Category: News and Opinion

In honor of Labor Day, I have appended the latest median household income and poverty data from the American Community Survey (for New York City, the boroughs and the U.S.) to the attached spreadsheets showing this data over the long term. I have data going back to 1970 for poverty (actually 1969, because the census asked about income the year before), and back to 1949 for median household income, so this presents a longer-term view than what you might have read in the newspaper. Certainly this is a different city, and a different country, than it was in 1969, when the city hit its highest payroll employment level, and 1950, when most historians believe New York City reached its pinnacle of national importance. Over that length of time, national economic changes overwhelm in importance anything specific to New York, and inflation makes dollar figures meaningless – the U.S. median household income was $2,619 in 1949, and a penny was actually worth something. By comparing New York City to the national average at each point, however, we can see how New York City residents have fared relative to the rest of the country. And the data show that the average New Yorker, in the time between 1999 and 2006, finally recovered from the early 1990s recession, though remaining worse off, relatively, than in the city’s pre-1970s heydays.

Following a link from Gotham Gazette, I found that the Center for an Urban Future has released a report on free outer borough tourist “trolleys” such as the Heart of Brooklyn trolley running around Prospect Park. The report can be found here http://www.nycfuture.org/images_pdfs/pdfs/ABumpyRide.pdf . Brooklyn’s trolley gets riders around the park and to the Brooklyn Public Library, Brooklyn Botanic Garden, Prospect Park Zoo, Brooklyn Museum of Art and over to the Brooklyn Children’s Museum. The report finds that the trolleys have added little to the attendance at these institutions, and blames infrequent service and poor marketing. The group is also concerned that the Brooklyn trolley rarely has more than a few passengers on board, and given that it only gets six miles per gallon, it is a poor environmental choice per passenger. The group suggests replacing the vehicles with more fuel efficient models, increasing signage and marketing, and running the service more frequently (even though it is currently underutilized). As a person who has trouble thinking inside the box, needless to say I have a more radical suggestion.

After reading my equity and eligibility posts, perhaps you have reached the same conclusion I that have: as government has become increasingly complex, it has also become increasingly unfair. More and more, we find that eligibility rules (or decisions made outside formal rules) favor the better off, the better organized, and the better connected – and those with a greater sense of entitlement. Once the growth of government, as a share of the economy, stopped, the trend has been for the number of beneficiaries to fall even as the benefits available to those in a position to access the system – through direct benefits or tax breaks – increases. And as the debts and pension promises of the past continue to bite, it is basic services for the majority and basic needs for the worst off that suffer, not extravagances for the influential. Equity, fairness, even decency requires that this trend be reversed. Some services and benefits should be made universal. Others should be eliminated. And younger generations have to be treated fairly. Otherwise, we are going to see general strikes in this country by a majority of people with nothing left to lose. That is why equity and simplicity in government was one of my four main themes when I became disappointed enough to run as a protest candidate for state legislature several years ago, as I described in this essay http://ipny.org/equalpro.html .

Virtually every method of restricting eligibility comes together in the public health care finance system of the United States. Medicare, and part of Medicaid, have eligibility restricted based on age. Other parts of Medicaid, and public health and hospitals, allocate benefits based on means and need. The exemption of health insurance premiums from taxable income allocates benefits according to the “golden rule,” while the publicly mandated right of those with tax-subsidized private health insurance to keep it (under COLA laws) allocates money based on feudal tenure. Scarce vital organs available for transplant are, theoretically, allocated based on “merit” criteria by quasi-public groups backed by federal and state regulations. When all the direct and indirect (tax subsidy) public spending on health care is added up, it turns out that the federal, state and local governments were already funding approximately three-quarters of all third party (not out of pocket) health expenditures in the country in 2000. Excluding non-vital services the government share was 80 percent. That share is certain to rise as the nation ages, and Medicare and Medicaid account for more of nation’s health care. This entire health care finance system is profoundly inequitable — if it didn’t already exist, would anyone dare to suggest it? Yet politicians continue to propose adding to it rather than scrapping it altogether, so numerous and powerful are the beneficiaries of that inequity.

We have now reached the bottom of the barrel from the point of view of equity and eligibility – public services and benefits that are rationed, and have eligibility restricted, not on the basis of need, or age, or means, or tax liability, or tenure, or queue, but by a “fair and through evaluation” of “merit.” In public applications and eligibility criteria, merit is sometimes determined by quantitative measurement, sometimes by qualitative criteria evaluated by a panel of “experts,” and sometimes by the whims – or political deals – of individual legislators. Deciding someone’s “merit” presents all the same liabilities as deciding their “need,” but with an added objection – in the United States of America, what business does the government have in deciding one’s merit at all?

The “Thin Edge of the Wedge” outcome and “American Feudalism,” discussed in earlier posts, provide greater public benefits to those who have more, but do so by stealth or accident rather than by design. The provision of public benefits and subsidies through the tax code, on the other hand, clearly and unambiguously follows the “golden rule” — he who has the gold makes the rules. Tax subsidies are preferences are the opposite of means-tested benefits. Under means-tested benefits, the less you have the more public assistance you get, at least in theory. Tax breaks provide greater public benefits to those who have more, not those who have less. And more and more, tax breaks are the public policy of choice for allocating public benefits.

Liberalism, conservatism, Republicanism, and Democratism: these “ideologies” are so often and so easily discarded for the benefit of an organized group of political supporters that it isn’t reasonable to call them ideologies at all. When it comes to social benefits and burdens, only capitalism and socialism are consistent. Under capitalism you get what you earn, at least in theory, and those who believe effort and talent should be rewarded, and incentives are required to get people to work on behalf of others, can agree with that. Under socialism you get what you need, at least in theory, and those who believe we are all one human family can agree with that. In addition to what you earn in the marketplace and what you need at home, however, there is another justification for obtaining public benefits – what you’ve got. All too often, increasingly often, public benefits are services are provided to those who already have them, because they already have them. Even as others, who have greater needs, are denied. Even as others, who have earnings that are taxed to pay for the benefit, are also denied.

Thus far, my equity and eligibility posts have reviewed public policies that direct, attempt to direct, or pretend to direct public benefits to the less well off, or to those most in need. Yet government eligibility rules have often directed public benefits, services and protections to the better off, not the worst off, with not only “conservative” and Republicans but also “egalitarian” Democrats in support. And the policy of providing benefits to the better off hasn’t been limited to obscure, limited-cost programs; it has been characteristic of the history of the most extensive and expensive public programs in the country. Over the past century and a half, many now universal or near universal benefits and protections such as public education, Social Security, unemployment insurance, and the minimum wage were offered first to the organized and influential, then to population at large, and finally to the least well off – the poor, the sick, the disabled, and minorities. The better off, in short, were the “thin end of the wedge,” those with the political clout to get a public benefit created, who later felt a duty to offer the same benefit to others. Until more recently the government, and the tax burden, reached some kind of maximum/equilibrium and the march to universal benefits stopped, leaving inequities in its wake. No one feels much duty to others anymore, even if they are receiving benefits themselves.

The non-decision to implement a “hope no one shows up” non-policy, discussed in my prior post, is directly connected to the issue of standards, and to the cost of benefits per recipient. For every needs- and means-restricted benefit, there is a tradeoff between the number of beneficiaries that can be served and the amount that can be spent on each. This tradeoff is being made, generally without a direct acknowledgement that it is being made, in almost every major category of public service, from education to health care. And liberals and Democrats, in pushing to enact expensive benefits, often end up agreeing to serve some people but not others – others who are just as in need, or more in need, than those who receive the benefits. As the United States, with the most expensive health care in the world but also the most uninsured people in the developed world, finally acknowledges how bad its health care finance system is, the issue of standards will clearly move to the forefront. Clearly the U.S. can afford basic health care, even good health care, for everyone just by using what the government is already spending. But that would mean some beneficiaries would have to give up extravagant health care, and it is those with extravagant health benefits, not the uninsured, who have political power.