A few weeks ago I mentioned that the Census Bureau planned to release a new report that would assess poverty using a newer and more comprehensive measure. The "official" poverty threshold dates back to 1964 and was very simple: it was calculated as the cost of a minimally adequate diet multiplied by three. The new measure is more complex and takes into account both government benefits (EITC, SNAP, housing subsidies, etc.) and higher costs in some areas (payroll taxes, medical bills, etc.).

The bottom line is simple: using the new formula, more people are in poverty than we thought. By age, there are fewer kids living in poverty, more adults living in poverty, and a lot more seniors living in poverty. Unfortunately, this is only moderately interesting. You can always make the threshold go up or down by fiddling with the formula a bit, so this doesn't actually tell us that much. But assuming the new formula is a good one, what would be interesting is to see the trend over time. Has poverty gone up or down over the past 40 years? Over the last decade? Since the start of the Great Recession?

We don't know because the report doesn't tell us. Instead, I'll leave you with this chart, which explains fairly well how the new formula works. It shows the effect of various elements of the formula on the poverty rate. For example, on the far left, when you account for the Earned Income Tax Credit the poverty rate goes down by two points. Accounting for SNAP (food stamps) lowers the poverty rate about 1.5 points. On the far right, when you account for the rise in Medical Out of Pocket costs, the poverty rate goes up by more than three points. (Since seniors have high medical bills and kids tend to have low ones, this goes a long way toward explaining why fewer kids are in poverty and more seniors are in poverty under the new formula.)

One other note: if you take this report seriously, it's a pretty good argument against reducing Social Security benefits by fiddling with the official inflation calculation. Rising out-of-pocket costs are hitting seniors harder than most of us, which suggests that the official inflation rate understates the actual inflation rate faced by the elderly. Reducing it even further would be a substantial blow.

If you're interested in diving into this in more detail, the whole report is here.

Consider two healthcare plans sponsored by the federal government:

  • Plan A depends on private insurers. Liberals think a public option should be added to the mix in order to discipline the private market. Conservatives oppose a public option.
  • Plan B is already a public insurance scheme. Conservatives think private insurers should be added to the mix in order to discipline the public sector. Liberals aren't especially keen on the idea.

Question: is there anything odd or hypocritical about this? I don't see why. In broad terms, liberals prefer the public allocation of healthcare, and given any particular starting point they'll argue for greater public participation. Conservatives are just the opposite: they prefer the private allocation of healthcare, and given any particular starting point they'll argue for greater private participation.

Why bring this up? Because Plan A is Obamacare. Plan B is Medicare. When Obamacare was being debated, liberals argued in favor of a public option to discipline the private market. Plan B is Mitt Romney's proposal for Medicare, which conservatives favor as a way of disciplining the current public plan.

This all comes from Austin Frakt, who also points out that liberals sometimes argue that Medicare would experience adverse selection (i.e., all the really sick people being shunted into the public plan) if private plans were allowed to compete. Conservatives ignore this argument. It's pretty much the opposite when the subject is Obamacare: conservatives occasionally bring up adverse selection concerns and liberals mostly ignore them.

Again: is this hypocritical? I guess so. But on a scale of 1 to 10, I'd rate it about a 3. Liberals mostly prefer an entirely public plan, similar to the national healthcare plans in Europe, so they highlight arguments in favor of it while soft-pedaling possible issues during the transition. Conservatives do the opposite. Diogenes would be more meticulous about this kind of thing, I suppose, but most of the rest of us aren't quite ready to adopt his rigorous standards yet.

And it's worth noting that this really is a transition problem. A fully public system has no adverse selection issues, and neither does a fully private system. What's more, in a mixed system, adverse selection problems can actually accelerate the transition to a fully public or private system, which means that proponents might welcome them as politically useful. That's not something you can actually say in public, though.

Anyway: Mitt Romney wants private insurers to compete with Medicare. I'm actually OK with that in principle: as Austin reminded me last week, there's evidence that competitive bidding for Medicare contracts could lower costs by around 8% in urban areas that have lots of providers. That won't save the republic, but it's nothing to sneeze at either.

At the same time, private insurers already compete with Medicare. It's called Medicare Advantage, and so MA has mostly fallen flat: it costs more than traditional Medicare and provides only slightly better benefits. Romney hasn't yet explained how his version of MA is going to be better than the current version of MA, and until he does I don't see much reason to be interested in his proposal as anything more than boilerplate rhetoric to demonstrate that he's a free market kind of guy.

Would you like to know the secret of successful political blogging? Tanni Haas, a journalism professor at CUNY, asked a bunch of bloggers and then put all the interviews together into a book. Here's my deathless advice:

You have to enjoy writing. You really have to enjoy sitting down at a keyboard and typing words. If you don't, then you might as well forget about it.

This thought is not original to me. In my first real job out of college I was a technical writer for a computer hardware company. When I interviewed for the job, the department manager made something like this comment to me. At first it sounded kind of dumb, but it stuck with me for a long time. Because he was right: if a job requires a fairly high volume of writing — as both blogging and technical writing do — you're not going to be happy at it unless you're the kind of person who just constitutionally enjoys the act of putting your fingers on a keyboard and making words come out. If you don't, you might do it anyway because you have to put food on the table, but you won't enjoy it and you'll likely never be all that good at it. And if you don't have to do it in order to put food on the table, you won't stick with it for long.

Pretty profound, huh? And I suppose that actually knowing something helps too, though that theory hasn't really been seriously tested yet in the blogosphere. (Or in human history, some cynics might say. Though not me, of course.) In any event, Haas also interviewed lots of smarter people than me, including Tyler Cowen, Digby, Juan Cole, Jane Hamsher, and quite a few others. So there's probably some smart stuff in the book too. Amazon, of course, will let you dip into the book a little bit for free if you want to test this assumption. Enjoy.

On Thursday I wrote about a poll in Florida in which half the respondents agreed that "Republicans are intentionally stalling efforts to jumpstart the economy to insure that Barack Obama is not re-elected." Remarkably, even a lot of Republicans and conservatives agreed with that statement.

But how about nationally? None of the big polling outfits has asked the question quite that pointedly yet, but the Washington Post recently asked a Statement A/Statement B question in which half of all respondents agreed with Statement A: "President Obama is making a good faith effort to deal with the country’s economic problems, but the Republicans in Congress are playing politics by blocking his proposals and programs." Not quite the same, but in the same ballpark.

But is that mostly just Democrats and Dem-leaning indies who agree with that? Greg Sargent took a look at the internals and found that moderates and independents poll a bit higher than 50%, but Republicans are bringing down the average: "The overall number is lower, at 50 percent, because a hilarously meager nine percent of Republicans believe this to be the case." I can think of two ways to interpret this:

  • The Post question was more partisan than the Florida poll question because it starts out with "President Obama is making a good faith effort...." Lots of Republicans are going to choke on that even if they agree that congressional GOP leaders are indeed trying to sabotage Obama. This explains why the Post numbers are lower than in the Florida poll.
  • The Post question was tamer than the one in the Florida poll, since it only suggests Republicans are "playing politics," not "intentionally stalling" efforts to revive the economy. But even at that, most Republicans in the Post weren't buying it. This suggests that the Florida poll is an outlier.

For now, I'm going with the second explanation. But I'd still be interested in seeing some more national-level polling on this with the question worded more directly. If I see one, I'll let you know.

From Dan Drezner, commenting on the latest twists and turns in the eurozone saga:

I've said it before and I'll say it again: any time the global economy is counting on Silvio Berlusconi to do the right thing is not a good time.

I think Berlusconi is an object lesson for America. This is what could happen if we actually elected someone like Sarah Palin or Herman Cain president. It's just a bad dream for us, but the Italians actually did it.

More here from Gavyn Davies via Paul Krugman, who says the best way to think about the eurozone mess is that it's fundamentally a trade deficit problem and nobody is even pretending to know what to do about it.

The Jets just won their game and I'm in a good mood. So I guess it's time to head over to the ol' computer and see what's up in the world today. I wonder what the Washington Post has for us? Just one short click and—oh, crap:

Do I have the heart to read this? I guess I have to. I am a professional, after all. Let's dig in:

The largest banks are larger today than when Obama took office and are returning to the level of profits they were making before the depths of the financial crisis in 2008, according to government data. Wall Street firms—either independent companies or the high-flying trading arms of banks—are doing even better. They've made more profit in the first 2½ years of the Obama administration than they did during the entire Bush administration, industry data show.

…A recent study by two professors at the University of Michigan found that banks, instead of significantly increasing lending after being bailed out, used taxpayer money to invest in risky securities to profit from short-term price movements. The study found that bailed-out banks increased their returns by nearly 10 percent as a result.

…"The too-big-to-fail banks got bigger profits and avoided failure because of trillions of dollars of loans directly from the Federal Reserve," said Linus Wilson, assistant professor of finance at University of Louisiana at Lafayette. "Today their profits are boosted by lower borrowing costs because their managers and creditors expect a Fed lifeline when markets get jittery."

Banks have also benefited from the massive increase during the recession in unemployment insurance, which is a joint federal and state program. Increasingly, banks offer debit cards to the unemployed to collect their benefits. These debit cards carry a range of fees that bolster bank bottom lines.

That's it. I can't go on. Read the rest yourself if you have the stomach for it.

Jared Bernstein directs us to Katharine Bradbury of the Boston Fed, who has done a longitudinal study of income mobility over the past four decades and concludes that Horatio Alger is slowly dying. Today, the rich are mostly staying rich and the poor are mostly staying poor:

By most measures, mobility is lower in more recent periods (1995–2005) than in the late seventies and the eighties (the 1977–1987 or 1981–1991 periods). Comparing results based on pre-government income suggests that an increasingly redistributive tax and transfer system contributed to rising mobility into the 1980s, but that its impact has since waned. Overall, the evidence indicates that over the 1969-to-2006 time span, family income mobility across the distribution decreased, families’ later-year incomes increasingly depended on their starting place, and the distribution of families’ lifetime incomes became less equal.

The study tracks the income of families over a ten-year period, and includes only families that were both independent (i.e., not living with their parents) and not retired for each ten-year period under study. Income is also adjusted for family size. Putting this study together with everything else we know, we can see a grand total of four things happening during the 35-year period from 1970 to 2005:

  1. Income inequality is increasing: the rich are much, much richer today than they used to be.
  2. To deal with this, tax rates on the rich have gone down.
  3. Income mobility is decreasing. If you start out poor or middle class, you're more likely to stay there than in the past.
  4. To deal with this, government assistance to the poor has gone down.

Jared suspects that these things are correlated. I suspect he's right. "The relationship between income concentration and political power is one important link," he says. In other words, more income concentration among the rich has given them more political clout, and that's allowed them to influence public policy in ways that encourage even more income concentration among the rich.

I'd add to that another dynamic: as the poor increasingly stay poor, the public starts to view them not as victims of larger trends, but as a permanent underclass that's not willing to work hard enough to better themselves. And who wants to see their tax dollars spent to support a bunch of shiftless layabouts?

The chart below tells the main story. The number of poor families who move up at all has decreased over the past 35 years, and the number who have moved up more than trivially has decreased even more. The American Dream isn't what it used to be.

From Andrew Sprung, after screeching to a halt in the middle of reading a book review because he thought — incorrectly, it turns out — that he might have caught an error:

This leads me to confront my own bias, which was toward finding a flaw, as in this post. You could call it predatory reading, a reflex triggered or neutralized by all kinds of confirmation biases as I work my way down a page. Not to mention the miracle of internet search and access — its wow factor may be getting long in the tooth, but it's still operative!

It's true. My reading these days is far more directed than in the past. If it doesn't seem likely to provide fodder for a blog post, I skim right past it. If it not only seems like potential blog material, but might even contain an error that I can glom onto, then Eureka!

But congratulations to Andrew for not finding an error and getting a post out of it anyway. That's professionalism, my friends.

Today is a very special day of catblogging: these are the first pictures taken with my shiny new iPhone 4s. It's true: I've given in to the dark side. I don't actually have any real use for a smartphone, but a little while back Marian decided she wanted an iPhone, and when we got to the store I somehow got talked into getting one too. That's just the kind of sheep I am.

So, anyway, I've been busy trying to figure out how to use the thing. Setup was a pain in the ass, not really due to anything inherent in the iPhone, but because I could only transfer the contacts from my old phone by downloading a free Verizon app. Unfortunately, even free apps require an App Store account, and setting that up Did. Not. Go. Well. Eventually, after a fair amount of swearing, I gave up and slunk back to my computer to do some work, where I discovered a waiting email telling me to click a link to verify my account. Naturally, the account creation process hadn't told me to expect this, and since email wasn't set up on the phone I didn't know anything was waiting for me. Once I clicked the link, though, my account was activated, I downloaded the app, and I was up and running. Hooray! So far everything seems to be functioning fine except for the battery, which sucks. But I understand that Apple is aware of this problem and has promised a fix real soon now.

Oh — and Siri. It doesn't work quite as well as the commercials lead you to believe, does it? This was my first conversation with Siri:

Call Marian.
I don't see Mariam in your address book.
Call Marian.
I don't see Mariott in your address book.
Call Marian.
I don't see Mary in your address book.
Call Marian.
I don't see Mariana in your address book.
Call Marian.
Which Marian? Marian Drum Work or Marian Drum Cell?
Marian Drum Work.
I don't see Mary and Drum Work in your address book.  

So even on the fifth try, when it finally recognized the word "Marian" and there were only two options for my response, it still translated my sounds literally instead of figuring out which address book entry they were closest to. And later, when I told it to "Call Marc," it told me that it couldn't find "Mark" in my address book. So this is going to take some work. (On the bright side, when I asked it for the weather in San Francisco, it popped right up.)

Anyway, that's that. Now it's time to figure out what nifty apps I should download. So far, all I have is a flashlight app, a barcode reading app, the Opera mini-browser, a Twitter reader, the New York Times, and the Economist. What else should I play with?

Sarah Kliff reports that Mitt Romney has provided us with a bit more detail about how he'd reform Medicare:

The plan has two major things in common with the Medicare reforms that House budget chairman Paul Ryan (R-Wis.) proposed earlier this year. First, it would provide seniors with a specified amount of money to purchase health benefits. The level of benefits would depend on the recipient’s income, as those with lower incomes would get more money to spend on Medicare. Second, it would allow private carriers into the Medicare space with two key requirements: They would have to provide a set of benefits comparable to the entitlement program and offer coverage to any senior who applied. The argument is that prices would drop as Medicare plans compete for business.

But there’s one big difference between the Ryan and Romney plans: While Ryan would have phased out traditional Medicare completely, Romney would leave it as an option for seniors. “We’d allows providers to compete to provide the best care at lowest cost,” a Romney campaign official told reporters Friday. “One of the choices will be to remain in traditional Medicare.”

Hmmm. That sure sounds a lot like a combination of traditional Medicare and Medicare Advantage. In other words, exactly what we have today. Romney apparently hasn't decided how he'd set premium support for the private plans,1 but that hardly matters if you keep the traditional program around. Premiums either keep up enough to compete with traditional Medicare, or else everyone eventually migrates to traditional Medicare and the private plans go out of business. So I guess I don't really get this.

Romney also wants to raise the Medicare eligibility age to 67. This would be extremely unpopular and it wouldn't really do much to lower Medicare costs. So I think we can safely consider that a nonstarter.

Other than that, Romney's plan sounds great.

1The big criticism of Paul Ryan's premium support plan was that the size of the voucher grew so slowly that within a couple of decades seniors would be paying huge amounts out of pocket for medical care. So as wonky as it sounds, the precise mechanism by which premium supports are calculated each year is really, really important.