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Article Artículo

Affordable Care Act

Health and Social Programs

United States

The Ranks of the Uninsured Have Declined More Under Democratic Governors than Under Republican Ones

Since the main provisions of the Affordable Care Act (ACA) were implemented in 2014, the uninsured rate has declined precipitously. This was on full display in the Census Bureau’s 2015 health insurance report, which showed that the share of Americans lacking coverage declined 5.1 percentage points between 2013 and 2015. According to the data from the American Community Survey (ACS), the share of the population without insurance fell from 14.5 to 9.4 percent (pp. 24-25).

Due to its large sample size, the ACS allows us to look at the change in the uninsured rate at the state level. And when looking at the state-by-state data, a clear pattern emerges: states with Democratic governors have seen far more significant gains in coverage than states with Republican ones.

CEPR and Nicolas Buffie / September 30, 2016

Article Artículo

Economists Keep Getting It Wrong Because the Media Cover Up Their Mistakes

Most workers suffer serious consequences when they mess up on their jobs. Custodians get fired if the toilet is not clean. Dishwashers lose their job when they break too many dishes, but not all workers are held accountable for the quality of their work.

At the top of the list of people who need not be competent to keep their job are economists. Unlike workers in most occupations, when large groups of economists mess up they can count on the media covering up their mistakes and insisting it was just impossible to understand what was going on.

This is first and foremost the story of the housing bubble. While it was easy to recognize that the United States and many other countries were seeing massive bubbles that were driving their economies, which meant that their collapse would lead to major recessions, the vast majority of economists insisted there was nothing to worry about.

The bubbles did burst, leading to a financial crisis, double-digit unemployment in many countries, and costing the world tens of trillions of dollars of lost output. The media excused this extraordinary failure by insisting that no one saw the bubble and that it was impossible to prevent this sort of economic and human disaster. Almost no economists suffered any consequences to their career as a result of this failure. The "experts" who determined policy in the years after the crash were the same people who completely missed seeing the crash coming.

We are now seeing the same story with trade. The NYT has a major magazine article on the impact of trade on the living standards of workers in the United States and other wealthy countries. The subhead tells readers:

"Trade is under attack in much of the world, because economists failed to anticipate the accompanying joblessness, and governments failed to help."

Of course many economists did not anticipate the negative impact of trade, but of course many of us did. The negative impact was entirely predictable and predicted. (Here are a few from CEPR, there are many more books and papers from my friends at the Economic Policy Institute.) The argument is straightforward: trade policy has been designed to put manufacturing workers in direct competition with low paid workers in the developing world. This costs jobs and puts downward pressure on the wages of these workers. It also puts downward pressure on the wages of less-educated workers more generally, as displaced manufacturing workers seek jobs in retail and other sectors. Stagnating wages and increasing inequality are the predicted result of this pattern of trade, not a surprising outcome.

CEPR / September 29, 2016

Article Artículo

Health and Social Programs

United States

Are Disabled Workers a Growing Burden? Not Really

As you may have heard, spending on Social Security Disability Insurance has been rising over the past 25 years. Many major news outlets have portrayed this increase as a looming disaster with headlines such as the following:

“It’s Time to Reform Our Bankrupt Disability Insurance,” National Review, September 2015

“Social Security Disability Insurance Program Is Financially Unsustainable,” Mercatus Center, September 2015

“With Social Security Disability Fund Going Broke by 2016, Congress Set for Partisan, Election-Year Showdown,” Fox News, August 2015

“Another Looming Crisis: Social Security Disability Insurance,” The Hill, July 2015

“Social Security Disability Insurance Is Failing,” Senate Republic Policy Committee, March 2015

“Averting the Disability-Insurance Meltdown,” Wall Street Journal, February 2015

“7 Facts About America’s Disability Check Explosion,” Breitbart, January 2015

“SSA: Disability Recipients Soar, Funding Nearly Depleted Under Obama,” Newsmax, December 2013

“Social Security Disability Claims Out-Of-Control,” NewsBlaze, October 2013

“The Rising Cost of Social Security Disability Insurance,” Cato Institute, August 2013

“Social Security Disability Insurance Costs Are Exploding,” Washington Examiner, August 2013

“Social Security Disability Fund to Go Broke in 2016,” Washington Examiner, July 2013

“Disability Explosion Puts Social Security in Danger,” Investor’s Business Daily, June 2013

“Disability Insurance, Out of Control,” Chicago Tribune, April 2013

“Disability Insurance: America’s $124 Billion Secret Welfare Program,” The Atlantic, March 2013

“Unfit for Work: The Startling Rise of Disability in America,” Planet Money (National Public Radio), March 2013

“Social Security Disability Program Reveals Budget Quagmire,” Washington Post, February 2012

“Social Security Disability Benefits Unsustainable,” Cato Institute, November 2010

“America’s Hidden Welfare Program: Social Security’s Disability Insurance Is Expensive, Destructive, and Out of Control,” Slate, September 2010

Given this sort of reporting, a normal reader might think that assistance to disabled workers has been “spiraling out of control.” But that just isn’t true.

CEPR and Nicolas Buffie / September 28, 2016

Article Artículo

NYT Editorial In News Section for TPP Short on Substance

When the issue is trade deals, like the Trans-Pacific Partnership (TPP), the New York Times throws out its usual journalistic standards to push its pro-trade deal agenda. Therefore it is not surprising to see a story in the news section that was essentially a misleading advertisement for these trade deals.  

The headline tells readers that Donald Trump's comments on trade in the Monday night debate lacked accuracy. The second paragraph adds:

"His aggressiveness may have been offset somewhat by demerits on substance."

These comments could well describe this NYT piece.

For example, it ostensibly indicts Trump with the comment:

"His [Trump's] first words of the night were the claim that “our jobs are fleeing the country,” though nearly 15 million new jobs have been created since the economic recovery began."

It is not clear what the NYT thinks it is telling readers with this comment. The economy grows and creates jobs, sort of like the tree in my backyard grows every year. The issue is the rate of growth and job creation. While the economy has recovered from the lows of the recession, employment rates of prime age workers (ages 25–54) are still down by almost 2.0 percentage points from the pre-recession level and almost 4.0 percentage points from 2000 peaks. There is much research showing that trade has played a role in this drop in employment.

The NYT piece continues:

"He [Trump] singled out Ford for sending thousands of jobs to Mexico to build small cars and worsening manufacturing job losses in Michigan and Ohio, but the company’s chief executive has said 'zero' American workers would be cut. Those states each gained more than 75,000 jobs in just the last year."

It is not surprising that Ford's CEO would say that shifting production to Mexico would not cost U.S. jobs. It is likely he would make this claim whether or not it is true. Furthermore, his actual statement is that Ford is not cutting U.S. jobs. If the jobs being created in Mexico would otherwise be created in the United States, then the switch is costing U.S. jobs. The fact that Michigan and Ohio added 75,000 jobs last year has as much to do with this issue as the winner of last night's Yankees' game.

CEPR / September 28, 2016

Article Artículo

United States

Workers

Private Sector Employment Has Flourished More Under Democrats than Under Republicans

Paul Krugman recently wrote an interesting blog post titled “The Curious Confidence of Charlatans and Cranks” Krugman starts off with an interesting graph showing the total number of private sector payroll jobs gained or lost under each U.S. president from Jimmy Carter to Barack Obama.

While this metric is informative, it is imperfect in at least two ways. First,a president’s track record on jobs will depend to a significant degree on his total time spent in office. Fortunately, it is easy to correct for this problem all we need to do is look at the average change in jobs per year. Second, the total number of jobs gained is an imprecise metric, given that at least part of the differences between time periods can be attributed to different rates of population growth. An easy way of correcting for this is to measure the percent change in the total number of jobs. Therefore the best metric for comparing different presidents’ track records would be the average annual percent change in jobs.

CEPR and Nicolas Buffie / September 26, 2016

Article Artículo

Honduras

Latin America and the Caribbean

World

Show Me the Data: On the Ground with USAID in Honduras

I traveled to Honduras recently to better understand how funding for the Central American Regional Security Initiative (CARSI) and for the Alliance for Prosperity Plan (APP) is being spent and accounted for by its implementers. Nearly half of the $750 million that the US government is channeling to the APP in fiscal year 2016 is specifically allocated to CARSI. These are historic levels of funding to the region, unparalleled since the early 1990s when the US was involved in Central America’s internal armed conflicts. Numerous reports indicate that military and police-perpetrated human rights abuses have increased since the creation of CARSI and there is no real evidence that CARSI has yielded minimal, if any, results.

In fact, very little is known about the efficacy or impact of these programs at all, despite the hundreds of millions of dollars being spent. On September 7, I co-authored a report published by the Center for Economic and Policy Research (CEPR) that shows that the only publicly available impact assessment study of a CARSI program, published in 2014 by Vanderbilt University’s Latin America Public Opinion Project (LAPOP), doesn’t conclusively demonstrate, as the study claims, that the CARSI program has had positive results  (LAPOP has published a critique of this report, and CEPR staff are now preparing a response to this critique).

The specific CARSI program that the LAPOP study assesses is a community-based violence and crime prevention program that is implemented by the US Agency for International Aid (USAID) and its partners in El Salvador, Guatemala, Honduras and Panama. In late 2014 a USAID official told Congress that “We have evidence that these kinds of programs are working, and evidence is crucial so we can build on what really works.” Since there is no hard evidence that the CARSI/USAID program is working — in the LAPOP study or elsewhere — I decided to have a closer look at the program on the ground in Honduras, a country I have worked in for over a decade, and see for myself.

CEPR and Laura Jung / September 26, 2016