Food stamps, time of the month, and outcomes

This is Joseph

A recent set of studies had some interesting things to say regarding food stamps, and what happens in the last week of the month of benefits.  Emily Badger concludes:

None of these studies can say for certain that the food stamps shortfall causes hypoglycemia, or poorer test scores, or student behavioral problems. And the relationship is likely complex, a product of fewer calories, rising stress, financial tradeoffs, or lost sleep. But these studies suggest that families struggle in multiple ways when the food assistance runs out, and in ways that have to do with more than hunger.

These are good experiments, as the participants are serving as their own controls, greatly mitigating potential confounders of this association.  Instead, week of the month seems to be acting like an instrument (acting only through benefit and wage cycles), which is a very good property for an exposure to have.

I think that there are two pieces here.  One, it is pretty clear that we are probably spending more public money to keep food stamp benefits low -- as being admitted to a hospital is expensive.  So it is a odd kind of frugality that insists we need to pay more to reduce benefits to people with low levels of resources.

Two, the test scores piece makes it clear that these decisions also affect children, who are not really moral agents in regards to family financing.  Instead, it is more of a "luck of the draw" as to what income strata one is born into.

I will also note that this could have interesting effects on high stakes testing in areas with a lot of low income families.  Just the variance as to which week of the month a class takes their test could influence teacher evaluations -- a clear example of an exogenous factor we really don't want driving our results.  

Small changes in taxes

This is Joseph

Matt Yglesias has a really nice chart on how effective tax rates have gone up on the top 1% and top 0.1% of earners in the recent administration.  It's still not a crushing burden -- it looks like about 27%, for both groups, based on the chart (from a low of 19%/23%).  It definitely makes one wonder about things like this piece, where Chris Dillow wonders why rich people object to taxes. 

But it is worth remembering that we aren't talking about a crushing increase in tax burden here, even if there are other sources of taxes other than federal income taxes.  None of us like paying taxes (it is an expensive world) but these are not the scale of increases that I suspect lead to crushing burdens.

A Paul Krugman pun so bad even he apologizes

And you thought Asterisks: The Gall was bad.

From Doubling Down on W [emphasis added]:

The only real move away from W-era economic ideology has been on monetary policy, and it has been a move toward right-wing fantasyland. True, Ted Cruz is alone among the top contenders in calling explicitly for a return to the gold standard — you could say that he wants to Cruzify mankind upon a cross of gold. (Sorry.) But where the Bush administration once endorsed “aggressive monetary policy” to fight recessions, these days hostility toward the Fed’s efforts to help the economy is G.O.P. orthodoxy, even though the right’s warnings about imminent inflation have been wrong again and again.

One interesting historical note: back in the day, the leading evangelical candidate was violently opposed to the gold standard.

Even suburban cowgirls get the blues

Recently, I've gotten into the habit of checking the relevant Wikipedia pages after reading a news story. I particularly recommend checking the demographics of the towns that come up in the report.

For example, Charles Pierce points us to this quote from Dana Perino.

One of the greatest compliments I've been given is that people who met me when I first got to Washington, D.C., in 1995 say that I'm still the same person today, even though I've been blessed with opportunities to work in the White House, travel the world, and transition relatively smoothly into a new career in television on The Five. I realized I couldn't start the book with my recollections of my years working for President Bush—just showing up at age 35 as the White House Press secretary—so I had to tell the story of how I became who I am today. And with every fiber of my being I think of those years in the West as the most formidable, and I miss that way of life so much. And I have always known that if ever I needed to, I could go home. They'd take be back in an instant, though I'd have to shed some of my big-city conveniences and haul my own groceries to my kitchen.

For the moment, let's put aside the question of whether carrying your own groceries in from the SUV constitutes roughing it, and instead look at that other way of life in the formidable West.

According to my go-to source,  Dana Perino grew up in an affluent white-flight suburb of Denver.

As of the census of 2000, there were 23,558 people, 7,929 households, and 6,525 families residing in the town. The population density was 1,615.2 people per square mile (623.4/km²). There were 8,352 housing units at an average density of 572.6 per square mile (221.0/km²). The racial makeup of the town was 92.60% White, 1.71% Asian, 1.01% Black, 0.45% Native American, 0.03% Pacific Islander, 1.88% from other races, and 2.33% from two or more races. Hispanic or Latino of any race were 5.80% of the population.

...
The median income for a household in the town was $74,116, and the median income for a family was $77,384 (these figures had risen to $80,679 and $89,154, respectively, as of a 2007 estimate). Males had a median income of $52,070 versus $35,700 for females. The per capita income for the town was $27,479. About 1.7% of families and 2.3% of the population were below the poverty line, including 2.2% of those under age 18 and 2.1% of those age 65 or over.

I tried to go to the National Review article to see if the quote looked better in context. If anything it came off worse. Both Perino and her interviewer, Kathryn Jean Lopez, are careful to present things like part-time college jobs and visits to her grandparents' ranch so that they suggest a simple cowgirl of humble origins who would raise to great heights. As someone who grew up  in rural Western Arkansas, that does stick in my craw a bit.

Of course, there's another level of irony in the fact that her career peak was working for a cowboy president who was afraid of horses, but that's a story for another day.

Star Wars the Force Awakens (mild spoilers)

This is Joseph

It has become hip for critics to complain about the new Star Wars movie.  That said, it is hard to imagine objectively bad cinema sustaining such high box office numbers.  Buzz and nostalgia can result in a large opening day but don't provide a good explanation for the sustained numbers and the repeat viewings.  I admit that I was one of the repeat viewers -- I had low expectations and they were definitely overcome.

Now, it is true that the movie starts out derivative and kind of stays there.  But it is a skillfully done version of derivative.  There is fan service, some of which is distracting, but you could watch the movie without ever having seen Star Wars and enjoy it.

Instead of presuming that this is the last good movie before the series craters, I think that we need to wait and see.  The next movie will have a new director, with a reputation for being a free thinker. It is obviously possible that the next movie will take derivative too far, and result in a bad flick.  There is no guarantee that a studio can't find a way to mess up a popular franchise, but I must admit two things:

One, the movie was a lot better than I expected.

Two, I am now cautiously optimistic about Stars Wars VIII and I look forward to seeing if my optimism is warranted.  

That said, J. J. Abrams does need to figure out how to create a perception of time passing during space travel.  It's by far the most immersion breaking flaw in the film, and could be easily improved by looking at Star Wars IV or almost any episode of Star Trek.

A good new year's resolution

This is Joseph

Harold Pollack has a great article in Vox on improving personal finances.  In particular, the first suggestion, "Pay off (or chip away at) your credit card debt", is probably the easiest way to improve one's long term financial situation.

A thought for the new year: Eisenhower on planning

From the indispensable Robert Bateman:

"Plans are worthless, but planning is everything. There is a very great distinction because when you are planning for an emergency you must start with this one thing: The very definition of "emergency" is that it is unexpected. Therefore it is not going to happen the way you are planning. So, the first thing you do is to take all the plans off the top shelf and throw them out the window and start once more. But if you haven't been planning, you can't start to work, intelligently at least."

Happy New Year from Windsor McCay and Little Nemo

Make it a good one. 

Originally posted at Mippyville.

This could go poorly

This is Joseph

Seattle voted for extra money to improve transit service in Seattle via a special Seattle-only levee.  This seemed to be a promising improvement in administration -- jurisdictions that wanted more service could pay for it.  This isn't working out quite so well in practice:

This isn’t surprising, as the suburban and small town/rural parts of Metro’s service area are over-represented on the board, and they’re simply fighting for their interests. But the risk to the (high-performing, heavily used, high farebox-recovery*) core Seattle routes might be more palatable given that Seattle’s prop 1 funded service hours make Seattle seem flush with service, such that they can afford to give it up. To take Prop 1 money and use it to pay for non-Seattle routes would be flatly illegal, but to achieve the same allocation of service hours through a change to the service revision guidelines isn’t. If this has a significant impact on future service allocations, it’ll be in the direction of reducing frequency in Seattle, keeping the kind of frequency that might support car-free living out of reach, while subsidizing commuter bus service that makes autocentric (for all but commuting to work) sprawl more viable.

This approach, if it remains, is a very bad use of incentives.  The places that decided not to fund additional services get them via a change in the service revision guidelines simply means that Seattle is paying for everyone's transit.  That isn't exactly a good basis to make future transportation policy on as this would eventually make the Seattle folks think they are being played for suckers. 

Hopefully wiser heads will prevail. 

As currently implemented, MOOCs make no economic sense

Dean Dad does, of course, have a dog in this fight, but his arguments are completely sound, particularly regarding the strangely neglected CLEP option.

 Quick, which is the better deal:

    Watch videos online and pay $649 for three credits.
    Take a class with a human being and pay $252 for three credits.


...

That’s not necessarily a bad thing, of course.  To the extent that folks watched MOOCs in the same way that they watch, say, TED talks, I don’t see the harm in it.  But to the extent that the partnership was supposed to be about opening pathways to bachelor’s degrees, it doesn’t come close to comparing to the already-established route of starting at a community college -- in this case, I used the tuition rate of Maricopa Community College, the largest feeder to ASU -- and transferring.

The program didn’t even follow the usual “script” for “disruptive innovations.”  It came in at a higher cost than a respected, existing alternative.  That’s not how disruption is supposed to work.  I have to wonder at the implied invisibility of the single largest sector of American higher education, but that’s another discussion. 

ASU was essentially trying to charge premium prices for Prior Learning Assessment and hope nobody would notice.  A savvy student could simply watch the MOOC and then take a CLEP exam for credit for less than a hundred bucks.  I admire the audacity of the effort, though I admire more the clarity with which most people saw it. 

I have serious doubts about the 1964 analogy, but ...

If you have to make the analogy,  I think it works better with Cruz than Trump.

The invaluable Robert Bateman provides the background:

Last night, Senator Ted Cruz demonstrated the depth of his ignorance about all things military when he said (and quoting him exactly is important):

BLITZER: Would you carpet bomb Raqqa the ISIS Capital, where there are a lot of civilians? CRUZ: You would carpet bomb where ISIS is, not a city, but the location of the troops, you use air power directed, and you have embedded special forces to direct the air power. But the object isn't to level a city, the object is to kill the ISIS terrorists...

Except earlier Cruz said, like, with his outside voice, this: 

We will utterly destroy ISIS. We will carpet bomb them into oblivion. I don't know if sand can glow in the dark, but we're going to find out."

I don't know if you caught that. Senator Ted Cruz proposed that as President of the United States, he would use nuclear weapons to bomb, indiscriminately, civilian population centers where ISIS holds people hostage. 

...

Carpet bombing is a tactic, and a measure of last resort. It is also now widely understood to be effectively illegal under the Law of Armed Conflict, which would make the United States' use of this tactic a war crime. It is different from precision bombing, guided by Special Operations Forces, the standard tactic for our armed forces today.

...

Today, with precision weapons, we drop bombs that go precisely where we want them. We do not drop unguided bombs indiscriminately on civilian population centers, as we have in the past. We, unlike some others, have precision weapons now. The Law of Armed Conflict is pretty clear that if precision is an option, you are not allowed to "carpet bomb" in civilian areas. (You are not allowed to anyway, but there is a mitigating factor that deals with "proportionality" as well. We'll leave that for another time.) ISIS, for its part, does not occupy a whole lot of conventional military-like defensive positions out in the desert either. Its operatives are embedded in the population centers, the villages, towns, and cities. Flattening entire cities to kill a few dozen or even a hundred ISIS fighters would be "disproportionate," just as it would be if we were fighting a conventional military force.

But there is one place the analogy definitely breaks down. Goldwater was, when you got past the scary stuff, likeable. 

From Josh Marshall:

Cruz, on the other hand, is not likable. And thoroughly unlikeable people do not win the presidency.

As I've written, in part from personal experience, there does not seem to be any social milieu in which Cruz has spent any amount of time in in which virtually everyone didn't dislike him. College, Law School, high profile legal work, Senate, etc. He has the uncanny and almost ingenious ability to radiate both intensely grating insincerity with wildly convincing true-believer-ism. His political appeal is geared to people who are alienated and angry enough that the mix of aggression, indifference, and exploitativeness he radiates is one that these people can identify with.

Second is simply ideology. Cruz is way too rightwing for a national campaign. This is almost mathematical. He's very right wing and unlike George W. Bush presents his hard right politics in a pure and unmediated form. That is a recipe for a staggering defeat in a national election. Just as importantly, I do not think Cruz is either temperamentally capable, interested or able to significant shift off those views in a general election. Part of it is character and part of it is simply that he's created to long a paper trail. There is no credible softer, gentler Ted Cruz who cares about people like you.

He would certainly have impassioned and intense support from the base of his party and some of the more conservative elements of the financial services community - something that Trump might struggle with. But beyond that he would have great difficulty.

Miami: the new Venice?

This is Joseph

I had known that Miami was in trouble due to the flat topography and the low distance above sea level.  What I had not realized was how much the limestone structure that South Florida is built on would be a problem by instantly raising the water table.  This article nails it:

“We have a triple whammy,” he said. “One whammy is sea-level rise. Another whammy is the water table comes up higher, too. And in this area the higher the water table, the less space you have to absorb storm water. The third whammy is if the rainfall extremes change, and become more extreme. There are other whammies probably that I haven’t mentioned. Someone said the other day, ‘The water comes from six sides in Florida.’ ”

This just seems to be set up to make flooding routine and will likely take out the local drinking water too (as sea water invades the limestone).   Why is this not a matter of bigger concern? 

I'm rather hoping it is not another case of Easter Island and Trees.

Principal agent problems

This is Joseph.

I am not usually all that bright but this new law confuses me:

The second provision relates to a campaign by investors and Democrats to prod the SEC into forcing corporations to disclose their political spending. The idea gained steam from a 2011 petition by a group of corporate law experts arguing that the Citizens United decision made corporate disclosure especially urgent. The petition has attracted 1.2 million public comments, the most in the SEC's history. The budget bill prohibits the agency from spending any funds to "finalize, issue, or implement" any rule on disclosure of political contributions.

As the petition observed, shareholder interest in such disclosure was so strong that more than half the companies in the Standard & Poor's 100 index had voluntarily adopted the policy by 2011. But the pace of adoption had slowed considerably in recent years, suggesting that SEC action is needed.

Indeed, the Supreme Court in Citizens United placed great weight on the value of disclosure -- perhaps naively so. "With the advent of the Internet," Justice Anthony M. Kennedy wrote for the majority, "prompt disclosure of expenditures can provide shareholders and citizens with the information needed to hold corporations and elected officials accountable for their positions and supporters." Disclosure would enable shareholders to "determine whether their corporation’s political speech advances the corporation’s interest in making profits, and citizens can see whether elected officials are 'in the pocket’ of so-called moneyed interests."

But as the law professors noted, this system doesn't work unless shareholders "have information about the company’s political speech....Absent disclosure, shareholders are unable to hold directors and executives accountable when they spend corporate funds on politics in a way that departs from shareholder interests."

Now, stop me if you have heard this before but don't the shareholders actually own the company?  How does allowing the managers of a company (owned by other people) conceal information about the use of corporate resources help matters?  Companies are already dealing with a host of principal agent problems but these can only be compounded by allowing these things to do done in secret.  If the political goals of the company advance the interests of the shareholders then should this not be the sort of thing that corporate executives should be able to easily justify? 

I can understand that transparency can be hard and that some forms of corporate practice need to be kept secret.  But this is a direct category of spending company profits (e.g. potential shareholder value) on what could be distinct from the best interests of the shareholders. 

Why would we not want more transparency?

Albert and Pogo's Christmas

Before Doonesbury, there was Pogo. Throughout the Post-War era, Walt Kelly's sharp but gentle political satire (best summed up by Kelly's line "We have met the enemy and he is us.") was obligatory reading for anyone who followed the news.

But before the comic strip, there were children's funny animal comic books like this. You won't find any explicit political commentary, but that doesn't mean they couldn't be subversive in their own way.

Via Mippyville.

Public subsidy of health care costs

This is Joseph

I was reading a fact checking article, and I encountered a very important set of cost estimates that bear repeating.  The OECD estimates health care costs.  It's not surprising that total US health care costs are very high.  What I found more useful to think about was the amounts that the United States ($4,197), the United Kingdom ($2,802), and France ($3,247) spent in terms of public support for health care.  Yes, the US already leads in government provided health care costs (as well as being more than double total costs for either of these countries).

Now I know that this example doesn't give many clues as to how to fix these high costs.  However, it does really start to make the question of whether market forces are really reducing costs in the health care sector seem critical.

I should also point out, that the UK has a very lean system and people may legitimately question if it is too lean for emulation on this side of the pond.  It works, but it makes some painful choices,  However, French health care (almost exactly half in total cost what the US pays) has a very good reputation (even among Libertarians) and may be a place where we can learn a lot about how to decrease total heath care expenses while keeping up the higher level of service that is a clear revealed preference in the United States.

The last piece here is the cost of innovation.  It's a complex topic, but it is clear that some cases of increased costs for medical services, like drugs, are not entirely about innovation but may involve some elements of profit-taking as well.  Insofar as there are innovations that won't exist if Americans do not subsidize them (thus making life better for everyone), it is worth asking if a) this is really the best way to generate these innovations and b) if there is not a way we couldn't average the costs out among other advanced nations based on treaties (it's got to be worth a try, right?).

Happy Holidays!