Thursday, February 26, 2009

More about military spending

We watched a film in class about why so much of federal spending goes to the military. If you are interested in exploring this issue, I have some links to recommend.

The website for the film we watched.

Eisenhower's 1961 farewell address.

A report on what we are doing wrong in Afghanistan from the Campaign for Innocent Victims in Conflict.

If you get a chance, watch Afghanistan Year 1380.

Study military contracts at the Military Industrial Complex website.

War resisters' website discussion of how much of our federal spending goes to defense.

More about the federal budget.

The White House's page about defense policy.

A radical perspective from Alexander Cockburn on the death count in Iraq.

Reaction Paper on Housing

I would like to start off with a story. Last year I decided that I was tired of living in an apartment. I wanted to have a place of my own where my son could run in the backyard. Maybe I could get a dog! I went to see a mortgage associate at National City Bank here in Springfield. After I filled out my paperwork, she informed me that I could afford to buy a 30,000 dollar house on my small income. That doesn’t amount to much of a house by American’s standards.
After seeing the disappointment in my face, she explained to me that I could apply for a mortgage based on a “tell” income. That is, I “tell” you what I make, and I get a loan for however much money I want. Of course, I would have to pay more in interest, but who cares, I could get the home of my dreams!
I immediately called my agent from Remax, and we were off looking for potential “dream” homes. Finally, after searching diligently, there it was. Unfortunately, my “dream” home fell into the 90,000 dollar range. But I didn’t care. It was in great shape and in a good neighborhood. It even had a fenced in yard for the dog! I couldn’t have asked for anything better.
Fortunately, someone else purchased the house before I even had a chance. Yes, I said fortunately! After all the excitement was over, I really sat back and looked at the situation. How in the world could I afford a 90,000 dollar house? My son and I would have to eat Ramen noodles for the rest of our lives.
I began to think about the discussion that we had in class last week. It seemed to me that the majority of the class agreed that poor people are entitled to own their own home. A few people argued that we shouldn’t have to help the Americans who extended their means to buy a $500,000 dollar house. I’m pretty sure that out of the 43% of people in poverty that Robert Rector claims to own their own home, many of them have extended themselves beyond their means just like the people who are better off. What’s the difference?
Mortgage companies took advantage of homeowners. Not too many people, including me, know how to navigate their way through the complex system of buying a house. These lenders don’t have our interests in mind. All they care about is how much money they will make off the loan of some sucker who knows nothing about fixed loans, adjustable rates, or “tell” incomes.
After the housing market crashed, it was apparent to me why. It is a great accomplishment to own your own home, especially if it has the white picket fence. Most Americans can’t afford the house of their dreams but purchased it anyway with the overenthusiastic help from the mortgage lenders. Now as a result of the mortgage crisis and our bad economy people find themselves losing their “dream” homes to foreclosure. So, I’m sure that Rector’s 43% will quickly decrease over the next few years.

A person who can afford a $30,000 home (with 30% of your income going to housing) could probably afford a $50,000 home. That is, although mortgage lenders are only supposed to arrange loans where the purchaser will end up giving 30% of their income to the principal, interest, home owners insurance, property taxes, and utilities, it is in fact the case that many lower-income people spend about half their income on housing. So, if you can legitimately afford a $30,000 home, you can probably stretch safely to buy a $50,000 home.

The first home I ever bought had one bathroom, two bedrooms, a large living room, a kitchen, and a basement (about 800 square feet), and I paid $42,000 for it, and sold it three years after purchasing it for $46,000. Had my stupid real estate agent helped me out more, I could have received about $4,000 in help as a first-time home-buyer buying a house in a special district of the city where there were incentives to help first-time home-buyers, which would have significantly reduced the cost of that home to me.

Looking at a real estate guide for Springfield I see a house at 2627 S 7th Street with two bedrooms and 995 square feet for sale at $46,000. There’s a home at 208 E Spruce St. with 1,043 square feet for $49,900. These homes are in okay neighborhoods, and they appear reasonably attractive, and they are priced in a way that makes me suspect there is nothing seriously wrong with them. Were I a bank lender, I’d be happy to put you in a house like these. But no, I wouldn’t want you to buy a $90,000 home. You could never afford such a thing. Assuming you purchased the home at 208 E. Spruce, and you had $2,900 for your down-payment, and used first-time homebuyer help from the City of Springfield, to come up with closing costs, you would be getting a loan of $47,000. With a thirty-year loan at 6.5%, your loan and interest payments would be about $300 per month. Your escrow for real estate tax would be about $80, and your homeowner’s insurance would be about $60 per month, so you would have a monthly home payment of about $440. With such a small house, your heating and cooling costs would be reasonable, and perhaps you would need an average of $120 each month for water, electric, and sewer (more in the winter, but much less between April and October). That’s a total housing cost of $560. If you are making $1680 per month, that’s fine. If you’re making $1120 per month, it’s too much, but you can probably survive and do it.

On average, homeowners care more about their community and get involved in civic affairs. As a taxpayer, I’d much rather have you as a homeowner in 208 E. Spruce than have you renting an apartment somewhere in town for $400 per month.

Let’s say you’re earning $9.00 per hour and working 34 hours per week. You would be earning about $1250 per month. You would have some of that lost in payroll taxes, but with the state and federal earned income tax credits you would clearly end up with an average take-home income over $1,300 per month. That would put a single mom with a child slightly above the 2009 poverty threshold (you would be earning about $15,000, and the poverty threshold for a two-person household is $14,570). So, in Springfield at least, it seems to me that if lenders were willing to let people take on extraordinary housing debts (where about 50% of income would go toward housing), a single mother with one child who was working for $9 per hour at near full-time could reasonably buy a tiny house in an okay neighborhood.

However, if a person in those circumstances I’ve described lost their job, they would be in trouble, because it would be difficult to make their home payment of $440. They would be in a similar problem with an apartment that had a $400 per month rent. The difference is that one can run away from an apartment and break that contract without having $40,000 of debt following you around, whereas if you can’t make a payment on your home the bank can repossess it and sell it for less than you owe on it, and you’re still stuck with the debt. The fact that you’ve had a foreclosure on your home will do more damage to your credit rating than running away from an apartment lease contract. In fact, if you can’t sell the house quickly when it becomes unaffordable to you, and the bank auctions it for less than you owe, you might declare bankruptcy, which is really bad, and isn’t nearly as likely if you merely get out of an apartment lease contract.

More about owning that little house… LIHEAP might help with utilities, and there might be other help available, but it would be difficult to make ends meet. A two-person family with an income of $15,000 would qualify for food stamps. It would be difficult to work 34 hours per week and also be a full-time student, especially if your child needed lots of adult supervision. I guess this all goes to prove that if you're living on the edge of poverty you're living in a precarious situation.

I think you are correct that many real estate agents care mainly about their cut of the closing costs. Likewise, mortgage brokers and loan officers seem concerned with their commissions on the loans. So, there are incentives for people to give the typical $15,000-per-year family a $80,000 loan, which such a family could never really afford. All this contributes to the economic crisis we find ourselves in.

I like this post about the mortgage crisis at Juan Cole's blog.

Example Reaction Paper with responses.

This was a good reaction paper, and I'll share it here along with my responses.
My student's words.
My words.

Let me begin with a disclaimer. I do not judge people who temporarily receive government assistance –welfare – in order to buy necessary food and housing. Life happens. Jobs and houses get lost, marriages end, medical emergencies happen. Sometimes life can just be hard and a person needs a hand up.

You are saying that you recognize a need for temporary assistance for people going through life problems. These would be the “welfare leavers” in the studies I asked you to read, and they make up a significant percentage of persons who use welfare.

It takes courage for a woman to leave an abusive relationship. I admire women who remove themselves and their children. More times than not they need moral support and financial help to get on their feet. Providing housing and food for their children is a need – not a want – a need. I applaud women who have left an abusive relationship, get on public assistance, realize this is temporary and actively look for gainful employment so they can provide for their families. I more loudly applaud women who are raising children alone, working, and taking classes to complete a degree so they can provide financial security for themselves and their families. I stand and applaud single parents who have had to get public assistance, are working and going to school to enter a profession like social work so that they can help other women who are where they once were. That is empowerment.

You are saying that the empowerment aspects of welfare appeal to you. When welfare helps people increase their abilities and get a new start in life, and in fact those who get aid make a new start, you feel that this is your tax money well spent.

What is more empowering – to help a person become self-reliant, working, able to provide their own food, housing, needs and wants with a sense of pride and self-esteem, or to keep them perpetually on welfare like beggars so they'll empower a political party in Washington that wants their votes? It's not much more than exploitation of the poor.

You are saying that some people are kept on welfare. That some welfare policies take away people’s power, and creates in them a mentality of reliance on government funding. You are also suggesting that the people who become dependent on welfare in this manner are politically conscious, and favor the politicians who will take more money from working people (taxpayers) and give it to non-working people (those on welfare). This reminds me of an observation I think Thomas Jefferson once made, that a democracy wouldn’t last if the people who didn’t want to work used the ballot to elect people who would tax those who did work and give away the tax revenue to those who preferred to remain idle. [Perhaps I'm thinking of his 1815 letter to Charles Clay: "...devices for fattening idleness on the earnings of the people...."]

Let me repeat the disclaimer because I'm writing about something that I know will offend many. I do not judge people who are poor or homeless that are receiving government assistance to help them get on their feet. What irritates me is the abuse of the system.

Why would anyone be offended by your opposition to systems that cause dependency, or fail to empower the poor? Surely everyone objects to those who cheat, who are freeloaders, and who prefer to collect welfare instead of working (if they are able to work). The controversy wouldn’t be about your objection to such situations, systems, and lazy scammers. The controversy will lie in whether this is in fact a common situation, whether a significant number of those on welfare are failing to use their help to get a second chance in life, whether many people are abusing the system, or whether the system is set up to encourage people to abuse it.


When I lived in Springfield, my neighborhood had Section 8 housing. There were single moms on welfare who had kids in school all day. There were many jobs available at the time, they were perfectly capable of working, but didn't have to. The government provided their food, housing, utilities. They spent the day watching soap operas – they could tell you in detail the plots - and going back and forth to each other's government-provided homes gossiping about what's going on in the neighborhood. One had a live-in boyfriend who worked and she had 3 children. Her 7-year-old little girl, Patty (name changed) became friends with my daughter. She would have moved in if I had let her. She would come for 3 days at a time to stay with us. I'd say, "Patty, don't you want to run over and see your mom?" She didn't. If she would fall down and was bleeding her mother would say, "Oh, you're all right. Get up." The kids were provided 2 meals a day at school and during the summer pretty much were on their own to make a sandwich if they wanted. We treated Patty several times for lice. It was expensive because we had to be treated, my home had to be disinfected, all the bedding washed, stuffed animals bagged up for a month. My daughter had played dress-up putting on hats with my niece and nephews at my mom's house, so I had to warn my sister, she treated her kids, and I had to disinfect my mom's house. I talked to Patty's mother and she said, "Oh, yeah, they said you have to clean and do all this stuff. As you can see, I'm not into that." Patty's brothers had shaved hair but Patty got lice again. I re-treated her in my bathroom and told her, "You're too nice a girl to have these bugs in your hair." I contacted her school and they told me they were going to send someone to Patty's house to show her mom how to get rid of the lice. They had already explained it to her because Patty had been sent home several times because of lice. So someone would be sent to basically clean her home of lice, more for the kids than anything. Here was a very capable woman who neither took good care of her children nor worked and didn't have to. Flipping hamburgers is not the career dreams are made of, but at least it's money coming in. But why should she go work for probably less than what the government will give her?

This is a good anecdote. You are describing a situation that illustrates several important points.

First, there is a question of parental competence and neglect. There are some parents who are so bad that child welfare should remove the children. There are other parents who are bad enough that child services ought to get involved to help improve the skills of the parents, but child removal isn’t really needed. Then, there are the parents who are bad, but not so bad that we need to get state workers involved in messing around in their lives. By the way, the more the child welfare system gets involved, the more we must pay in the costs of social work interventions, court investigations, record-keeping, and so forth.

Then there is the question of personal competence. Some people are pretty stupid, some people are pretty darn lazy, and some people are very incompetent in general. These women you describe seem to have been pretty low in these dimensions, lacking intelligence, motivation, drive, ambition, and competence. Well, what is to be done? Can we change some of these variables? Let’s assume these women had enough intelligence and enough competence to get a low-skilled job and hold it without getting fired; shouldn’t we cut off their government support so that they would be forced to work? But what if they still were so incompetent and lazy that they would get fired from every job they tried? Or, what if we were wrong in judging their intelligence and abilities, and in fact, they had intellectual deficits or psychological problems that made them unable to gain and hold any job? Is therapy the answer? Also, since those mothers were caring (in their inadequate way) for children, if we punished those mothers and cut their benefits, what would happen to their children? If the parents became homeless, the children would be homeless as well. If the parents ran out of food, the children would go hungry as well. If the parents had no money, the children would have no money. The ideal policy solution would help the children (who are innocent) and punish the parents (who are blameworthy). An ideal policy could also accurately distinguish between those parents who could work and simply choose not to (blameworthy) and those who are so incompetent or intellectually limited that there are no jobs in which they could provide an employer with work that was worth even minimum wage.


Your anecdote makes many of these issues quite evident, and that is a good thing about this anecdote.

My cousin was divorced, in her 60s, working 2 and sometimes 3 jobs trying to survive. She worked at a grocery store and every month when the government checks were sent out, two women would each buy about $700 of groceries. Two checkers had to be pulled from other duties to open two lines just for these women. They flashed diamond rings, had big bills in their billfolds, and a guy sat out in the car in a new Cadillac. They bought steak and shrimp on food stamps. My cousin was scraping by and never could afford steak and shrimp.

Where was your cousin, and when did this happen? If this is still the case, I know of some social scientists who would love to go to the grocery store and meet these welfare queens. Any researcher could become famous by finding this elusive creature (the welfare queen) and getting an interview to write up in a scholarly journal. Believe me, I’m serious, if your cousin still sees this, I am very interesting in finding out more about it.

Realistically, this situation your cousin described is in fact quite possible. In the most generous states (in New England), a person with a large family (many children, and perhaps many foster children as well), could qualify for that much in food stamps and other financial support. If such a person decided to spend it all at once, they could do so. And they could decide to spend it on expensive cuts of meat and prepared foods. Diamond rings (it’s hard for a person who isn’t trained to distinguish between diamonds and cubic zirconium, but let’s assume they were in fact diamonds) could be hidden or otherwise not counted as assets when people are qualifying for food stamps. Having Franklin and Grant in one’s wallet could be an indication that one has just cashed a large check, perhaps some sort of support check. After all, as your cousin reported, these women appeared when government checks came out, so if they took a check for several hundred dollars to a check cashing place and then came straight to the grocery store it is likely they would indeed have $100 and $50 bills in their wallets, or else a thick wad of Jacksons. This could indicate that these women didn't participate in mainstream banking, or the welfare in your cousin's area was distributed as checks rather than as cash cards (cash cards are a preferrable way to distribute benefits). As to the man in a new Cadillac, it’s quite true that cousins, uncles, nephews, parents, and boyfriends aren’t considered when determining adult welfare eligibility, and studies of actual welfare users show that they are quite reliant on informal support given by friends, neighbors, and extended kin. I have my own life as an example: in the 1990s when I was a graduate student our household income ranged between $10,000 and $14,000 for several years, and we qualified for WIC, and we used it to help us afford enough milk and juice and so forth. Yet my parents, who were helping us out financially (renting to us a home they owned at far below market rate, and treating us to dinners at their home every couple weeks) did drive nice cars. I never had my dad pick me up in his Lexus when I was at a grocery story using our WIC coupons, but such a thing could have happened, and it would have resembled the situation you describe of a low-income person getting picked up by a person in a new Cadillac.

I worked part-time at a doctor's office. A single woman who was a patient had a medical card. She also had a live-in boyfriend who was an electrician that conveniently was not reported. She came in for an appointment one day, pulled out her medical card and began showing everyone the pictures of their honeymoon in Hawaii. The doctor's wife said later, "Do you believe she had the nerve to show me her pictures of Hawaii when she's got a medical card, he's an electrician and they've been living together?"

By medical card I assume you mean she received Medicaid. She must have had children or been pregnant, or else been disabled, as poor people do not qualify for Medicaid unless they meet certain qualifications (over 64, under 19, pregnant, caring for dependent children in the home who are under 19, or certified as disabled). Persons who are poor are allowed to have lovers who are wealthy, and the wealthy lovers are allowed to treat their poor friends to vacations. She benefited from the generosity of her electrician lover, and was sharing her success and happiness with someone else by showing the pictures of their honeymoon. But, now that she and the electrician are married, I suppose she will no longer qualify for Medicaid if her initial qualification was related to her income as a single person. Perhaps the electrician's wages are still low enough that she will still qualify for Medicaid. It is possible, after all, for a person with a rather low income to save up money for several years and, with the aid of frequent flier miles or a great off-season deal with Priceline, get affordable tickets to Hawaii.

Are you suggesting that when poor people develop romantic relationships with wealthy (or middle-class) people who then treat them to food, vacations, or housing, that the poor people should give up public benefits and rely instead on the informal financial support they receive from friends of lovers? I can see the sense in such a suggestion, but if she and the electrician weren’t married, there would be insecurity there. And, although he might like to share a home with her, share a vacation with her, and help her with groceries or romantic dinners in restaurants, he might not want to pay for her medical expenses. As it is, when they aren’t married, he is paying a higher tax than he would if they were married and filed a joint tax form. The benefits she gets as a single woman who is poor might be greater than the tax benefits he would get if they married and became officially a two-person family. Perhaps the solution is to re-write the tax codes and welfare qualification policies so that the tax benefits of being a one-income middle-class family of two persons is greater than being a single middle-class individual living with a single poor individual. At any rate, your anecdote is interesting for the issues it raises.

Obviously, not everyone on public assistance abuses the system. I know people who have received help for a while but never would want it to be a way of life. But there is abuse – and a lot of it. There seems to be a sense of entitlement – I'm an American so the government has to provide for me. Nothing is free. Government money is not free. It comes from taxes we pay that decreases our disposable income.

It is not clear to me that the women who spent $700 on groceries when they received their food stamps or the low-income woman who allowed her live-in boyfriend to take her on a vacation to Hawaii when they married were abusing the system. It seems possible (maybe even probable) that these people were taking benefits that they could afford to forgo, but the details you have given are not necessarily cases of abuse of the system.

You say that there is a lot of abuse. I wonder if you mean this in terms of the percentage of all persons who receive welfare funds. What do you suppose is the percent of the population that receives welfare who in fact abuse it? You’ve read the study of single women getting off welfare, so I assume the permanent welfare leavers, who were 26 percent, aren’t abusing the system. The 56% who cycle in and out of poverty might be abusing the system, but certainly not as a way of life, since they spend significant stretches of time off welfare, and usually when they are on welfare they only receive benefits for a matter of months or merely a year or two. The people who abuse welfare must be some fraction of the 18% who stay on welfare for a long time.

About 15% of the population receives some welfare, but only about 4% (at any given time, in cross-sectional studies) are actually dependent on welfare (where dependency means over half of family income for a year comes from TANF, Food Stamps, and SSI over the course of a year). Now, 4% of 305 million Americans is a lot of people: over 12 million. And if only 10% of those who are welfare dependent are abusing the system, that’s well over 1 million, and close to 1.5 million people, who would live in families where the head of the household is abusing the system. That would mean hundreds of thousands of lazy free-loading scammers sucking up our tax dollars to support their parasitical lifestyle, and more if you think more than 10% of those who are welfare dependent are abusers (but I think 10% is high, since most of those who are welfare dependent are probably seriously disabled, have intellectual disabilities, or have chronic health problems or terminal illnesses, and such people by definition deserve help and can’t be abusing the system).


So, if a couple hundred thousand or a half million people are abusing the system, is this “a lot” of abuse? Sure, you could fill a couple cities the size of Springfield with welfare abusers, and that is a lot of people. But if you look at it as a percentage of the total population of adults in this country, over 230 million adults, then we’re looking at a fraction of a single percent, and some people would say that isn’t a lot, and others would say that it is a lot. It’s a debatable point, depending on how you define “a lot”.


Look at the abuse with Hurricane Katrina. Contrary to popular opinion, George Bush did not cause Katrina to wipe out New Orleans. Nor was there a bomb planted as a government plot according to Jesse Jackson. It's not the hurricane that did all that damage. The levies were not shored up even though elected officials had been warned about it. The money was misused, the work not done, and the levies didn't hold. Those officials were responsible. When the victims started getting their "free" vouchers, some of them actually were buying diamond rings and other luxuries. There will always be abuse by a few.

The Army Corps of Engineers was responsible. They have admitted this. They are not elected officials. The Army Corps of Engineers is part of the American military. About 1,200 people died in New Orleans, and over half of those lives were lost because the Army Corps of Engineers hadn’t built or maintained adequate flood protection walls and levees around New Orleans.

You’re right that there will always be abuse, irresponsibility, and foolishness by a few. How much of this abuse, irresponsibility, and foolishness can we tolerate? You can make rules and regulations and procedures to reduce abuse, irresponsibility, and foolishness, but such rules, regulations, and procedures will require time, effort, and money. At some point there is an optimal level of rules, regulation, and procedural control, where the reasonable costs of administering welfare yield lower abuse rates down to an acceptable level. You can have controls that are too lax, and then you get too much abuse, or you can have controls that are too strict and burdensome, and that brings abuse down to good (low) levels, but the price in terms of administration is too high. Do you think we are now administering Medicaid, SSI, TANF, and the Food Stamps programs in a way that we could increase rules, regulations, and procedures to fight abuse and get a more optimal result? On what evidence do you base this? An anecdote about a person with low income and Medicaid whose middle-class live-in boyfriend took her to Hawaii for their honeymoon? An anecdote about two women who spend $700 on groceries when they get their food stamps? Anecdotes that people who received disaster relief used the money to buy luxuries instead of using it to get a new start in life? As you say, there will always be abuse, so I don’t know whether such anecdotes are simply evidence (if they are evidence) of the problem that there are always a few cheats and fools, or whether they are evidence that our welfare programs aren’t doing enough to catch cheats and fools.

But, this is a central question in welfare, and I’m very glad you’re raising it in your reaction paper. This is why I drew that diagram about types of errors in policy. You can have errors of being too selective, and that gives you too many errors of injustice where you deny services to those who deserve them, and you can have errors of being too sensitive, and that gives you too many errors of injustice where you give excessively generous services to those who are undeserving. Some amount of injustice and error is inevitable, and the question is whether we are being too sensitive or too selective in our policies.

As a side note, today about a million people are without electricity due to ice storms. Try going without electricity in the winter. Where is the outcry that the government has abandoned these people? Why are we not screaming that it's Obama's fault? Do you see how ridiculous that is? It is no more Obama's fault that an ice storm hit than it was Bush's fault that a hurricane hit. It's all political.

I agree that much of the criticism directed against presidents (whether Bush or Obama) is based on unrealistic expectations of what a chief executive can do at the top of something as massive and complicated as the federal government executive branch. In retrospect, it seems clear that Bush should have paid more attention to levees and the Army Corps of Engineers’ plans for defending New Orleans from Hurricane storm surges, but before Katrina hit, there was not much public demand for the president to do this. (However, there was some demand for it, as I read an article about the lamentable state of the New Orleans levees and intentionally went to New Orleans the year before Katrina because I was aware that a category 5 hurricane would more-or-less destroy the city, and I wanted to see it before it was gone. It’s a pity neither Bush nor any of his advisers read that article I read, and I was probably lax in my responsibilities as a citizen for not writing a letter and sending along a copy of the article to the White House and my congressman and senators).

I also think the mayor and governor deserve more blame that the president for what happened. Nevertheless, the president had made some poor decisions about who he appointed to run FEMA, and a better president would have done more to push federal entities to prepare for the disaster when weather forecasters were warning about the hurricane. You’re quite right (and you’re being realistic) that the president can’t micro-manage everything the government does, and disaster relief has not been the sort of thing a president takes a strong personal interest in anyway. The floods of 1993 and the Northridge Earthquake of 1994 are the most recent domestic natural disasters that I can think of, and although I recall Vice President Gore and President Clinton making speeches about those disasters, I can’t remember much controversy or any sense that the White House took direct leadership in details of the federal responses. Likewise, I don’t remember George H. W. Bush personally directing the response to Hurricane Andrew in 1992.




So back to politics. Is redistribution of wealth a form of socialism? The definition of socialism is the ownership of exploitable capital and means of production by the government, not by individuals or by private enterprise. As we see the government taking over the housing, banking, auto industries, etc. we are becoming more government-controlled. There was greed and abuse by the few in corporations that led to this bubble that had to burst. I personally don't agree with the bailouts. In Detroit there's a lot of poverty, illiteracy, and the multimillion dollar headquarters of Chrysler looms above it all. That's fine if they want a multimillion dollar building and to overpay their executives, but when they've mismanaged their business and it fails, they should fail. I know, we have to think of all the people employed in the auto industry, but I don't like giving my money, my daughter's money, my future grandchildren's money to bail them out because they operated their business poorly. Let them fail, keep the government out of it, and you'll see entrepreneurs rise to the occasion, open new factories, hire these displaced people and go on to success. Once we started bailing out this industry and that industry and now Larry Flint wants a bailout because the pornography industry has been hit - where does it end? We are an outstanding country with a unique history. We are the youngest yet most impacting country in the world. Others may criticize us, but everyone in the world benefits from the inventions and technology that have come from America – from people with vision and knowing that the sky's the limit. You can come to this country and prosper. The bailouts are creating another bubble and we know what has to happen to bubbles.

You touch on two important themes in this paragraph. First, you are aware that modern economies have a mix of public (government) and private ownership of productive industries and services. In Springfield, for example, we (citizens of Springfield) own our water, power, and sewer utilities. In most other places in the USA these utilities would be run as monopolies by private for-profit companies rather than being run by a public utility that must answer to elected representatives (the mayor and city council). As a general rule, the more public ownership you have of capital and industry, the lower your national growth rate will be. So, if growth rates are the most important thing, it’s generally wise to have very little government ownership (socialism). But, although growth is generally good (it creates more wealth, so on average people have more stuff and there can be less poverty), there are sometimes other considerations that may matter more to us than economic growth. Thus, there are situations where a bit of socialism can be desirable, at least to some people who aren’t ideologically opposed to any public ownership of any productive enterprises. You’re asking how much of an economy ought to be socialized. That’s a great question. To a large extent, the answer depends on values and ideologies.

This leads you to a discussion of bail-outs. You are aware of the problem of fairness in pay. Some people are paid too little in relation to the work they do (as a person going into social work, this should be obvious to you, as many social workers are pretty obviously underpaid). Others are clearly overpaid. There is no way that all of the engineers and middle-managers in those car companies really “earn” the $100,000+ salaries they receive, and even the unionized auto workers may not be so productive that they “earn” the $25-$35 they earn per hour of labor. And clearly the top executives have not in any fair sense of the word “earned” multi-million dollar bonuses and salaries. So, those of us who earn $15-$25 doing work that is approximately comparable to that of the work done by auto workers or middle-managers don’t like to have our tax dollars taken from us to help out the auto workers and middle-managers. That seems unfair, and it is unfair, if indeed those who benefit from the bail-outs are overpaid and we who pay the taxes for their rescues are underpaid.

An argument against the bail-out is that the automotive industries ought to be forced into bankruptcy, so that contracts and salaries for everyone in those industries could be re-negotiated, and the salaries of managers and engineers would drop from excessive figures (over $100,000) to reasonable ($60,000-$80,000), and the auto workers would accept wages of $25 per hour instead of $35 per hour. Such changes in salaries and wages would allow car prices to drop, and the auto industry might recover.

Another argument is that the government should not choose which industries (such as the car industries) to bail out. Perhaps it would be much better for everyone if instead of spending ten billion to help out auto manufacturing our government instead invested that ten billion in solar and wind energy, light rail mass transit, and public ultra-high-speed internet connections to rural areas. The installation and maintenance of these alternative sectors of the economy might stimulate more jobs and more economic growth compared to the benefits of bailing out auto manufacturing, but the auto industry has more political power relative to rural Americans with dial-up internet services or the multitude of tiny and disorganized solar power and wind power companies.

Should we continue with bail-outs for specific industries and services like banking and automotive manufacturing, or should we use wiser selection of which industries to subsidize and put money into some other sectors of the economy (education, medicine, internet accessibility, renewable energy, organic farming, etc.?) Another option is to simply not subsidize anything, and let the free market sort out which industries are most productive and profitable, and let those industries thrive. The reasons no democratic government will ever take this entirely hands-off approach to the economy is that the market takes a long time to reach decisions about which industries should thrive, and the market allows terrible swings in growth and production (or economic shrinkage and factory idleness), so that without regulation and government involvement, you can have economic collapses where demand shrinks up and unemployment soars over 15%. The voting public doesn’t like that sort of uncertainty, and so they always vote for politicians who will meddle in the economy and try to keep unemployment below double-digit figures, and taxing and spending will be used to boost demand (set a floor on income and consumption for the elderly and poor and unemployed). Given that reality, it’s really just a game of politics to try to push the government to make the wisest choices in how it sustains demand and meddles in the economy. That’s why social workers have to take classes like this one on policy. We need to learn about this game, and learn enough that we can take part in advocating for sensible and sustainable policies that will avoid economic or social ruin.

The housing collapse was another bubble. Community organizations with political power and the government forcing banks to give loans to people who would never be able to repay created a lot of bad notes. They say that we have to be fair. Everyone in America has the right to live in a house. Yes, everyone in America has a right to live in a house if they can afford it. That's the reality. If you can't afford it you can't buy it. It's really quite simple and logical, but we have distorted it in the name of social justice. Work hard, save your money and you can have nice things. It is hypocrisy that elected officials like Chris Dodd who received sweet deals from the housing crunch are going to save the day.

You here are making a claim that community organizations and the government forced mortgage lenders to make loans to people who were likely to default on those loans. I think you are mistaken in this belief, but I know the belief is very widespread, as there has been a coordinated effort by certain political strategists to promote this view. I have posted links about this issue on the policy-class blog, and you might enjoy looking at the sources I found on both sides of this issue.
The deeper issue you’re addressing here is whether the government did things that encouraged the credit bubble. Clearly it did. The economists who have been most powerful in government, or who have been appointed by the government to head the (independent) Federal Reserve Bank, have all been adherents of mainstream economic ideologies that favor high growth and mass consumption. This has been true of the liberal and conservative economists. The sort of environmentalist slow-growth economists who would have fought against a credit bubble and tried to slow growth and reduce consumption are considered fringe thinkers by both the mainstream liberals and conservatives.

As government gets bigger and the few in power decide what to do with our money, yes, redistribution of wealth is on the way. Barack Obama campaigned for it. His wife, Michelle, talked about that pie that everyone is going to get a fair piece of – that's redistribution of wealth – moving from capitalism, money in the hands of businesses who will hire employees, to socialism, money in the hands of government distributing it at will. It's great for votes, but what about the abuse of power in government by the few?

Abuse of power is always an issue, whether those with power are public officials who must answer to an electorate that may vote against them or private executives who must answer to stockholders or a board of directors who may remove them. As you may recall from reading pages 38-44 in your textbook, America is mainly a residual welfare state, and only slightly a redistributive welfare state. I think you are correct that the election of Obama and the victories of the Democratic Party, especially considering the strong support for liberal candidates by voters under 25, indicate that the United States may be heading toward a more redistributive welfare state.

In any system, there will be abuse of power and bad decision-making, and it’s our duty as citizens, and especially as informed social workers who understand something about social welfare policy, to point out facts about the worst and best policies, and urge politicians and voters to support those policies that work and change or abandon those that are inefficient or worthless. You’ve got the right instincts here to be wary of abuse of power. Our democracy and its freedoms depend on that wariness in the electorate.
We need an "alert and knowledgeable citizenry," as Eisenhower observed.

It's interesting that the people who champion redistribution of wealth don't practice it in their own lives. Let's say you're making $50,000 a year. You've paid your dues, studied hard while others watched TV, gotten a degree and a good job. Social injustice says it's unfair for you to be making $50,000 a year when others make only, say $30,000. But if we take $10,000 from you and give it to someone who makes $30,000, then you both have $40,000 and that's fair. To me that's not fair. What incentive is there for you and what incentive is there for the recipient of your hard-earned money to advance?

The scenario you have outlined here would indeed be very unfair. However, it is not a realistic scenario, and I don't think it's a fair characterization of the principle of "social justice" when that perspective is used to argue for redistributive policies. A typical head-of-household earning $50,000 will indeed pay approximately $10,000 in all taxes (property taxes, sales taxes, income taxes, and and various other taxes and fees). However, most of those taxes will not be transferred to persons earning less than $50,000. Rather, most of the money will go to things like schools (teacher salaries get a lot of that), police and fire protection (and pensions for retired police and fire protection), insurance against disability (if a person becomes disabled they will get SSI), insurance against poverty or medical expenses in old age (Social Security and Medicare), maintenance of infrastructure such as roads and bridges and airports, regulation of food safety, protection from foreign invasion, and so forth. Only a trivial amount will go to give benefits to persons earning $30,000. More of the redistributive money goes to persons with schizophrenia who really can’t work, or other persons with chronic problems that make it impossible for them to support themselves, and so forth.

But you say, the loophole is that the government won't take from my $50,000. It's only for those rich capitalists who make $250,000 or more and hire a lot of people. Well, do you really believe in the principle of redistribution of wealth or is it just for others? You compare your salary to a salary of $250,000 and say "They don't need all that money." But someone is looking longingly at your $50,000 and saying, "They don't need all that money." On both counts it's social envy. You work hard, cut corners where you can so you can save for a family trip or home improvements. But social injustice says, "There are people who have less than you. You should feel guilty. You work all day and they have to sit on their porches waiting for a handout." If you really believe in redistribution of the wealth to let the government decide what to do with your money you should be racing for your checkbook to write the government a check for $10,000. After all, a trip is really not a need; there are many people in America who don't get to take trips. Home improvement is not a need; it's a want and there are people who don't even have their own homes. The money you scrimped and saved for these things can be given to the poor so we can all be equal. Anything less is hypocrisy.

I think you are making a useful distinction here between social envy and actual need. You seem to support income transfers to keep people from starving or keep people from dying of exposure. But you seem dissatisfied with income transfers that allow people to have decent lives, in the sense that a person who only earns enough to survive might be given enough in benefits to allow luxuries. Those people are getting their social envy and their wants met by income transfers, and you prefer to restrict income transfers to merely meeting people’s basic needs, or survival needs. Your accusation that people are being hypocritical if they support public income redistribution without personally redistributing their wealth seems to be an emotional argument, rather than one that looks at the logic of redistributive policies and support for such policies.

A person may believe that everyone who is comfortable ought to be coerced by the government into giving some money to welfare so that those who are uncomfortable may be given enough benefits to make them comfortable without holding the view that an individual who is comfortable is morally obliged to voluntarily give away “extra” income to poorer individuals so that the giver reaches a level of consumption equality with the receiver. The first position about government redistribution and coercive redistribution is a position that realistically accepts the fact that if all income transfers are strictly voluntary, the most benevolent will end up giving too much and the most stingy won’t give enough. If
historical evidence is valid, it appears that without a coercive collective redistributive policy that prevents starvation and mass homelessness you’ll end up with too many people who are desperately poor, and social unrest will follow. A coercive (government-run) set of redistributive policies spreads the burden among the comfortable so that even the stingy will be forced to give their “fair share” toward the common good and redistribution. In a democracy we can argue about what a “fair share” is and how much redistribution we want. You want minimal redistribution, enough to avoid social unrest, but not so much that those unable or unwilling to work should enjoy luxuries. That certainly seems like a reasonable position, and I believe your position is widely held, but by a minority of American voters at the moment.

In contrast, this business about people racing to write checks and making sure that they privately give away enough of their comfortable surplus to reach total equality is a quite different approach to values and ideologies. The extreme total equality you expect from individuals who should redistribute their own wealth is the sort of thing that is rarely seen (Leo Tolstoy comes to mind). That sort of commitment to the poor does seem to have been held up as an ideal, but as a difficult one: (see Matthew 19:16-26; Matthew 25:31-46; Luke 16:19-31; James 5:1-6, and so forth)
. It's possible for people to favor some degree of redistribution and have a more generous (but not necessarily more accurate) sense of what is adequate or fair redistribution than you, but not embrace radical egalitarianism and total private redistribution to a level of total equality or a society without private property. Holding the first belief without embracing the second is hardly a case of hypocrisy.


It's when we're looking at our own bank accounts that it gets personal, doesn't it? And it should. What we do with our money is our business. People laud the rights of abortion. I believe that should be privatized. I don't want the federal government paying for abortions. Ask those that champion the cause, "So you really believe in abortion. How much of your money did you give to Planned Parenthood in 2008?" and it hits home. Er- uh- hmm. It gets more personal when you talk about your own money. I really don't care. If someone wants to work 40 hours a week and turn over their paycheck to Planned Parenthood, that's their business. But I don't want my tax dollars going to fund abortions. If it is privatized those that want to give can give and those that don't are not forced. If it's under the umbrella of the government people think the government is paying for it. But those tax dollars represent less disposable income for you and me and that will hit home.

A government will do many things. We will object to some of those things. If we object strongly to some of the things our government does, it’s our duty to attempt to change what the government is doing. Some people even go so far as withholding a certain percentage of their taxes because they object so strongly to what the government does with the money. But a fundamental element of a government in a democracy is that it will respond to the demands and needs of the people who elect the government. Sometimes we will be in a minority, and we will strongly object to the decisions of the majority in our society who have elected leaders we judge to be unwise or immoral. So, we must educate the electorate and educate the elected people’s representatives in our government.


There is no untruth in this paper. I criticize policies and politicians whether Republican or Democrat. There are things President Bush did that I don't agree with. There are things that President Obama is doing to which I disagree. While criticizing the CEOs of corporations for their extravagance, Barack Obama didn't scale down that $150 million inauguration and the $2 million party in Grant Park. I would have had more respect for him if he had. Governor Brian Schweitzer of Montana and other governors said no to their own inaugural parties because of the tough economic times. That's the kind of change I want to see in politicians. President Obama could have had a great party and still come out looking good by saying, "I want to scale back this celebration and give some of that money to the homeless," – not a photo op of him in a white shirt putting a few strokes of paint on a homeless shelter. The inauguration was extravagant – more than was ever spent on a presidential inauguration while the country is, according to him, "in a crisis." For a while his wife was making over $300,000 a year – yes, 300,000 - and they gave little to charity for years until they were in the limelight and scaled up to give to Jeremiah Wright's church, the Black Caucus and a black theater group in Chicago. I have to question their sincerity about redistribution of wealth. Talk about personal finances and you see how much people believe in their ideologies.

This is a personal reaction paper, so the accuracy or truth of your statements isn't something I'm too concerned about. It's your reaction to the facts we've been learning in the class that interest me, and you have certainly given many interesting reactions to the social welfare policy issues.

It is fair and wise to look at the personal behavior of people in politics to see if their private lives match the public statements they make about their priorities.

So I guess redistribution of wealth is a hot topic and depends on individual viewpoints. The fact is we are all created equal in some things, but we're never going to all be equal. Nor should we. It's not even politically correct to let a high school girls' basketball team win by 100 points. How could they do such a thing? They could have thrown a few points to the losing team so they wouldn't feel so badly. The winning coach was fired because he wouldn't apologize for winning. He defended his players and said they won fairly and played with integrity. We want to redistribute everything – even points in a basketball game - so nobody feels badly.

You are here acknowledging the fact that many people have a gut reaction against gross inequalities. You are contrasting this with the fact that there are indeed some inequalities in ability or effort. This seems to be a central tension in civilization. On one hand, we are looking for legitimate and fair inequalities. Who deserves respect and honor? Who is rightfully on top of the hierarchies? On the other hand, who is too high and mighty? Who has usurped our attention and respect? Who is unfairly grabbing power and wealth for which they have a weak claim? As I view society, this seems to be a central aspect of human thought and civilization, whether in the intimate social groups at a school or workplace, or on the great stage of national affairs.

Government assistance is a wonderful privilege that people in many countries don't have. It can help people get back on their feet after a life crisis. But keeping people on welfare is not empowering to them – ask anyone getting government aid if they feel empowered - and taking from the wealthy to give to the poor isn't fair and won't work. It's not being mean; it's trying to empower people.

I felt empowered by the help the government gave me when I was poor. I received the Earned Income Tax Credit and, when my wife was pregnant and when our sons were young we received WIC. My children have attended public schools, and I also did so. Police have protected me. I have made use of public roads. Public regulation of agriculture, food production, and restaurant sanitation has minimized my experience of food poisoning. These things seem to empower me. I also think that keeping the incompetent, the disabled, and the lazy on a minimum income so they can stay home and watch television is rather nice, because they don’t bother me when I’m out and walking around. I’ve been in societies (India, China, Mexico, and East Africa) where welfare didn’t give people decent benefits, and so the scammers and cheats and lazy con artists prowl the streets accosting people. And, I also didn’t feel empowered seeing hungry children begging me for food, or disabled persons dragging themselves around the streets and trying to earn their living by selling a me a stick of gum or begging me for direct personal income transfers. I prefer living in a society where such people are given an allowance so they can hang out at home and live comfortably enough, reading books, watching television, patronizing public libraries, writing angry letters to the editor, or visiting with their friends. Yeah, it bothers me that some people getting welfare are undeserving, but given a choice between our current system of welfare and more selective and stingy one such as people endure in places like Kenya, Mexico, India, or China, I’ll take our system any day.

Friday, February 20, 2009

ACORN's role in the economic problems

In class during our fifth week meeting we started talking about ACORN and I distributed some literature I'd picked up from my old college friend Kevin Whelan at the Johnston Center Renewal the previous weekend. One of the sharp students in my class mentioned at some point that ACORN had been encouraging banks to lend money to poor people who couldn't afford the loans, and this had been one element among the many that have caused the current economic crisis. This was a funny coincidence, because Kevin had been telling me about this accusation just a couple days before class. I asked my student where she had heard this. In the online portion of my classes I provide links to all sorts of political websites (it is, after all, a class on social welfare policy), and I knew I had put up links to some pretty far out right wing web pages. So, I thought perhaps she had followed a link I'd provided and arrived at a page that claimed ACORN was partly responsible for the mortgage loan problems we've been having. She couldn't remember exactly where she had read about it. I mentioned that I had it from Kevin that ACORN had not in fact encouraged risky lending to poor people who couldn't afford homes. Then, another one of my clever students pointed out that my source was biased (such a clever student; this really impressed me that a student was both savvy enough to question authoritative sources and bold enough to do so openly in the classroom— bravo!).

Well, I'll share some links here to help people see what's out there on the Internet about ACORN and the mortgage defaults and foreclosures.

First of all, in defense of ACORN, I recommend...

The Questionable Authority, who offers this summary:
Banks started making bad loans - not just subprime, but predatory - as a result of demand caused by investment banks that purchased and bundled the loans. Groups, including ACORN, protested, in an effort to bring the practices to a halt. Partly in response to prompting from these groups, several states passed laws in an effort to crack down on predatory lending. Banks and lenders fought against these efforts every step of the way. When they failed to stop the legislation, the Federal Government stepped in to protect the banks from the states. The Federal Government replaced the state efforts with guidelines that are so toothless that they make a jellyfish look like a shark. The banks reduced their underwriting standards even more. Chaos predictably ensued. And the right is trying to blame ACORN for the chaos.
Or go directly to the ACORN website to get their side of the story.
And, the Nation gives a perspective on ACORN.

Wanna see some of the propaganda against ACORN?
Here is a clip from CNN (Lou Dobbs) and it's such an inaccurate hack job it's funny.
A guy with academic credentials who attacks ACORN is Tom DiLorenzo (he also attacks Abraham Lincoln and thinks the 1861-1865 Rebellion of the Southern Slaveholders was a just cause).
And, here's yet another piece blaming ACORN for the mess.
The ultra-conservative Michelle Malkin has an entire ACORN watch thing going.

Well, I'm sure my students and readers can consider the relative merits of these web pages and decide for themselves which side is more accurate. I don't think this is a case where the "truth lies somewhere in the middle."

Thursday, February 5, 2009

State Budget Deficit is 9 billion?

There's a good article about the Illinois state budget deficit at the Journal-Register. Dan Hynes has been warning about a shortfall for months, but before this week I had never heard that he warned we could face anything like a $9 billion deficit. 
In a related note, the Capitol Fax blog discusses some of the politics around the state budget deficit and federal politics. 
Dan Hynes has a pretty good webpage for the Comptroller where you can read about budget issues related to various policies. 

CHIP

In class this past week we discussed social welfare policies that had been in the news recently. We got into a long discussion about parenting, fertility treatments, autonomy, rights to bear children, people who are unfit to be parents, and so forth. I thought the conversation went well.

We didn't talk much about the recent passage of the CHIP law, which was signed the same day as our third class session.

Read about the Children's Health Insurance Program Reauthorization Act at the White House blog.
If you wanna read the actual text of the law (PL 111-3), it's available here. And by the way, it's the third law passed by the 111th Congress. The second law (the Lilly Ledbetter Act) was an amendment to various civil rights laws to clarify that unlawful discrimination continues so long as discriminatory payment is made up until the time the court finds discrimination exists. This has the practical implication that you can sue someone for violating your civil rights related to unequal pay even if the unequal payments took place a long time before you discovered it, or if you have already stopped working at the workplace that was discriminating against you in your compensation. The first law of the 111th Congress was a boring financing act involving the Department of the Interior.

If you're interested in the CHIP program, here are some links to follow to learn more:
  1. National Conference of State Legislatures describes the SCHIP.
  2. The progressive (liberal) non-partisan Drum Major Institute describes SCHIP and explains the law at their middle class website.
  3. The very neutral and authentically non-partisan Project Vote Smart also offers some good analysis of the law.
  4. The low end of the strongest opposition to this S-CHIP program and the new law can be found at Michelle Malkin's blog (I shudder).
  5. For a more moderately toned opposition to this policy you'll find what you seek at the Wall Street Journal editorial page.
  6. For an example of what Senate Republican Leader Mitch McConnell said about the program, and a little of his testimony about an amendment he tried to have added to the bill, check out the Congressional Record for January 28, 2009.
  7. As usual, the best reporting on this policy is from the Christian Science Monitor.

Wednesday, February 4, 2009

How to write a reaction essay: example from "The Story of Stuff"

Here is a 60 minute reaction essay.

I begin working at 8:40 a.m. I decide I will write about the film we saw in class about stuff.

I start by going on-line to look up the film, and I find a website related to the project “The Story of Stuff” with Annie Leonard. http://www.storyofstuff.com/.

Now, I’ll look up other sites that might critically review what Annie Leonard said in that film. I google this: [“The Story of Stuff” Misleading]

The first hit is from an Ezine article by someone named Alexander Glaser, and his article is “Story of Stuff or Story of Lies” That article is a rant by an ill-informed ignoramus. He writes in the second paragraph of his screed:

According to the Story of Stuff, "It's the government's job to take care of us." However, the document that lays out the government's job, our constitution, makes no mention of "taking care of us."

He evidently hasn’t read the preamble about “promoting the general welfare” or “providing for the common defense” or gotten the concept of what it means to “take care of” the public. He’s probably not familiar with Locke, Hobbes, Jefferson, or Hamilton’s writing about the role of a government. He’s certainly not familiar with the 1937 Supreme Court decisions (or Justice Cardozo’s opinion in Helvering vs Davis).

Yes, I find some of his points similar to misgivings I had. Annie Leonard said that half of our government spending went to defense. That’s correct if by “government spending” you restrict yourself to a consideration of discretionary spending and exclude payments on the national debt and if by “military spending” you include pensions and medical care and benefits to veterans and their survivors. Of course, Leonard couldn’t explain this, because her point was to make a broad picture of the problem with the industrial production stream, and if she had gone into details this would have distracted from her main point and lengthened her presentation.

She said 4% of our original forests are left. She’s right, but that disguises the fact that most of the forests in the United States are second-growth or third-growth forests. In fact, there are probably over 750 million acres of forests in the United States, and only a tiny fraction of those are old-growth never-harvested original forests. The percentage of American land covered by forests has increased dramatically in the past century. She also says 40% of our waterways have become undrinkable. Well, I don’t know if it’s a fact that 40% of our waterways have water that his so dirty that it is cost-prohibitive to treat them for domestic drinking consumption (you can treat almost any water to make it drinkable, and the real question is how much it would cost to treat the water). I do know that since the passage of the clean water act (CWA, officially named the Federal Water Pollution Control Act) the quality of surface waters have generally improved significantly across the nation. Geez, when I was a little kid (in 1969) a river in Cleveland caught fire (R.E.M. had a good song about this, Cuyahoga). Perhaps the most misleading fact was the point that only 1% of stuff produced by the linear system of modern industrial production is still “in use” after a couple months. Well, it seems to me that this must be due to the fact that the modern industrial production line mainly produces food (which has been converted into garbage, human bodies, and sewage within a few months of production) and energy (which is mainly converted into heat, movement, carbon dioxide, ash, sulfur, spent Uranium fuel rods, or whatever).

Okay, the point here is that the program doesn’t go into details, and the way it presents facts doesn’t have the solid evidence or meet academic standards of precision. What is the essential message or messages?

  • A finite system (the earth) can’t sustain indefinitely a production system that uses up raw materials so quickly.
  • The system that exists is unfair because many costs are shifted to people who don’t benefit from the production process.
  • We ought to reduce our consumption.
  • People ought to have more control over how resources are used.
  • We are artificially driven to consume energy and goods and food at levels that we do not require. Advertising and a culture of consumption supports this false inflation of resource-use in our society.
  • This is a consequence of human decisions and choices, and we can make different choices.
  • We ought to make decisions to change the system of production and consumption. We ought to produce and consume less.
  • What we do produce ought to be produced in ways that waste fewer resources.
  • The whole system of production and consumption ought to be changed so that people benefit by having more time for things that make them happy (free time, time with family, time with friends) and people have more control over the process.
  • Production systems ought to force people to pay for the externalities (costs imposed on the commons) related to the manufacture of the food, energy, and goods they consume.
  • The use of toxic materials in production ought to be curtailed.
  • We need more regulation of the production system to protect us from toxic materials in production and wasteful production methods that will exhaust resources.
  • We need to change society so there is more emphasis on human values and the quality of life and less emphasis on economic growth, high levels of consumption, and wealth accumulation beyond what we need for satisfying lives.
  • Wealth and good standards of living ought to be shared so that we eliminate extremes of wealth and power inequality. It’s hardly fair to ruin environmental systems of people who have little wealth and power so that people who are already wealthy and comfortable can enjoy ever-increasing levels of unsustainable consumption.

It’s 9:22 now. I’ve read up on the documentary, read a bit about one person didn’t like it, and considered what I didn’t like about the documentary. I’ve also extracted the main points I took from the documentary. Now in the next 10-15 minutes I’ll take my notes and write something that could serve as a good reaction essay.


Here’s the first draft. I’ll write this in fifteen minutes, using some of the notes I’ve already generated.

In my class on social welfare I showed the video “The Story of Stuff” in the second session of class. It had been recommended, and I was aware it was a good tool for provoking discussion and thought. I like films like this that make people question they way they are living their lives, and I especially enjoy arguments that force us to face assumptions and lifestyles that we take for granted.

After showing the film I visited the film’s website, and also googled the film to read some of the discussion about the film. It’s easy to find websites where people discuss the film and offer opinions about the film’s message. What is the film’s message? Some people say the film is warning about overpopulation. Others say the main point is to get viewers to reduce their waste and consumption. I made a list of main points I took from the film. Here is my list:


  1. A finite system (the earth) can’t sustain indefinitely a production system that uses up raw materials so quickly.
  2. The system that exists is unfair because many costs are shifted to people who don’t benefit from the production process.
  3. We ought to reduce our consumption.
  4. People ought to have more control over how resources are used.
  5. We are artificially driven to consume energy and goods and food at levels that we do not require. Advertising and a culture of consumption supports this false inflation of resource-use in our society.
  6. This is a consequence of human decisions and choices, and we can make different choices.
  7. We ought to make decisions to change the system of production and consumption. We ought to produce and consume less.
  8. What we do produce ought to be produced in ways that waste fewer resources.
  9. The whole system of production and consumption ought to be changed so that people benefit by having more time for things that make them happy (free time, time with family, time with friends) and people have more control over the process.
  10. Production systems ought to force people to pay for the externalities (costs imposed on the commons) related to the manufacture of the food, energy, and goods they consume.
  11. The use of toxic materials in production ought to be curtailed.
  12. We need more regulation of the production system to protect us from toxic materials in production and wasteful production methods that will exhaust resources.
  13. We need to change society so there is more emphasis on human values and the quality of life and less emphasis on economic growth, high levels of consumption, and wealth accumulation beyond what we need for satisfying lives.
  14. Wealth and good standards of living ought to be shared so that we eliminate extremes of wealth and power inequality. It’s hardly fair to ruin environmental systems of people who have little wealth and power so that people who are already wealthy and comfortable can enjoy ever-increasing levels of unsustainable consumption.

I actually agree with just about every point on this list. That said, I can’t say I really enjoyed everything about the video. One thing I didn’t enjoy is that the film was made as a 20-minute piece of propaganda. It was made to be entertaining, fast-paced, and superficial. That’s the nature of any 20-minute take on a big complex subject like the materials production system. And so, the film was full of generalizations and characterizations lacking nuance. It probably comes with my training as a scholar, but I like arguments to have high standards of evidence and precise truth. On the other hand, the purpose of the video was to provoke thought, search, and questioning, and I think it works well at that level.

One thing that I want to defend is the basic premise made in the video that the public (our elected government) is supposed to take care of us. It seems some reactionaries and libertarians on some of the online discussions of it are trying to re-frame this and question this point. A government is supposed to protect and empower the citizens. Protection comes in several forms. In America, our government is supposed to provide for our common defense and promote the general welfare. Although when we talk about ‘common defense’ we tend to think of defending us against criminals or invaders or terrorists, but it seems to me we should also be defended against businesses that want to sell us unsafe products. We also should be defended against anyone, whether a private for-profit interest or a public entity, that would allow us to be exposed to poisons or risks or costs that we should not need to bear. And as for the “promoting the general welfare.” this has already been established (see the Supreme Court cases of 1937) as one of the roles of government.

There, it’s now 9:35. So, I have eight minutes to revise this. Here is the final draft:

In the second session of our class on social welfare we watched the video “The Story of Stuff”. The film had a reputation as being entertaining and informative, and I knew it could be a good tool for provoking discussion and thought. I like cultural artifacts such as this film when they make people question the way they are living, and I especially enjoy arguments that force us to face assumptions and lifestyles that we take for granted. Another work like this is Ishmael, by Daniel Quinn. Although I disagree with much in that book, and there were points in this film with which I take issue, I still enjoy the overall message and the feelings I get when I’m forced to critically examine my own life.

After showing the film I visited the film’s website, and also searched the Internet to read some of the discussion about the film. It’s easy to find websites where people discuss the film and offer opinions about the film’s message. What is the film’s message? Some people say the film is warning about overpopulation. Others say the main point is to get viewers to reduce their waste and consumption. I made a list of 14 main points I took from the film. Here is my list:

  1. A finite system (the earth) can’t sustain indefinitely a production system that uses up raw materials so quickly.
  2. The system that exists is unfair because many costs are shifted to people who don’t benefit from the production and consumption process.
  3. We ought to reduce our consumption.
  4. People ought to have more control over how resources are used. The government and the private corporations aren’t sufficiently looking out for our interests.
  5. We are artificially driven to consume energy and goods and food at levels that we do not require. Advertising and a culture of consumption supports this false inflation of resource use.
  6. This over-consumption and production system is a consequence of human decisions and choices, and we can make different choices.
  7. We ought to make decisions to change the system of production and consumption. We ought to produce and consume less.
  8. What we do produce ought to be produced in ways that waste fewer resources.
  9. The whole system of production and consumption ought to be changed so that people benefit by having more time for things that make them happy (free time, time with family, time with friends), and people should have more control over the process.
  10. Production systems ought to force people to pay for the externalities (costs imposed on the commons) related to the manufacture of the food, energy, and goods they consume.
  11. The use of toxic materials in production ought to be curtailed.
  12. We need more regulation of the production system to protect us from toxic materials in production and wasteful production methods that will exhaust resources.
  13. We need to change society so there is more emphasis on human values and the quality of life and less emphasis on economic growth, high levels of consumption, and wealth accumulation beyond what we need for satisfying lives.
  14. Wealth and good standards of living ought to be shared so that we eliminate extremes of wealth and power inequality. It’s hardly fair to ruin environmental systems of people who have little wealth and power so that people who are already wealthy and comfortable can enjoy ever-increasing levels of unsustainable consumption.

I actually agree with every point on this list. That said, I still want to point out some limitations of the video. One thing I didn’t enjoy is that the film was made as a 20-minute piece of propaganda. It was made to be entertaining, fast-paced, and superficial. That’s the nature of any 20-minute take on a big complex subject like the the modern materials production system. And so, the film was full of generalizations and characterizations lacking nuance. It probably comes with my training as a scholar, but I like arguments to have high standards of evidence and precise truth. On the other hand, the purpose of the video was to provoke thought, search, and questioning, and I think it works well at that level.

One thing that I want to defend is the basic premise made in the video that the public (our elected government) is supposed to take care of us. It seems some reactionaries and Libertarians on some of the online discussions of it are trying to re-frame this and question this point. I think it’s clear that a government is supposed to protect and empower the citizens. Protection comes in several forms. In America, our government is supposed to provide for our common defense and promote the general welfare (read the preamble to our Constitution). When we talk about ‘common defense’ we tend to think of defending us against criminals or invaders or terrorists, yet we should also be defended against businesses that want to sell unsafe products. We also should be defended against anyone, whether a private for-profit interest or a public entity, that would allow us to be exposed to poisons or risks or costs that we should not bear. And as for the “promoting the general welfare.” this has already been established (see the Supreme Court cases of 1937) as one of the roles of government.

There, it’s 9:43, and I think I’m done with this. It took exactly one hour to produce the essay above.