Morning Report – Hedge funds betting on Fannie Mae 04/08/13

Vital Statistics:

  Last Change Percent
S&P Futures  1550.9 4.9 0.32%
Eurostoxx Index 2600.8 15.6 0.60%
Oil (WTI) 93.27 0.6 0.61%
LIBOR 0.279 0.000 0.00%
US Dollar Index (DXY) 82.61 0.111 0.13%
10 Year Govt Bond Yield 1.72% 0.01%  
Current Coupon Ginnie Mae TBA 106 0.1  
Current Coupon Fannie Mae TBA 104.3 0.0  
RPX Composite Real Estate Index 190.1 0.4  
BankRate 30 Year Fixed Rate Mortgage 3.54    

Markets are higher this morning on no real news. The Japanese Yen continues to fall, and is now approaching 100 yen to the dollar. The new program of quantitative easing in Japan is re-igniting the yen carry trade, except now the Japanese are borrowing yen to invest in US dollar assets. In case you missed it, Japan’s Nikkei 225 stock market index is up 52% since November. Incredible move. Japan’s QE program will mean incrementally lower rates on US long-dated Treasuries and MBS. Bonds and MBS are flat this morning.

Alcoa kicks off Q1 earnings season after the close today. We will get JP Morgan and Wells Fargo earnings on Thursday before the open.

Friday’s lousy jobs report probably means that any talk of ending QE this summer is probably over. After 3 consecutive economic slumps over the summer months, the Fed is going to stay aggressive. Chicago Fed President Charles Evans said “I’m going to have a lot more confidence if I begin to see indications that growth is well above trend and its going to be sustainable.” The Fed is going to be wary of reducing stimulus given that the fiscal policy has tightened a little bit.

Fannie Mae’s surprise profit has investors re-thinking the theory that they will be euthanized. Hedge funds are jumping into the preferred stock, which was issued in spring of 2008 as Fannie Mae was circling the drain before becoming nationalized. The 8.25% prefs have a $25 face value and were trading at $4.81 on Friday. All of this is predicated on the idea that Fannie Mae will be able to pay back the government. Once that happens, Fannie will restructure, and the bet is that there will be a place in the capital structure for the prefs. Risky bet, obviously, but big upside too.

121 Responses

  1. It was fun hearing Stockman and Krugman spar this weekend. Kinda wish they’d left it to a segment rather than a panel.

    ßß

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    • yello:

      FYI, just wanted to let you know that, because of our interaction here, every time I have to type the word “yellow” in any context, I now misspell it as “yello”. Thanks.

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  2. You’re welcome. I think that says more about you than me.

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  3. They call him Mello Yello.

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  4. Controversy at Boston College.

    In February, 2009, 89.47% of the student body at Boston College, a private Jesuit research university, voted in favor of the following referendum:

    Boston College needs to improve its sexual health education and resources, including but not limited to:
    – affordable testing for sexually transmitted infections (STI)
    – prescription of birth control at Health Services
    – availability of condoms on campus

    As a result, an unofficial student group, Boston College Students for Sexual Health, began distributing information on contraception and sexual health that included passing out free condoms. Apparently, some in the remaining 10.53% weren’t very happy about it and began complaining.

    The group hands out 5,000 condoms a semester–often on a sidewalk adjacent to campus–and isn’t inclined to stop. The chairwoman, Lizzie Jekanowski, told the New York Times:

    “Students are going to be having sex regardless, and unless they have the education to know that you need to use a condom every time — for pregnancy prevention, S.T.I. prevention — and unless they have them available, they’re not going to use it… It harkens to a much deeper Catholic morality of caring for your neighbor — and that’s literally what we’re doing, is caring for our neighbors.”

    It seemed that even the Pope got that distinction when, in 2010, the man who then held the office–Pope Benedict–decided that condoms could be used when the intention was to reduce the threat of contracting AIDS. He asserted that the use of a condom to protect human life was acceptable, saying:

    “[The Catholic Church] is not fundamentally against the use of condoms. It of course does not see it as a real and moral solution. In certain cases, where the intention is to reduce the risk of infection, it can nevertheless be a first step on the way to another, more humane sexuality.”

    http://www.addictinginfo.org/2013/04/08/boston-college-chooses-dangerous-catholic-values-over-responsible-sexual-health/

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  5. I didn’t know this about WVA.

    In West Virginia, prescription drug overdoses are the leading cause of accidental death. Mingo County is second only to its neighbor, McDowell County, for the highest rate of overdose deaths in the state from pills. The state currently ranks second, after New Mexico, for the highest rate of prescription drug abuse deaths in the nation.

    The people I’ve talked to in trips to West Virginia say the pill scourge keeps getting worse. (See the detailed story on pilling in Mingo County here.) Abuse of hydrocodone-based painkillers such as Vicodin and anti-anxiety drugs such as Xanax is now entering its second generation, with babies being born addicted to these drugs. The effects of pill addiction on poor families in southern West Virginia has been devastating. There are few treatment centers where families can afford help for addicted family members, who often turn to robbing and harming their own kin to obtain pills.

    West Virginia’s elected officials keep trying to quell the epidemic. Just a week before Crum’s murder, the state senate approved a bill that limits hydrocodone prescriptions to 30-day supplies and two refills. Also last month, U.S. Rep. Nick Rahall, a Democrat whose district includes much of southern West Virginia, introduced legislation that would require opioid-based prescription drugs to include abuse-deterrent technologies that prevent substance abusers from crushing or dissolving prescription opioids, so that they cannot be inhaled or injected to achieve an immediate high.

    http://www.alternet.org/drugs/prescription-pill-epidemic-has-spiraled-out-control-sheriffs-death-alarm-bell?page=0%2C1

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  6. That’s too bad about Annette Funicello, but what’s even worse IMO, is that she was in a coma for years and on life support. Poor thing.

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  7. I believe that Brent noted this earlier:

    “”Is Steven A. Cohen Buying Off the U.S. Government?
    Posted by John Cassidy
    March 28, 2013

    Most scandals involving the cozy relationship between Wall Street and its regulators play out behind closed doors. Others happen in plain view, and this is one of the latter. In a Manhattan courtroom Thursday, a federal judge held a hearing on whether to approve a legal settlement in which Steven A. Cohen, one of the richest and most publicity-shy men in the country, appears to be buying off the U.S. government, which for years has been investigating wrongdoing in and around his hedge fund, SAC Capital Advisers.

    Unless the judge, Victor Marrero, rejects the settlement between the Securities and Exchange Commission and SAC, which was announced a couple of weeks ago, Cohen will be free to go about his business, which has long been clouded by suspicions of insider trading, once he writes a check of six hundred and sixteen million dollars to the Securities and Exchange Commission. There will be no further sanctions and no admission of wrongdoing. And in fact, Cohen already appears to be celebrating. According to a report in the Times, he has just purchased a Picasso painting, “Le Rêve,” for a hundred and fifty-five million dollars, and an ocean-front mansion in East Hampton, for sixty million dollars.

    To his credit, Judge Marrero has, at least for now, refused to go along with this travesty. Reserving judgement on the case, he asked why the settlement didn’t include an admission of wrongdoing on the part of SAC and Cohen. “There is something counterintuitive and incongruous about settling for six hundred million dollars if it truly did nothing wrong,” the judge said. (A lawyer for SAC told the judge that the firm paid the fine because it didn’t want litigation hanging over its head for years.) ”

    http://www.newyorker.com/online/blogs/johncassidy/2013/03/did-stevie-cohen-just-buy-off-the-us-government.html#entry-more

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  8. Oxycontin is known as Hillbilly Heroin because of its prevalence in Appalachia.

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  9. I know this sounds snarky, but what is the arguement about why those college students can’t get BC?

    They’re in college for goodness sake. I managed, despite terrible poverty, to buy condoms while I was in school. If these kids can’t, what hope sowe have for the Country, seriously?

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    • I managed, despite terrible poverty, to buy condoms while I was in school.

      Tell those whippersnapper kids to quit fornicating on your lawn.

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    • McWing:

      I know this sounds snarky, but what is the arguement about why those college students can’t get BC?

      Of course they can get it.

      When I was at Boston College 25 years ago, getting birth control was incredibly easy. In fact, despite the fact that it was a Catholic institution, the campus infirmary would write prescriptions for birth control pills for pretty much any woman who wanted one. All you had to do was go in and claim that you had some kind of menstrual cycle problem, and with a wink and a nod they would prescribe birth control pills ostensibly to regulate the cycle. That was precisely what my then-girlfriend did along with every single one of her roommates. As you can imagine, the quest for birth control was quite a hot-topic of conversation at the time, so this was hardly a closely held secret. It is hard for me to imagine things have gotten more difficult since then.

      As for condoms, there was (and I believe remains) a small convenience store literally across Commonwealth Avenue from the campus church, Saint Ignatius, next to the T stop, that sold (and presumably still sells) condoms. I can assure you that condoms were not difficult to come by around campus. In fact, not to get too graphic, but I will never forget one year when there was a sewage pipe break outside of one of the Hillside dorms. All of the unpleasant bathroom detritus that had been flushed flowed down the driveway towards the storm drains at the bottom of the hill, and I remember being amused at the huge number of used condoms that ended up littering the driveway once they stopped the leak.

      My suspicion is that any “controversy” over the current issue is largely a function of Boston College Students for Sexual Health’s desire to court it. BTW, I found this quote from the group’s Chairman, Lizzie Jakenowski, rather amusing:

      “Students are going to be having sex regardless, and unless they have the education to know that you need to use a condom every time — for pregnancy prevention, S.T.I. prevention — and unless they have them available, they’re not going to use it

      I am extremely familiar with the not-exactly-paltry academic standards required of prospective BC students in order to get accepted into the school these days (as opposed to when I went!), and I will say confidently that any student who needs Lizzie Jekanowski to either tell them what birth control is for, or can’t figure out where to find it, probably shouldn’t have been admitted in the first place.

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      • McWing:

        BTW, while I as at BC there was also an off-campus abortion clinic that regularly ran advertisements for “reproductive services”, including birth control, in The Heights, the campus newspaper. I know this because I was the managing editor of The Heights in my junior/senior year, and it was the source of great consternation and controversy going back many years.

        During the mid ’70’s, the campus newspaper began advertising for the abortion clinic, and refused to bow to administration pressure to cease. So the university stopped funding the newspaper and kicked them off campus. It survived for a while off campus, but the pressure of paying rent for space was just too much, so a deal was cut between the administration and the paper. The paper would delete any reference to “abortion services” in the adverts of the abortion clinic, but would still allow the clinic itself to advertise for “reproductive services”. And the University agreed to allow the paper to move back into campus space, but would still refuse to fund the paper. From then on, including through my tenure, the paper was independently financed exclusively through advertising revenues. This become somewhat of an issue during my time only because the clinic in question would provide us with their standard advertisement, and we ourselves had to remove the references to “abortion”. One time during the copy editing process we forgot to edit the advert, and the paper when to print with the “abortion services” reference in the advert. That caused a bit of a kerfuffle.

        Anyway, I mention all this as yet another example of how information on the availability of birth control was, and presumably still is, hardly a secret kept from BC students.

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  10. If the school won’t stock them it’s a hopeless situation. It’s been a while since i’ve been to Boston, but I’m pretty sure its 1-stoplight kind of town.

    http://goo.gl/maps/xgnJy

    I have to wonder why you’d go to a Catholic school if you didn’t want to deal with Catholic rules.

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  11. I have to wonder why you’d go to a Catholic school if you didn’t want to deal with Catholic rules.

    Sooner or later it comes down to fate.

    http://www.youtube.com/watch?v=rlEvh-DZ-kE

    The affiliation of the school doesn’t make the students not teenagers. My wife went to a Baptist college. At least three of her friends are now out of the closet.

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  12. Hey, they wanna bang on my lawn go ahead, I’ll watch. I just want to know what happened that buying rubbers, or other BC, has now become impossible?

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  13. I just want to know what happened that buying rubbers, or other BC, has now become impossible?

    Give ’em condoms or buy their babies formula with WIC. Your call. I’d not only give out free BC, I’d pay them to use it. $50 for every month they fail a pregnancy test.

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    • yello:

      I’d not only give out free BC, I’d pay them to use it.

      Well if that were true, you could. Nothing is stopping you. Trouble is you want someone else to do the giving and paying.

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  14. “Give ‘em condoms or buy their babies formula with WIC”

    that’s a false choice.
    there’s any number of things they can do to avoid pregnancy … an none of them require contraception paid by a third party. and they’re college students. if they can load up on debt, they can use their laptops to order crates of condoms. we’re not talking about impoverished people here.

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  15. Why did I worry about disease and pregnancy to the point of paying for it myself and they do not? What has happened that disease and unwanted children have ceased to be a concern among college students? I find it hard to believe that there is less sex education.

    If I was given free Trojans I would have used them, but we’re in an environment now where free rubbers/free or subsidized taxpayer funded BC has resulted in more unwanted pregnancy? How does that work exactly?

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  16. we’re not talking about impoverished people here.

    Where’s john/bannedagain? He’ll tell you the parents sure are.

    we’re in an environment now where free rubbers/free or subsidized taxpayer funded BC has resulted in more unwanted pregnancy? How does that work exactly?

    Because the opposite is true?

    Teen births and pregnancies have plummeted over the past two decades, down 42 percent from 1990. Most Americans, it turns out, have no idea that we’re actually in the midst of a big public health success story.

    In a new survey from the National Campaign to Prevent Teen and Unplanned Pregnancy, 50 percent thought the teen pregnancy rate had gone up over that period. Eighteen percent correctly answered that it has declined.

    Face it. You’re just jealous.

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  17. wait — teen birth rates aren’t applicable here. we’re talking about college students … adults.

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  18. I was reading another piece last week that said “hooking up” is now considered an art form on college campuses, so it makes some sense to me that easily available forms of BC and STD prevention should go hand in hand with that.

    The students asked for it and so I’m sure they or their parents are the ones paying for it in the end. I doubt it’s something the rest of us will be sent a bill for.

    Kids have sex and so we might as well make it safe I suppose.

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  19. wait a minute. i have 2 cousins-in-law at BC. ewww.

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  20. Anybody with a kid at college or who knows a college student should read I Am Charlotte Simmons. It’s a little histrionic but scarier than anything by Stephen King.

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  21. oh OT — LMS, apparently my subscription to Health Affairs expired. it shouldn’t have and i’m looking into getting it back.

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  22. Teen births and pregnancies have plummeted over the past two decades, down 42 percent from 1990

    I’ll be curious to see the statistics from the various states that are attempting to undo both Roe and easy access to birth control. I figure we’ll start seeing a swing in about 10 years. Condoms and other forms of BC as well as access to the morning after pill and early abortions are presumably having a positive effect on teen pregnancy. Or maybe it’s the abstinence only crowd, hahaha.

    Now if we can convince 18 year olds off to college that having a sexual partner on week one isn’t something to necessarily strive for, we’d really make some progress. I was pretty shocked when I read the piece last week, sorry I can’t remember where now, and I grew up in the sixties and raised three girls. I’m hardly a prude but the sexual freedom I was reading about had a very self-destructive aura about it. My daughters have now taken over the sex ed of their niece as they managed quite nicely without too much drama or trauma. I leave the boys to the men, pretty much anyway.

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  23. No worries nova, I’m out anyway………………………lots of work this afternoon and this week.

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  24. Just throwing this one against the wall:

    http://www.youtube.com/watch?v=Oa9temz_Cxw&feature=player_embedded

    For the YouTube impaired, it’s Melissa Harris-Perry of MSNBC basically saying “It takes a village…”

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  25. i saw that. it’s beyond it take a village.

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  26. I was speaking of illegitimacy.

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    • McWing:

      I was speaking of illegitimacy.

      It is a bit disturbing that there is such a disparity between the rate of growth in unwanted pregnancies and the rate of growth in illegitimate births, suggesting, as it does, that more and more women are choosing to have children without a husband around.

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  27. What’s the MSNBC ad mean to you Yello?

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  28. Do you view your children as your’s or as society’s?

    I’m curious if the MSNBC’r would mind if, colllectively, society felt children should be trained to shoot guns.

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  29. Scott, to me it’s a problem, though declining birth rates are a disaster for a welfare state. Particularly one that gives preference to non-skilled labor.

    Edit: gives preference to non-skilled immigration.

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  30. The link is to a partisan blog but the story is compelling. Bottom line, Obama is paying for some NewTown victim’s families to fly on AF1 to DC for some PR on his move to confiscate guns (SWIDT) but refuses to fly the mother of one of the Bengazi victims to DC to attend a ceramony in which her son receives honors.

    http://poorrichardsnews.com/post/47463272613/white-house-flies-newtown-families-on-air-force-one

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  31. I will never understand what you Libertarians have against free birth control. Presumably the students themselves are paying for these condoms, somehow (student fees or something).

    It seems to be a knee-jerk reaction with some of you. “Ack!! Free stuff!! It’s the End Of America As We Know It!!”

    Jeez, let ’em have the free condoms and enjoy themselves.

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    • Mich:

      I will never understand what you Libertarians have against free birth control.

      I don’t have anything against you buying fbirth control and then giving it away for free to whoever you want. What I object to is making me pay for things that you will then pass out to others under the guise of it being “free”.

      Presumably the students themselves are paying for these condoms, somehow (student fees or something).

      Not at Boston College.

      It seems to be a knee-jerk reaction with some of you. “Ack!! Free stuff!! It’s the End Of America As We Know It!!”

      We must be doing a horrific job explaining libertarian principles if you actually think this.

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  32. McWing, that link is only worthy of the “troll” part of your name. AF1 will be in Hartford, anyway. It’s not like he’s sending the plane for them.

    You would be crying bloody murder if he sent the plane to pick up that one woman and fly her to DC.

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    • I am rethinking my final pick, which was neither of them. I think Dieng will handle McGary and that will be the difference, considering how McGary is a bricklayer at the foul line. Louisville. By 4.

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  33. Michi,

    I’m trying to understand why the woman is agitating at a Jesuit colleges for free BC. Also, why in an age of taxpayer funded free/subsided BC, is illegitimacy increasing.

    As for the link, why fly either victim groups? What’s the reason taxpayers (or sucker, er, Democratic campaign donors) should pay for either?

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  34. Scott:

    We must be doing a horrific job explaining libertarian principles if you actually think this.

    That’s certainly what it sounds like over and over and over.

    What I object to is making me pay for things that you will then pass out to others under the guise of it being “free”.

    As an alum you’re having to buy the condoms??? OK, that would piss me off.

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  35. I would object to both groups being flown if the plane weren’t there already. As it is, I don’t see a big deal in using it to fly a few extra bodies somewhere that it’s going to go, anyway.

    I sincerely doubt this is the first time that this has ever been done (by either party) and it seems to me to be just another trying-to-create-a-scandal-where-none-exists.

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  36. “Michigoose, on April 8, 2013 at 3:46 pm said:

    I will never understand what you Libertarians have against free birth control.”

    There’s no such thing as free. The question is who pays, and why it would be considered appropriate or desirable for someone else other than the student to bear these costs.

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  37. I picked Louisville to win it all, so I have some small solace. My final four had Louisville over New Mexico (the second straight year a final four pick of mine went down in the first round) and Miami over VCU.

    With regards to teenage pregnancy rate and college students, I will remind folks that many freshmen are 18 and many sophomores are 19 (at least to start). Teenagers by definition. I wouldn’t be surprised to see similar rates if one moved the window up to 25.

    Incidentally, “free” birth control may not be free, but pregnancy is a lot more expensive both medically and in terms of lost productivity.

    ßß

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  38. There’s no such thing as free. The question is who pays, and why it would be considered appropriate or desirable for someone else other than the student to bear these costs.

    Paul corked me in what I would have said.

    Besides, an unofficial student group, Boston College Students for Sexual Health, began distributing information on contraception and sexual health that included passing out free condoms. So, despite what Scott said, students are buying the condoms somehow. If they want to hand them out to their fellow students, what’s the harm?

    Unless Scott, as an alum, is having to kick in.

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    • Mich:

      If they want to hand them out to their fellow students, what’s the harm?

      Just to be clear, and as I said before, if someone (you, yello, Lizzie Jekanowski) wants to buy condoms and pass them out to others for free, I don’t care in the slightest. Have at it.

      My original comment to McWing was only meant to reinforce what seemed obvious to McWing..this organization at BC is hardly performing a heroic service without which STD’s and little undergraduate babies would be popping up all over campus. As I said, birth control was and presumably still is quite readily available in plenty of places around Newton and Chestnut Hill, and kids with the intelligence that BC students presumably posess ought not have a hard time finding it. And of course as a Catholic institution BC itself is well within its right to disallow the distribution of condoms on campus if it desires, and, again as a Catholic institution, that it would do so ought not be surprising in the least, either to students like Lizzie Jekanowski or to people here at ATiM.

      My comment about giving away “free” stuff at my expense was a response to yello’s suggestion that McWing should either “give ’em condoms” or pay for their babies food with WIC. With the reference WIC, it seemed to me he was making a comment about public policy, not the policy of some student organization. Hence my comment.

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      • All this talk of Boston College made me nostalgic today, so I went and discovered that all the old issues of the campus newspaper, The Heights, are actually on-line. If you want to see an early ScottC op-ed, see page 7 of this issue.. With the exception a now-embarrassingly self-aggrandizing reference to “serving the students needs”, I think this one actually holds up pretty well. I won’t be linking to some other more cringe-worthy efforts.

        BTW, the ever-controversial advert for contraceptive services can be found on page 22.

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  39. NoVA: on GoT book 3 now. My Kindle tells me I’m 20% of the way through; Sansa just got measured for the new dress Cersei ordered for her. Something tells me there’s a trap in there. . .

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  40. My favorite part of Scott’s editorial:

    “For Fr. Cheney to question the integrity of present or past Heights editors is appalling”

    Appalling I say!

    Oh the humanity of the injustice!

    😉

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    • McWing:

      Appalling I say!

      Father Cheney had been talking about me and my editor-in-chief colleague. I was pissed!

      The irony was that the editor-in-chief, while in all other ways a standard issue liberal, was in fact staunchly anti-abortion. This was back in the good old days of the ’80s when a person could still be a Democrat in good standing despite being pro-life. As I recall, he was the son of a teen mother who had given him up for adoption rather than get an abortion, and so he took the issue quite personally. I remember one editorial board meeting when he threatened to resign if the paper ran an editorial endorsing abortion. So for Cheney to call us out over the whole abortion issue was a bit much.

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  41. Scott,
    Thanks for that link. It nicely summed up some history and context. That op-ed was written 25 years ago. Funny that so little has changed in a quarter century.

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    • yello:

      Funny that so little has changed in a quarter century.

      It’s a Catholic institution. I imagine that the whole appeal of Catholic doctrine, for those to whom it appeals, is the fixed and enduring nature of it. It’s kind of hard to imagine that the kind of God Catholics believe in changes his mind from one year to the next, depending on popular demand. God is not a politician.

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  42. Just busting your ass Scott!

    In the Corp I had a buddy who was adopted and his biological mother had been a teen. He was staunchly anti-abortion as well. It was difficult to argue with him from a pro-choice perspective because he would always refer back to his own circumstances.

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    • McWing:

      he would always refer back to his own circumstances.

      It is always hard to have policy debates with someone who sees the issue as a personal one.

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  43. This was back in the good old days of the ’80s when a person could still be a Democrat in good standing despite being pro-life.

    You still can be. This, for instance, is the very first thing that comes up if you Google “pro-life democrat”. Note that an actual active politician has his name at the top of the billboard.

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    • Mich:

      You still can be.

      Yeah, I was being slightly hyperbolic. But only slightly. I think it is pretty undeniable that pro-life positions are much less acceptable within the party, and there are far fewer pro-life Dems, especially at the national level, than in the 70’s and 80’s.

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  44. Well, dang. Louisville. . . phhhhthbt!

    Mark was right again.

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    • It was a good game. The expected happened. UM had too many weapons to be stifled, but once their big was in foul trouble they could not cope on the boards. Coupling second half rebounding with their relentless pressure, L’ville was able to beat my four point spread.

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  45. @Michigoose: Game of Thrones! Have been through the books twice now. As I recall, there’s not much of a trap specific to the dress making, but Cersei is not in Sansa’s corner, naturally. Neither is Joffrey. Great books. Makes me want a sigil for my house. 😉

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  46. Most people only really care about issues that affect them personally.

    To put it another way, the majority of any population will pay little or no attention to news stories or government actions that do not appear to impact their lives or the lives of close associates. If something non-local happens that is brought to their attention by the media, they will passively accept government explanations and simplistic solutions.

    The primary issue is “does it impact my life?” If it does, people will pay attention. If it appears not to, they won’t pay attention. For instance, in Shenkman’s book unfavorable comparisons are sometimes made between Americans and Europeans. Americans often are said to be much more ignorant about world geography than are Europeans.

    This might be, but it is, ironically, due to an accident of geography. Americans occupy a large subcontinent isolated by two oceans. Europeans are crowded into small contiguous countries that, until recently, repeatedly invaded each other as well as possessed overseas colonies.

    Furthermore, it does not matter if the ideology is politically left or right, or for that matter, whether it is secular or religious. One’s critical abilities will be suppressed in favor of standardized, formulaic answers provided by the ideology. Just so work done within a bureaucratic setting.

    Bureaucracies position the worker within closely supervised departments where success equates with doing a specific job according to specific rules. Within this limited world, one learns not to think outside the box, and so, except as applied to one’s task, critical thinking is discouraged and one’s worldview comes to conform to that of the bureaucracy. That is why bureaucrats are so often referred to as cogs in a machine.

    http://www.alternet.org/tea-party-and-right/why-americans-are-so-ignorant-its-not-only-fox-news-there-are-some

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    • I read this and I wonder what is the actual influence of the internet?

      Was not awareness in 1989 much less widespread?

      Anyone know of a “study”?

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      • going solely on conversations with “these kids today”, I think “awareness” has the potential to replace actually doing something.

        Meaning “liking” something on facebook isn’t doing anything. but as obvious as that is to me, i get push back on that from the younger set.

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  47. Sorry for the wording in the link. I wasn’t actually implying the ignorance was only a right wing phenomenon. I think most Americans, myself included, are fairly ignorant about a large number of policy choices and the subtleties of their impact. I think it’s because we really only care, or possibly have the time to worry, about those issues. I also believe it’s why policy becomes personal and our discussions also become personal, at least for some of us.

    Just a thought.

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  48. I think a chunk of the problem is that some people assume others hold different opinions out of ignorance rather than a different philosophy. For example, I think a welfare state requires a thriving, growing economy along with a growing population. I don’t think it’s an immoral or even wrong political philosophy to have, I just think there are better, or more optimal political/economic models out there. I do not hold my political opposites in contempt nor do I think they’re even wrong (most of the time), it’s just that my world view and what I think is optimal may be different.

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  49. I read a long piece yesterday on poverty. It’s not even a discussion we’re having in the political arena today. It’s grown so much worse in the last decade and neither R’s nor D’s are discussing it at all. Is it because we’re not poor ourselves so we just don’t care that much, because neither party seems to have done a good job reversing it and we’ve grown complacent or fatalistic about it, or because we’re so focused on our own personal issues that we’ve assigned a lot of others to the back burner? I think it’s an interesting question.

    I saw a map of various states, and the level of poverty in each for both adults and children, and it was downright embarrassing, for all of us I think, and yet no one mentions it really.

    I saw the video about our common interest in all children and wondered if perhaps this was what she was talking about…………………….shouldn’t we make more of an effort to protect all of our children from the worst of these circumstances. I don’t know, I’m just thinking out loud. How far does our responsibility to each other really go? Is that the difference between conservative/libertarians and liberals? Is there a balance in the middle somewhere………………..I’m beginning to doubt there is. I think that’s why I stayed away for awhile……………….realizing there isn’t a middle ground because we’re all so convinced we have it right and the other guy is always wrong.

    Or maybe it’s like the piece above claims, we’re basically just stupid about things that don’t have a personal impact on our own lives and by the same token don’t particularly want to hear about the circumstances of others’ lives and how they may be impacted.

    And contrary to McWing saying he doesn’t have contempt for his political opponents, I think he may be the exception.

    Then again, perhaps I’ve lost my optimism and have simply become a cynic. All those words to find the truth…………………………….hahahaha………………..at least I might fit in better here with the rest of you cynics.

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    • lms:

      I saw a map of various states, and the level of poverty in each for both adults and children, and it was downright embarrassing, for all of us I think, and yet no one mentions it really.

      I’d be curious to know if the level of poverty reported included government transfer payments. The trouble with a lot of poverty statistics is that they ignore all of the government programs designed to ameliorate poverty. So naturally, if you ignore all of the things that are being done to help the poverty stricken, it will appear that nothing is being done to help the poverty stricken.

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  50. I’ll try to find it again. I’ve been reading a lot without the intention of linking so I don’t bookmark or save the tab. I’ll try to remember where I read it. It was an interactive map showing statistics for each state.

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  51. I found it again. I was looking for a charity to support and saw this. I still think I’m going to work with the library’s literacy program but I thought this was an interesting challenge, cut the poverty rate in half in ten years. I doubt it addresses your questions.

    http://halfinten.org/issues/articles/interactive-map-2011-poverty-data-by-congressional-district/

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    • LMS, Scott’s question is a good one, of course. We do try to ameliorate poverty at many levels.

      Travis County, Texas (Austin), admittedly a liberal bastion, has a MH-MR program that provides widespread aid to the poor and even working poor who have identifiable mental/emotional disabilities. Neighboring Williamson County does not.

      Austin has 19 community health clinics.

      Austin has homeless shelters. Austin has battered women’s shelters. Austin Community College has over 70000 enrollees, many of whom are job retraining according to identified community needs.

      We have attacked poverty here and with some success. But the fact that we are growing fast, and have lots of jobs even in tough times, George’s point, I think, must be taken into consideration.

      I read that one of the cities in OH has very intentionally attacked joblessness, low education, and poverty with much success. If I can find it I will link. As in Austin, business was an active partner in the endeavors.

      Lms, I know there are success stories out there that can be replicated by concerned citizens. The way this should work in our country is that LMS in San B. joins with others in San B. to ID a community need, and they find allies in business and local gummint, and NGOs. If state funds could help, sometimes they make their state reps and state senator aware of the good work they are doing and how a little state aid would go a long way. The group makes its pilot project work and finds NGOs that support that work, typically.

      Some ed group in Austin just got some backing from both the Dell Fndn and the Gates Fndn.

      It’s actually hard work and you have to show some results before you interest anyone else.

      You know all this.

      I’ve done a lot of charity work in my life and I know you have, too. I am working with a group now founded by a retired FBI analyst that actually thinks it can sharply reduce crime. Our Sheriff and Police Chief and the County are all interested. This may sound peripheral, but fear of violent and of drug crime is toughest on the working poor, and their kids.

      Finally:

      I think the library’s literacy program is perfect!

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  52. BTW, I found the map but I can’t remember where the original article was, sorry.

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  53. I understand Mark. The food bank a group of us started in 2009 at one of the local senior housing complexes took off big time and has now expanded to another complex as well as people living outside of the complexes. We actually turned it over to a church who was interested in carrying on for us.

    I’m just rambling about poverty, especially in regards to children, and wondering it there is a mandate for more tax payer intervention or not? And also if it’s something we can discuss without some of the rhetoric that both sides bring to the table. I’m very discouraged with the political process of late.

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  54. @lmsinca: “shouldn’t we make more of an effort to protect all of our children from the worst of these circumstances.”

    We do a lot, and more every year, I expect. Schools in poor areas get Title I funding that schools in more prosperous areas don’t, and often enjoy newer equipment and text books because of it. I know there are dozens of programs in existence now in the schools to help the poor (food programs, computer access, course recovery, etc) that did not exist when I went to school, and then there were a lot of programs that would not have been dreamed about when my parents went to school. And that’s just in the school system.

    I think it may be more difficult to get general well child care today, in terms of cost and convenience. The days of $5 doctors visits (without insurance) and house calls are long gone. But for numerous illness, there are more specific charity hospitals, with greater capacity, so that’s a plus.

    Also, I think there is some question of what poverty means. Does it mean today what it did in the 1950s? I don’t think it does. I think a poor person is ostensibly much better off today relative to a poor person of the 1950s in many ways, if by no other metric than in access to public programs, but no better off, or worse off, when compared to the modern day upper middle class than they might have been, back in the day.

    As to the mandate for more taxpayer intervention, the question is, where does it stop? There has to be a stopping point somewhere, and, after that point, somebody who is poor will not be getting something they would otherwise benefit from. They will be denied an educational opportunity or a medical procedure, and thus will still be poor in comparison to those who have the resources to access such opportunities.

    Myself (and this is completely anecdotal), I have never seen someone using foodstamps who didn’t look reasonably healthy and well-fed, if not a little unhealthily obese. I’m sure this is not always the case, but I’ve encountered multiple dozens over the years, and they aren’t going to bed hungry, which I doubt they would be absent public assistance. Which leads me to conclude that, properly accessed, public food assistance accomplishes the goal of providing enough, or more than enough, food to prevent malnourishment in those taking advantage of the system as it is.

    In the end, most of the things we see as problems today will require technological solutions. The way to create an egalitarian healthcare system is to make the performance of surgeries and production of pharmaceutical orders of magnitude less expensive than they are. If food production costs could be cut in half, food stamps could buy twice as much food. Some of such things are logistical and policy related, but much of it is technological. They are problems that are constantly working towards solving themselves.

    I think things are, generally, much better than they were, and in 25 years will be better still. But presently look like a godawful mess, depending on how you look at it, and will continue to appear so 25 years in the future. Human beings are hardwired to move the goal posts: it gives us incentives for progress. We could wipe out poverty as we understand it today, and there will still be have-mores and have-lesses, and a lot of the reasons people have less will seem stupid and foolish and fixable, and we will still be getting poverty charts that make us look like a 3rd world country, even if everybody can go purchase a cure for cancer at the corner pharmacy and process household yard waste into a turkey and stuffing dinner in their government subsidized Food-o-Matic.

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  55. @markinaustin: “has a MH-MR program that provides widespread aid to the poor and even working poor who have identifiable mental/emotional disabilities. Neighboring Williamson County does not.”

    I think this is an important point. My anecdotal experience that food stamp recipients that I have known appear well fed and healthy (if not overweight), and that recipients of free lunch or free breakfast appear similarly well fed is predicated on people being able to take advantage of such public assistance. The mentally ill or incompetent have a great deal of difficulty accessing such things without additional assistance.

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  56. @nova: “going solely on conversations with “these kids today”, I think “awareness” has the potential to replace actually doing something.”

    Yup, which the folks wanting likes on Facebook actively encourage. “Like this if you want to end poverty in your lifetime!”

    *like*

    Well, I’m done . . .

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  57. @lmsinca: “I think most Americans, myself included, are fairly ignorant about a large number of policy choices and the subtleties of their impact.”

    This is true, but there are so many policy choices, programs in places, and decisions made in these programs, some of which have multiple consequences, that it’s difficult for people to be aware of everything going on within a narrow area of expertise, much less everything, everywhere. People could be more aware than they are, no doubt. I certainly could be. But I doubt many of us can really become aware of all the specifics and really see the relationships except in very, very narrow areas where we develop expertise. And then we’d probably see things very differently than we did before developing said expertise, and perhaps lose sight of the bigger picture, as our perspective is now down at the bottom of our tower of expert knowledge and experience, which occludes much of the larger world beyond.

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  58. @lmsinca: “To put it another way, the majority of any population will pay little or no attention to news stories or government actions that do not appear to impact their lives or the lives of close associates.”

    Given how we are wired, and our natural tribal orientation, and what would have constituted survival instincts for early homo sapiens, this isn’t stupidity, or shallowness, it’s perfectly rational, instinctive, intuitive behavior.

    What’s wrong with you people? Why aren’t you interested in stuff that has no effect on you or your family or anybody you know, about which you can probably do nothing about, and would not change your life for the better in any intuitive way you can see, if you could do something about it?

    And ignorance is contextual. People vary wildly in what they know, and about what topics. A person with a broad and deep understanding of 19th century British literature can be completely ignorant about physics, or database design, or contemporary Russian politics. It doesn’t really make them stupid, or “ignorant” in some sort of global sense: it makes them very smart about things they are interested in. Various things influences those interests, but mostly what influences those interests is what they think will get them laid, or best distract them from the fact that they aren’t getting laid.

    Cuz we’re primates, after all.

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  59. Cuz we’re primates, after all.

    I’m not, I’m a girl…………………….

    Thanks for all the responses, more later, we got pounded with orders just now…..yay

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  60. @lmsinca: “Thanks for all the responses, more later, we got pounded with orders just now…..yay”

    That’s what you call a “high quality problem”. 😉

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  61. You are assuming that Disney would walk away from all that mech money. Plus that makes all the Clone Wars cartoons non-canon. Just do what I do and pretend nothing has happened since the VHS release of the original trilogy.

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  62. @nova: Heh! I wish he had originally gone with Wookies instead of Ewoks. It made sense, as in the expanded universe, Wookies are essentially technology slaves. It’s slave wookies that build those big Star Destroyers and help bolt together the TIE fighters. So they would have been both capable of and ripe for rebellion. But, instead, e got Ewoks.

    No biggy. I still love ROTJ, especially the final battle between Luke and Vader.

    The prequels won’t be reshot. The originals will remain untouched, except for possible 3D releases, though this is not guaranteed.

    What is guaranteed is that, starting out, Disney is going to put all its Star Wars eggs in the third trilogy. Meaning that everything from this point out is going to be focused on building and promoting and merchandising the next three movies. TV series that don’t lead into the next 3 tent poles? Gone. Games that don’t lead into the next 3 tent poles? Gone. Product that isn’t about the next 3 movies? Gone. Everything Lucasfilm produces over the next 6 years is going to be about supporting the movies. Either the three trilogy films, or the stand-alones. It’s going to be about positioning games, television, product, and movie, altogether as a package. Redoing the prequels or releasing the original trilogy, unedited, on Blu-Ray, or telling more tales of the Clone Wars . . . none of that is part of the picture. Unless it can somehow synergize with one of the movies. Which is unlikely. Which is why Seth Green’s long-gestating “Star Wars Detours” has been (thankfully) cancelled (after a lot of the episodes were in the can, mind you). Why Star Wars 1313 has been tabled. Why a lot of the merchandising product based on the prequels and The Original Trilogy that was coming out has been cancelled, some of it just in America, some completely.

    Right now, I think it’s pretty clear Disney envisions a Star Wars money machine: each year, a new batch of product, games, and perhaps even support television or novels that lead into, or take place during, the upcoming movie release. No Yoda in the next movie? No Yoda product in the stores. No Yoda in the next game, unless the creators can work it in there, and still mostly build it around the world of the next movie. Or unless they eventually to a Yoda stand alone. Disney isn’t going to be throwing money into, or doing licensing deals, without it “building the brand”–and, in this case, the “brand” is the movie franchise moving forward.

    And that’s my opinion. But I would totally endorse completely redoing the prequels.

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  63. @yellojkt: Clone Wars may not be canon. Disney seems really uninterested in Clone Wars (or its fans, who have been very unhappy about its cancellation), and is onto the next animated series, which will probably be about a time period leading up to Episode VI. Nobody has said that J.J. Abrams has to regard it has canon (not that there’s likely to be much that would conflict with anything he wants to do).

    I think we’re going to find that it’s going to be all about the upcoming movies (and, of course, focusing on product that Disney has all the rights to, and no profit sharing, which I’m not sure was the case with Clone Wars and other various projects recently killed).

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  64. I’ve been thinking about poverty some more since I brought it up. I primarily used it as an example of a subject that doesn’t receive much political discussion and was wondering why, but now that I’ve been researching it a little more I’ve learned a few things.

    When you google welfare and poverty, 9 out of 10 of the sites that come up are conservative ones………….I thought that was interesting.

    We spend about 5% of the Federal budged on welfare for the non-working poor. Other money goes to aid the working poor, especially those with children.

    About twice as many single parental households living in poverty are headed by women. There is also a large racial difference with blacks having the highest percentage of poverty in both categories of either single parent or both parents living in the home.

    Spending on welfare follows the same pattern as increases and decreases in GDP. Welfare spending goes up as GDP goes down. There was a big spike in welfare spending during this recession but it is going back down.

    Most of this is pretty obvious really. The question I have is why the money we spend seem to be essentially giving people a subsistence existence, surviving in poverty but basically no ladder out of poverty. Is it just a fact of our culture that there will always be a certain percentage of people living in poverty no matter how much money we spend or how many programs we offer? Or is it some sort of a structural defect in our economic system?

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    • lms:

      Is it just a fact of our culture that there will always be a certain percentage of people living in poverty no matter how much money we spend or how many programs we offer?

      It is not a fact of our culture. It is a matter of definition. Since the official definition of poverty specifically excludes non cash benefits such as public housing, food stamps, Medicaid – ie pretty much all government assistance programs designed to alleviate poverty – then it truly doesn’t matter how much “we” spend or how many programs the government offers. The government could house every poverty stricken family in the nation in their own mansion in Beverly Hills, give them each a Rolls Royce, and provide them with 14 weekly meals at Ruth’s Chris steakhouse, all paid for by the taxpayer, and every single one of them would still be defined as being in poverty.

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  65. And Kevin, I agree with a lot of what you said. I think we do spend quite a bit on poverty in this country, albeit a lot less than other countries with similar stature. I didn’t agree with your stereotype of adults and children on welfare apparently doing fine based upon your observation of their size. It’s clear we have an obesity problem in this country but it’s not exclusive to the poor and I don’t think it’s a helpful analogy.

    I’m not particularly in favor of just throwing more money and food at a problem in the hopes that it will go away. It seems we should be able to come up with a better solution, assuming anyone agrees it is a problem. But like I said earlier, I’ve become a cynic when it comes to the state of affairs of our political system and I think I should add financial system. I’m also wondering if income inequality has a link to poverty.

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    • LMS – since 1970 about 30% of the eligible population have been HS dropouts. There was a time when there were good paying blue collar jobs in abundance. By 1985 or so, and ever since, there have been nothing but minwage jobs for that cadre, if even those.

      I think the fastest way out of poverty is a community college tech or nursing degree. If you just want fast and cheap, support your neighborhood CC.

      Frankly, I think the first state that expands its CC systems widely enough to train for all the available but unfilled positions will boom for the effort. And make a big, big dent in “poverty”.

      I don’t see it as naturally a federal problem.

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      • Mark:

        Frankly, I think the first state that expands its CC systems widely enough to train for all the available but unfilled positions will boom for the effort. And make a big, big dent in “poverty”.

        I wonder if access is really a problem. Is there any indication that applicants are being turned away in significant numbers from existing community colleges due to a lack of available spots?

        The fact is that people are free to ignore the opportunities that are made available to them, and many, many people do. And those choices have consequences.

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  66. The government could house every poverty stricken family in the nation in their own mansion in Beverly Hills, give them each a Rolls Royce, and provide them with 14 weekly meals at Ruth’s Chris steakhouse, all paid for by the taxpayer, and every single one of them would still be defined as being in poverty.

    Let’s hope there’s no plan for that. I don’t know much about how the government defines poverty, and why they include and exclude different income and benefits, but presumably it’s something that has been calculated to be fair to both the taxpayer and the recipient.

    We know there are cheaters out there living high on the hog on welfare benefits because we’ve caught a few of them and they’re in jail now. That’s the old “welfare queen” argument I guess. It’s my understanding there are lots of rules in place now, more than pre-1995 or 1996 to steer people toward work and other than food stamps I don’t think there’s much money being handed to able bodied adults who don’t have children.

    I’m simply wondering why, with the amount of resources we’ve thrown at the problem, we haven’t gotten better results. I’m sure there are people who have decided that’s all the life they want and are destined because of their life choices to remain right where they are. It’s too bad their children also suffer those consequences. It would be interesting to find out more about these people. I think the key is more in line with jobs and education but that’s just a guess.

    I can honestly say there are a lot of people in this country who shouldn’t ever have been allowed to have children…………….but that’s definitely a slippery slope social engineering argument.

    I like Mark’s idea of utilizing the CC system to a much larger degree. I don’t know about other states but here in CA the system has taken a nasty hit due to state budget cuts. There was a training program our oldest daughter participated in as a teacher in one of the CC’s to help teachers integrate returning vets into the community but unfortunately about a quarter of the teachers who participated eventually lost their own jobs due to departmental cuts, including her.

    It’s a complex problem and in my opinion we, as a nation, haven’t found the solution yet. I imagine it will be easier for our legislators, both state and federal to maintain the status quo rather than tackle the problem.

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    • lms:

      I’m simply wondering why, with the amount of resources we’ve thrown at the problem, we haven’t gotten better results.

      My point is that it is impossible to make a judgment about how good the results have been by looking at poverty statistics, because the stats exclude most of the resources that have been thrown at the problem. Poverty is a measure of income level. A person with zero income, but whose needs (food, housing) are being provided for by the government in a perfectly satisfactory manner will still show up in the stats as poverty stricken.

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  67. I should add unemployment benefits to the aid provided to able bodied adults, in addition to food stamps above. That’s what caused the real spike in spending during this recession. I’m not going to argue whether or not those benefits are justified or not as I think both sides have already agreed they are necessary during the kind of recession we suffered. A lot of people are still out of work who want jobs and the extended benefits are being cut back anyway as employment rises.

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  68. @lmsinca: “When you google welfare and poverty, 9 out of 10 of the sites that come up are conservative ones………….I thought that was interesting.”

    We tend to be very paranoid about the creation of a nanny state, or the expansion thereof, and for good reason. There are plenty of examples of the welfare state getting out of control in the world, and examples of expensive programs that seem to do little to ameliorate the problems they are designed to address. And there are real concerns about the affect of welfare programs on incentives: as Zig Ziglar says, give a man a dole, you take away his dignity.

    There is also a concern about protective measures (such as attempting to ensure employment) as being counterproductive. When you can’t fire a poor performing employee, or an employee you just don’t get along with, then you don’t want to hire anybody. High minimum wages make it harder for unskilled laborers to get a job where they might learn a new skill. Etc. Conservatives also worry about poverty and don’t like it any more than liberals, but believe the best answer is to “let the free market work”. In the long run, I think they tend to be right: the profit motive leads to innovation which allows for (in the long run) cheaper drugs and medical treatments and food production, etc.

    I think policy can help things along: I’ve long thought a patent extension scheme that allowed pharma companies to trade patent years on life saving drugs for patent extension on lifestyle drugs that are hugely profitable, and get everybody from Canada to India on board, would make a huge difference in the availability of inexpensive life saving treatments. And would be imminently fair: let buyers of Viagra and Cialis fund the next wave of inexpensive cancer treatments. And that’s just one example.

    “We spend about 5% of the Federal budged on welfare for the non-working poor. Other money goes to aid the working poor, especially those with children.”

    Indeed, and I think that’s a very reasonable amount. Other programs that help address issues of poverty (and limited finance) would include more money, though: social security and medicare. Part of what keeps the disabled and the old from falling into poverty are just such programs. These guys say SS is 20% of the budget: http://www.cbpp.org/cms/?fa=view&id=1258

    And that’s a big part of poverty reduction in this country, even if it doesn’t means test.

    “About twice as many single parental households living in poverty are headed by women. There is also a large racial difference with blacks having the highest percentage of poverty in both categories of either single parent or both parents living in the home.”

    Which suggests (a) that child support could use greater enforcement, and that single parenthood, if not stigmatized, should be discouraged because of the negatives, just as smoking is discouraged because of negatives, and that cultural biases against (or at least not towards) the sorts of things that prevent poverty at a personal level should be examined. Doing well in school should not be considered “acting white”, or effeminate, or weak. Also, racial differences should take into account new immigrants, as it is unreasonable to expect new immigrants, especially if unskilled or poor in English, to have an easy time of it. If you come to America without much education or money, you’re going to be poor, at least in the first generation. A lot of poverty in America comes from first and second generation immigrants. Who were, to be fair, much poorer where they came from, most of the time.

    “The question I have is why the money we spend seem to be essentially giving people a subsistence existence, surviving in poverty but basically no ladder out of poverty.”

    If they are capable of getting out of poverty on their own, a subsistence existence keeps them going until they can. This is important, and last time I saw statistics on people climbing out of poverty, I recall that a lot of people seemed to move out of poverty after a period of time, though they are often replaced by new folks immigrating, or by birth rate. So that’s a net positive. It would be nice if more could be done, but it’s hard to address the issues of cultural environment and home life that inform people’s existence. If you are poor and your friends are poor and your family is poor, that defines existence. Breaking those patterns is very difficult.

    “Is it just a fact of our culture that there will always be a certain percentage of people living in poverty no matter how much money we spend or how many programs we offer?”

    To a great degree, I think so. Certainly, new immigrants from poor countries are going to be in poverty when the immigrate here, often for years, sometimes for generations. I think attempting to get everybody out of poverty at once, especially while you allow poor immigrants into the country (which we should) is impossible. What is possible is helping people keep their heads above water until they can climb out on their own, and provide ladders out of poverty to people able to climb out. To get out of poverty, you’ve got to be willing to work, and work hard on the right things (usually, getting an education in a field or multiple fields with employment and growth potentials). Not everybody is in that position, and not everybody is going to do that. The poor will always be with us; the question is, what will poverty mean (unable to buy food, or unable to afford a cell phone?)? And who is poor? Hardworking folks who can’t get a break (often) or people who are mentally ill, and who would need much more active management (long counseling, education, medication) to ever hope to be self-sufficient.

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  69. @lmsinca: “I think both sides have already agreed they are necessary during the kind of recession we suffered”

    I don’t know if everybody agrees, but I do. We find people often who are chronically unemployed finally find a job just about the time their benefits run out, so this indicates that extending unemployment benefits does tend to extend unemployment. However, it gives many people an opportunity to be more selective in their job searches, and makes it more likely that they will find a job where they can perform well and utilize their skills, which is, I think, a net positive. And helps people who just can’t find a job keep their heads above water, of course.

    “A lot of people are still out of work who want jobs and the extended benefits are being cut back anyway as employment rises.”

    It has to happen at some point. Here, I attend many meetings about the new structure of our new school system. I’m in a room full of people where the director of the department just says, flat out, that come next July, not all of you (sometimes many of you) will not have a job. Budget wise, this is at least half necessary, even though I look around the room and think we’ve got 300,000 kids to educate, and what we have isn’t enough, and we’re going to have less? But property tax revenue is way down, because people have moved, don’t live in the houses and so aren’t paying property taxes, and property taxes are down because assessments are way down because the value of real estate is down. It’s a bad situation, but it is what it is. There’s not enough money to provide the necessary support to students and teachers, so we have to prioritize and provide what we can, even if it’s not enough.

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  70. @lmsinca: “We know there are cheaters out there living high on the hog on welfare benefits because we’ve caught a few of them and they’re in jail now.”

    I would think that is very, very few. Generally, abuse is much more minor: fat people buying brand name junk food with food stamps (or subsidizing their purchases of said brand name junk food by paying for meat and cheese with WIC and spending their own cash (or other cash subsidy) on crap. You see housing projects here covered with satellite dishes. One assumes we a subsidizing a lot of people being unproductive, watching a lot of television, but otherwise living near subsistence lifestyles. This isn’t living high on the hog by any stretch of the imagination, it’s just the welfare state subsidizing a low quality life of indigence. But it’s generally going to be poorly educated adults without a lot to contribute to the job market . . . so it’s a mess. Can’t go back in time and forcibly educate them in areas that give them marketable skills.

    But, back to the point: government programs where people cheat them tend to get taken pretty seriously, and cheats make everybody look bad, so they don’t want to be defrauded. So they tend to look dimly upon folks exploiting the system, and work to prevent it. When TennCare started here, it was new, and they simply weren’t prepared for the amount of people looking to defraud our local universal healthcare: so it was nearly bled dry by cheats. They finally got a handle on it, because the cheats were going to end up bankrupting the system. But there were still politicians (Republican Don Sundquist!) whose solution to the fraud was to institute a state income tax in order to funnel taxpayer money into TennCare, not deal with the fraud. So there are reasons conservatives worry about taxpayer money going to folks who just want to exploit the system.

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  71. There is a certain pretzel logic to the argument that we don’t really have poverty because our anti-poverty programs are so good at giving people their basic needs. For one, I dispute that we have effectively eradicated poverty. Anyone who has spent time in the Mississippi Delta or East Baltimore will recognize that there are still plenty of pockets of astounding poverty.

    I will concede that we he have a rising standard on what constitutes poverty in this country. The poorest person in America has it pretty good compared to subsistence farmers in the Third World. As Fox News and other outlets crow, the penetration of consumer goods into household in America. But manufactured goods have become cheap to the point of ubiquity. High-touch intangibles such as health care and education are the current sectors whose costs are rising much faster than inflation.

    This may be why the current euphemisms tend to emphasize ‘income inequality’ rather than abject poverty. For one the latter encompasses the working poor and the lower middle class. And I’m not sure it’s all attributable to class envy.

    When I was a kid the job I was told I needed to avoid was ditch-digging. Back-breaking, outdoor physical labor. Anyone who has seen a modern construction site knows that ditches are dug with massive complicated machines and an inordinate amount of safety equipment. It’s still tough work, but work that requires a great deal of training and skill.

    We have outsourced so many of our low-skilled jobs, textiles, consumer electronics, etc. that all that are left are location specific chores such as food service and lawn care.

    Obviously better education at all levels is part of the answer. But even that only goes so far. College educated graduates are crowding out service sector jobs where the unskilled could be employed. We are breaking economic rules about optimum utilization in ways that will eventually lower our living standards.

    It seems pretty well recognized that labor rates are pretty inelastic at the very low end. If it costs an extra quarter to the dollar item menus at a fast food place but that employee gets health care and doesn’t need SNAP, that seems to be the most effective anti-poverty program.

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    • yello:

      There is a certain pretzel logic to the argument that we don’t really have poverty because our anti-poverty programs are so good at giving people their basic needs.

      I’m not sure who has actually advanced this argument. What I have been saying is that it makes no sense to measure how well anti-poverty programs are working as a function of a statistic that specifically excludes the effects of those very same anti-poverty programs.

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  72. @ScottC: “I wonder if access is really a problem. Is there any indication that applicants are being turned away in significant numbers from existing community colleges due to a lack of available spots?”

    Access is less a problem than incentive. Folks need to want to do it, and they be motivated to stick with it and do the hard work it takes to master new skills.

    My experience, when I was looking for new opportunities, was that I signed up for a number of continuing education courses in just the sorts of technological subjects employers were demonstrably looking for, in terms of mad Javascript skillz, MSSQL server, Crystal Reports, etc, in the local community. One after the other, I didn’t get to take any of those classes, because none of them made. In not a single case (and I was all about learning what employers were asking for in their classifieds) were there enough people signing up for the class for the class to happen. I got my money refunded, but, hell!

    The alternative are places like New Horizons, which offer all the right classes and you get to take them, no matter what. However, those places are very expensive, and if you’re poor, spending a month’s worth of grocery money on a single class seems like a crazy extravagance. And if you have very basic skills, you’d have to take a years worth of grocery money in classes on the basics before you could get to the advanced stuff employers are looking for.

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  73. Kevin, I think your point about a subsistence existence as a temporary existence is really where most of us agree our welfare dollars should go. What irritates tax payers is when a percentage of people end up gaming the system in some way at our expense.

    If what you’re saying is accurate, assuming I’m reading it right, that new people move into the welfare rolls as others move out and so we’ll always have that certain percentage of people existing on welfare and or living in poverty, then I’d say he system is working the way it was designed and we can attribute the rise in poverty and welfare spending to the current economic situation.

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  74. @yellojkt: “There is a certain pretzel logic to the argument that we don’t really have poverty because our anti-poverty programs are so good at giving people their basic needs. For one, I dispute that we have effectively eradicated poverty. ”

    We have effectively eradicated 3rd world level poverty for all but the mentally ill and homeless. Poverty is still poverty when you can’t pay for electric bill and your cell phone bill, but is still a different thing than it once was when you have electricity and a cell phone, even though poor. What the poor in modern America have access to is very different than what the poor in 1930s America had access to.

    “And I’m not sure it’s all attributable to class envy.”

    What if it is? When you are able to put food on the table, but can’t afford to go back to school or travel or remodel the house or fix the leaky sink or buy new clothes for your kids, and you see folks in the nice neighborhoods installing amusement parks for their kids birthdays and buy them horses they ride one summer and never again and so on and so forth, class envy is a perfectly natural human reaction. It’s lovely that you don’t have a dirt floor and don’t have to use an outhouse and can, if you must, get penicillin, but living in a world where many people have much more (and, let’s face it, all of us have known people much better off than we are who did not strike us as smarter or more moral or hard working than ourselves) is going to engender some feelings of discontent even in the most dispassionate.

    No level of federal spending is going to change that, not really. But I tend to feel treating a sense of discontent that many people seems to have benefits or privileges unavailable to us as a character flaw is unfair. It’s natural to want more; it’s natural to feel at least a little resentment, especially when we are struggling, when we see people we feel are no more capable than us, and no smarter, enjoying the benefits of wealthy parents or knowing important people.

    “College educated graduates are crowding out service sector jobs”

    Part of this the nature of collegiate education. Universities are interested in selling degrees, not in the value of those degrees in the marketplace. Doctorates of Philosophy have little value, or most people, in the marketplace. There are far more PhD’s in philosophy than there are teaching positions in the subject, which is about the only job where a degree in philosophy means anything. Even more useful degrees aren’t worth much, despite their cost, when it’s well known that the market is saturated with that particular specialty. There’s not much attention paid to what skills are needed in the job market when students head to college. If there were, there’d be a lot more engineers and Cisco certified technicians coming out of schools. And, even those guys would be better off if they also had a degree or at least certification in three or four other distinct areas of active technology in areas that are growing, rather than shrinking.

    Tangent: out of control energy costs are going to make us all effectively poor. When the price of energy goes up, the price of everything goes up. We are not only paying more for our gas and electricity, but for everything that is produced with electricity and shipped in trucks and trains. When I’m getting paid the same or less, but everything from the gas to get to work to the bread I buy at the store costs more because of rising energy costs, I’m poorer every quarter.

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  75. Community college is no longer cheap. At nearby Prince Georges County, tuition and fees are a whopping $140 per credit hour.

    I work around the corner from a for-profit tech institute which is always crowded with people. The prices they charge are nearly impossible to find on their website but it seems to be about $20k for a one-year HVAC Tech course before loans and grants.

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    • yello:

      Community college is no longer cheap. At nearby Prince Georges County, tuition and fees are a whopping $140 per credit hour.

      That comes to $1,680 for a typical 12 hour semester, or less than $3,400 per year. “Whopping” is not a word that comes to mind.

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  76. @lmsinca: “What irritates tax payers is when a percentage of people end up gaming the system in some way at our expense.”

    I know someone “gaming” the system, in a sense that, in theory, he should be able to work for a living and hold a job (he also gamed us, in a way, as we kept sending him money we didn’t have that had been meant to help support my wife’s sister, who had passed away years before under his negligent care, and I won’t get into why we kept doing that . . . we’re both saps, basically).

    However, he can’t hold down a job. Whatever prevents him from doing it may be psychological, or a form of light mental illness (I think it is), as from all appearances he should be able to work, and work in a field where he would make a decent living, but he just can’t. Yet anyone looking at him from the outside would say he’s gaming the system, and I guess he is, but . . . I think many of the folks gaming the system are only doing so because it’s about the only thing they are capable of doing, no matter how able bodies and generally competent they appear. Very, very, very few people are going to living an upper-middleclass lifestyle by gaming the welfare state. They are natural born parasites, and incapable of being anything else.

    Yet if you are going to help the people who need it, and will benefit from it, and live to return value to the community, you’re going to end up with those people, too. People committing outright fraud, you prosecute. Those folks who might float from job to job (or end up living off relative to relative, or sugar daddy to sugar daddy) are an artifact of the system we end up having to live with. We’re all going to know someone on public assistance who we think should be able to get a job and work, just like we do.

    I think welfare reform in the 90s was positive. Welfare-to-work, etc. But I don’t think you’re ever going to get everybody, nor do I think everybody on welfare is capable (no matter how capable they appear on paper) of being self-sufficient. These folks aren’t ever going to climb out on their own, or contribute to the overall society, but I think it’s difficult to judge the success or failure of anti-poverty programs based on them.

    “Then I’d say he system is working the way it was designed and we can attribute the rise in poverty and welfare spending to the current economic situation.”

    I think that’s true by and large. There are folks chronically in poverty (I can’t remember the number: 10%, 20%?) for over ten years, but I think most of those are the can’t-ever-quite-get-it-together folks who are not going to get out of poverty no matter what. Remember Parenthood (the movie with Steve Martin?) and the brother who always had something cooking, but always ended up in debt. He was a gambling addict, but is a good example of that kind of person: seems like he should be capable of getting his shit together, but, for whatever reason, never can. There are people who never have life-changing epiphanies, no matter how often they should.

    You are on to another problem, as regards the current economic situation. Normally, we should be moving towards another boom cycle by now, I would think. Or at least should be hinting at it. And I just don’t see it. Employment numbers seem to be improving mostly because people are giving up looking for jobs, or their unemployment benefits have run out. I’m worried we’re going to turn into Japan. Never going bankrupt like Greece (good!) but never quite crawling out of our economic malaise, or at least not doing so for years and years (bad!).

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  77. Scott

    A person with zero income, but whose needs (food, housing) are being provided for by the government in a perfectly satisfactory manner will still show up in the stats as poverty stricken

    I know seniors living in subsidized housing and benefiting from the food bank we helped establish living on small SS fixed incomes and receiving Medical (Medicaid) benefits who would disagree with the perfectly satisfactory part of your sentence, but I understand your point. I think Kevin is making the same point and we basically all understand that these people aren’t exactly “dirt poor” although I think there are still people in parts of the country who actually are. I believe the reason they aren’t dirt poor is precisely because of the benefits they receive. Is it too much, I don’t think so. That they are still considered poor by some government metric doesn’t really concern me that much.

    The map I saw tracked the increased percentage of people living in poverty based on the same metric which says something about the economy and/or the availability of jobs and necessary skills set which I think is a more important discussion.

    As I said it’s a complex issue not really prone to simple answers. I think all the issues raised by yello and Kevin are really interesting.

    Thanks everyone…………………………..another busy work day for me………….thank God.

    BTW, as a struggling single mom and college student, disowned by family and friends (that’s a long story), I received food stamps for about two years so I am partial to the temporary aspect of welfare as a bridge to a better life.

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    • lms:

      I know seniors living in subsidized housing and benefiting from the food bank we helped establish living on small SS fixed incomes and receiving Medical (Medicaid) benefits who would disagree with the perfectly satisfactory part of your sentence…

      I wasn’t claiming that anyone is being provided for in a perfectly satisfactory manner. I was saying that even if they are being provided for in such a manner, they would still qualify as poverty stricken. Which means that poverty statistics are not a sensible measure of the “success” of government programs deigned to ameliorate the effects of poverty.

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  78. LMS started this discussion of a “do we care”

    personally …. No, I do not. largely b/c of what yello, notes, that we’ve largely addressed absolute poverty and are dealing with relative poverty.

    I tend to view government efforts to address this like I do foreign aid. We have these programs so members of congress and their spouses can engage in slum tourism and talk about how awful it is while they show pictures of them standing in front of poor kids. bonus points if they’re black. +2 if they have some sort of disability. jackpot if it’s from a war.

    Basically, they’re a bunch of Michael Gersons. If you read his columns, there’s one in the rotation that is “essentially we have to do something” about problem X, and we’re BAD PEOPLE, because we’re not. If he actually cared, he’d do something about it.

    LMS did more with her local food bank than 1000s michael gersons and his ilk. but she’s interested in actually helping her fellow man. so it’s a different goal.

    and yes, i’m that jaded about it.

    I also tend to think that temporary vs. systemic poverty can’t be addressed with the same efforts. although we tend to do that.

    I also think that Americans are a good and generous people who will step up when asked, but bristle at being scolded and/or told they’re obligated to do something. Back to Gerson — if he writes about AIDS in Africa and says “help me” and here is how you can … I bet he’d get more results than his “we’re bad people for not caring and Americans are supposed to be better. what happened USA, you used to be cool”

    I’m ranting .. sorry.

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  79. Okay Scott, I understood your point but I think it’s somewhat tangential to the discussion we’ve been having and not that valuable as none of us here actually chose the metric. Using the same metric year after year tells us something about the lower rungs of the income ladder. Whether you or Kevin, or even I, actually consider them “poor” or not is not that significant to me.

    See y’all later. And thanks for the great discussion, it’s what I missed about ATiM.

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  80. @lmsinca: “That they are still considered poor by some government metric doesn’t really concern me that much.”

    It concerns me only in this way: it makes it difficult to judge when we’re making progress. Gregg Easterbrook made this point 10 years ago in his book, The Progress Paradox. The subtitle of which was something about how as things get better, we feel worse. Gregg can be a very liberal guy, but he expressed concern that constantly moving the goal posts on what constitutes poverty (and not putting the number of people who get out of poverty, and how many poor are new immigrants, etc) makes it very difficult to judge accurately how well anti-poverty measures are working. That it can lead to a gloom and pessimism, in fact, that is wholly inappropriate.

    I think it’s better to keep things in context. Subsistence living with limited access to opportunities is far from ideal, but that it is not now the common baseline for poverty is also something to celebrate. Conservatives argue that the War on Poverty failed, because it hasn’t worked . . . but, in fact, in many ways, it has. It just seems like a complete failure because well-meaning folks who see that there is still real poverty out there tend to move the goal posts, or try to discuss poverty in bleak terms that they hope will spur action and government spending.

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    • Scott suggested that we may not have enough folks taking advantage of what is being offered now in CCs and Kev gave a concrete example.

      Of the 29% of folks between 19 and 58 who are HS dropouts, some irreducible minimum are Very Stupid, addicted, or Lazy.

      More, I suspect, are living in information free zones where they have no idea that a possible exit from poverty exists.

      Got no numbers for ya.

      All just guesses.

      If outreach is an issue, once again, it is a local one. I do not see a federal role here, absent veterans benefits or federal reservations impact.

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  81. @novahockey: “LMS started this discussion of a “do we care”
    personally …. No, I do not. largely b/c of what yello, notes, that we’ve largely addressed absolute poverty and are dealing with relative poverty.”

    I do care. A lot, actually, but there are limits to both the money we have to spend, and the utility of spending more to solve the problems of relative poverty. I’ve always thought of the idea that simply reducing wealth inequality will have magical ameliorative effects as wishful thinking, at best—the freer the marketplace, the “richer” the poor get even as the wealth inequality grows greater.

    The things that will benefit the most of the relatively poor, to the greatest degree, are going to be minor policy changes or incentive structures (I gave my example of trading patent years on lifesaving drugs for extensions on lifestyle drugs), not taxing Peter to pay Paul. Unlike many of my fellow conservatives, I would be open to doing so if it worked. At some point, there is no more benefit to be gained from redistributing wealth, and I think we’re at the point.

    To reduce the burdens on the poor further is going to require growing the economy overall (which will increase wealth inequality, not decrease it) and technological innovation, which can be encouraged with policy, perhaps, but not subsidy (Solyndra, anyone?). Everyone would be richer tomorrow if energy cost a tenth of what it does now, and that can be helped along by policy (drilling, federalizing gas standards so refineries didn’t have to retool, designating an area of land to be a “refinery zone”, etc) but will also require technological innovation that’s only going to happen when it happens. The best thing the government can do there is get out of the way, not try to play favorites.

    “I also tend to think that temporary vs. systemic poverty can’t be addressed with the same efforts. although we tend to do that.”

    Agreed. But how do you avoid addressing systemic poverty when you’re addressing temporary poverty? And what happens to the systemic guy when you kick him off the dole? He becomes somebody’s problem.

    @novahockey: “but bristle at being scolded and/or told they’re obligated to do something”

    A few conservatives out there might call me liberal, and I suppose I can be about certain things, but there’s a reason I do not self-identify as liberal, and would never, and I’m not a Democrat, and that’s a big part of it, right there. Some Republicans politicians are losing me, because of the whiny victimhood, scolding, and finger pointing. Boy, that just doesn’t work for me. Got a good idea? Advance it. Don’t just whine and be a douchebag about how rotten liberals/conservatives are.

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  82. @limsinca: “Using the same metric year after year”

    True enough.

    Scott’s point about official stats on poverty not including public subsidy is a good one. If you do not include food stamps in the assessment of poverty, then food stamps isn’t actually an anti-poverty program. It doesn’t make sense to say “something is working” when you intentionally eliminate the effects of efforts you are making from your analysis. It’s like saying you crashed into a wall at the end of the street, even though you actually turned and didn’t crash into the wall, because if you subtracted your turning the car wheel, well, you’d certainly be crashing into that wall, so . . .

    That verges on incoherence. Point being, it’s an issue when assessing poverty, and the benefit of anti-poverty efforts, when you don’t include the effects of anti-poverty programs in your assessment.

    From Wikipedia: “In November 2012 the U.S. Census Bureau said more than 16% of the population lived in poverty in the United States, including almost 20% of American children,[1] up from 14.3% (approximately 43.6 million) in 2009 and to its highest level since 1993. In 2008, 13.2% (39.8 million) Americans lived in poverty.[2]”

    So, after 4 years of Obama/Biden, poverty has gone up 3%? The answer is clear: elect Republican presidents. 😉

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  83. One more quick link and I’m out…………..really, quit drawing me back in, I have work to do. The metric was only changed a few years ago by the census bureau. Before that we used the same metric for 40 years or so. Here are the benefits of the new calculations. And contrary to popular theory apparently anti-poverty programs do work.

    “I think people get a sense that poverty’s out there, it’s sort of endemic, and public policy can’t really do much to affect it,” Lower-Basch said. “But public policy really does matter. This measure does a better job of reflecting that.”

    The official measure — which will still be used to determine eligibility for federal programs — has been largely unchanged for 40 years. When it was first created in the 1960s, the poverty line was set at three times the minimum budget that a family spends feeding itself. Research at the time suggested that this was a good proxy for a family’s expenses. That standard has largely been in place since, with updates for inflation (and to the surprise of its original creator).

    Over time, though, food has gotten cheaper, and the average living standard of an American family has risen, while the poverty line has not kept pace. The official measure has also failed to take into account everything from childcare and health costs (on the expense side of the equation) to food stamps and tax credits (on the income side).

    The new measure does all of these things, while pegging the poverty line to a different benchmark — just above the 33rd percentile of U.S. family expenses on food, clothing, shelter and utilities — that will shift as living standards do throughout the country. The new measure also weighs the varying cost of living in different parts of the country.

    http://www.psmag.com/health/improved-poverty-metrics-show-aid-does-help-37763/

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  84. Hmmm. Overlap this map of gun violence over lms’s map of poverty and you get an interesting correlation (but not necessarily causation):

    http://thinkprogress.org/justice/2013/04/03/1811311/study-states-with-loose-gun-laws-have-higher-rates-of-gun-violence/

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  85. @yellojkt: “(the number of guns sold in that state used in crimes around the country)”

    I’m not sure I follow this. Is this saying they are factoring in deaths that occur in other areas of the country in with the statistics of the state where the gun was originally purchased?

    Possible correlation: states where gun control is popular are states where people are less likely to use guns to commit a crime. You aren’t going to support gun control if you think you might want to shoot somebody. 😉

    I tend to suspect Hawaii would have low gun crime even if it had the laxest gun laws in the land. It’s frickin’ Hawaii.

    Wonder what other demographic correlations hold true. States with large populations of young men would tend to be likely to have more gun violence, I suspect. One might suspect there is an ethnic component, or an immigrant component, except California has a very large immigrant population, and it’s a low gun violence state, and that wouldn’t explain Alaska. I live in an area with a lot of urban gun violence, and it’s mostly gang related, it’s mostly black-on-black crime, and it’s mostly poor young men.

    The correlation makes sense, if you think about it. If you have more to lose—and if you’re middle class or wealthy you certain do—you’d think twice before shooting someone, even if you had a gun. If you have nothing to lose, and can barely keep yourself fed, but you’ve got a gun . . . I suspect if you adjust gun violence statistics of those who commit gun crimes, you’d find a great deal of gun violence is done by people at or below the poverty level.

    It’s why, in stark disagreement with Paul Erlichman, I think abundant free energy is exactly what we need, and it’s the exact opposite of giving a child a loaded machine gun. If you and radically reduce the cost of energy, you reduce the cost of everything, thus reduce the effects of poverty, and would thus decrease gun violence.

    So, all we need is a cheap, safe source of abundant energy at low cost. Easy-peasy.

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  86. I’m late to this discussion due to a business trip.

    Here’s the Wonkblog links on the various poverty measures:

    “The new poverty measure is out, and it’s grim
    Posted by Dylan Matthews on November 14, 2012 at 12:40 pm

    Officially, the U.S. poverty rate in 2011 was 15 percent exactly, a 0.1 point reduction from 2010. But as I pointed out when that number was released in September, that figure doesn’t mean a whole lot.

    The official poverty threshold is the amount of money a family of three would have to make to spend less than one-third of their income on food in 1963 and 1964. Seriously. The only changes from a half-century ago have been adjustments for inflation. At no point was the measure changed to account for other costs, like health insurance, transportation, or housing, or to factor in income from transfer programs like food stamps or WIC.

    In recent years the Census Bureau has begun developing a “supplemental poverty measure” that lacks these shortcomings. Today, it released the supplemental figure for 2011. Overall, it’s higher than the official measure, at 16.1 percent, but for some groups, such as children under 18 and blacks, it’s actually lower. By contrast , it’s much higher for the elderly (15.1 percent in the supplemental measure, 8.7 percent in the official one) and Asian-Americans (16.9 percent supplemental, 12.3 percent official), and slightly higher for those 18-64, Hispanics, and non-Hispanic whites.”

    http://www.washingtonpost.com/blogs/wonkblog/wp/2012/11/14/the-new-poverty-measure-is-out-and-its-grim/

    See also:

    http://www.washingtonpost.com/blogs/wonkblog/wp/2012/09/13/how-the-government-fights-poverty-in-one-chart/

    http://www.washingtonpost.com/blogs/wonkblog/wp/2012/09/12/the-official-poverty-rate-last-year-was-15-percent-heres-what-that-misses/

    http://www.washingtonpost.com/blogs/wonkblog/post/is-the-poverty-rate-even-higher-than-we-think/2011/09/15/gIQAIlxzUK_blog.html

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  87. The difference in poverty rate for the elderly has to be due to medical expenses, yes?

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  88. Thanks jnc. All good links.

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