Clinton, Trump Triumph Over Poverty

As for the claims of soaring inequality made famous in recent decades by economist

Thomas Piketty,

they often failed to adequately account for all the government benefits that contribute to income, especially for low earners.

In related news, the decline in poverty has been remarkable. Jason DeParle reports in the

New York Times

:

…with little public notice and accelerating speed, America’s children have become much less poor.

A comprehensive new analysis shows that child poverty has fallen 59 percent since 1993, with need receding on nearly every front. Child poverty has fallen in every state, and it has fallen by about the same degree among children who are white, Black, Hispanic and Asian, living with one parent or two, and in native or immigrant households. Deep poverty, a form of especially severe deprivation, has fallen nearly as much.

In 1993, nearly 28 percent of children were poor, meaning their households lacked the income the government deemed necessary to meet basic needs. By 2019, before temporary pandemic aid drove it even lower, child poverty had fallen to about 11 percent.

This is certainly news to celebrate, but continued progress also relies on understanding why this welcome decline in poverty occurred. The Times collaborated with an outfit called Child Trends and “found that multiple forces reduced child poverty, including lower unemployment, increased labor force participation among single mothers and the growth of state-level minimum wages. But a dominant factor was the expansion of government aid.”

Really? It’s true that aid expanded but readers will note an accompanying chart in the Times showing particularly steep declines in child poverty during both the Clinton and Trump presidencies. These just happen to be two eras when pro-growth policies increased the incentives for firms to invest and hire.

Richard Burkhauser, an emeritus Cornell professor who served on the Trump White House Council of Economic Advisers, writes via email:

To me the most meaningful piece of legislation of the Trump Era that effected employment and market income including for those at the bottom tail of the income distribution was the supply-side impact on firms of the 2017 Tax Reforms because they are directly responsible for the actual increases in economic growth above those predicted by the previous administration and other inside-the-Beltway prognosticators at the time and which continued until the economy was shut down… in March 2020.

It is also the case that the increase in the Child Tax Credit from $1,000 to $2,000 per child in the 2017 Tax reforms (and the increase from $1,000 to $1,400 in the refundable part of the credit for those who worked) also had some impact on willingness of low-skilled workers to come back into the labor force and hence resulted in increases in employment and wages while not increasing inflation. But the increased willingness of firms to hire workers was the main driver of this outcome. This is exactly the combination of strong economic growth and low inflation that marked President Clinton’s second term. It was the perfect time to launch his triangulated Welfare Reforms that ended [Aid to Families with Dependent Children] and gave birth to [Temporary Assistance for Needy Families].

Note that the [New York Times story] seems to miss the point here. They report substantial declines in child poverty between 2017-2019 and related it to similar declines in the 1990s but fail to see the connection between economic growth and increases in work-based transfers between the two. Instead they focus on growth in overall transfers. They fail to mention for instance that [Supplemental Nutrition Assistance Program] expenditures greatly fell between 2017-2019… because a large number of SNAP beneficiaries came back into the labor force, voluntarily giving up their SNAP benefits to do so.

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Another Form of Work-Based Benefits

Billy House reports for Bloomberg:

The top Republicans on two House committees want details from the White House on whether any administration officials who worked on President

Joe Biden’s

student loan debt forgiveness plan will personally benefit from it.

“We write to request documents and information to determine whether Biden Administration officials have a conflict of interest in advocating for and enacting this massive government handout in which they or their family members would receive a financial benefit at the expense of American taxpayers,” Representatives James Comer of Kentucky and Virginia Foxx of North Carolina write in a letter Thursday to White House Counsel Stuart Delery…

The two lawmakers cited a May 19 Bloomberg News report that at least 30 senior White House staffers collectively could have as much as $4.7 million in outstanding student loans, based on required financial disclosure filings.

… income limits presumably would disqualify some senior administration officials, but it’s unknown how many White House aides might benefit from loan relief, as the disclosures are incomplete…

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How Much Pay Would You Forgo to Work From Home?
A new working paper from the University of Chicago’s Becker Friedman Institute reports:

The pandemic triggered a large, lasting shift to work from home (WFH). To study this shift, we survey full-time workers who finished primary school in 27 countries as of mid 2021 and early 2022. Our cross-country comparisons control for age, gender, education, and industry and treat the U.S. mean as the baseline. We find, first, that WFH averages 1.5 days per week in our sample, ranging widely across countries. Second, employers plan an average of 0.7 WFH days per week after the pandemic, but workers want 1.7 days. Third, employees value the option to WFH 2-3 days per week at 5 percent of pay, on average, with higher valuations for women, people with children and those with longer commutes.

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The Left vs. Liberalism
Jemima Kelly opines in the Financial Times:

Free speech used to be a sacred principle of the left — this was the side that gave a voice to the voiceless and challenged the status quo. Free and open debate was the route to progress.

In recent years, though, a large and vocal section of the left has abandoned this doctrine. Even the term “free speech” has itself become a contentious phrase that is considered on a par with “cancel culture”: an eye-roll-worthy rightwing obsession that is a non-issue at best, or a cover for bigotry at worst. So-called “free speech warriors” are stuffy, gammon-faced and probably racist — the kind of people whose opinions can safely be ignored.

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Did Someone Neglect to Follow the Science?
“HBO Sued Over Allegedly Allowing COVID-19 Testing Fraud on ‘Winning Time,’” Hollywood Reporter, Sept. 15

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James Freeman is the co-author of “The Cost: Trump, China and American Revival.”

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(Teresa Vozzo helps compile Best of the Web. Thanks to Harry Forbes.)