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The Politics of Dependency

The Politics Of Dependency   <– PDF version

Our topic today is the policy that seeks to reduce poverty.  But before I address the modern particulars, first consider an extended passage from a book by the 19th century American economist Francis A. Walker [1].   I have indicated in square brackets some explanatory notes, mostly related to the calculation of dates.  It is very important to recall as you read this, that Dr. Walker was a white person talking about other white people.  In his 1884 book he writes [2]:

The Impotent vs. the Able-bodied Poor.  The relief of the impotent poor, whether by private or public charity, is, so far as political economy is concerned with it, a question relating to the consumption of wealth.  It is so much a matter of course, under our modern civilization, that the very young and the very old, the crippled and deformed, who are unable to earn their own maintenance, shall not be allowed to starve, that the matter of relief to these classes becomes one of administrative detail, that does not require even to be alluded to in an elementary treatise on economics.

The experience of that country from which we derive our law and much of our administrative machinery [Great Britain], is, however, so instructive as to the influence for mischief upon the entire laboring population and upon the future production of wealth which may be wrought by ill-considered provisions for the distribution of alms to the able-bodied poor, as to make it worth while briefly to recite that experience here; and thereupon to define the limits outside of which the consumption of wealth for this purpose becomes prejudicial to production.

We shall get at our subject most directly by inquiring why it is that the laborer works at all.  Clearly that he may eat.  If he may eat without it, he will not work.  The neglect or contempt of this very obvious truth by the British Parliament, during the latter part of the eighteenth and the earlier part of the nineteenth century, brought the working classes of the kingdom almost to the verge of ruin, created a vast body of hopeless and hereditary pauperism, and engendered vices in the industrial system which have been productive of evil down to the present day.

Establishment of the English Pauper System.  By the act of the 43rd year of Queen Elizabeth’s reign [1601], every person in the kingdom was given a legal right to public relief, if required; but voluntary pauperism was severely dealt with, and the able-bodied compelled to work.

The principle of requiring the able-bodied poor to work continued for generations to be fundamental in the English pauper system; and for the better enforcement of this requisition parishes or unions of parishes were, by an act of 9th George I. [1722], authorized to build workhouses, residences in which might be made a condition of relief.  Moreover, from the days of Elizabeth to that of George III, the spirit which actuated the poor laws was jealous and severe.  Doubtless in that administration unnecessary harshness was sometimes practiced; but, on the whole, the effect on the working classes was wholesome, for it was made undesirable to become a pauper.

Removal of the Workhouse Test.  On the accession of George III [1760], a different theory came to direct legislation relating to poor relief, and a widely different temper of administration began to prevail.  Six successive acts, passed in the first years of George III, intimated the changed spirit in which pauperism was thereafter to be dealt with.  In the 22nd year of that reign [1781], the act known as Gilbert’s act gave a fuller expression to this spirit.  By the act the workhouse was no longer to be used as a test of voluntary pauperism:

The 32nd section provided “That where there shall be in any parish, township, or place, any poor person or persons, who shall be able and willing to work but who cannot get employment, the guardian of the poor of such parish, etc., on application made to him by or on behalf of such poor person, is required to agree for the labor of any such poor person or persons at any work or employment suited to his or her strength and capacity, in any parish or place near the place of his or her residence, and to maintain, or cause such person or persons to be properly maintained, lodged and provided for, until such employment shall be procured, and during the time of such work, and to receive the money to be earned by such work or labor, and apply it in such maintenance as far as the same will go, and make up the deficiency, if any.”

By the repeal of the workhouse test, and by the additional most injudicious provision which we have placed in italics, a deadly blow was struck at the manhood and self-sufficiency of the working classes of England.

The Logical Outcome.   By 1832 the false and vicious principle on which Gilbert’s act was based had been carried logically out to its limits in almost universal pauperism.  The condition of the person who threw himself flat upon public charity was better than that of the laborer who struggled on to preserve his manhood in self-support.  The drone was better clothed, better lodged, and better fed than the worker.

All the incidents of this bad system were unnecessarily bad.  The allowance for each additional child was so much out of proportion to the allowance for adults, that the more numerous a man’s children the better his condition, and thus the rapid increase of an already pauperized population was encouraged; while the allowance in the case of illegitimate children was even greater than for those born in wedlock.  “It may be safely affirmed,” said the Poor Law Commissioners of 1831, “that the virtue of female chastity does not exist among the lower orders of England, except to a certain degree among domestic servants, who know that they hold their situations by that tenure and are more prudent in consequence.”

Such may be the effects of foolish laws.  The legislator may think it hard that his power for good is so closely restricted; but he has no reason to complain of any limits upon his power for evil.  On the contrary, it would almost seem that there could be no nation, of any race of men, which a few laws respecting industry, trade and finance, passed by country squires or labor demagogues in defiance of economic principles, could not transform within half a generation into a nation of beasts.

Poor Law Reform.   We have seen what a system the English squirearchy substituted for the economic law that he that would eat must work.  The natural effects of this system were wrought speedily and effectually.  The disposition to labor was cut up by the roots; all restraints upon increase of population disappeared under a premium of births; self-respect and social decency vanished before a prize for bastardy.  The amount expended in the relief and maintenance of the poor had risen, in 1832, to 7,000,000 [pounds sterling].

In this exigency, which, in truth, constituted one of the gravest crises of English history, Parliament, by the Poor Law Amendment Act (4th and 5th, William IV) [1833 and 1834], returned to the principle of the act of Elizabeth.  The workhouse test was restored; allowances in relief were abolished; paid overseers were appointed, and a central system was created for the due supervision of the system; illegitimacy was discouraged by punishing the father, instead of rewarding the mother; and the law of pauper settlement was modified so as to facilitate the migration of laborers in search of employment.

By this great legislative reform the burden of pauperism, in spite of the continuing effects of the old, evil system, was reduced in three years, by an average amount, the kingdom over, of forty-five percent.

The Principle that Should Govern Poor Relief.  The moral of this episode in the industrial history of England is easily drawn.  It is of the highest economic consequence that pauperism shall not be made inviting; but that, on the contrary, the laborer shall be stimulated to the utmost possible exertions to achieve self-support, only accepting relief as an alternative to actual starvation.  It is not, to this end, necessary that any brutality of administration shall deter the worthy poor who have no other resource; but it should be the prime object of legislation on this subject to make the situation of the pauper less agreeable than of the independent laborer, and that, by no small interval.

“All”, says Mr. George W. Hastings [3], “who have administered the Poor Law, must know the fatal readiness with which those hovering on the brink of pauperism believe they cannot earn a living, and the marvelous way in which, if the test be firmly applied, the means of subsistence will be found somehow.”

The white people of England between the 1780′s and the 1830′s showed that if you subsidize dependency, you get more of it.  If you reward illegitimacy and the breakdown of the family, you get more of it.  If you treat the idle better than the worker, you get more idle people, and a great deal of resentment from those who work and pay taxes to support the idle.  It turns out that the people of America, white and black alike, have demonstrated the exact same behavior in the last fifty years as the English did over a similar interval.  Ambition to work is generally down; illegitimacy and poverty are generally up among all the races in America.  But this problem cannot get the attention it deserves because those heavily invested in the current system will not allow a discussion of it.  Consider the similarity of Walker’s conclusions with the remarks of Congressman Paul Ryan (R-WI), on 12 Mar 2014:

“We have got this tailspin of culture, in our inner cities in particular, of men not working and just generations of men not even thinking about working or learning to value the culture of work.”

To which Her Most High Indignancy Congresswoman Barbara Lee (D-CA) commented:

“Let’s be clear, when Mr. Ryan says ‘inner city’, when he says ‘culture’, these are simply code words for what he really means: ‘black’.”  She also called Rep. Ryan’s statement a “thinly veiled racial attack”.

By calling Ryan’s statement “a racial attack”, Her Imperial Righteousness Rep. Lee is implying that blacks and whites are somehow different; that black people do not want the same things as white people, and behave differently than white people.  That sentiment is foreign to true civil rights advocates, but typical for narrow-minded race-baiting bigots.  How can Congress correct the problem if one faction of Congress calls the other side racists just for stating the obvious?  But enough said about politicians.  What about the 7 million pounds sterling that Dr. Walker mentioned, and how does it relate to America today?

The data from two websites [4, 5] reveal the following statistics:

a.  Nominal GDP of the United Kingdom in 1832 was 459,000,000 pounds sterling

b.  Nominal GDP in the United Kingdom in 1832, measured in 2008 pounds sterling, was 45,087,000,000.

c.  Nominal GDP in England (to which Walker referred) was 36,837,000,000 measured in 2006 pounds sterling.

Ignoring the difference in 2006 vs. 2008 pounds sterling, we have the ratio of the GDP of England to GDP of the UK in 1832 as 36937 million / 45087 million = 81.7%. Hence the nominal GDP of England in 1832 pounds sterling was 81.7% of 459,000,000 = 375,012,376.  The 7 million pounds Walker referred to thus represents 7,000,000 divided by 375,012,376, or 1.86% of GDP, which Walker called a “grave crisis”.

The U. S. 2013 federal budget [6] contains the following entries under the category “Welfare” (all figures are in $ billions US).

a.  Family and Children:           269.8

b.  Unemployment:                      53.2

c.  Worker Compensation             8.0

d.  Housing:                                   53.9

for a total of $ 384.9 billion US.  This excludes $ 366.6 billion for “Vendor payments for health care (Welfare)”.  I have excluded the latter figure since the payments for poor relief in England likely did not include any medical expenses.

Using only the 384.9 figure, and the 2013 GDP of the U. S. [7] as  $ 15,684.8 billion US, it is seen that the $ 384.9 B represents 2.45% of GDP; even worse than the ratio under the English system.  If the medical costs of welfare were included, the total comes to 4.79% of GDP.

So where does it end?  It doesn’t.  We will have more of the same (dependency and resentment) because the race-baiting politicians want it that way.

References

[1]  Francis A. Walker (1840 – 1897); economist and statistician, officer in the Union Army in the Civil War; chief of the Bureau of Statistics 1869-1870, Superintendent of the 1870 Census, President of the Massachusetts Institute of Technology 1881 – 1897.

[2]  Francis A. Walker, Political Economy, NY: Henry Holt and Co., 1892, (copyright 1884), pp. 356 – 361

[3]  George W. Hastings (1825-1917), English Liberal politician, Member of Parliament from East Worcestershire 1880-1892.  He was expelled from the House of Commons for fraud.

[4]  http://www.bankofengland.co.uk/publications/Documents/quarterlybulletin/threecenturiesofdata.xls

[5]  http://www.measuringworth.com/ukcompare/

[6]  http://www.usgovernmentspending.com/federal_budget_detail_fy10bs12014n_4010#usgs302

[7]  http://www.tradingeconomics.com/united-states/gdp

 

 

 

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Renaming the Washington Redskins

RenamingTheWashingtonRedskins  <–  PDF version

The Washington Redskins NFL football team has been criticized on and off for the past twenty years by some activists, supposedly representing Indian tribes, that the nickname “Redskins” is a racial slur.  Among the cases that have been litigated are Harjo et al v. Football, Inc. [1] and Blackhorse vs. Pro Football, Inc. [2], both objecting to the name under the disparagement clause of the Trademark Law. Apparently most persons of actual Indian descent are not particularly offended by the name (if we believe some polls taken among Indians).

More recently, two federal politicians, Senator Maria Cantwell (D-WA) and Congressman Tom Cole (R-OK) have voiced their opinion.  They wrote to NFL Commissioner Roger Goodell on 10 Feb 2014, stating in part [3]:

“The terminology used by theWashingtonfootball team has been determined to be a racial slur.  It is, in fact, an insult to Native Americans.  We are calling on you and the National Football League to take a formal position on a name change.”

Team owner Dan Snyder, citing statistics indicating that the public generally favors the current name, and reluctant to incur the costs associated with changing it, has stated that the name will never change.  I believe that in the long run Mr. Snyder is wrong.  Given the continuous string of accusations of racism from all the “aggrieved” interest groups (real and imagined) it is likely that he will eventually have to change the name.

If there is going to be a name change, there are two ways to go.  The first type, under the category ‘maybe the complainants should be careful what they wish for’, is to rename the team to reflect what the natives actually stood for and what they were.  Then we could choose from several viable alternatives:

a.  Stone Age Barbarians

b.  Enslavers of Women

c.  Demon Possessed Primitives

d.  Merciless Indian Savages (as mentioned by Thomas Jefferson in the Declaration of Independence)

But there is no point in that; after all, the Indian Wars are long over and members of the Indian tribes have not offended anyone.  They have in fact, suffered greatly from all the “help” given them by the government (not to mention the recurring violation of the treaties).   Since the federal politicians have weighed in (apparently not having anything else to attend to), I favor a second type of name change, one that honors the city of Washington as the seat of the federal government.  How about these for possibilities:

a. Masters of Corruption

b. Pathological Liars

c. Bureaucratic Incompetents

d. Marxist Crusaders

e. D. C.’s (Destroyers of the Constitution) – my favorite

Since all of them are provably true, it is hard to see any objection on the grounds of disparagement.

References:

1.  Suzan Harjo sought cancellation of the team’s trademark in 1992 under the “disparaging terms” clause.  She won the initial verdict in the Trademark Trial and Appeal Board in 1999, but that ruling was overturned by the D. C. Court of Appeals in 2005, citing insufficient evidence and expiration of the statute of limitations.

2.  This suit makes the same claim as Harjo, but with younger plaintiffs, supposedly not barred from a complaint.  It was filed in 2013 and is still in process.

3.   http://www.bbc.com/news/world-us-canada-26127941

 

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The Central Lie of the 2014 Elections

CentralLieOf2014Elections   <– PDF version

Happy New Year, 2014.  This marks the beginning of the 2014 Congressional election cycle, ready or not.  At stake is control of the House (currently controlled by the Republicans) and the Senate (currently controlled by the Democrats).  Since the Democrats have more vulnerable Senate seats in play, and require only a small number of victories to take control of the House, it is important for the Democrats to capitalize on their successes to expand their power base.  Unfortunately, they do not have any successes.  Therefore, it will be important to turn their most important fiasco, namely, the roll-out and implementation of Obama “I Lied, Period” Care into a net positive.  To do so, the Democratic Party Central Lie must be repeated early and often (the same way dead people vote in Chicago).  The Democratic Party Central Lie this election year may be:

“Because of the interference of the evil Republicans, the Messiah/President has found it necessary in the public interest to make adjustments in the Affordable Care Act, which has resulted in its having been effectively repealed.  Therefore it is necessary to elect Democrats to large majorities in both the House and Senate so that the principle of free health care for all can be re-established without the undermining activity of the evil Republicans.”

It is possible that the talking-point narrative from the Democratic Party hacks, reinforced through constant repetition by the adoring sycophants at ABC, CBS, NBC, CNN, PBS, and The New York Times, may be something like “More Democrats must be elected because….

a.  The initial difficulties with the health care exchange website were due to PATRIOT ACT restrictions imposed by the Republicans, which prevented the rollout from going as smoothly as planned.”

b.  The exemptions given to certain Democratic political groups were necessary in order to prevent the Republicans from taxing health care benefits of families whose main breadwinner are Union members.”

c.  The delay in the employer mandate was necessary because the Republican-driven government shutdown and sequestration prevented the economy from growing fast enough to allow employers to expand their businesses and provide free health care.”

d.  Over 350 million Americans have been provided with free health care already under the Affordable Care Act, but more needs to be done for minorities to counter the racist faction of the Republican Party.”

The Republicans are not politically clever enough to formulate a Central Lie of their own (and no one would broadcast it anyway).  It is better that way.  If the Republicans did attempt a Central Lie, they would inadvertently tell the truth about something and shock the entire political system.

 

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What’s Next for Obama “I Lied, Period” Care

WhatsNextforObama_ILied_Period_Care   <– PDF version

President Barack “I Lied, Period” Obama has suffered some bad press recently owing to the disastrous rollout of the healthcare.gov website.  Enrollment rates are far below what is required to make the system work, and at this writing about 5 million Americans have had their health insurance cancelled.  It is expected that ultimately 90 million people will have their health care interfered with by government regulations and the enforcement bureaucrats run amok. Of course, the good news is that Barack “I Lied, Period” Obama, his family, Joe Biden, his family, administration officials, their families, the members of Congress, their families, Congressional staffs, their families, the wealthy, their families, the politically well-connected, and their families will be unaffected by the “Affordable Care Act” (ACA).  Therefore, there is no problem for the “people who matter”, if you know what I mean.

The website is supposed to re-launch tomorrow, and the administration will regard it as a big success if only 20% of the people who attempt to access it are unable to do so.  The good news is that the technical problems with the web site will ultimately be engineered out; and eventually it will work almost as well as any of the other 100 million websites offering products to the consumer.

The website is not the real problem.  The real problem is that the algorithm underpinning it must coded by software engineers, who are eminently logical people.  They are faced with coding a law written by bureaucrats and self-serving insurance industry operatives, put into legalese by Congressional staffers who are immune from it, passed by members of Congress who did not read it, and signed by a President who lied about it.  It was then transmogrified into incoherent bureaucratic “regulatoryspeak” by employees of the Department of Health and Human Services, all of whom are also immune from it.  The political part was about what we expect from the political elite.  But the software coders still must implement the bureaucratic maze.  With 25 years of experience writing software, I can tell you that there are four possible types of answers in the course of integrating any software process:

a)  The answer is correct, and is verifiably correct

b)  The answer is incorrect, and is obviously incorrect

c)  The answer is incorrect, but cannot be verified

d)  The answer is correct, but cannot be verified

Before one can declare success by achieving option a), he must first verify that none of the other possibilities occur.  The second item b) is the easiest to deal with: if the power company sends you a residential electric bill for $25,852,902.45 for the month of October, there is clearly an obvious problem, and correcting it is a matter of investigation and correction of some erroneous input somewhere.  Those types of problems with the implementation of the ACA will all be tracked down sooner or later.

The last two are the real problems, and are likely to be widespread in a system as complex as the ACA.  We are likely to see in the next year or two, many cases where the premiums and subsidies as quoted appear to be consistent with expectations (higher cost, lower access to care) but are actually wrong, and will have to be revised (another increment of higher cost and lowered access).  Or, we may see cases where the quoted values are actually correct, but there is confusion within the health insurance industry because the result of the government’s implementation is different from what the insurance companies expected (or were lied to about); again requiring an eventual re-adjustment (higher cost, lowered access to care, in addition to lower profits for the insurance companies).  Both of these are very bad insofar as instilling public confidence, and from a software standpoint, are the most difficult and time-consuming to correct.  But, given the inept nature of oversized government in general and this administration in particular, what else should we expect?

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