Tag Archives: great-recession

Here’s a New, Simpler Unemployment Rate For Our New, Simpler President

Mother Jones

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Donald Trump thinks the official unemployment rate is “fiction,” so Jordan Weissmann suggests we judge him by a different metric. Instead of a complicated measure that tries to divine whether someone “wants” to work, or whether they “want” full-time work but can’t get it, or any of that nonsense, let’s use a simpler measure for this new, simpler era:

The BLS even produces a data point that Trump himself might like: The employment-to-population ratio for adults between the ages of 25 and 54—or “prime-age EPOP.”…It gives us a raw look at the employment rate, without any fancy caveats about who is and isn’t part of the labor force. And because it only tracks workers 25 to 54, it isn’t really distorted by the wave of retiring boomers or growing college attendance. It’s a simple snapshot of the portion of the population we most need to worry about….Best of all, from Trump’s perspective at least, prime-age EPOP has plenty of room for improvement….If Trump wants to argue that Obama left him an economy that was still hurting, this is one stat that will easily help make the case.

Fine. But we don’t really want to know how many people are working, we want to know how many people aren’t working. So here’s the inverse prime-age EPOP, since 1990:

IPA-EPOP1 fell steadily during the postwar period as more and more women left the (unpaid) household workforce and entered the (paid) market workforce, but it’s been relatively stable since 1990. That means we can think of the period from 1990 until the start of the Great Recession as sort of a baseline for normal. The average during this period was 20.2 percent, and right now we’re still 1.6 percentage points away from that. As Weissmann says, this gives Trump some room to show improvement.

Now, naysayers are going to complain that this doesn’t really make sense. After all, this number includes lots of people who don’t want to work, mostly stay-at-home mothers and fathers. Shouldn’t we take them out of this calculation? Sure, we should, but then we’re back to that whole tedious discussion of who’s in the labor force and who’s just given up and all that stuff. We want simple: working or not working, end of story. And in fairness, when the economy is hot, wages go up and more stay-at-home parents are drawn back into the workforce. That makes this an OK measure of economic hotness.

So there you have it. Trump’s starting point is an IPA-EPOP of 21.8 percent. In four years we’ll see if he’s managed to bring that down.

1Rolls right off the tongue, doesn’t it?

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Here’s a New, Simpler Unemployment Rate For Our New, Simpler President

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Fox News Screws Up Its Latest Lie

Mother Jones

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This post starts out in an all-too-familiar way: with a Fox News headline. Here it is:

Food Stamp Fraud at All-Time High: Is It Time to End the Program?

Now, the obvious response to this is twofold. First, they’re just lying, aren’t they? And second, this is like a headline that says, “Traffic Deaths at All-Time High: Should We Ban Cars?”

But at this point the story takes a strange turn. First, I have no idea where Fox’s $70 million figure comes from—and I looked pretty hard for it. The Fox graphic attributes it to “2016 USDA,” but as near as I can tell the USDA has no numbers for SNAP fraud more recent than 2011.1

But that’s not all: $70 million is a startlingly low figure. In the most recent fiscal year, SNAP cost $71 billion, which means that fraud accounted for a minuscule 0.098 percent of the program budget. Even if this is an all-time high, the Fox high command can’t believe this is anything but a spectacular bureaucratic success.

And it would be, if it were true. But it’s not. If you look at inaccurate SNAP payments to states, the error rate since 2005 has decreased from 6 percent of the budget to less than 4 percent. However, this isn’t fraud anyway: It’s just an error rate, and most of the errors are eventually corrected. SNAP “trafficking”—exchanging SNAP benefits for cash—is fraud, but it’s been declining steadily too, from 3.8 percent in 1993 to 1.3 percent in 2011 (the most recent year for which we have records):

So in any normal sense, the Fox story was a lie. SNAP fraud isn’t at an all-time high. It’s been declining for years. But here’s the thing: The fraud rate in 2011 may have been low, but this was in the aftermath of the Great Recession, when total SNAP payments were very high. So although the percentage is low, the dollar value of fraud clocked in at $988 million. Fox could have used this far higher number, which is, in fact, an all-time high. It’s only an all-time high because SNAP was helping far more people, but still. In the Fox newsroom, that would hardly matter.

Bottom line: Yes, Fox is lying in any ordinary sense of the word. But they’re also vastly understating the amount of SNAP fraud. Even when they’re trying to deceive their audience, it turns out, they’re also incompetent.

1SNAP = Supplemental Nutrition Assistance Program = food stamps.

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Fox News Screws Up Its Latest Lie

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Living At Home Has Become Steadily More Popular Since the 1960s

Mother Jones

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According to the Wall Street Journal, millennials are living in their parents’ basements at record rates:

Almost 40% of young Americans were living with their parents, siblings or other relatives in 2015, the largest percentage since 1940, according to an analysis of census data by real estate tracker Trulia.

Despite a rebounding economy and recent job growth, the share of those between the ages of 18 and 34 doubling up with parents or other family members has been rising since 2005. Back then, before the start of the last recession, roughly one out of three were living with family.

Hmmm. “Rising since 2005.” I’ll assume that’s technically true, but take a look at the chart that accompanies the Journal piece. The number of young adults living with their parents rose in the 70s. And the 80s. And the aughts. And the teens. Basically, it’s been on an upward trend for nearly half a century. That seems more noteworthy to me than the fact that it failed to blip slightly downward after the Great Recession ended.

Part of the reason, of course, is that people have been getting married and settling down later in life. According to the OECD, the average age at first marriage has increased nearly five years just since 1990, and ranges between 30 and 35 around the world:

The United States is still at the low end of the world average.

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Living At Home Has Become Steadily More Popular Since the 1960s

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Am I Still Bitter Over Republican Perfidy in 2009? Oh Yes.

Mother Jones

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The Economic Report of the President is out, and we should probably take a look at it, if only for old time’s sake. The rumor mill says that the next chairman of the CEA will be supply-side TV blatherer Larry Kudlow, and God knows what we can expect from him. Probably a ten-minute YouTube video. Or maybe a tweetstorm. Who knows?

Anyway, this year’s report is stocked full of the usual number of interesting charts, but I’m going to highlight their version of my favorite chart. This one shows state and local spending following the Great Recession:

Normally, spending increases after a recession, and this is one of the things that powers the recovery. This time that didn’t happen. Thankfully, we at least had a bit of help at the federal level:

Needless to say, Republicans feverishly opposed all attempts at economic stimulus because they didn’t want the economy to get too much better. That might have helped Obama’s reelection chances, you see.

Oh well. Bygones. I’m sure Trump will fix everything.

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Am I Still Bitter Over Republican Perfidy in 2009? Oh Yes.

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When it Comes to Helping the Poor, Block Grants Are an Epic Failure

Mother Jones

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I remain agnostic about the 1996 welfare reform act, simply because I haven’t studied it enough. But Ron Haskins, a former Republican congressional staff director, points out one very conspicuous failure:

Haskins said the reform has had important successes — improving day-care programs, helping local authorities collect child-support payments from absent fathers, establishing the value of work in American culture with an unequivocal statement by Congress and the president.

At the same time, Haskins said, the reform has done too little to help the worst off. Clinton’s reform gave states authority to use federal money to help parents train and find work, but many states used the money for other purposes, he said.

“This group of moms at the bottom needs help,” he said. “It’s disappointing to me that the states have not tried harder.”

I assume Haskins is sincere, but this is what happens when you leave social welfare programs up to the states, as Republicans have been hellbent on doing for decades. This usually takes the form of “block grants,” where federal programs are eliminated and money is instead given to states with only moderate strings attached.

Because of they way they’re funded, block grants are a handy way of ensuring that spending on the programs will never increase much: in the case of TANF, funding for the block grants was fixed forever at $16.5 billion. In inflation-adjusted terms, this means that funding has decreased from $21 billion to $16 billion since 1996. Even during the Great Recession, TANF funding only barely rose—for two or three years—to 1996 levels. This was despite the fact that the number of poor during the Great Recession far exceeded the number in 1996.

But that’s not all. Block granting also allows states more freedom to do what they want, and the plain truth is that there are a lot of states that don’t really want to do anything. So they do their best to game the system in every possible way, spending their block grant money on anything except helping the poor. As the CBPP chart on the right shows, only about 26 cents of every block grant dollar goes to cash assistance for the poor, and only half goes to core welfare programs at all.

This is especially ironic in the case of welfare reform, which was largely the result of experiments by states in the late 80s and early 90s. Some of those experiments had been pretty successful, which allowed the states to argue that they could handle welfare programs better than the sluggish federal bureaucracy. But once welfare reform was passed, the experiments ended. Instead, many states began pushing the envelope as hard as they could to redirect their block grant money away from poor people and into other programs. They argued—and continue to argue—that these programs help the poor more than actual welfare programs do, but in most cases this is obvious sophistry. They’re just plugging budget holes with welfare money and telling the poor to pound sand.

Of course, there are other ways states can show their contempt for the poor even more transparently. Obamacare allowed states to expand Medicaid for virtually no cost. It was a no-brainer. But lots of states didn’t want to help the poor, and when the Supreme Court gave them the opportunity to reject the free federal money, they did. This hurt their hospitals and hurt their economies, but no matter. Their hatred for spending money on the poor is so red hot that they pulled out of the expansion program anyway.

Whatever else you think about welfare reform, there’s one clear lesson we’ve learned: federal programs should remain federal programs. Lots of states actively hate spending money on the poor, and if you give them money they’ll do everything they can to avoid spending it on the people it’s designed to help.

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When it Comes to Helping the Poor, Block Grants Are an Epic Failure

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