Does It Make a Sound?

by Dave Schuler on December 20, 2012

If anybody were to read Peter Cove’s very interesting op-ed at RealClearPolicy, I would think it would create quite a stir:

But here are cultural reasons we have become so dependent. First, we have witnessed stigma being replaced by selfishness. There was a time when being on welfare was considered shameful. There was a time when out-of-wedlock births were an embarrassment. Once rewards for not working were ignoble. Now single motherhood is considered a right to be supported by government. Not working now calls for disability payouts to support an otherwise largely employable class. The life of responsibility has become the Life of Riley with most expecting government to be its underwriter in perpetuity.

The second is the liberal notion that every social problem must be met with government spending for new programs. And where has that gotten us? A plethora of unworkable poverty and income support programs that have spent $19 trillion since 1965 has resulted in a de minimis reduction in poverty. With that has come a staggering increase in dependency. And it is this dependency, on medical support, Social Security, and welfare programs, that is pushing us over the fiscal cliff.

Don’t just dismiss him. He puts his money where his mouth is: his job is finding work for welfare recipients and other hard to place workers.

My own complaint is slightly different from his. I think that a lot of our health, education, and welfare apparatus is dedicated to doling out money to people in the top 10% or 20% of income earners who, nominally, work on behalf of the poor. When doctors get paid to treat the poor but the poor don’t get any healthier, is that money well spent? If teachers are paid to teach the children of the poor, but those children aren’t learning anything, do the poor really benefit by it?

{ 18 comments… read them below or add one }

Sam December 20, 2012 at 10:40 am

While I’m fine with this in principle, but the real problem we have is redistributing wealth to the already moderately wealthy. When we focus on the inefficiencies of transfer programs for the poor, we end up keeping the transfer programs to people who don’t really need them because they are “earned”.

Dave Schuler December 20, 2012 at 10:45 am

I don’t disagree with that (see the post below).

When we focus on the inefficiencies of transfer programs for the poor, we end up keeping the transfer programs to people who don’t really need them because they are “earned”.

Some of that sense that a benefit is earned is legitimate while the rest is salesmanship. Social Security benefits are earned in the sense that for most people what they receive in benefits is just a bit less than what they paid in plus a bit of interest. It’s more or less a fair program although if, as I expect, the benefits aren’t allowed to decline as the trust fund dries up, it will become less fair rapidly.

Medicare isn’t remotely earned. Most people take out a multiple of what they’ve paid in. No wonder it’s popular!

TastyBits December 20, 2012 at 11:17 am

I mostly agree with the post.

The US has attained a level of wealth and security that makes many of these luxury items available. Europe, the US, and Canada are in an affluence bubble. It will burst at some point, and the outcome may or may not be a catastrophic collapse of these countries. I see both outcomes as possible.

Much of this wealth is built upon money borrowed into existence (private debt), and if this money did not exist, many of these luxuries would not be available.

Jimbino December 20, 2012 at 12:03 pm

And don’t forget our national and state parks and forests. You will hardly ever see a poor person, a Black, Hispanic or Native American in any of them, including the vaunted Yosemite, Yellowstone and Grand Canyon.

Indeed, you won’t even see a person of color in any of Ken Burns or NatGeo documentaries about those public lands.

Jimbino December 20, 2012 at 12:13 pm

“Social Security benefits are earned in the sense that for most people what they receive in benefits is just a bit less than what they paid in plus a bit of interest.”

There are many ways a totally indolent person will receive Social Security for which he/she hasn’t paid one thin dime in FICA:

1. Up to 5 indolent spouses can receive at 62 their share of a worker’s SS.

2. Indolent minor children of a SS recipient will receive benefits even while in college.

3. Indolent survivors of a dead SS recipient will get benefits.

4. Indolent disabled folks will get SS benefits.

That doesn’t leave much to the poor Black Amerikan man who works and pays lifetime FICA and who dies early, as we expect him to, leaving lots of his money in the coffers to support the indolent White widows who will live to 95 or so.

PD Shaw December 20, 2012 at 1:41 pm

I think on the larger points of culture and incentives Cove has points to be made. But too much of this piece is undigestable. It starts with the cute rhetorical device of claiming the poor are the selfish ones.

And some of the numbers are not terribly convincing. Obviously, federal aid went up when the economy tanked. I don’t think culture and incentives changed dramatically in 2009. Also, though I don’t have time to follow-up, the notion that one can do very well, perhaps receiving an income in the upper $40 thousands seems theoretical and doesn’t pass the smell test of what I see when I drive through poor communities.

Which leads to a final observation. How many neighbors does anybody have who are on welfare? I don’t know of any. It doesn’t mean there aren’t, but it does suggest that they don’t want me to know. Perhaps the loss of stigma has to do with people living apart from each other, not within a shared community. The poor have segregated themselves off (selfishly) where they are not subject to the judgments of others.

Dave Schuler December 20, 2012 at 1:49 pm

Perhaps the loss of stigma has to do with people living apart from each other, not within a shared community. The poor have segregated themselves off (selfishly) where they are not subject to the judgments of others.

That’s a fabulous point but I’m not sure I would attribute the segregation by wealth to the poor. I have a vague recollection of people of means leaving the cities in droves for “better schools” (translation: no poor people).

If you look closely at pre-automobile photos of cities, one of the factors that’s quite noticeable is that people of all income levels were living in close proximity to each other. It was a necessity. The servants of the rich needed to live with them or, at least, nearby if they were to do their jobs. Managers and laborers lived relatively near one another, located where the work was. The kids of the well-to-do and upper middle class (like my dad) attended the same schools as the children of the poor (like my mom).

Here in Chicago a few years back a strip of SROs was torn down to make room for condos, offices, and stores. They had been the very last really affordable housing on the North Shore. When they were gone it meant the people who’d lived there needed to live much farther from their work. It wasn’t the poor people who tore them down.

jan December 20, 2012 at 2:24 pm

It’s pretty rare that someone like a Peter Cove will write an opinion-piece free of ‘political correctness.’ Whether you agree with him (I do) or not, he lays it on the line as to how he sees it.

Cove’s quote, from Alexis De Tocqueville, “No Americans are devoid of a yearning desire to rise…not only are desires boundless, but the power of satisfying them seems almost boundless, too.” , gives rise to him opining how far we have evolved from this earlier philosophical playing field:

We have since changed and the results have eroded our belief in industriousness and how much government must provide. We have journeyed from the serving the deserving poor, to all are deserving. The safety net has become a version of the game Dialing for Dollars where all can play and most win.

I think he has a point. For instance, my own parents grew up in desperate poverty, but eventually moved up, first into a blue collar life, and finally into a lower middle class one. I grew up in the mix of blue collar and lower middle class. But, my husband and I have succeeded into carving out an upper middle class lifestyle. Basically, these generations shifted slowly upward by doing, not receiving.

Now, in our son’s twenty-something crowd, I’ve seen a noticeable lack of effort towards upward mobility. If it’s easy, quickly done, then sure they will go for it. Otherwise, hanging out, drifting, lingering in arrested development phases are much more prevalent, and even given kudos by peers, if you are able to simply exist without doing much to provide for yourself.

Like Cove pointed out, the stigma of loafing or becoming a slacker has significantly diminished, if not altogether disappeared. And, in it’s place more young adults are looking to government as a parental extension means for protection and financial security. And, when you finally have this ever-increasing mood in the young — doing little while expecting much from others, visa vie the government largess — eventually clashing with the inevitable feebleness of a large aging baby boomer set, just who is going to grow those ‘money trees’ to provide for these extreme, unproductive opposites in the U.S. population?

jan December 20, 2012 at 3:12 pm

I think too much is being made of the button-pusher word selfish in this article. The very definition being, “self interest, having little concern for others,” does apply to the usage of various social programs by some beneficiaries of such programs. And, it is these people who, as I read into the article, he was addressing. If anything, it seemed Coves was criticizing government more, for enticingly reeling people into dependency, though programs having little oversight or few built-in incentives helping to wean them off of government assistance and back onto their own feet again, by saying this:

“I do not mean to place blame on the people taking advantage of these programs; they are simply reacting to the rules and incentives that the game of life is now played by.”

Also, the people who work in poverty pockets, like apparently this author did, and I once did, see an array of behavior in these populations — from heroic, selfless to selfishly taking advantage of a flawed, bloated system — a reality that is not available to the average person’s awareness living in a middle-class neighborhood.

Drew December 20, 2012 at 4:42 pm

i admit to not being current, but i do believe that recipients get far more back than payments in plus an imputed investment return.

Dave Schuler December 20, 2012 at 4:50 pm

i do believe that recipients get far more back than payments in plus an imputed investment return

Oddly, no. I’ll look up the reference. I thought what you thought but when I looked it up I found that on average people get back what they put into Social Security plus interest. Now Medicare…

PD Shaw December 20, 2012 at 4:59 pm

“That’s a fabulous point but I’m not sure I would attribute the segregation by wealth to the poor.”

Sorry, I was being facetious.

PD Shaw December 20, 2012 at 5:03 pm

Drew, Social Security is insurance and should not be measured as an investment. People who pay throughout their life and die at the age of sixty do not get good returns. (Survivor benefits complicate this, but the premise still stands) By pooling the risk of surviving the ability to work, everybody’s contributions are going to be reduced by the ability to rely on the contributions of those that receive little or nothing.

PD Shaw December 20, 2012 at 5:04 pm

Not saying its necessarily actuarially sound insurance. Everybody agrees it needs tweaking, but yet it doesn’t ever seem to happen.

steve December 20, 2012 at 8:04 pm

Sounds like Cove has burn out. He works with the worst of those on welfare and it is getting to him. I know that feeling. But , on the facts, he kind of misses it. We face future debt problems because of health care costs. The demographics are mostly unimportant, though they dont help. If health care costs had grown at the same rate as inflation the last 30 years, and revenue stayed the same, we have almost no debt. What we pay in welfare expenditures is trivial.

I would also second PD. When jobs were available in 2007, even if they were the result of a bubble, those same selfish, lazy people were willing to work. I didnot notice any big cultural change over the last 5 years, except that there arent any jobs, especially for people at the lower end of the income ladder.

On the stigma thing I find it is mixed. Anumber of my patients are clearly embarrassed about not being able to pay or being on Medicaid. Some are pretty snotty about it.

Steve

Jimbino December 21, 2012 at 9:47 am

PDShaw,

Don’t you think there’s a problem in that the Black male, who is expected to die at 71, gets back far less from SS than the White female, who is expected to die at 81? We may as well base the SS benefits on sex and race.

Furthermore, survivor benefits are one thing, but up to 5 indolent ex-spouses of a man qualify for SS benefits based on his SS contributions alone. We may as well base SS benefits on sex, race and marital status and forget the fairness talk.

Andy December 21, 2012 at 10:16 am

On an iPhone for the next few days, so please excuse commenting problems.

I tend to agree with Steve. I think upper-middle income people like me get the bulk of benefits when everything is thrown in. Everyone exploits the system for maximum gain, I can’t really blame anyone, especially the poor, for not leaving money on the table.

And, the sad reality is that poverty too often begets poverty regardless of government assistance. I’m not sure that’s a problem that better technocracy can solve

PD Shaw December 21, 2012 at 11:33 am

Jimbino, if the Black male on average contributes less to SS insurance during his lifetime, then its not unfair if on average they receive less SS insurance because of a shorter lifespan. (I don’t see any data on lifespan of middle class Black males versus middle class White males; perhaps because class is not a constant.)

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