Where Democrats are winning

The mere fact that major Republican presidential contenders feel that they have to talk about inequality and poverty as problems is a sign that Democrats are winning on this issue.  This is simply playing ball on the Democrats’ home turf.  In much the same way Republicans have so won on the tax issue that most Democrats are loath to discuss raising any taxes but for the very richest Americans and frequently embrace Republicans’ language of tax relief, etc.  NYT had a nice story on this shift in Republicans.  It’s pretty amazing to see words like the following come out of Mr. 47%’s mouth:

Mitt Romney, vowing a campaign to “end the scourge of poverty” if he runs for president a third time, has backed raising the minimum wage over the wishes of congressional leaders.

He’s not alone:

Similarly, Jeb Bush’s new “super PAC,” announced with the fanfare of a presidential declaration, proclaimed, “While the last eight years have been pretty good ones for top earners, they’ve been a lost decade for the rest of America.” …

Just acknowledging a wealth gap represents a significant shift in language for Republicans, who have long held that market forces driving overall economic growth will ultimately yield higher incomes without any help from government…

The problem for Republicans, though, is that a debate over wage stagnation and a shrinking middle class plays on Democratic turf, where Democrats can offer up what Mr. Romney once derided as “free stuff.”

“This plays to the Democratic sweet spot,” said James Pethokoukis, a commentator at the conservative American Enterprise Institute who writes on economic policy. “They can say, ‘Hey, we have a whole set of answers.’ ”

The problem for Republicans is that they truly only have talk, no actual answers.  It is abundantly clear that limiting taxes on wealthy Americans and cutting back government regulations are not the solution for a robust and growing middle class.  But the Republicans have continued to offer little else.  That’s why Alec MacGillis (loved him in TNR, so happy to see he’s landed at Slate) argues they are really in a box on this:

Some of these Republicans’ proposals—to expand the earned income tax credit or child tax credit, for instance—hold real promise. But there is a big problem with this new anti-poverty, anti-inequality platform, one that gives all this new rhetoric an air of unreality: The party remains at its core committed to fighting solutions that would come at the expense of the very wealthiest Americans, even at a time when that upper-upper echelon is achieving truly historic levels of affluence. [emphases mine] Just look at what has been the first order of business for Republicans after they won full control of Congress for the first time in eight years this past fall. It’s not expanding the earned income tax credit, but rather pushing a Wall Street wish list for tweaks to weaken the Dodd-Frank financial reform law of 2010…

This will likely prove to be the primary achievement of Obama’s new tax proposal, which, as he bluntly put it in Tuesday night’s speech, is targeted at “giveaways the superrich don’t need” and “lobbyists [who] have rigged the tax code with loopholes that let some corporations pay nothing while others pay full freight.” No, it’s not going anywhere in a GOP-led Congress. But it has served to call the bluff of the Republicans now claiming the mantle of inequality warriors. The proposal has led them into a political trap, prompting them into an instinctual, reflexive defense of the wealthiest Americans. And it has thereby clarified the discussions to come on the campaign trail over the next year and a half. Talk all you want about restoring shared prosperity, Obama is saying, but this is the kind of reform it will take to bring balance to an economy that has gotten so top-heavy and out of whack.

The simple fact is that government is always going to take money in and spend it back out in different proportions to where it came from.  Democrats want more of the inflow from the wealthiest and more outflow to the middle.  The Republicans want less inflow and less outflow period (while Americans are quite in favor of more outflow to the middle and more inflow from the top) and that’s a big difference.

Why we do policy evaluation

Okay, it’s still a little early, but the results so far from Florida’s requirement that welfare recipients pass a drug test pretty much fail a standard cost-benefit analysis:

MIAMI — Ushered in amid promises that it would save taxpayers money and deter drug users, a Florida law requiring drug tests for people who seek welfare benefits resulted in no direct savings, snared few drug users and had no effect on the number of applications, according to recently released state data…

From July through October in Florida — the four months when testing took place before Judge Scriven’s order — 2.6 percent of the state’s cash assistance applicants failed the drug test, or 108 of 4,086, according to the figures from the state obtained by the group. The most common reason was marijuana use. An additional 40 people canceled the tests without taking them.

Because the Florida law requires that applicants who pass the test be reimbursed for the cost, an average of $30, the cost to the state was $118,140. This is more than would have been paid out in benefits to the people who failed the test, Mr. Newton said.

As a result, the testing cost the government an extra $45,780, he said.

And the testing did not have the effect some predicted. An internal document about Temporary Assistance for Needy Families, or TANF, caseloads stated that the drug testing policy, at least from July through September, did not lead to fewer cases.

“We saw no dampening effect on the caseload,” the document said.

So, an empirical analysis suggests that this is quite unlikely to save all the money proponents have argued.  Sometimes, you just need to put a policy in place and see what happens.  To be fair, you want longer for a full accounting, but I think what is most telling, is the shift in arguments from empirical (it will save money) to normative (drugs are bad!) and is therefore a great example of empirical versus normative policy evaluation I just discussed with my class:

But supporters of the law said four months of numbers did little to discredit an effort they said was based on common sense. Drug users, no matter their numbers, should not be allowed to use taxpayer money, they said.

“We had to stop allowing tax dollars for anybody to buy drugs with,” said State Representative Jimmie T. Smith, a Republican who sponsored the bill last year.

So, if it is about punishing drug users (something far more difficult to quantify) you can argue that the policy is a success, regardless of the budget numbers.  As for me, my take is that people will waste money.  There’s no check in the system to make sure that these welfare recipients aren’t wasting their welfare checks on video games, or expensive cell phone plans, or overly-expensive processed food, or alcohol.  Thus, to me, it’s just silly to try and single out this one category of bad spending.  But hey, drugs are bad!

Photo of the day

Recent National Geographic photo of the day:

Picture of Black Bayou Lake National Wildlife Refuge in Monroe, Louisiana

On the Bayou

Photograph by Keith Yahl, National Geographic Your Shot

“I was up before sunrise on a chilly January morning in Monroe, Louisiana,” writes Keith Yahl, who shared this picture with our Your Shot community. “I hoped to capture the changing light over the nearby Black Bayou Lake. There was a serenity in the early morning scene. I continued to capture the sunrise from different angles as it changed the colors around me from orange to blue.”

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