The Food Stamp President

Okay, let's first just look at the history.

The first food stamp program --they were called "food scrips" then-- originated in the thirties, in response to the widespread need during the Depression. Participants could buy a defined amount's worth of "orange" stamps, which were good for any food item, and with them get a proportional amount of "blue" stamps, that could be used to purchase only surplus commodity foods. By the end of its first year the program was regarded as a success in two ways: (1) as the nation began to ramp up its military preparedness, food stamps were viewed as enabling a larger supply of potential soldiers who were physically fit, malnutrition having been a serious problem; and (2) the food stamp program provided a market for surplus agricultural products and thus kept farm prices from collapsing --the government was already concerned about maintaining robust farm production to meet the needs of what looked like a brewing war effort.

This program was discontinued in 1943; the food surplus and the unemployment problem had vanished due to the war. It was revived during the 1961 recession by President Kennedy, and made applicable only in a few coal-mining areas where changes in the economy had produced widespread unemployment (Kennedy had begun his presidential campaign with an unexpected victory in the West Virginia primary, and the program was the result of a campaign promise). The first recipient was a miner whose mine had been closed a year earlier, and who had 13 children. He got a monthly allotment of $95, which the FDA expected would cover about one-third of his family's need.

In 1964, the program was expanded across the nation as part of the War on Poverty. Ronald Reagan, in campaigning in 1976, attacked the specter of a "strapping young buck" --yes, he really said that, in Florida-- using food stamps to buy a T-bone steak; but a year later, during another recession, the program had just over 16 million participants. By the way, there were 220 million people in the USA then, compared to 314 million today).

Jumping ahead, the number of people fell in the early '80s (Reagan, again) but then grew rapidly in the '90s; there were 27 Million participants in 1994. Republican efforts during the Clinton Administration succeeded in defining the food stamp program as "welfare," thus subjecting participants to the new work requirements that were a centerpiece of the Clinton "end welfare as we know it." As a result, enrollment began to decline substantially: single mothers and their toddlers aren't good candidates for work, it turns out, nor are elderly sick people. It was estimated in 2001 that half of the eligible population no longer received food stamps. Under G.W. Bush, the program was again liberalized, though, as the price the Democratic Congress exacted for an expansion of the farm subsidy program. Under Bush, the program also dispensed with paper coupons and began using electronic benefit cards; this step, along with the program's new name, Supplemental Nutrition and Assistance (SNAP) reduced the stigma of food stamps. In 2008, according to the Food and Nutrition Service of the USDA, about 66% of the 41 million eligible persons were actually receiving SNAP benefits. Overall participation was about 20 Million people in 2000; that had grown to about 30 Million in 2009; the average monthly benefit per person in the program is currently about $125. Currently, about 47 million people receive benefits. Well over $50 million is spent annually on the program.

Now: What does it mean to call Obama the "Food Stamp President?"

Well, certainly the number of people receiving SNAP benefits has grown during Obama's administration. Unemployment has also grown, dramatically. Here are some numbers:

	Month	Jobs Lost
	Aug '08	300,000
	Sep	450,000
	Oct	550,000
	Nov	725,000
	Dec	650,000
	Jan'09	780,000
	Feb	720,000
	Mar	750,000
	Apr	500,000
	May	400,000
	Jun	500,000
	Jul	350,000

That's nearly 7 Million jobs lost in the last 6 months of the Bush Administration and the first 6 months of the Obama Administration. In only one month during 2008 and 2009 was there a net gain in employment. If the eight or nine million people who lost jobs during those 2 years had one dependent each, and if all of them applied for SNAP starting 6 to 12 months after they became unemployed, that would account for an increase from 30 million at the start of 2009 to well over 45 million, all by itself.

Of course, the overly-simplistic nature of this analysis is obvious, on several counts; but the point is just to demonstrate that the increase in people on food stamps should not have been unexpected. It's very similar to the argument that government expenditures exploded under Obama, or that government employment spiked, again, as an example of waste, growth in big government, and so on, during the first part of 2010. There are reasons for this, and they point to the proper functioning of government rather than to the excesses of our first Muslim, Socialist, America-hating president. Automatic increases in unemployment compensation payments largely account for any unusual growth in government expenditures, and government employment in 2010 spiked, in April, due to the hiring of hundreds of thousands of temporary Census workers --it dropped back to the pre-Census level two months later.

So: you can complain that Obama didn't do enough to end the recession or to stanch the bleeding, where unemployment is concerned. I agree with that. But the food-stamp situation is just an aspect of that, not a separate indictment, as if there was an Obama plot to put zillions of people on food stamps.

Small Points

For our text today, let's look at a couple of claims that were repeatedly made during the late, unlamented election campaign:

1. The US is heading towards becoming another Greece.

Greece is suffering for these reasons. It has historically ---

• been unwilling or unable to enforce its own tax laws, so tax evasion is so endemic it's become the norm.
• earned its revenues largely from a few industries: tourism, olives, wine.
• had very high public employment (as a percent of total employment)+

All this produced a low-output economy, with a low-energy (if you will) society. If you've ever spent a week vacationing on a Greek island, you probably, at this point, say, "Opaaa!!!" The Greeks have (or had) a society and a culture that was a pleasure to experience, at least as a visitor: devoted, seemingly, to a relaxed pace and an appreciation of life's little pleasures: sipping coffee or wine in the sun for two or three hours in the afternoon; slow, easy late afternoons, late dining, late rising in the morning. Sounds nice, no?

And then came the Euro. German productivity, German GDP/debt ratios, and so forth became the standard for ... Greece! Whatever you know or don't know about those two countries, does that make sense to you?

A full analysis would be long and complicated. But here is a simple fact:

• The US has its own currency and its own central bank. Greece does not.

What does this mean: First, that the US (via the Federal Reserve) can control the interest rates it pays, because those rates are set by the central bank. And when external economic pressures become too great, or creditors begin demanding interest rates that are too high, the US can also let the value of its currency float.  The pressures will drive the currency down in value, which has two benefits to the US: (1) it can repay debt with cheaper dollars*, and its exports become cheaper, thus improving thehealth of the manufacturing and other sectors that produce these exports. Greece can do neither of these things. The only thing Greece can do, and it is a slow and painful thing to do, is reduce salaries and benefits internally. This takes a long time, seriously harms the population's standard of living, and exacerbates the deficit problem because it (like the austerity that has been insisted upon by Germany, and which has further harmed every country where it has been tried) reduces the total amount of money in the economy and the resulting tax receipts.

In contrast, if the international investment community (bond buyers) decides it does not have confidence in the US economy, it will refuse to buy US Treasuries, consequently bidding down the price (which is the same as bidding up the interest rate). This is what has happened to Greece (and Spain, but Spain is a different case). Greece cannot afford the debt service on its national debt, at 6% or 7%. The US, through its central bank, can choose to let rates rise; but if it does not the value of the US currency will fall, which accomplishes the same thing in some ways.

Interestingly, even with the debt-ceiling crisis, the interest rate on US Treasuries has remained at an historic low for the past few years. Also note that there has been a steady chorus of doom-sayers predicting runaway inflation unless the US embarks on a huge austerity program. These people have been wrong for four years now; and those who made bets on higher interest rates have lost a lot of money.

But what is clear is that the U.S. bears no resemblance to Greece, and no matter how bad our debt situation becomes, a Greece-like situation is, practically speaking, not possible.

*Another way of looking at all this is that if you have your own currency, and your debts are denominated in that currency, you control your own fate. If you use a currency controlled by others, others will control your fate.

2. Obama has resolutely ignored the recommendations of his own Bowles-Simpson Commission, including the recommendation to cut individual tax rates substantially.

In fact, there was no "Bowles-Simpson Commission Report." The 18 members of the Commission were unable to agree on a report, in part because of member Paul Ryan's "no" vote on the report proposed to be issued.

This is true, Look it up. It is the reason we are facing the "fiscal cliff," at least the "sequester" part of it. If B-S (!) didn't produce a report  that would be accepted by Congress, the agreement was that Congress (through its "Supercommittee") would produce a deal itself, or the sequester would automatically occur on 1/1/13. All this was according to the Budget Control Act of 2011.

Bye, Bye, Cubs!

The Ricketts paterfamilias, one Joe Ricketts, has this really great idea, see: spend ten million bucks plastering pictures of Negroes all over the country during the coming election season. See, one of the Negroes is, however illegitimately --isn't even an American, or a Christian--, the current President; and the other is a retired minister who is on record as saying the kind of intemperate things that people like Pat Robertson have said about America. The retired minister, see, was the secret mentor of the Muslim president; and if America only knew that, why, the Republicans would sweep the polity and restore fiscal sanity to our country, cutting off the lavish tax money giveaways to all those other Negroes, in the process.

Isn't ten million a lot to spend on this kind of foolishness?

Not when you're confidently expecting the City of Chicago to give you $150 million to outfit your fancy new toy, Wrigley Field.

I admit, it's not much of a sacrifice, electing to forego the exquisite experience of watching the Cubs flail about that storied ballpark. But, like one of their better players, who today announced his retirement, I will henceforth render the attention I give to Chicago sports in the direction of the South Side, where the announcers do not have to congratulate the left fielder on his determination, a decade into his career, to learn how to catch a fly ball.
I don't have an account at AmeriTrade --pace Sam Waterston-- that I can cancel. So I'll have to take at least part of my stand against gutter politics and criminally rich bigots by avoiding the Cubs, from now on.

Small loss. It's July, and the Cubs are safely in last place.

Treason!

Dr. Shakil Afridi, the Pakistani physician who set up a fake health clinic in Abbottabad, the operations of which eventually provided the CIA with strong clues concerning the whereabouts of Osama bin Laden, was sentenced by a Pakistani court to 33 years in prison for treason.


As McClatchy newspapers writes, "The Afridi case illustrates the stark differences between the two countries on anti-terrorism issues. Afridi is regarded as a hero by American officials but as a traitor in Pakistan." The United States had been negotiating, prior to Afridi's conviction and sentencing, to have him released.


Q: How is this case different from that of Jonathan Pollard?

Read more here: http://www.sacbee.com/2012/05/24/4512979/pakistani-in-bin-laden-hunt-sentenced.html#storylink=cpy

Taxes and the Constitution

Response to an op-ed piece in the NYT:

Richard Epstein argues that, in granting to Congress the power to tax, the Constitution restricted the use of this power to what he calls “public goods.” He defines public goods as benefits that must be given to all citizens if they are given to any, and then makes a rhetorical leap: “General welfare … is best read as covering only matters that advance the welfare of the United States as a whole.”

I suspect that Mr Epstein, confronted with a student’s argument that some text is “best read” in one way and not in some other, would ask why. And surely he owes his readers the same courtesy, particularly because he goes on to assert that “the redistribution of income, or ‘transfer payments’ among citizens … doesn’t qualify for taxation …”

It would be instructive to learn how, for instance, the transfer of payroll taxes collected in Chicago to retirees in Florida, in the form of Social Security benefits, does qualify. Or how the expenditure of federal funds to address the problems caused New Orleans by the Katrina hurricane is permissible. And, of course, if the power to tax can be used “to pay the Debts” of the government, does Epstein mean to suggest that the government may not incur a debt, unless the related expenditure passes the test of benefiting the United States as a whole? How is that test to be applied?

But more fundamentally, Epstein should tell us who gets to decide what “advance(s) the welfare of the United States as a whole.” If providing our Congressional representatives and their families health insurance coverage, at taxpayer expense, benefits the United States as a whole, but providing the same benefit to other citizens does not, what is the principle at work?

If we allow the recent trends to continue, until the polity consists of one hundred fifty million citizens who have no income, and one hundred fifty million who each have incomes of one million dollars, so that the average income is a half million dollars, would Epstein argue, first, that the welfare of the United States as a whole is undisturbed, and second, that the power to tax cannot be used to take (by taxation), say, five per cent from the top half and transfer it to the bottom half so as to keep half the population from living and dying in the streets?

I think Epstein has labored too strenuously to produce an argument that, ultimately, says the power to tax cannot be used for any purpose that does not directly benefit each and every American. If we take him at his word, most of the budget of the United States is subject to the charge of being unconstitutional. Maybe that is his point.

A Distant Hope

Fresh news on the Tenth Amendment: The Arizona Secretary of State has requested that the State of Hawaii "officially" confirm that it has the president's birth certificate.

The Secretary, one Ken Bennett, hastened to say that he himself was not a "birther;" he's just accommodating the request of a constituent. One presumes that the youth of Arizona are taught, in their English-only-at-all-costs public schools, that "constituent" and "whacko" are synonyms. If only I were a "constituent," I could request that Mr. Bennett apply to the Government of Mars that Sheriff Joe Arpaio was not, in fact, born in that jurisdiction. Lack of an appropriate response would presumably bar Mr. Arpaio from ballot access.

But please, please, Hawaii: don't respond. Let Arizona keep Obama off the ballot. Expose the crazies for who they are, and let the state go on record as refusing to put the President of the United States on its ballot for the 2012 election.

Is that too much to hope for?

A Healthy Dose of Reality

Suddenly, the press, fresh from a near-consensus that the Supremes would find Obamacare constitutional, is abuzz with the news that Justice Kennedy frowned, or something. As Jeffrey Toobin writes, "All of the predictions including mine that the justices would not have a problem with this law were wrong."

So be it. Having read a big chunk of the 2,000-plus pages of this law, I won't be able to muster much grief at its demise.

Besides, there is an obvious solution for the President, should he wish to avail himself of it. A couple of simple rules would suffice.

First, reduce Medicare support for hospitals providing charity care. Cover only palliative care --the relief of pain and the mitigation of damage that would prevent discharge of a patient: fix broken legs, provide antibiotics. No heart operations, no cancer treatment, no dialysis.

Second, allow insurers to impose a two-year waiting period on anyone applying for new coverage.

Both these rules would probably require nothing more than executive orders. And I can promise that the free market that everyone loves so much --the big insurance companies-- would be only too happy to abide by the two-year rule, given the requirement that they accept all comers.

Assuming the Supreme Court leaves the law intact, except for the hated individual mandate (not necessarily a safe assumption, given the ideological underpinnings and political motivations of this Court), the government could still provide subsidies for the low-income newly-insured.

Cutting the hospital subsidies for charity care would remove a major incentive for tax-exempt hospitals to retain their tax exemptions, with all those odious anti-inurement rules; so there may even be an upside to states and municipalities who could begin putting these huge organizations with their enormous physical plants onto the real estate tax rolls.

Now, many people, seeing the impossibility of enrolling later if they did not enroll now, would probably sign up for insurance; even healthy twenty-somethings who are sensible would do that. But inevitably lots of people would remain without coverage. It would take a few years of horror stories for the message to get across: no, we won't let you die in the street. You can die at home, with morphine, but not with Avastin, or dialysis, or a bypass operation that you cannot pay for yourself. So you might want to think about getting coverage before you need it --because by the time you need it, you won't be able to get it. And no more Emergency Room admission when you're feelin' poorly.

Sorry. It's a tough world. But it's the one you voted for.

Of course, an awful lot of people might flock to Massachusetts.
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