Category Archives: Entitlements

Virginia Welfare Trends

I came across some interesting data on the Virginia Department of Social Services website showing the number of Virginians receiving social welfare benefits. I offer the data without commentary. — JAB

Temporary Assistance for Needy Families (TANF)

Temporary Assistance for Needy Families (TANF)

Supplemental Nutrition Assistance PrograM (SNAP), formerly known as food stamps.

Supplemental Nutrition Assistance Program (SNAP), formerly known as food stamps.

medicaid_enrollment

Medicaid

Children's Health Insurance Program (CHIP)

Children’s Health Insurance Program (CHIP)

Energy Assistance -- heating and cooling

Energy Assistance — heating and cooling

Energy Assistance -- crisis

Energy Assistance — crisis

Hospitalization claims

Hospitalization claims

General relief

General relief

Boomergeddon Watch: Student Debt Relief

debt_reliefby James A. Bacon

It should surprise no one that Hillary Clinton is advocating free college tuition and  loan forgiveness for millions of students in an attempt to appeal to the Millennial vote. But the pandering of presidential candidates doesn’t begin to plumb the depths of perversity in the American political system. Now industry is joining the cause. Reports the Wall Street Journal:

Real estate agents, farmers, architects, startup lenders, lawyers, tech companies, benefits administrators — even podiatrists — have sent lobbyists to Capitol Hill over the past two years to push for legislation to forgive or at least reduce what workers and consumers owe on their student loans. … Many industries argue that freeing up student debt, even for well-paid workers, would help the economy.

The proposal with the most traction, says the WSJ, would allow employers to contribute up to $5,250 a year toward an employee’s student debt without it being taxed.

The bald self-interest of these industries is appalling. To be sure, forgiveness of all or part of the $1.3 trillion in student debt would stimulate consumer spending — Millennials could buy more houses, more cars, more consumer goods. But such measures would pass on the cost to taxpayers, and it would ratchet up moral hazard to unprecedented levels.

It is mind-numbing to me that anyone is considering massive debt relief that would reward the profligate and irresponsible while punishing those who dutifully paid off their obligations. But why not? After all, we bailed out Wall Street after the real estate crash. We bailed out Detroit. We hand out tax breaks to big business like John D. Rockefeller tossed out dimes. We allow affluent home owners to deduct mortgage interest from their taxes. Now Donald Trump wants to hand out billions for a day care entitlement. There’s no end to the goodies we dispense, so what’s one more multi-billion-dollar giveaway?

The blindness is breathtaking. Despite sequestration, despite the expiration of the Bush tax cuts, despite a zero interest-rate monetary policy, despite continued (though tepid) economic growth, the Congressional Budget Office says that the post-recession trend of declining deficits is over, and that spending shortfalls will continue to increase every year, pretty much forever, and so will the national debt.

projected_deficits

Adding another entitlement — a higher-ed entitlement — rather than addressing the underlying problem of rising college tuition will only accelerate America’s march to Boomergeddon. This cannot possibly end well.

The New Idle Class: Men

fat_guyby James A. Bacon

Earlier this week, I noted that employers in Martinsville, a city with one of the highest unemployment rates in Virginia, have 1,400 unfilled jobs. Many jobs require skills that locals do not possess. But few aspiring workers are enrolling in courses at the region’s New College Institute that would equip them with those skills. Local officials bemoaned the lack of motivation of those out of work.  “We don’t have an employment problem,” said City Manager Leon Towarnicki. “We have a participation problem.”

It turns out that the phenomenon of unfilled manufacturing jobs is hardly unique to Martinsville. Openings for manufacturing jobs this year have averaged 353,000 a month nationally, but manufacturers struggle to find workers to fill them, reports the Wall Street Journal today. The Journal article emphasizes the mismatch between job requirements and worker skills.

In 2000, 53% of manufacturing workers had no education past high school. By 2015, that share had fallen 9 percentage points, while the share with college or graduate degrees increased 8 points. … The “upskilling” in manufacturing mirrors a broader bias in the economy toward more educated workers. …

Companies say education and training systems haven’t evolved with industry needs.

Perhaps there is something grievously wrong with the U.S. system for educating and training workers. That’s not hard to believe: The federal and state governments fund more than a dozen job training programs, which are notorious for their overlap, administrative inefficiency and lack of effectiveness. But, then, the nation does have a strong system of community colleges. And as the Martinsville case shows, many people out of work are unwilling to avail themselves of the opportunities to re-tool themselves.

In a separate WSJ piece, “The Idle Army: America’s Unworking Men,” Nicholas Eberstadt with the American Enterprise Institute focuses on the decline in workforce participation among American men. The fraction of American men age 20 and older without paid work rose from 19% to 32% over the past 50 years. “For prime working-age men,” Eberstadt wrote, “the jobless rate jumped to 15% from 6%. Most of the postwar surge involved voluntary departure from the labor force.”

Who are America’s new cadre of prime-age male unworkers? They tend to be: (1) less educated; (2) never married; (3) native born; and (4) African-American. But those categories intersect in interesting ways. Black married men are more likely to be in the workforce than unmarried whites. Immigrants are more likely to be working or job-hunting than native-born Americans, regardless of ethnicity. …

What do unworking men do with their free time? Sadly, not much that’s constructive. About a tenth are students trying to improve their circumstances. But the overwhelming majority are what the British call NEET: “neither employed nor in education or training.” Time-use surveys suggest that they are almost entirely idle. .. For the NEETs, “socializing, relaxing and leisure” is a full-time occupation, accounting for 3,000 hours  a year, much of this time in front of television or computer screens.

Part of the problem can be attributed to the workforce barriers encountered by America’s huge pool of ex-prisoners and felons, who account for one adult male in eight in the civilian non-jail population. Another is the increase in nonworking men who draw from disability and other means-tested benefit programs.

Meanwhile, writes Eberstadt, “the male retreat from the labor force has exacerbated family breakdown, promoted welfare dependence, and recast ‘disability’ into a viable and alternative lifestyle. Among these men the death of work seems to mean also the death of civic engagement, community participation and voluntary association.”

The assumption that “everybody wants to work” is no longer founded. That is an ethnocentric notion of U.S. elites, projecting their own values through an ideological filter upon an expanding underclass of all races. Economic policies that fail to recognize the new workforce reality, no matter how well intentioned, are a waste of time. Indeed, insofar as such policies distract us from the real issues and squander precious resources that our decreasingly affluent society can no longer afford, they do an actual harm.

The Student Indebtedness Dilemma

debtby James A. Bacon

The problem of student debt is finally getting high-level attention in Virginia, as evidenced by a panel discussion on the subject hosted in Richmond over the weekend. It’s less clear that anyone has a realistic idea of what to do about it.

Some one million Virginians owe a total of $30 billion in student debt. The indebtedness is disproportionately concentrated among African-Americans who tend to come from lower-income families, borrow more, take longer to graduate, are less likely to complete their degrees, are more likely to miss repayments, and are more likely to see their credit scores suffer as a consequence.

Although this was not a theme of the conference, as reported by the Richmond Times-Dispatch, I  would argue that, insofar as institutional racism is a reality today, the most oppressive institution in the United States is the system of higher education, which creates unrealistic expectations for poor, academically unprepared students and loads them up with life-crippling debt. While extremely liberal in ideology, higher ed is highly illiberal in practice, and it is creating a new class of indentured servants. Even in the early plantation economy of the American colonies, indentured servants could work off their debt in seven years. Student loan debt can last for decades.

Speaking at the Richmond event, Sen. Glen H. Sturtevant Jr., R-Midlothian, described his prospects as a Millennial with three young children. “By the time they’re ready to go to college, I’m going to be paying for them to go to college and still be paying off my student loan debt from when I went to law school.”

At least Sturtevant completed his law degree.

The underlying cause of student debt is the high cost of attending college. Due to escalating costs and stagnant contributions from the state, increases in college tuition and fees over decades have relentlessly outpaced the growth in household incomes of all but the most affluent Virginians. But that’s not all there is to the story. Colleges, driven by their commitment to racial and ethnic diversity, are especially aggressive in their recruitment of blacks with the consequence that blacks on average are less prepared academically than their peers, more likely to struggle, take longer to graduate (assuming they do graduate), and more likely to accumulate large debt obligations.

Another part of the problem is a powerful cultural belief that college is the only entry ticket to a middle-class life. Anne Holton, Virginia’s Secretary of Education, alluded to it in her panel remarks. “It’s a bit of a leap of faith,” she said, but research shows that the return on investment makes a degree worthwhile, resulting in up to $1 million in additional income in lifetime earnings.

Holton acknowledged that the $1 million figure is an average figure, and it does not apply evenly to everybody. Needless to say, a degree in engineering, computer science or business will lead to more remunerative employment prospects than a degree in education, social work, history or anthropology.

What Holton did not say (or was not quoted as saying) is that literally millions of jobs are going begging in the American economy that pay handsome middle-class wages and don’t require a four-year college degree…. Which brings us to a CNN Money story, referred to us by our friend Tim Wise (El Growler Grande), which says that the U.S. has a near-record 5.6 million job openings. American companies are looking for workers. The trouble is, they can’t find workers with the right skills — and those skills are not taught in four-year colleges.

While the number of students in college has increased from 15 million in 2000 to 20 million today (great news for the educational-industrial complex), what the economy needs is more truck drivers, electricians and plumbers. People may fret about the impact of self-driving Google cars on demand for drivers a decade from now, but the American Trucking Association says the economy could absorb 50,000 additional truck drivers today. The median annual wage for a trucker working for a private fleet is about $73,000.

Here in Virginia, 90% of all jobs in the future are forecast to require some education and training beyond high school but 50% to 65% will require less than a bachelor’s degree, according to “Workforce Credentials: The Pathway to Virginia’s New Middle Class,” a publication of the Virginia Community College System.

Put another way, for every one job that requires an advanced degree, there are two jobs that require a bachelor’s degree and seven jobs that require an associate’s degree or industry-recognized credential. The Virginia economy produces about 175,000 of those jobs each year.

Community college is cheaper than four-year residential colleges, it requires fewer years of study, and it provides degrees and/or credentials that lead to solid middle-class jobs. Lower-income students — especially those coming through school systems that did not provide them solid academic preparation — should consider an alternate, low-debt path to a middle-class life.

Nothing less than a wholesale reorientation of priorities is sufficient to fend off the social calamity of indebtedness.

An Alternative to Expanding Medicaid: Expanding Free Clinics

Del. John M. O'Bannon III

Del. John M. O’Bannon III

by James A. Bacon

With all the bad press that Virginia’s Medicaid program has been getting recently, the prospect of the General Assembly enacting an expansion of the health care entitlement in 2016 are just about nil. First came a report last month that the state wasted $21 million last year paying Medicaid benefits to recipients who no longer qualified. Then the McAuliffe administration revealed that the state share of funding Medicaid is forecast to surge in the next two-year budget cycle, boosting the annual cost from $7.9 billion in fiscal 2015 to $9.3 billion in fiscal 2018.

That’s without expanding Medicaid as allowed for in the Affordable Care Act. While the federal government has covered 100% of the cost for an introductory period, state governments will have to begin paying a share of the cost beginning in the next fiscal year, eventually topping out at 10% of the added spending.

Virginia Republicans have held fast against expanding the entitlement. Their primary argument has been one of fiscal responsibility: Every state dollar spent on Medicaid is one less dollar that can be invested in K-12 schools, higher education, and other pressing state needs. But Medicaid doesn’t exist in a vacuum. It needs to be seen against a larger backdrop of reforming a largely dysfunctional health care system and a tattered social safety net.

Yesterday I sat down with Del. John O’Bannon, R-Henrico, a practicing physician who happens to be vice chair of the House Health, Welfare and Institutions Committee, to discuss the wellness (or lack of it) of Virginia’s health care system. The thrust of my questions was this: It’s all very fine to oppose Medicaid expansion on fiscal grounds, but the health problems of poor and near-poor Virginians are real. What do Republicans propose as an alternative?

His answer comes in two parts. First, the General Assembly has steered more funds into the state’s mental health programs and into free clinics. Said O’Bannon: “We’re for strengthening the safety net.” But he prefers programs that Virginia can control without federal interference or that leverage private-sector philanthropy. Second, the state should do more to promote competition and transparency to contain medical costs and improve outcomes for all Virginians, including the poor. In this post, I’ll focus on the first approach.

In the current fiscal year, the General Assembly approved $125 million in new safety-net funding for mental health, free clinics and Federal Health Centers.

Of that amount $96 million is dedicated to SMI mental health, which, with an equal match from the feds, should treat 20,000 people with serious mental illness. (SMI stands for Serious Mental Illness.)

The balance of the new funds supports free and affordable clinics, which provide physician care, x-ray services, lab services, immunizations, preventive services, prescription drugs, and some dental care to Virginians lacking other health care coverage. According to FreeClinics.com, there are 254 clinics in the state of Virginia. Some clinics are federally sponsored Community Health Centers, which may charge patients a fee, depending on income, while others are entirely free. While coverage does not extend into every nook any cranny of the state, it is extensive. In Southwest Virginia, the mobile Health Wagon fills in some of the gaps by providing care services to residents of 11 counties.

State funds complement charitable donations and professional time contributed by doctors, nurses and other volunteers, while the Virginia Health Care Foundation works with pharmaceutical companies to contribute prescription drugs.

Although free/affordable clinics do provide primary health care to hundreds of thousands of Virginians, the health safety net is “stretched as never before,” states the website of the Virginia Health Care Foundation. “Free clinics reported up to a four-month wait for patients seeking a first appointment. Some have instituted lotteries to determine who can receive care. Other clinics are simply unable to accept new patients because of capacity and/or resource limitations.”

As imperfect as the safety net may be, Virginia’s dense network of free/ affordable clinics is “unique” in the country, says O’Bannon. By comparison, he says, Maryland doesn’t have a single free clinic. Instead of expanding Medicaid, with its arbitrary rules and fiscally unsustainable cost, Virginia should focus on strengthening its home-grown institutions that are inherently closer and more responsive to the community.

Memories of a Klan Rally

KlanersBy Peter Galuszka

I was looking through a some old clips today and spotted this Golden Oldie that ran in the Jan. 30, 2000 edition of BusinessWeek magazine where I worked for about 15 years. Bloomberg now owns rights to it and I hope they don’t mind me re-running it.

Mindful of the lofty rhetoric one reads on this blog about being Southern and symbols, I thought this might be an interesting read about how nothing is sacred. Not the Confederate Flag. Not even Stonewall Jackson.

It also shows how little things change. The flag and statues of Confederate generals are still flashpoint issues and people like GOP presidential candidate hopeful Donald Trump are running around making offensive statements about Mexican immigrants. (For the record, the late U.S. Sen. Robert Byrd of West Virginia had been a Klan member early in his life and he later renounced his membership).

The Ku Klux Klan rally I covered was on Nov. 6, 1999.

Here goes:

Letter From West Virginia

The High Price of a Klan Rally

Studying me solemnly from across his desk, Thomas A. Keeley sighs and says in his West Virginia twang: “I have to take care of my people.” I kid Tom that he sounds like the sheriff who was battling coal-company thugs in the 1988 movie Matewan. Tom grins. He puts up with me, since we go back 35 years–to grade school here in Clarksburg, a town of 18,000 nestled in the hills of central West Virginia. Today, Tom, as president of the Harrison County Commission, is the county’s top elected official, and I’ve come to find out how he intends to take care of “his people” in what could be one of the biggest crises Clarksburg has ever faced.

In two days, the Knights of the White Kamellia, one of 55 units of the Ku Klux Klan, will hold a rally on the front steps of the Harrison County Courthouse in downtown Clarksburg. The Klan picked the spot because of its dramatic statue of Confederate General Thomas J. “Stonewall” Jackson, born in Clarksburg in 1824. The Klan figures that Stonewall, riding north against the Yankees, will make a dandy prop for its November rally. So will the 70 state troopers, city police, and county deputies who will be providing the security. The Klan believes that the police presence not only will make it appear to be an oppressed group but will also increase the media coverage.

The city-county expense for the Clarksburg rally will be about $50,000–pin money compared with what 40 cities spent in 1999 hosting the Klan. Security at Cleveland’s August rally ran $600,000, although only 21 Klansmen showed up. But Harrison County is in the heart of the Appalachian poverty belt, and it desperately needs the money for other things. The hamlet of Marshville, for example, badly needs help, since its groundwater has been polluted by coal mines. “It’s costing us a lot of money to accommodate a bunch of white-trash bigots, and you can quote me on that,” says Tom, leaning back in his rumpled suit.

But he doesn’t have much choice. Not only is the Klan making noise, but a far more dangerous ultra-right-wing group is also active locally: the Mountaineer Militia, a cabal of heavily armed survivalists ready to fight what they consider excessive federal power. Militia members from the Clarksburg area hatched an Oklahoma City-style plot in 1996 to bomb the new $200 million FBI fingerprinting center in Clarksburg. The installation employs 3,000. After the FBI infiltrated the group, five men were convicted or pleaded guilty to explosives charges; one was convicted of selling blueprints of the center.

IDENTITY CRISIS. Taking a cue from New York Mayor Rudolph Giuliani, who has also had to deal with a Klan demonstration, Tom is forbidding the wearing of masks at the rally, figuring that fewer Klansmen will show up if they are not able to keep their identity secret. At this point, nobody is sure who they are. The only known Klansman is Cletus Norris, who wrote Tom the letter announcing the rally, using a post office box in Grafton, 20 miles to the east. Norris is a former road worker, once employed by the city. The next day, as I drive to Grafton in search of Norris, I try to recall if the Klan had been active when I lived here back in the 1960s.

In the Deep South at that time, the Klan was bombing black churches and killing civil-rights workers. But from what I remember, not much happened here. Besides, Klansmen in these parts traditionally weren’t so much antiblack (there were few blacks here) as anti-Catholic. That was in reaction to the Italian immigrants who streamed into the area in the 1800s to build the Baltimore & Ohio’s main line to St. Louis, taking jobs away from Protestant backwoods types. The animosity was resolved naturally over the years as boy met girl and both defied ethnic hostility. Today, largely due to intermarriage, 40% of local folk are of Italian descent.

As luck would have it, driving down a Grafton street, I spot a parked gray Dodge pickup with bumper stickers bearing Confederate flags and the slogan, “Racial Purity Equals American Security.” Bingo! I walk up the crumbling concrete stairs to a yellow clapboard house and knock on the door. A slim man with a reddish-blond beard answers. “I am the Grand Dragon,” confirms Cletus Norris. He invites me to sit in the warm autumn sun on the front porch of his parents’ house. The experience is unnerving because for an hour, this 33-year-old is talking softly, pleasantly, almost seductively, but is expounding truly hateful ideas. At one point, Norris asks gently, “You aren’t Jewish, are you?” I reply: “No, but I am Catholic.” Norris says: “That’s O.K.”

A Klansman for five years, Norris claims his group is peaceful and interested only in protecting white rights. “Our rally,” Norris reassures me, “will set a lot of minds at ease. They’ll listen to us and see that we’re just normal Christian men.” Their agenda? “By the year 2040, we will be outnumbered by the combined nonwhite races of this country, and whites won’t get a fair shake.” The message is spreading through cyberspace. “We have some people in Europe and Australia, thanks to the Internet,” he says, as he hushes a dog barking inside the house. Norris insists he doesn’t hate blacks, only “race-mixing.” As for Mexicans, the border to the south should be closed. And Jews? “Christ didn’t have one good thing to say about the Jews.”

Later, I contact Mark Potok, editor of The Intelligence Report of the Southern Poverty Law Center, a Montgomery (Ala.) nonprofit that tracks hate groups. He says Klan membership is static at about 5,000, but that 200,000 belong to other hate groups: Membership in those groups is increasing 25% a year.

PEPPER GAS. The following day–rally day–the police are nervous. Clarksburg looks as if it’s occupied by an invading army. Police vehicles include a bomb disposal truck. There are SWAT teams wearing black Wehrmacht-style helmets and face masks. “If things really get out of hand,” says policeman J.P. Walker says at a press briefing, “you’ll hear a siren, and then you’ve got 10 seconds until the pepper gas goes off.” The rally site has three fenced-in pens–one for Klan supporters, one for the press, and one for protesters. Participants must go through detectors, and attendees can’t bring in anything more than a car key.

Right on time, Norris, head up and confident-looking, dressed in white robe, leads the Klan parade out of the courthouse onto the front plaza, right past Stonewall. He is followed by eight Klansmen and two Klanswomen in brightly colored robes and hoods–no masks. About 150 protesters and 20 supporters shout insults at each other. “This country will go down the tubes,” shouts Norris, but he is barely heard above the noise because Tom won’t allow loudspeakers. When a rumor sweeps the crowd that one Klanswoman is a local English teacher (which turns out to be false), she yells good-naturedly: “There’ll be a test Monday morning.”

After two hours without incident and only one arrest–for disorderly conduct–the Klanspeople are escorted to a city parking lot, where they get into three cars, with Missouri, Ohio, and Virginia plates. Norris announces that a rally the next day in Fairmont, 20 miles north, has been canceled. Is that because the mayor refuses to provide security, I ask? “No, we just don’t want to make a nuisance of ourselves,” Norris says. The irony of that is not lost on one police officer. As he waves to the departing caravan, he mutters: “Goodbye, you sons of bitches–and to think I had seats on the 50-yard line at the West Virginia-Virginia Tech game today.”

By Peter Galuszka; Edited by Sandra Dallas

Taking The Statues Down

stalin By Peter Galuszka

In 1993, I was stumbling along the rough concrete sidewalks of Alma Ata, then the  capital of the former Soviet Republic of Kazakhstan. I was late for an interview with an official of what was now an independent nation rich in oil, natural gas and uranium.

The street map I had was old. I stopped a Kazakh woman in a kerchief and asked, “Is this Lenin Street?”

“Not anymore,” she replied. “It is Apple Street.”

Therein lies a small history lesson. Every human society, it doesn’t matter, where undergoes a major reassessment of how its humanity squares with its history.

The former Soviet Union is an excellent example. Its architect, V.I. Lenin, was a brilliant organizer but a killer. Josef Stalin murdered at least 20 million (who’s counting?) during the Great Purge and later in the war against Hitler.

Time and again, the old USSR and now the Russian Federation would undergo a change in leadership and the statutes would come down. They did when Stalin died in 1953 in Eastern Europe. Russians were shocked when new chieftain Nikita Khrushchev gave his liberal-minded “Secret Speech” in 1956 denounced Stalin. When another liberal, Mikhail S. Gorbachev, came to power in 1985, he pushed the national conversation even further.

By that time, I was reporting there for an international magazine. I visited a tractor factory in the town of Vladimir in 1987. Its very bright deputy director who would go on the Harvard Graduate School of Business, smirked uneasily when he said the factory was still named after Andrei Zhdanov.

He didn’t need to mention that Zhdanov was a Stalin thug who oppressed artists like Anna Akhmatova and Dmitri Shostakovich. He also was instrumental in starting the great purge of the 1930s during which 1.5 million people were imprisoned and more than 680,000 were shot.

The old statues really started to come down after the Soviet Union fell apart in 1991. The Zhdanov plant got a new name (although the way things are going under Vladimir Putin, the statues are starting to go back up).

So, what’s may point? That all societies need to air their history and their myths – including the ones that white Southerners have clung to for yours. Are some so arrogant as to claim they are above what other nations undergo?

Mother Jones, one of my favorite magazines, has story listing just how many streets, schools and public buildings are named after dubious characters. In Jacksonville, Fla., they renamed a high school named after Nathan. Bedford Forrest, a lieutenant general in the Confederate Army and founder of the Ku Klux Klan. North Carolina has renamed school facilities named after former Gov. Charles Aycock, a white supremacist.

And for the truly strange, look no farther than Richmond. The Martin Luther King Jr. Middle School is on a street named after John Singleton Mosby, a famous Confederate cavalry raider.