I really liked this piece.
Jared Bernstein:
Let’s start with the safety net since it’s a fixture of advanced economies and serves the critical function of catching (or not) the most economically vulnerable when the market fails. What follows is a brief overview of a many-faceted topic, but there’s solid evidence that key parts of the safety net performed well — probably better than you thought.
Before I get to the evidence, a word about context. First, as suggested above, there’s another recession lurking out there somewhere, so let’s learn what worked and what didn’t.
Second, and this is particularly important in today’s political economy, too many policy makers devalue the safety net. In Representative Paul Ryan’s terminology, it’s a “hammock.” For Ronald Reagan, it was a feckless weapon in the “failed” war on poverty (though to his credit, he extended a wage subsidy for low-wage workers that has become a highly effective anti-poverty tool). For many of today’s conservatives, the increased use of a safety-net program is proof that there’s something wrong with the user, not the underlying economy.
But while people do abuse safety nets — and not just poor people (think bank bailouts and special tax treatment of multinational corporations) — I want to see receipt of unemployment insurance, the rolls of the Supplemental Nutrition Assistance Program (food stamps), and so on go up in recessions. In fact, their failure to do so would be a sign that something’s very wrong, like an air bag that failed to deploy in a crash.
The figure below tracks three programs, two which responded quite elastically to the downturn, and one — Temporary Assistance for Needy Families, or T.A.N.F. — which did not. (I’ll get to why unemployment insurance has gone down while SNAP remained elevated in a moment.)
There are two reasons that T.A.N.F. was so unresponsive. First, welfare reform in the mid-1990s significantly increased its work requirements, which worked well then, as the policy change interacted with historically strong demand for low-wage labor. Since then, and especially in the great recession, the low-wage job market has been much less welcoming.
Second, T.A.N.F. was “block granted,” meaning states receive a fixed amount that is largely insensitive to recessions (my colleague Liz Schott has noted some minor wrinkles) and inflation. Since the block grant began, the real value of T.A.N.F. funds is down 30 percent. Now, consider this: it is a fixture of conservative policy on poverty to apply this same block grant strategy to food stamps and Medicaid. The numbers and the chart above show this to be a recipe for inelastic response to recession, or, more plainly, a great way to cut some big holes in the safety net.
The official rate for children goes up over the recession, from 18 percent to 22 percent, but once you include the full force of safety-net (and Recovery Act) measures that kicked in, it holds steady at about 15 percent. Though child poverty rates even under the alternative measure are still too high, this figure provides strong evidence of the effectiveness of the American safety net in the worst recession since the Depression.
So let’s get this straight: the poor and their advocates were not the ones who tanked the economy. Nor should they be on the defensive when the safety net expands to offset some of the damage.
I watched the safety net work during the Great Recession right here where I live. We had people coming into this office who have never relied on assistance before telling us they needed help. For a while there I felt like I was delivering public service announcements: “go to Job and Family Services on the square and apply for food stamps. Today.” I cannot imagine how bad it would have gotten without a safety net, because it was the worst I’ve ever seen with a safety net.
So great to have someone look at what actually happened to us, instead of pondering the abstract theoretical musings of Mr. Paul Ryan and his merry band of pundits.
Cassidy
I needed it. It kept food on my table when I couldn’t find work. The people who try to dismantle it deserve a painful death and nothing less.
Baud
Thanks, Kay. Too often we focus on things that “aren’t good enough,” and forget to make clear the real world benefits of the things we’ve achieved.
Violet
Thanks for this post Kay. Its so good to see amlittle factual analysis on this issue rather than the usual fapping about mochers and takers.
Hillary Rettig
Amanda Marcotte tweeted a figure that 76% of Americans are now living paycheck to paycheck. With so many people on the edge, attacks on the safety net become (literally) a case of life versus death.
c u n d gulag
But what will our sociopathic Reich Wingers do for sexual arousal, if it weren’t for the suffering of others?
And, the more suffering, the merrier!
Especially if most of those suffering aren’t white, male, Christian, and straight.
Kay
@c u n d gulag:
How disgusting is it that right after the worst economic crisis in decades Paul Ryan started babbling about “hammocks” and it was well-taken?
The disconnect is just astounding.
a hip hop artist from Idaho (fka Bella Q)
The pundits and Paul Ryans are like the mythical Pauline Kael – “nobody I know has ever needed a safety net.” Definitionally, of course. Since Paul Ryan seems to have gotten some SS benefits, no?
ruemara
They don’t want safety nets, because they want us desperate, frightened and willing. You’ll do anything to get that to stop. Safety nets mean you might feel some relief and you can’t have that when you’re looking to create a neofeudal, slave American.
Kay
@a hip hop artist from Idaho (fka Bella Q):
I think they know what they can get away with.
In a sane world, the response to Ryan’s campaign approach would have been “now? you think it’s a good time for us to start kicking these people now, after what they just went thru?”
Instead it was a pile-on. Just repulsive behavior.
Elizabelle
Paul Ryan deserves shaming.
For shame.
Hammock my ass.
piratedan
Kay, any likelihood that the latest travesty on womens rights recently introduced by the GOP passes the Ohio Lege and if so, does Kasich sign it?
Kay
@piratedan:
I think it passes. I don’t know if he signs it. He dodged the last time he was asked. He said “I am pro-life” but I don’t think that’s an answer.
a hip hop artist from Idaho (fka Bella Q)
@Kay: I have (sadly) no doubt that it will pass. It’s gonna be interesting to see what the Fox News Personality does then. Does he remember SB 5? Of course, whether there’s similar momentum on the ground about the heartbeat bill remains to be seen, but we sure as hell are noisy.
Kay
@a hip hop artist from Idaho (fka Bella Q):
I’m curious too, because he’s not really “one of them” is he, among OH Republicans?
It’s a class thing, I’m convinced. Kasich’s “base” are white suburban middle and uppers, don’t you think? NOT religious or rank and file rural GOP. We both know his female voters aren’t really on board with the rabid anti-choice crowd.
driftglass
“For many of today’s conservatives, the increased use of a safety-net program is proof that there’s something wrong with the user, not the underlying economy.”
Turns out the most famous leaker in the world agrees wholeheartedly with that kind of “Let the lazy old fuckers die” mentality — Is That You John Wayne? Is This Me?
gene108
@Kay:
What do you expect from Mitt Romney’s middle-class supporters, who earn only $250,000 a year?
Tone in DC
Pet peeve of mine.
These gas-holes are NOT conservatives. They are right wing/reactionary/social Darwinism fans.
An actual conservative is pro-environmental protection, pro made in the US manufacturing, and can be reasoned with. These teabaggers, not so much.
Enhanced Voting Techniques
Well to give a taste of how worse it can be; imagine not only no unemployment for workers so lazy to let themselves get laid off but Mr Banker takes their savings to pay for his stockmarket gambling habit. That’s pretty much what was the Great Depression. One of the reasons it lingered was so many people ended up preferring to keep their savings in their house rather than the bank.
Kay
@Tone in DC:
I get what you’re saying, but I disagree. To me, it’s like conservatives saying “Bush wasn’t a REAL conservative”
As long as you keep conservatism on the plane of purely theoretical, you can justify chasing it forever. Political parties and “movements” are composed of people who do things. As long as they embrace the Tea Party, that’s conservatism. It’s just way too easy to give them a noble aspirational definition that has nothing to do with them or their actions.
Lawyers here like to tell me they abhor the religious conservative agenda, it’s not “real” conservatism. Except that’s how they win elections and it’s a third of their coalition. Doesn’t get much more real than that!
driftglass
@Tone in DC:
Well it wasn’t Liberals who cooked up the Southern Strategy. It wasn’t Liberals who invited the Fundies into the Party of Lincoln. It wasn’t +60M Liberals who voted to re-elect Dubya and then turned around to tell the Left, “Ha ha, traitors! We won, you lost, suck it!” It wasn’t Liberal who applauded Dubya at CPAC in 2008 and still cheer for Cheney every time he leaves his crypt.
Plenty of people warned Conservatives for decades that there’d be Hell to pay some day for courting the crazies and playing footsie with paranoid bigots. Well, that day has come and too bad if we can’t tell the difference between the lunatics and the people to wooed the lunatics from this distance.
Or, as I wrote back in 2005, one day we will have to explain to the children what happened when Thurston Howell III lost his right mind and decided that for the sake of some tax cuts to make him incrementally more comfortable, his very bestest buddies in the whole, wide world were the Ultra Right Wing Gorgons down in Jesusland.
May I suggest the story of Little Red State Fundy: http://driftglass.blogspot.com/2005/04/little-red-state-fundy-sez.html
Tone in DC
@driftglass:
I get that it wasn’t liberals who committed all these heinous acts over the last 40 plus years. Not tough to grok that.
All I am pointing out is this: these brain donors (like Howell) are calling themselves conservatives, but they aren’t. Eisenhower, Gerald Ford, Herbert Hoover and GHW Bush were conservatives.
I hope we can fix this situation with the help of the few actual conservatives that are left.
Tone in DC
@Kay:
Except that’s how they win elections and it’s a third of their coalition. Doesn’t get much more real than that!
Kay:
No, it doesn’t.
RaflW
In Mr. Ryan and his merry band of bandits have no use for evidence.
Facts are dangerous and lead to dependency and loss of liberty. Starving, or having your kids growth stunted by malnutrition is a bracing slap of freedom, don’tcha know.
I really have nothing but snark to offer. Treating these immoral rich-lickers as anything other than the butt of bitter jokes makes me too angry to see.
What Have the Romans Ever Done for Us?
@Kay: Pretty effing disgusting. Then he has the nerve to say he’s “focussing on poverty” lately. Yeah, focussing on making it worse.
BH in MA
“When the markets fail”? I’ve got news for you – the markets CAN’T fail. The fact that these people became unemployed means the market didn’t need them at that time. The fact that so many are STILL unemployed is because Obama won’t let the conservatives cut Medicare, Social Security, food stamps, unemployment, taxes for the rich and criminalize abortion.
Joking aside, I think Bernstein is making a mistake saying that these programs are for when the market “fails”. We have a capitalist system and business failure and unemployment is built in – it is REQUIRED. When we switch from horses to cars, we don’t need buggy whips any longer. When computers start becoming important, we don’t need armies of accountants doing double entry bookkeeping by hand, but we do need programmers and chip designers. Technological advances happen, tastes change, demographics change, and when that happens the things and services that we need and want changes. Some businesses guess right, some guess wrong, some cause the change and some are swept aside as a result. The result is business failure or restructuring, unemployment, bad debts, etc. Sometimes the recessions are small like in 2001, sometimes they are large like in 1929-1933 or 2007-2009. For conservatives to want to cut these programs now BECAUSE PEOPLE ARE USING THEM is the same sort of logic behind the gutting of the Voting Rights Act. Eliminate the VRA because society has changed; but it changed BECAUSE of the VRA you idiots! We have to cut these programs that help people when the economy is bad because they’re really expensive. Well, they’re expensive because the economy is still really bad, stupids! Boost employment and watch payments for unemployment and food stamps decline. Oh, and you’ll see tax collections go up, too. You’ll be attacking that deficit from both sides.