part of "corporatism", which is fundamentally different from a true free market system.

It bears saying, once again, that we haven't had a true free market in the US for a long, long time.

Jeff Lindsay: said...

Dan, in saying that an increase in price lowers demand, what is meant is that holding other variables equal, the effect of increased price is to lower demand for labor. (For a few unusual items like luxury goods, sometimes a price increase has a marketing benefit that increases demand. Labor generally isn't one of those items.) Sure, strong economic growth increases the demand for labor and the price that must be paid. But for a given employer in a given market, if the price that he or she must pay for any resource is increased by an arbitrary mandate, that price increase will, on the average, motivate that employer to use less of the more expensive resource if possible. That's true for energy, food, steel, and labor. Force the employer to pay more, and they will seek to use less. The fact that the employee can now afford to buy more hamburgers is not adequate compensation for the higher price the employer must pay.

We can tell employers that they have to pay twice as much and think we're helping the poor, but this can actually just lead to more poor people without jobs, while a few benefit. Compassionate? Maybe not.

Stan, fully agree on cost-benefit analysis for all policies (second, though, to a Constitutional analysis to see if it is something government has any right to do in the first place). Also can't deny that any change, however disastrous, will have benefits for some.

Also agree that knee-jerk reactions are unwise. That, I fear, is what is behind the minimum wage in the first place. The simple assumption that we make people better off by artificially raising the cost of their labor. Many times these simplistic theories have unintended negative consequences.

Surely we can at least agree that if employers have to pay $20 an hour, that a teenager or other prospective employee is unlikely to land a job where the value they would have contributed to the employer was on the order of $5 and hour? I don't know if you've raised any teenagers recently, but it can be awfully hard for them to find jobs.

Jeff Lindsay: said...

For those of you who tremble at the mention of Thomas Sowell, then here's someone else I hope you're more comfortable with. Check out what Orphe Divounguy has to say about the impact of the minimum wage law in his video at http://www.cato-at-liberty.org/minimum-wage-hikes-deserve-share-of-blame-for-high-unemployment/.

He makes the point, for example, that our recent 40% hike in the minimum wage over 3 years may have had an especially harmful impact on minorities and is a part of our current unemployment problem.

Dan said...

Jeff,

You're going to have to continue increasing minimum wage just to keep up with inflation. As mentioned earlier, minimum wage was $10 an hour in 1968, based on today's numbers. A kid working at McDonald's today is getting less money for his labor than a kid was in 1968. And yet, the unemployment rate in 1968 was 3.4%. While you are correct that on paper, it makes sense that if you increase a cost, the demand tends to lower, this is just not a principle that is reflective in the employment world.

For instance, let me bring up labor unions again. Would you agree that, under how you view things, a labor union creates an artificial wage? If that is the case, why hasn't the creation of labor unions destroyed the industry with labor unions? Or even the overall economy? Since the inception of labor unions in this country, our economy has roared to heights never before seen in the history of the world, and no matter how much I repeat that, you still don't acknowledge that. Why not? Either acknowledge it or refute it. Have we not experienced the greatest economic growth in the history of the world from 1945-1999? How could that be if we 1) increased minimum wage during this time, and 2) forced companies to pay all labor a better wage? What you say is not reflected in reality, Jeff.

Jeff Lindsay: said...

Stan, I would also suggest that the impact of Neumark and Wascher's work goes far beyond their critique of the New Jersey work and far beyond any subtle or overt bias in data provided by EPI. Since that paper I cited, their scholarship has continued to survey the problem at an international level. See the abstract for their 2006 paper, "Minimum Wages and Employment: A Review of Evidence from the New Minimum Wage Research."

We review the burgeoning literature on the employment effects of minimum wages - in the United States and other countries - that was spurred by the new minimum wage research beginning in the early 1990s. Our review indicates that there is a wide range of existing estimates and, accordingly, a lack of consensus about the overall effects on low-wage employment of an increase in the minimum wage. However, the oft-stated assertion that recent research fails to support the traditional view that the minimum wage reduces the employment of low-wage workers is clearly incorrect. A sizable majority of the studies surveyed in this monograph give a relatively consistent (although not always statistically significant) indication of negative employment effects of minimum wages. In addition, among the papers we view as providing the most credible evidence, almost all point to negative employment effects, both for the United States as well as for many other countries. Two other important conclusions emerge from our review. First, we see very few - if any - studies that provide convincing evidence of positive employment effects of minimum wages, especially from those studies that focus on the broader groups (rather than a narrow industry) for which the competitive model predicts disemployment effects. Second, the studies that focus on the least-skilled groups provide relatively overwhelming evidence of stronger disemployment effects for these groups.

In 2009, they published a book, Minimum Wages. Are you sure that their work has been destroyed academically?

Jeff Lindsay: said...

Yes, Dan, when inflation is taken into account, minimum wage was higher long ago--and employees are worse off. But that's not because we haven't increased minimum age fast enough. It's because we've increased deficit spending and the money supply too quickly. Our money has lost over 95% of its value since the huge private bank known as the Federal Reserve was given power to control the money supply, and especially since our currency became fiat currency able to inflated easily. Those on fixed income are especially vulnerable. It's a terrible loss--always in the name of some feel-good objective by spending more and more without restraint. The erosion of value in our currency is one of the great and terrible unintended consequences of unrestrained compassion. We are all being impoverished by it.

As for unions, yes, of course they raise wages relative to what would prevail in the market without their influence and thereby create barriers to employment for others. I'm not saying they are inherently evil or haven't played a helpful role historically.

For an employer, forcing the salary to be higher than what the market requires means fewer jobs. Can it possibly mean more jobs, on the average?? Don't you think it's possible that the role of unions in the US automotive industry gave us a competitive disadvantage relative to, say, Toyota?

Jeff Lindsay: said...

Dan, the benefits of the industrial revolution, of the electrical age, of the technological age and knowledge economy, of the revolution in food and health and medicine, of the space age, of the Internet, of the spread of liberty to new nations, and so forth, have created a tidal wave of prosperity that has been far more powerful in moving the world forward than many forces that worked the other way.

Yes, during this era, unions rose, taxes were raised, and minimum wage laws were imposed. But it's a stretch to give them credit for the economic revolution. Especially globally.

I fear a chance of mistaking occurrence with causality. During this time, anti-Semitism burgeoned, nuclear weapons were invented and deployed, cancerous chemicals were dumped into the environment, AIDS, syphilis, and malaria spread globally, and Lady Gaga went viral. I'm not sure that all those factors deserve credit for elevating the human condition, either. That's just my opinion, of course.

Stan Beale said...

Michael,

In a way you missed my the argument I made. Let's start with a restatement of my thesis My point was simply applying a an economic theory to legislation without careful thought and analysis can be very dangerous. I tried to use examples from both ends of the economic and political spectrums (thus the luxury yacht example from the left), You still cannot change he fact that Reagan had to agree to higher taxes because the Laffler Curve effect did not cause a rise in Federal Revenue. You cannot change the reality that lessening or ending regulation did not help lead to a lot of corrupt practices and fraud.

Let me give a current example. Paul Ryan's GOP proposal for Medicare is badly thought out. There is little debate that Medicare needs to be dealt with, but the question is how.

Ryan's plan for those who turn 65 after 2021 would have medicare pay for about 1/3 of a Senior Citizens medical costs (CBO estimate). The prime cause of that is that the medical expenses of people over 65 cost about 3.3 times the cost of people 21-65. In today's dollars that would mean Grandpa and Grandma would have to fork over about $40,000 a year for medical coverage. Frankly, in the parlance of the rural folk around here, "that dog don't hunt."

Dan said...

Jeff,

Don't you think it's possible that the role of unions in the US automotive industry gave us a competitive disadvantage relative to, say, Toyota?

Nope. Toyota is forced to pay their employees here in America a higher salary directly because they fear their employees unionizing.

For an employer, forcing the salary to be higher than what the market requires means fewer jobs.

What the market requires? Or what management thinks it requires?

I fear a chance of mistaking occurrence with causality. During this time, anti-Semitism burgeoned, nuclear weapons were invented and deployed, cancerous chemicals were dumped into the environment, AIDS, syphilis, and malaria spread globally, and Lady Gaga went viral. I'm not sure that all those factors deserve credit for elevating the human condition, either. That's just my opinion, of course.

So as long as I do not find equal good and bad in previous generations, they were better off than we are now? The 17th-19th centuries saw slavery as one of the main uses of labor. Is that what the market deemed right? Sure was great for slave owners. They made lots of money.

Since we're just giving out opinions, it is my opinion that the "market" is quite flexible and finds a way to work itself out under almost all conditions (the one example where it simply cannot is North Korea---but since no one in their correct mind has any desire to repeat their debacle, there's no need to mention it anymore). Maybe we should worry less about what the "market" wants, and care more about the individual people. That seems to be more of what Jesus Christ taught us to do. Particularly since the "market" being invisible and all, doesn't tell us much about its real intentions or desires, or even what its true levels of maximum efficiency really are. Perhaps if we care less about that, and care more about the souls of men, we might find ourselves in better shape. Or, we could just give the rich all the money they deserve. Clearly they're righteous and we should trust them to use it right.

Jeff Lindsay: said...

Dan, I think I'm with you in spirit on some of this. Generous treatment of one another should be our standard. Yes, the greedy stand rebuked in the Lord's eyes, and that can include employers who extract too much for too little. In a more Zion-like society, I think we would have generous employers and conscientious employees. Given what we have to work with right now, though, I lean toward the side of personal liberty to resolve how things should be allocated. The market is vastly inferior to divine wisdom, but it's far smarter than bureaucrats in determining the optimum allocation of resources through the mechanism of price. If an employer wants to pay me too much (no complaints, actually--it works for me) or too little, that's their right, but it's my right to walk and go where I find the opportunities I like. External help in the name of fighting poverty can end up creating more, unintentionally.

May we all be increasingly generous in what we provide to others. Easy to say, but hats off to the many employers I know who really strive to be more than fair with their people and are truly generous in helping others.

Jeff Lindsay: said...

Some external help, that is. Not always. Mostly when stupidly implemented and done without considering the long-term consequences and actual costs.

Dan said...

Jeff,

You use the words "personal liberty" as if my position is against it. I think "personal liberty" has become a catchall word to mean whatever one wants it to mean and fit some ideology. Liberalism is not statism, or corporatism, and is certainly not against personal liberty, no matter how conservatives frame the debate.

Dan said...

Jeff,

Given what we have to work with right now, though, I lean toward the side of personal liberty to resolve how things should be allocated.

Just one more thought on this. You say "personal liberty" should be the main guiding force behind resolving how things should be allocated. Who's personal liberty? The worker's? How could the worker be able to demand the right pay for his labors? Let's go back to those utopian days before "big government" got in the way for a few examples.

1. If I were a guy with a wife and two kids living in, say, West Virginia, how much personal liberty do I have to demand a safe working environment and a decent pay to work in the mines?

2. If I were a teenager (we're not even gonna go into the "personal liberty" debate over child labor...I'm sure we're both in agreement that back in those heady days of true personal liberty, our society was wrong in working children to death...) how much personal liberty do I have to demand more than pennies for my labor?

3. I'm a woman, not yet married, but away from the parents trying to live life. What personal liberty do I have to demand equal pay for equal work with a man?

4. I'm an African American living in Mississippi. I've got a wife and three kids at home. I don't have much of an education, but I want to work hard and will do whatever is necessary to bring home the bacon, so to speak. What personal liberty do I have that I can demand equal pay to a white man?

Or is personal liberty just something important for the manager or the business owner?

Anonymous said...

What personal liberty do I have to demand equal pay for equal work with a man?

What personal liberty do I have that I can demand equal pay to a white man?

NONE! You have to understand that, from the perspective of the libertarian or "small government conservative," equality of the sort you're talking about here doesn't count for jack.

From the perspective of the libertarian or "small government conservative," individuals SHOULD be free to discriminate on the basis of sex, race, religion, etc. as much as they want to. The government should not infringe upon that liberty by forcing them to treat men/women/blacks/Mormons/you name it equally. I should be free to hang up a sign at the door of my business saying, "No dogs or Mormons allowed." True, the market might punish me for doing that (or not, depending on local attitudes), but the government should not punish me for doing it.

From the perspective of the libertarian or "small government conservative," if you're a member of a historically disadvantaged group, you're just out of luck. Use the back door, buddy. The front door is only for whites.

Republicans don't necessarily believe that sort of thing is right, but it's intrinsic to their philosophy that such a thing be permitted.

It's no accident that Republicans are disproportionately white and male and well-off. It's a consequence of their basic conception of the proper role of government. It's all about liberty, not equality. And why not? If you're already on top, what do you care about equality?

Michael said...

"It's all about liberty, not equality. And why not? If you're already on top, what do you care about equality? "


I love it! There is only ONE way to bring about equality. And that is the pure, unadulterated use of force and coercion.

"Life, liberty, and the pursuit of happiness"....The framers didn't talk a lot about equality because they understood that it's a false god. Whether pursued in the Soviet Union in the past, or Venezuela currently, equality really means a Midas lifestyle for the enlightened at the top and misery for everyone else.

Michael said...

"Paul Ryan's GOP proposal for Medicare is badly thought out. There is little debate that Medicare needs to be dealt with, but the question is how."



Actually, Ryan's plan, while far from perfect, is the freshest breath of fiscal air from Washington in a long, long time.

Here is a question that I want a liberal or a leftist to answer honestly: how do you really pay for the upcoming $40 trillion Social Security entitlements?

There is not enough money in the world to pay for it. And just printing out the cash, Bernanke style, will make us all paupers in the end.

Anonymous said...

Here's a question I'd like Michael to answer: How do you propose to pay for the upcoming $400,000,000,000,000,000 in military costs? Huh?

If I choose my time frame conveniently enough (say, from here to 2096) I can generate pretty much any kind of scary figure I want, which is a heck of a lot easier than framing an actual argument.

The sensible approach is to tweak payments into and out of the SS system early on when you anticipate a demographic "egg" approaching--this is not rocket science; it's like managing any other fund, unless, of course, you're trying to gin up a sense of panic in the hopes of convincing people to privatize the system.

BTW, "equality" in this context means "equality of opportunity," not the straw-man "equality of outcomes" which right-wing rhetoricians always accuse liberals of beliving in.

The left believes in equality of opportunity. The right does not, but realizes the unpopularity of its position and so misrepresents itself as holding the position of its opponents, and its opponents of holding a position that is insane.

Michael said...

Anonymous,

You are assuming that I'm a fan of war, and that I am happy with never-ending wars and the deficit spending that finances them.

I do not favor either.

We need to drastically cut defense and entitlements if we are save our country. Contrary to your insinuations, this isn't fear-mongering. It's the god-awful truth. Democrats and collectivists refuse to acknowledge this. There is not enough money in the world to pay for a cradle-to-grave welfare state. There never has been.

Anonymous said...

Some time ago, I wrote a blog post about the broken state of our economy that has been effectively designed to avoid fixing itself. I promoted removing welfare and the minimum wage and putting welfare wages to use in programs that helped people "learn to fish" instead of live forever on what was provided. I still think our various systems have a lot to do with what is keeping the system from helping itself. These programs (both welfare and minimum wage) have a lot to do with the onslaught of illegal immigrants who come to this country to receive both government assistance and jobs that pay below minimum wage. Again, removing both would contribute greatly to helping right some of the wrongs of our present situation. Not that our government is willing to even consider such moves...

Anonymous said...

When my wife and I purchased our minivan, we felt particularly led to consider it a consecrated vehicle. In the almost seven years we've owned it, we have used it to contribute greatly to LDS Emergency services as the church sent help after the seven hurricanes that hit the US in two years. We loaned it to a family whose only vehicle has blown an engine so the father could get to work, which allowed him to save enough to fix the truck eventually and return our van. We loaned it again to a friend whose van lost its engine during flooding in our area when his wife was literally pulled off the road by a powerful surge in a storm that came so suddenly the whole town was caught unawares. Finally we let another family borrow it while their much older van received repairs that allowed them to continue to use it. I am leaving my name off of this post because I am not concerned about credit: I want to say how blessed our family has been every single time we have so willingly responded to these needs without worrying about government assistance or church welfare. Each of the families we were able to help had already blessed our lives and continue to do so by their love and friendship, but even beyond their direct help, we have seen so many ways we have been supported in our own struggles.

I love the spirit with which you wrote this post, Jeff, and I hope those who initially were bothere by it now see the goodness in your intention. There is so much more goodness in giving someone a hand up instead of a hand out. I have seen it from both sides (giving and receiving). We could all learn to do more to help each other up.

John Jackson said...

May the post that was killed live forever as this thread never dies. (Just kidding, but 70 comments is a fair amount.)

John Jackson said...

I do not understand at all why we do not do something about this, why we do not insert work into our social programs.

"I think Jesus would say that it doesn't matter how we help the poor," Dan says, in the first comment in this thread. Jeff replies that it matters very much how we help the poor, and he is right.

But, if the how is important, the who is not so crucial. If it is to be the government, then so be it, but let's have the government attach work to the programs. It has been 75 years since the inception of our current system and what are we saying, that since we are not in favor of government welfare, we will not tinker with it at all?

You might not like the government to be involved, but it is. And, if it is to be involved, let's have it do it right.

I cannot believe that 75 years has gone by and yet so little has been done. Do we hear of federal legislation even being introduced? Can we name even just one of our congressmen (from any of the 50 states) who are pressing for this?

Anonymous said...

@ John Jackson: You might want to read up on "workfare."

John Jackson said...

Have, some, and note New York, noteably, instituted it.

Anonymous said...

@ John Jackson -- I would like to suggest a general point of moral philosophy: to the extent the poverty rate is the result of conscious government policy (that is, our policy), then the government bears a moral responsibility (that is, we bear a moral responsibility) to help the poor. Things like the poverty rate are of course determined by many factors, only some of which are under human control. But if the we adopt a policy that knowingly exacerbates people's misfortunes in order to achieve other objectives (lowering inflation or whatever) then we have an obligation to mitigate the harm we have done. This is particularly true when the policies we adopt habitually benefit one segment of society at the expense of others. (I'm not making any claims here about specific policies--just a general point.)

I base this on the general principle of taking responsibility for one's actions, of mitigating the harm one has knowingly brought about (or even passively allowed to happen). In theory, this is a pretty simple principle, though of course in practice it can get pretty gnarly.

I bring this up to suggest that sometimes what are framed as government "handouts" might actually be collective moral obligations. Sometimes what people treat as purely technocratic matters, questions to be resolved purely by citing economic studies, sometimes have a moral dimension that transcends the purely economic.

Bookslinger said...

Jeff, when are you going to learn? There are certain nattering nabobs of negativism out there who are going to twist and misconstrue whatever you write so that they can get on their high-horse to denounced Mormonism, or conservatism.

It's a never-ending battle. And you'll never be able to write something that totally pleases them unless you AGREE with them.

They are true totalitarians, doing Satan's work in the name of compassion.

Anonymous said...

Wow, Bookslinger! I've disagreed with Jeff (and others, including many of his opponents), but I've never called anyone I've disagreed with a totalitarian, or accused them of doing Satan's work.

That kind of talk strikes me as pretty rude. Jeff, I'm just curious -- do you agree with Bookslinger? Do you consider your verbal sparring partners to be totalitarian agents of Satan?

P.S. Sometime after uttering the phrase "nattering nabobs of negativism," Spiro Agnew resigned the vice presidency in disgrace. He was a hateful and corrupt politician, hardly the sort of guy you really want to identify yourself with.

John Jackson said...

@ Anonymous, whose opinions are as good as mine and who I do not view as someone forwarding Satan's agenda:

If a government policy exacerbates a problem then we should do what we can to mitigate the harm the policy is causing. I would apply this thought to our welfare program. Welfare was a solution our nation arrived at back in 1935, but the program created places people not only outside of work, but in a position where they become dependent on free care. We, the people, then have the obligation of calling on our legislators to insert work back into the equation.

I did go back and briefly review the workfare history. Mayor Rudy Giuliani's efforts in New York drew praise at the time, but later resulted in charges that workfare workers were replacing city workers at lesser wages and drew charges of unfair labor practices. It seems like there had been national legislation ahead of Giuliani's effort, but I did not restudy long enough to know that. I did find that the landmark national legislation came in 1996. It was a product of the Contract for America, and the bill was signed into law by Bill Clinton, who hailed it as "the end of welfare as we know it."

Among other things, TANF replaced AFDC.

As much of a landmark as it may have been hailed to be at the time, I do not believe nearly enough has been done in replacing welfare with work.

John Jackson said...

The best solution to the welfare problem is to just give everyone jobs to begin with, but perhaps that would be considered socialism. I say, if it is the solution -- if it works -- do it, regardless what label it attracts. Nobody accused Joseph (the one sold into Egypt) of socialism when the government he directed stored food, and then doled it out.

We run from the answer in the name of running from a label. Better that we embrace the good wherever it is found.

Just give everyone a job. Create companies for those who are unemployed. We might not even need to have government being the force behind this. So, no socialism. Private enterprise can do it. Many of our richest people are also philanthropists. Many of them are fiercely patriotic. Most of them are already running companies that provide our employment. Yes, I think many WOULD respond if we called on them to create companies whose first objective was not to make a humongous profit, but simply to provide employment.

Anonymous said...

Agreed. Isn't this more or less what was done during the Depression with the Works Projects Administration?

John Jackson said...

The Work Projects Administration and Civilian Conservation Corps did provide jobs. It hits me that of all the things created in the wake of the Great Depression -- Unemployment Insurance, Aid to Families with Dependent Children, and whatever else -- most have survived to this day, in one form or another. But, putting people to work? That was shuttled.

That said, I read how a group called WPA Today and also Paul Krugman and his Job Party are suggesting the WPA be resurrected, 21st Century style -- and I quake, tremble and fear. At a time we are grappling to solve an out-of-control budget, we must not add to our woes. The WPA was the largest agency in the New Deal Administration. Expenditures were $11 billion in 1943.

If instead of a WPA, we simply called on our rich to create new companies (companies just to provide jobs, not turn enormous profits), we could solve one problem without creating another.

Closing note: Despite the WPA, the unemployment rate remained high even at the end of the 1930s. The WPA workers were not counted as part of the workforce (for whatever reason), but even if a correction of that is factored, unemployment still calculates out to about 10 percent in 1940. If you are attempting to get all willing and able-bodied souls into jobs, it should not be that high.

RWW said...

Theft is theft, whether the loot is completely squandered, or some of it is given to the poor. After 78 comments, no one has pointed out this basic principle yet? Very sad.

Anonymous said...

What is theft, RWW? Is taxation theft?

dovh49 said...

Hi Jeff,

I linked you from the "Wheat and Tares" Mormon blog, which has a lot of liberals (not all are liberals though and I don't know how many of the commenters were from there on your original post). Don't know if that is why you received a bad report from your first post that I linked to.

I thought it was a great post and made lot's of sense. Really, there is nothing we can do to convince other people of our views. I've tried but really people have to be open minded and most of us aren't (including myself on certain things).

Take for example the person that mentioned Head Start as a good program. The government itself has done studies showing that it doesn't work yet we continue to increase its funding. Not only that, but you can say that it does help break families apart by taking children away from families that otherwise would have to stay home with their children because they wouldn't be able to afford to work and send their children to daycare. I suppose you could say the same thing about government schools in general.

Anyways I enjoy your blog (even if I disagree with your rare political points), keep up the good work.

jackg said...

Jeff,

This is very good. I work for a Rescue Mission as Direct Services Manager, which means I oversee the distribution of food, clothing, and furniture to the poor and homeless. As an adolescent, my father was in a motorcycle accident that put us on Church welfare. The best part of being on Church welfare was the opportunity to go the orange groves the Church owned and help pick oranges for others in need. It was the best part because giving back helped my family's self-esteem. We weren't just takers, but when my dad got back to work we were contributors. It was a time in my life I will always remember.

Sometimes, I think we struggle to give to the poor because we want to make judgment on the decisions they may have made in their lives that have caused them to be poor, homeless, needy, and dependent on others. Shame on us when we do that. We are not called to point fingers, but to help without worrying how the person got to such a place in their lives.

There will always be a tension as you describe in which the question of whether or not we are enabling another person is posed. Sometimes what we give will be used for something that we don't support, such as alcohol and drug use. I don't think we should focus on that. That could make us crazy after a while and keep us from responding with a heart of compassion. The important thing is to touch another life with the same heart of compassion as God.

Thank you for this wonderful article, Jeff. I was able to sense your heart of compassion, and it warmed my soul.

Peace and blessings to you and your family on this week of amazing grace!

Mateo said...

wow, I'm horribly late to this party. First off, I think the concept of every person thinking more about how they can give and help those around them is fantastic. I think in some ways volunteers are more capable then a government entity to help the poor.

I think it has an extent of it's ability though. While in a perfect world everyone would give enough and you wouldn't need a government, we don't live in that world. It'd be great if we didn't need law enforcement either but I don't see that being the case. Large scale societies suffer from a lot of problems when it comes to being self correcting because after a certain size the annonymity of the individual inspires them to take advantage or the faceless masses. In small groups the libertarian method works great, but that doesn't say much because lots of government styles (or a complete lack thereof will work in a communal setting. Sorry I'm going on a tangent here.

Jeff, you stated this earlier:
"Dan, in saying that an increase in price lowers demand, what is meant is that holding other variables equal, the effect of increased price is to lower demand for labor."

The problem I see with what you're proposing is in insinuating that all other variables stay the same. They don't. Increasing minimum wage changes the dynamics of the area. You seem to see the problems with this statement when looking that the points of views of others (for example when you pointed, correctly, that there are lots of other variables that were changed from 1941 and today that could account for the lower unemployment other then the minimum wage at the time. This issue is pretty complex to be deriving such a simplistic answer like "increasing minimum wage will increase employment" We can point to correlational statistics but as has been previously shown you can find contradictory studies that seem to point in either direction. Perhaps it's possible that the correaltion to the two is not direct in all cases but is sometime indirect. Perhaps there is a different factor that better correlates.