Do You Think The Government Can Fix Poverty? Look At Baltimore

I have written many times (for example here and here) about the spectacular failure of the government's efforts to fix the problem of human poverty by the favored devices of "programs" and handouts.   But it isn't often that the nation's attention gets riveted onto quite such a graphic display of the disaster of our anti-poverty efforts as we have had in the past couple of days from Baltimore.

Baltimore is in that group that I have often referred to as the "basket case cities" -- the not small group of U.S. cities that have thrown wads of cash and hordes of bureaucrats at the poverty problem, only to see poverty worsen while the population of the city declines precipitously and the place basically circles the drain.  The poster children for this phenomenon are Detroit and Cleveland, but they are really just the start.  Chicago and Philadelphia also qualify, even though they both put on good shows in their downtowns.  Another trait that the basket case cities share is voting 80% + for Democrats in their elections.  Could it really be that anyone here thinks that the next round of "programs" and handouts is going to work?

Baltimore easily meets all the criteria to qualify as a "basket case."  By the official decennial census, the population peaked in 1950 at 949,708, and has been in decline ever since.  In 2010 it hit 620,961, down about 35% from the peak.  Maryland is one of the wealthiest states, but Baltimore is one of the poorest cities in the country.  The official Census Bureau "poverty rate" for Baltimore is 23.8%, about 9% above the rate for the rest of the country and 14% above the rate for Maryland as a whole.  Median household income is $41,385, compared to $51,900 for the U.S. as a whole and $73,538 for Maryland (all 2013 data).  The murder rate in Baltimore is 37.4 per 100,000; by comparison, New York's is around 4 per 100,000.  This is not a small difference.  And how do they vote?  To take just one example, in the 2012 presidential election, Obama got over 200,000 votes in the City of Baltimore to Romney's 25,000.

As befits its status as a relatively poor city, Baltimore has long "benefited" -- if you want to use that term -- from more than its pro rata share of the government programs and handouts supposedly designed to cure poverty.  Comparative statistics aren't easily available for every program, but consider just a few.  In the U.S., following the explosion during Obama's presidency, there are now about 46 million recipients of food stamps/SNAP; that's about 14% of the population.  In Baltimore the percentage on food stamps was 24% when Obama first came to office, and then it really took off.  Today it's more like 35%.  Or consider public housing.  According to HUD's website here, well less than 1% of U.S. families live in public housing.  In Baltimore, it's more like 4.5%.

Yet the government's own income statistics show that with all the programs and handouts, Baltimore remains poor and is not catching up.  And there's another statistic that I think is even more revealing.  Take the number of jobs in the country here, and divide by the population, and you get an employment-to-population ratio.  For the U.S. as a whole, depending on which measure of employment you use, you get something in the range of 44 - 47%.  For Baltimore, the Maryland Department of Labor says that the December 2014 unemployment rate was 8.2% -- it doesn't sound so bad.  But divide the number employed in Baltimore (251,889) by the 2014 population (622,793) and you get barely 40%.  That means there's a good 5% of the population -- more like 6.5% of the working age population -- that is working in other places in the country but is not working in Baltimore.  These people don't show up in the labor force or in the official unemployment rate.

This is tens of thousands of people.  Who are they?  A very good hypothesis is that large numbers of them have been appearing on our television screens the last couple of days.  Without doubt, there is a good deal of idleness in many of their lives.  Others likely work at what might be called "non-traditional" activities, without getting counted by the government as employed.  They have been relieved of the necessity of steady, regular work by the supposed kindness of the government programs.  This is a prescription for exactly the result we have been seeing.

The fundamental assumption behind the government programs and handouts is that the recipient population is just not up to the job of taking care of itself like the rest of us.  The correct term for this is liberal racism.  The young men have been put in the insulting and demeaning position where their wives/girlfriends and children don't need them for support and they are "free" to hang out, take or deal drugs, or hustle on the street.  Should we be surprised that they are aimless and angry?  I too would be in their position.  Now, why they vote with 90 or so percent majorities for more of the same, that I can't explain.  But it is very, very hard not to take the handout. 

UPDATE, July 25, 2018:  A reader wrote in to inform me that my links to the Census data for Baltimore did not work any more because the Census Bureau had moved the data to a new site.  So I have update the links above.  However, unfortunately, the data have also changed, and no longer match the numbers in the post, although the changes are not material to the points made.  I have left in the post the data that were provided by Census at the date of the post. 

How Worried Should You Be About A Greek Default?

My answer:  not at all.  In fact, the opposite:  we should all be praying for a Greek default.

The Greek default business has been mostly off the front pages of the U.S. papers for a while, but that doesn't mean that it has gone away.  Greece has some big debt payments coming due as early as June, and many think they won't have enough money to pay without some infusion of cash from EU colleagues or some "restructuring."  ("Restructuring" means that the creditors agree to take less than they are owed and not call it a default.)  And thus endless "negotiations" take place over some kind of "deal" to avoid default.

The benefits to everyone else of Greek default are obvious.  Greece's politicians have made ridiculous spending promises to their voters, counting on other people's money to fulfill the promises.  They way overpay their government workers, demand pitifully low productivity, give out lavish pensions and benefits, don't enforce their taxes -- and pay for it all with borrowing.  When they default the borrowing spigot turns off, at least for a while.  They literally can't pay their bills at the level they are running, and they will have a modicum of financial discipline forced upon them.

Of course there would be losers.  But the only obvious losers are the holders of the defaulted debt.  The people who have lent money to Greece in any recent time frame are not people that anyone should feel sorry for.  Greece's financial irresponsibility has been obvious for many, many years.  Lenders to Greece have gotten premium interest rates for most of human memory.  Why does anyone else owe them a bailout?  Other than lenders to Greece, the potential losers from a Greek default are not obvious at all, and would only emerge if there is some kind of systemic financial crisis that follows the default.

And yet these endless negotiations continue, with the seemingly universal assumption that there will be a bailout or restructuring of some kind if only the recalcitrant Greeks agree to sufficient "conditions."  What I don't understand is, why is anyone even talking to them?

The only answer I can find boils down to -- fear of the unknown.  As one of many examples, consider Rick Moran today at American Thinker:

Thankfully, American banks have very little direct exposure to a Greek default.  But the wild uncertainty of what would happen to the rest of Europe in the case of a Grexit is extremely worrisome to American financial institutions. . . .  But no one in Europe is sure if these measures [taken by European pooh-bahs so far] are enough.  That's because managing expecations following a Grexit cannot possibly take into account the panic factor.  And as swiftly as crisis can move in these days of instantaneous news reporting and speed-of-light transfer of funds, it is more than a distant possibility that panic could overwhelm the system and start a domino effect of collapsing banks in every corner of Europe.

In an afternoon, the international banking system could collapse.

Really?  Of course, I can't predict what will happen with certainty, but frankly this is ridiculous.

And why is this the unknown?  Sovereign defaults happen all the time.  Argentina, with about 4 times the population and two plus times the GDP of Greece, defaults regularly -- most recently last year, and the time before that in 2001.  Venezuela, well over double Greece in population and close to double in GDP, is about to default, and nobody seems to think that that poses any great threat to the world financial system.  Russia, ten times or so the size of Greece in population and GDP, defaulted in 1998.  And I could go on and on.

Well, Greece is part of the Euro.  Does that make a difference?  Only in the sense that nobody knows.  Here is Charles Wyplosz writing today at the Credit Writedowns site:

What makes the coming event interesting is that it will be the first time that a default occurs within a monetary union.

I would dispute that.  Eight U.S. states defaulted on their debt in the 1840s.  Doesn't the U.S. qualify as a monetary union?  Nobody bailed those states out and they didn't exit the dollar.  Is the world different today?  Sure.  But do any of the differences constitute a reason to panic?

I have a very simple proposition:  If the EU can be buffaloed into bailing out Greece by use of threat of "global financial collapse" or something like that, then there is no end to it.  Sooner or later we either have to pour the entire world GDP down the infinite maw of Greece, or toughen up and let the default happen.  The financial institutions need to learn now how to harden the financial system to deal with defaults, or else the Portugals and Italys of the world will follow Greece's example and hit up everyone else for a bailout.  Best to do the default sooner rather than later. 

Competition For The "Sustainability" Award: New York City?

Mayor de Blasio must have heard about Manhattan Contrarian winning the "World's Most Sustainable Web Site" award, because from the moment that award was announced on Tuesday (April 21) literally ever second word out of the guy's mouth has been "sustainable."  But can New York City actually compete with the Manhattan Contrarian for coveted "sustainability" brownie points?  Not a chance!  In fact, de Blasio seems to be making a ridiculous parody of himself as he tries to compete on the elite "sustainability" battlefield.  (Or was he already a ridiculous parody of himself and just made it a little more ridiculous by tacking the word "sustainable" on to every sentence he utters?  You be the judge!)

So as reported in the New York Times here, on Wednesday April 22 de Blasio announced his new "OneNYC" plan for the next several decades for New York City.  The speech announcing the plan can be summarized as ". . . sustainable . . . sustainability . . . sustainable . . . sustainability . . . blah, blah, blah, blah, blah . . . ."  Or, to take an actual quote from the Times article:

“Environmental sustainability and economic sustainability have to walk hand in hand,” he said. “Some of my brothers and sisters in the environmental movement don’t get that yet.”  He added, “A beautifully sustainable city that is the playground of the rich doesn’t work for us.”

"Economic sustainability" -- Wait a minute, that's a new one.  You ask, what the heck is it?  The very fact that you ask the question indicates that you don't understand the first thing about "sustainability."  Obviously, it means whatever the cool people want it to mean at any given moment.  But maybe can we get a clue what he's talking about by taking a look at the OneNYC document?

Good luck with that.  The Times article discusses the document as if it's something real, like with actual text and paragraphs and things like that.  Not so much.  Here it is.  I'd say it's a lot of bright colors with a few sentences or phrases consisting of the most banal of possible clichés scattered around each page.  It's not quite as low as kindergarten level, but maybe second grade.  A few snippets from the first page will give you some flavor: "We must act boldly to build on our strengths and confront our challenges."  "The goals we envision and the actions we take today will define our city's future."  "Our Growing, Thriving City" "Our Just And Equitable City" "A Sustainable City."  (You knew the word "sustainable" would be there at least once!)

But still no clues on what "economic sustainability" might mean.  For that, try the link called "Our Just And Equitable City." Go there and you'll find exactly two sentences that give some idea what they're talking about:

When combined with OneNYC anti-poverty initiatives, we will move 800,000 people (10% of the city's population) out from poverty or near poverty over the next decade. This is transformative change.

So does "economic sustainability" mean "moving people out of poverty"?  The concept doesn't seem to bear a relationship to any meaning of the word "sustainability" that you were previously familiar with.  But anyway, didn't Lyndon Johnson promise to end poverty 50 years ago, only to see the percentage of people said to be in poverty in this country remain flat ever since, even as the taxpayers threw $20 trillion or so at the project?

Permit me for a moment to examine critically this idea that a New York City governed by de Blasio and his progressive pals is actually going to "move 800,000 people out of poverty" over the next decade.  This is the New York City that already spends more on anti-poverty programs than anywhere else, and what do we have to show for it?  The City's official "poverty rate" is right there on the same page as that last link.  It's 21.3% according to this very document.  That's a solid 6+ points above the average for the rest of the country, where they don't come close to our smorgasbord of anti-poverty programs.  Can't we see that something here is not working?

And then take a look at the proposals here that are supposedly going to accomplish the goal.  It's just doubling down on the exact same stuff that got us where we are.  "Raising the minimum wage to $15 per hour would be a powerful force in reducing poverty."  How so exactly?  There's not a word of analysis here as to whether that is true or not.  I think it is highly likely that raising the minimum wage, particularly by such a dramatic amount, would increase measured poverty.  Why?  Because very few minimum wage workers are in poverty now (in a small family full time minimum wage work is sufficient to put you above the poverty line, and in larger families with minimum wage workers there are usually other workers too), and because some workers at the current minimum will lose their jobs and go into poverty.  It's just how the numbers work: no job is poverty; full time minimum wage work is not poverty.  Are they too uninformed to know this?  While you're puzzling over that one, consider the other proposal on this page that supposedly will help get 800,000 people out of poverty over the next decade: "Pre-K for All."  Do they think we don't know that nobody who attends their new universal pre-K within the next decade will be older than 15 when the decade is up?

In truth they have zero interest in reducing the number of people said to be in poverty.  Any reduction in poverty will be in spite of, and not because of, their policies.  The shimmering distant mirage of 800,000 fewer people in poverty ten years from now is just the sales tool to convince the public to spend yet additional billions on things that obviously will not improve the designated metrics, not to mention the lives of the people in question.  

Compare this to the actual, real accomplishments of the Manhattan Contrarian.  For example, at Manhattan Contrarian we always eat locally-sourced food, except when we don't.  Now that's real sustainability! 

Manhattan Contrarian Named World's Most "Sustainable" Web Site

And who, you may ask, gave us that prestigious honor?  We gave it to ourselves, of course!  Why not?

If you've been having an actual life and plodding away at a real job lately, you may have missed that "sustainability" is the latest obsession in the precincts of the Left, particularly academia.  But what does it actually mean?  That's the great thing about it -- nobody knows!

For example, the big thing now if you are an academic institution is that you must divest your endowment from investments in companies in the fossil fuel business.  If you have ever taken an economics course, or even thought about the subject for a few minutes, you will realize that divestment from fossil fuels by a few or even many academic institutions will have exactly zero effect on the production and consumption of fossil fuels, although it might slightly raise the returns on investments in fossil fuels for those still willing to make them, of which there will assuredly be plenty.  So this is just a completely futile symbolic gesture.  Then why divest?  Because it's "sustainable"!

George Will has a great column a few days ago making fun of the campus "sustainability" movement, titled "Sustainability Gone Mad On College Campuses."  Will in turn refers to a report just out from the National Association of Scholars calling the "sustainability" movement "higher education's new fundamentalism."  Why fundamentalism?  Here's Will's take:

Like many religions’ premises, the sustainability movement’s premises are more assumed than demonstrated. Second, weighing the costs of obedience to sustainability’s commandments is considered unworthy. Third, the sustainability crusade supplies acolytes with a worldview that infuses their lives with purpose and meaning. Fourth, the sustainability movement uses apocalyptic rhetoric to express its eschatology. Fifth, the church of sustainability seeks converts, encourages conformity to orthodoxy and regards rival interpretations of reality as heretical impediments to salvation.

And he hasn't even gotten to the wonderful feeling of superiority over the lesser humans that you can get from engaging in completely futile symbolic gestures.  But he does get to the real point, which is promoting socialism and bureaucratic control:

 The unvarying progressive agenda is for government to supplant markets in allocating wealth and opportunity. “Sustainability” swaddles this agenda in “science,” as progressives understand it — “settled” findings that would be grim if they did not mandate progressivism. 

Don't believe that sustainability has gone mad on campuses?  Check out the endless breastbeating issuing from my own degree-granters, Yale and Harvard.  Here is Yale's "sustainability" web page, and here is Harvard's.  Would you think that these seemingly prestigious institutions would be capable of at least a smidgeon of critical thinking?  Forget it. Just today I got an email from Yale reporting that a task force had recommended that Yale adopt its very own carbon charge "as an incentive to reduce Yale's carbon emissions."  Do they even know that China and India between them plan to build 1000 or so new coal power stations over about the next decade?  But of course, facts like that are irrelevant.  This is about performing meaningless gestures to demonstrate that you are part of the cool group.

So of course, performing meaningless gestures is exactly what the Manhattan Contrarian has done to win its prestigious "most sustainable web site" award.  For example, we live in Manhattan!  Here in Manhattan, we always eat locally produced food, except when we don't.  Hey, it's cold here half the year -- you can't expect us to eat nothing but potatoes and carrots all winter!  We save huge amounts on heat and air conditioning by having our home be right adjacent to the neighbors.  We drive a fraction as much as you guys in the hinterlands.  And that's just the start.  For example, unlike climate campaigner Barack Obama, we didn't take a flight on Air Force One to Florida to make a speech for Earth Day!  And unlike Leonardo di Caprio, we didn't take six flights on private jets in the past month! Think of the thousands of gallons of evil fossil fuel we have saved.  Clearly the Manhattan Contrarian is a worthy recipient of the "world's most sustainable web site" award. 

How To Tell News From Propaganda

Mike Bloomberg makes no secret about his being a climate campaigner, including a letter to the editor in today's WSJ justifying his efforts to close coal power plants.  On the other hand, Bloomberg News purports to be an objective news source that puts out reliable factual information.  But somehow the climate campaign corrupts everything it touches.

Within the past week two different stories on recent temperatures have occupied prominent positions on the front page of the Bloomberg News website.  On April 10 there was "California's New Era Of Heat Destroys All Previous Records"; and then yesterday we had "Global Temperature Records Just Got Crushed Again."  This stuff can sound pretty scary.  From the California story:

What's happening in California right now is shattering modern temperature measurements—as well as tree-ring records that stretch back more than 1,000 years. It's no longer just a record-hot month or a record-hot year that California faces. It's a stack of broken records leading to the worst drought that's ever beset the Golden State. . .The last 12 months were a full 4.5 degrees Fahrenheit (2.5 Celsius) above the 20th century average.

As scary as that sounds, the problem they have is that some of us have read a few other things.  For example, how about that "worst drought that's ever beset the Golden State"?  Really?  Here's something from the San Jose Mercury News last year:

Through studies of tree rings, sediment and other natural evidence, researchers have documented multiple droughts in California that lasted 10 or 20 years in a row during the past 1,000 years -- compared to the mere three-year [now four] duration of the current dry spell. The two most severe megadroughts make the Dust Bowl of the 1930s look tame: a 240-year-long drought that started in 850 and, 50 years after the conclusion of that one, another that stretched at least 180 years.

And how about that "4.5 degrees above average"?  Scary or no?  Glancing at the weather page in today's New York Times I find that the recorded temperature in New York City for 2015 year to date is -- ready for this? -- 4.7 degrees  F below normal!  Over at the ICECAP website Joe D'Aleo reports that January to March 2015 was the coldest January to March during the entire period of the thermometer record (going back to the late 1800s) for the ten Northeast U.S. states plus D.C.  Also that the trend for the last 20 years for that area is down 1.5 degrees F per decade.  Somehow this story didn't make the front page of Bloomberg News.

What we've proved so far is that there is always a record for heat and a record for cold being set somewhere, if you just get to pick your boundaries and your time period to get the result you want.  So how about the worldwide picture?  Bloomberg's version is in that second story:

It just keeps getting hotter.  March was the hottest month on record, and the past three months were the warmest start to a year on record, according to new data released by the National Oceanic and Atmospheric Administration. It's a continuation of trends that made 2014 the most blistering year for the surface of the planet, in to records going back to 1880. 

But wait -- that's NOAA, run by known climate campaigners.  The story also mentions the NASA version of temperatures, which showed that March was not a record high, but close.  But they're also climate campaigners.  Don't the Bloomberg people realize that we know about the satellite measurements from UAH and RSS, going back to 1979?  They cover the whole world much more completely and accurately than the scattered thermometers in the NOAA and NASA sets.  What do the satellites show?  

Below is the latest UAH chart from Roy Spencer's website.  And the answer is that March 2015 is not close to a record for anything.  The March anomaly was +.26 deg C.  The record high anomaly was back in January to March 1998, when it hit +.68 deg C.  I count easily 40 months with an anomaly higher than the +.26 deg C of March 2015, including at least one in the 80s and one in the 90s.  RSS tracks UAH extremely closely.  They have the exact same +.26 deg C anomaly for March 2015 -- and a list of the hottest Marches that shows March 2015 as the tenth hottest in a 35 year record.  Warmer Marches include 1991 and 1983.

Sorry, Bloomberg, but in the age of the internet we know the other data that is out there.  We also know that NOAA and NASA have been aggressively altering their data to lower earlier temperatures to make the latest temperatures appear warmer by comparison.  You just can't put out stories trying to scare people without discussing this well-known adverse information.  If you try, it's immediately recognizable as propaganda rather than real news.  You're not fooling anybody.

What Does Hillary Stand For?

The lead editorials from The Economist over the weekend and from the Wall Street Journal this morning ask exactly the same question.  Actually, not quite exactly the same:  In The Economist it's "What does Hillary stand for?", while in the Wall Street Journal it's "What does Mrs. Clinton stand for?"  Close enough.

Neither thinks we have much of a clue what the answer might be.  The Economist guesses that you might be able to get an inkling of Hillary's plans for the economy by looking at the current proposals of the Center for American Progress, the activist organization long headed by former Bill Clinton Chief of Staff John Podesta.  Not that she's actually said that, of course.  Meanwhile the Journal speculates that she will use her status as the first female major-party candidate for President to push supposedly "women's" issues like universal pre-K and government funding for childcare.  But it's all just guesswork, and these guesses don't even get to the biggest issues.

Try Hillary's new campaign website and you won't get any more.  "Everyday Americans need a champion.  I want to be that champion."  That's nice.  What does it mean?  By the way, can I please opt out of having Hillary as my "champion"?  Really, no thank you.  But anyway, other than offering to be your "champion," the website gives no information as to what she stands for, and no specific proposals on anything.

But this is why you have the Manhattan Contrarian to help you peer into the future.  Hillary may be saying absolutely nothing and keeping it as vague as possible while she awaits her coronation, but here at MC we know how to take the little clues and turn them into deep insights.  People, what do we actually know about Hillary?  Here's what we know:  We know that she is the very most conventional of left-wing thinkers.  We know that she has no interest whatsoever in rocking the government gravy boat.  We know that she deeply believes in the main project of the Left, which is to bring social justice and equality to the world through government action and crony capitalism.  We know that she has taken tens of millions from oil states for her family "foundation."  We know that she believes in the efficacy and moral goodness of government programs to help the downtrodden, in large part because lots and lots of her acquaintances and supporters run all those things and they seem to her like nice people.

Take these basic bits of knowledge and apply them to the big questions of government policy, and all the answers suddenly seem obvious:

• Without doubt, Hillary supports the continuation and gradual expansion of every single thing that the federal government is currently doing.  $700 billion per year to "fight poverty" and nobody ever exits from poverty?  We'll just let that $700 billion increase on autopilot by 5 or 10% per year.  She will never propose a cut to anything.
• Obamacare?  She'll veto any attempt at repeal, revision or reform.
• Entitlements?  If you think Hillary could be bothered to propose any meaningful reform to get them on a sustainable path, you're kidding yourself.  She sees the entitlement issue not at all in terms of what is right for the country and instead entirely in terms of potential partisan advantage: we'll sit back and let the Republicans propose the reform, and then we'll accuse them of throwing grandma off a cliff!  Might she think it's some kind of a problem that the country will be borrowing $50 trillion or so by mid-century in a massive income transfer largely from relatively poor to relatively rich?  Well, math was never her strong subject, and anyway Paul Krugman says that the best thing a country can do for its economy is to borrow $50 trillion and waste it -- and he won the Nobel Prize in economics!  Actually, under Krugmanomics, borrowing $100 trillion would be even better.  And besides, all this is long after her term will be over.  Pass the problem on to the next guy -- it sure worked for Obama!
• New programs?  Sure she'll propose a few.  After all, if you become President you're entitled to some immortality from putting your name on something.  More spending on education and childcare are good bets.  Should something else be cut to fund it?  That's not her issue.
• Energy and climate?  Over at Climate Progress they collect various statements that Hillary has made over the years.  The short version is that she's a completely gullible believer in the idea that the weather can be improved by making your electricity a lot more expensive.  "[S]he has said the President’s use of the Clean Air Act to rein in carbon pollution from power plants, 'must be protected at all costs' during a speech last year to the League of Conservation Voters. She has been critical of fossil fuel subsidies and supported boosting renewables. To her, climate change represents 'the most consequential, urgent, sweeping collection of challenges we face as a nation and a world.'  'The science of climate change is unforgiving, no matter what the deniers may say, sea levels are rising, ice caps are melting, storms, droughts and wildfires are wreaking havoc,' she said. "   Does she understand that there may be some contradiction between pretending to be a "champion" of the middle class and trying to double everyone's electricity bill?  Again, math was not her strong subject.  Anyway, don't forget those tens of millions from the Arab petrostates to her foundation.  Energy policy is the perfect place to practice crony capitalism while at the same time claiming the moral high ground and never getting challenged on that by the government press.
• Foreign policy?  She was Obama's Secretary of State, for Chrissakes.  Sure there could be a few tweaks around the edges, but does anybody think anything major is going to change?

Pick any other issue, and you will see that Hillary's position can be predicted with near one hundred percent certainty.  It's easy!