Acceptable, Available, Affordable Housing

Note: An edited excerpt from this blog post (primarily the "Is there a right to housing?" section) was published by The Gazette on August 1, 2017 ("Health Care, Housing Rights?") and reproduced below.

And see, Addendum: "Why Do So Many Christians Believe Lack of Effort is Cause of Poverty, or Jesus Would Oppose Government Social Programs?"

And, for a little good news on this subject, Lee Hermiston, "Shelter House Gets $2.7 Million for 'Housing First' Project in Iowa City; Construction Could Begin in October," The Gazette, August 4, 2017, p. A1.

Excellent and data-loaded: Editorial, "Locked Out: All Counties in Creative Corridor Lack Affordable Homes," The Gazette, August 6, 2017, p. D1 (not yet available online; link will be added when available; excellent data for 7 Iowa counties: population, persons in poverty, percentage who earn less than 30% of median income, number of affordable units for that population, percentages spending more than 30% of income on housing, increase since 2007 in rent for two-bedroom unit compared with percentage increase in median household income, number in 2016 who were homeless and sought emergency services.)

Contents
Is there a right to housing?
Whom are we talking about?
What are their needs; what are the solutions?
Housing in context
What's "affordable"?
Capitalism
Data
Conclusion
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Housing policy is, as President Trump once said of healthcare policy, "an unbelievably complex subject. Nobody knew that [it] could be so complicated." [Michael A. Memoli, "Trump: 'Nobody Knew that Healthcare Could be so Complicated,'" Los Angeles Times, February 27, 2017.]

[For details on polling results and trends regarding the number of Americans who support universal single-payer health care, see Kristen Bialik, "More Americans Say Government Should Ensure Health Care Coverage," Pew Research Center, January 13, 2017 (e.g.: "Currently, 60% of Americans say the government should be responsible for ensuring health care coverage for all Americans, compared with 38% who say this should not be the government’s responsibility.").]

Is there a "right" to housing?

At the outset of discussions of any social program is the threshold issue of "rights": to what extent do we have (legally) or feel (morally) an obligation to care for those beyond our own family, community or "tribes" (variously defined)? To what extent do others have a "right" to expect such care from us?

Obviously, if a majority of us believe, and act as if, others have no "rights," and we have no "obligations," that's pretty much a conversation stopper. So let's first try to figure out what we believe about "rights" in general, by considering some comments from others before returning to the matter of "rights" to housing.

"Right. That which is consonant with equity or the light of nature; that which is morally just or due."
-- Oxford English Dictionary (Compact Ed., vol. II, 1971), p. 669, Right, 3.

"Health care is not a right. Housing is not a right. A job is not a right. College is not a right."
-- Joe Walsh, May 4, 2017 (syndicated radio host; former member of Congress)

"Thou shalt love thy neighbour as thyself." . . .
"Verily, I say unto you, Inasmuch as ye have done it unto one of the least of these my brethren, ye have done it unto me."
-- Jesus, Matthew 22:39, 25:40 (KJ)

"[W]e can see the TRUTH of the true religion of God woven like a GOLDEN THREAD throughout all faiths whose origin is from Him in the form of the GOLDEN RULE."
-- Bahai, Universal House of Justice (with quotes and citations from 16 major religions; emphasis supplied)

"We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness."
-- Declaration of Independence, July 4, 1776

"Everyone has the right to a standard of living adequate for . . . health and well-being . . ., including food, clothing, housing and medical care . . .."
-- United Nations Universal Declaration of Human Rights, Article 25, December 10, 1948

There remain differences among us as to whether our obligations to others should be fulfilled through governmental programs or non-governmental organizations' efforts. But as we see, virtually all the world's great religions, and nations (UN), are agreed that we do have at least some obligations to fellow members of our species. (Indeed, some would extend this to other animal (and even plant) species as well. Why? For answers see, Frans De Waal, Are We Smart Enough to Know How Smart Animals Are?" (W.W. Norton, 2016), and Peter Wohlleben, The Hidden Life of Trees (Greystone Books, 2016).)

And yet, among Americans, Joe Walsh (above, "Housing is not a right") speaks for the majority.

This is somewhere between ironic and inexplicable, given that over 50% of Americans say "religion is very important in their lives" (the highest of any wealthy nation). How can we square "I've got mine, Jack," shouts of "Get a job," and denying healthcare to tens of millions of Americans, with the Golden Rule and caring for "the least of these"? How can we explain that "57% of Americans disagreed with the statement 'Success in life is pretty much determined by forces outside our control,' a higher percentage than in any of the European nations polled. . . . [Or that] 73% said hard work is very important for getting ahead in life compared to a European median of 35%. . . . [And that] nearly six-in-ten in the U.S. (58%) believe allowing everyone to pursue their life’s goals without interference from the state is [most] important [, whereas] majorities in all European nations polled in 2011 said guaranteeing that nobody is in need is more important." [Richard Wike, "5 ways Americans and Europeans are Different," Pew Research Center, April 19, 2016.]

In a nation in which a majority holds such beliefs, a nation willing to trust its democracy to a political process fueled (and therefore largely controlled) by the largest campaign donors, it can't be shocking that many elected officials share some donors' belief that "my right to a tax cut trumps (so to speak) your right to come in out of the cold."

Thankfully, there are also thousands of knowledgeable, caring individuals in Iowa and throughout our nation who are trying to do something about insuring every American has decent housing. This blog post is dedicated to them, and addresses the challenges they face.

Whom are we talking about?

Many of us are relatively well housed. Of America's 135 million dwelling units, about 60% (in Iowa and the nation) are single family, detached houses. Others live in condo units or rented apartments. When it comes to housing, these are among the most fortunate, notwithstanding their occasional difficulty paying mortgages, rent, taxes, and utility bills. Thus, with rare exception, housing is not much of an issue for those in the top 20% (annual income $111,000 or more).

["Stats for Stories: American Housing Month," Housing, U.S. Census Bureau, June 2017 ("The 2015 American Community Survey counts almost 135 million housing units in the U.S.: 61.4% are detached single-family homes and 6.3% are mobile homes.") "Most Americans Make It To The Top 20 Percent (At Least For A While)," Planet Money, National Public Radio, May 5, 2014.]

It's a little different story for the homeless -- those roughly 500,000 Americans with no place to call home on any given day. Some have shelter, others are on the streets, or otherwise unsheltered. Some are individuals, including children on their own; some are part of homeless families. They may be chronically homeless or only temporarily so. [Photo credit: unknown.]

Of course, some of those "sheltered" may be couch surfing, or otherwise living in overcrowded conditions shared with other families or friends.

Others may be in a shelter considered unhealthy or otherwise dangerous substandard housing. ("About six million homes in the United States are substandard by American Housing Survey (AHS) standards, a statistic that has seen little change over the last two decades." Dwellings considered substandard have "interior and exterior leaks, signs of pests, and other factors collected by local public health and code enforcement agencies." ["Substandard Housing," National Center for Healthy Housing.

And see, "What Is Substandard Housing?", HomeGuides.sfgate.com ("Substandard housing . . . , often in severe disrepair, [is] housing that poses a risk to the health, safety or physical well-being of its occupants . . . associated with increased risk of disease, crime, social isolation and decreased mental health. . . . Some cases of substandard housing are not so visible. Outdated or dangerous electrical systems, rusting or loose pipes and gas leaks . . . might go unnoticed until an accident happens.")]

Housing can be unsafe for other reasons, such as spousal abuse, or neighborhoods with relatively high levels of violent crime.

The remnants of Americans' prejudice can make it more difficult for some to find housing -- those of a given race, religion, country of origin, new immigrants, or former convicts who've served their time and are trying to reenter society -- regardless of their ability to pay.

But some of those most at risk for becoming homeless are living in "poverty" (defined as an individual with $12,060 annual income or less; $24,600 for a family of four). [Kimberly Amadeo, "Federal Poverty Level: Definition, Guidelines, Chart,"The Balance, February 2, 2017.] Note that "poverty" can result not only from steady employment at a low wage, but also from unsteady, seasonal, or otherwise occasional income (regardless of hourly rate) that doesn't reach an annual total in excess of poverty levels.

The unemployed are an at risk group for housing. "The share of prime-age [American] men (ages 25-54) who are neither working nor looking for work has doubled since the 1970s. . . . [One] in six prime-age men in America are either unemployed or out of the workforce altogether -- about 10 million men" -- one of the highest rates in the world. [Derek Thompson, "The Missing Men," The Atlantic, June 27, 2017.]

Another category are those paying over 50 percent of their income for housing. "When more than 50 percent of a poor household’s income goes to paying rent, that household is experiencing what is known as severe housing cost burden. [These are] households . . . more likely to have an unexpected event -- such as loss of employment or unexpected medical costs -- result in . . . homelessness." [The State of Homelessness in America (2016), pp. 48-49, endhomelessness.org.]

[For one of the best collections of data regarding the financial challenges confronting nearly all Americans regardless of income and net worth, presented in 24 pages of graphics and very readable text, see "On Track or Left Behind? Findings from the 2017 Prosperity Now Scorecard, July 2017 Prosperity Now.org, released July 25, 2017.]

What are their needs; what are the solutions?

Although "categories" are listed above, most of those with housing needs have stories that are somewhat unique -- as are the solutions, to the extent possible.

An abused spouse or children may not be lacking shelter; their problem is not a leaky roof, it's the violence to which they're subjected. They need an alternative shelter, or safe house -- along with some legal assistance -- until they can relocate (or the abuser is imprisoned). There may be other reasons why temporary, rather than permanent, housing is the solution.

For those with a "severe housing cost burden," or without the resources even if they used all their earnings for rent, there may be public housing, "affordable housing" required of landlords, or subsidies such as "Section 8." [Housing Act of 1937, as amended, 42 U.S.C. §1437f.]

Housing in context

As with medical specialists who are less aware of a patient's related conditions, so it is with housing. By contrast, some doctors actually make "house calls" -- not to see the patient, but to see the house, and how it might be contributing to the patient's condition.

For example, in addition to the occasional relationship between housing and healthcare, there is often a relationship between housing, educational level and unemployment.

There can be a relationship between housing, poverty and public transportation (or access to a reliable vehicle). If businesses would build housing close enough to their stores or factories that their employees could walk or bike to work -- with rent they could afford on the hourly wages they were paid -- it would solve both the housing challenge and eliminate employees' costs of commuting from the distances necessary to find affordable housing (as well as improving workers' health and the environment). Public buses or trains that run every 10 or 15 minutes (rather than half-hour or hour), and don't require two or three changes from home to work, would help.

Child care, on the job site or nearby, could sometimes make the difference.

Of course, social workers and others are aware of these interrelated needs and solutions -- as they are aware of not having the necessary resources to do what they know needs to be done. Just as there are IEP's (individual education plans) for K-12 students with disabilities, it would help when addressing individuals' "housing in context" challenges to create a plan for every individual who comes into the system that addresses housing, healthcare, nutrition, transportation, training, childcare and whatever other needs and services are relevant.

What's "affordable"?

There is much reference in discussions of housing to so-called "affordable housing," defined as housing that one can obtain for 30% or less of one's income.

"Families who pay more than 30 percent of their income for housing are considered cost burdened and may have difficulty affording necessities such as food, clothing, transportation and medical care. An estimated 12 million renter and homeowner households now pay more than 50 percent of their annual incomes for housing. A family with one full-time worker earning the minimum wage cannot afford the local fair-market rent for a two-bedroom apartment anywhere in the United States." ["Affordable Housing," Department of Housing and Urban Development.]

"Affordability" is not a very precise concept at best, and is certainly subject to, among other things, almost unlimited potential multiple variables.

Income. Thirty percent of what? What do we count? What do we deduct? Is it what's left after taxes? Which taxes (i.e., federal and state income tax; FICA; sales tax)? What about essential fixed expenses?

Fixed expenses. The minimal, essential expenses for a family of four (or more) will be both different, and far exceed, those for a young, childless single person. Childcare expenses can be significant if there's no grandmother to volunteer. A family paying for grandparents' nursing home costs, or services for a person with a disability, or a mortgage, will have far less for food and other expenses than someone who does not.

Absolute dollars. No one can eat a percentage. Someone in the top 20%, earning $200,000 a year, has $140,000 left over after paying 30% ($60,000; $5,000 a month) for housing. Someone earning the minimum wage ($7.25 an hour) and lucky enough to work 40 hours a week for 50 weeks a year ($14,500 a year) has $10,150 ($846 a month) left over after paying 30% ($4,350, or $362.50 a month -- if such apartments even exist) for housing.

Capitalism

Like a bull in a china shop, or a pig in the parlor, there's nothing inherently wrong with capitalism -- so long as it's kept in its proper place. To protect competitors, employees and consumers some government regulation is often necessary, but "free private enterprise" and "marketplace competition" can produce greater incentives for innovation, productivity and efficiency by business, along with greater choice and lower prices for consumers.

But just as there are some sectors of the economy in which government ownership and operation may not be the optimum approach, there are also other sectors of the economy that seem inappropriate for capitalism.

There are some who seemingly want to privatize everything. But there appears to be at least a significant minority, if not majority, of Americans who recognize the advantages of public ownership and operation of K-12 schools; libraries; national, state, and local parks; and the Interstate Highway system.

Profit-maximizing businesses can have conflicts of interest when providing public goods. Experiments with private ownership of prisons, for example, show that there is an inherent conflict of interest between public policy goals of shorter sentences and alternatives to incarceration and the prison owners' goals of profit maximization: the more people convicted and incarcerated, and the longer their sentences, the greater their profits.

There are doctors and dentists who volunteer in free clinics and elsewhere to provide healthcare to those who otherwise would have to do without. But for the most part healthcare is a private, profit-maximizing industry. As those urging a form of universal, single-payer healthcare say -- a form of healthcare available to citizens in most industrialized countries -- there is a big difference between "health insurance" and "health care." The statistics on such measures as years of life expectancy, or rates of infant mortality, suggest that we are paying more while getting less and serving fewer than those countries. We joke about medical students who want their specialty to be "diseases of the rich," but the fact is that in a capitalist healthcare system everyone from medical professionals, to Big Pharma, to hospitals, to insurance company shareholders and executives would like to be paid more.

Admittedly, there is no more agreement regarding public housing than there is about healthcare. The UN may say, as quoted above, that "Everyone has the right to a standard of living adequate for . . . health and well-being" (including housing and healthcare), but there are still individuals who believe that even those without shoes should simply "pull themselves up by their bootstraps." [United Nations Universal Declaration of Human Rights, Article 25, December 10, 1948.]

Home builders and realtors will, when necessary, build, remodel, sell, or rent homes and condos to those scarcely able to pay. But when their income is calculated as a percentage of the price of their sold homes, or the square footage of those they've built, large, expensive homes for the wealthy are clearly to be preferred over those for the poor. Segregation in our communities is largely perpetuated by housing policies, which are often driven in part by what the upper 20 percent believe to be "the best schools."

A builder of a city center high rise full of condos, who can sell them for a half-million to a million dollars or more, has zero economic incentive to include units that college students, or minimum wage workers, could afford. Of course, a city government that is gifting the builder a portion of construction costs (say, a TIF that reduces the owner's property taxes) has a lot of leverage -- if it will use it -- to insist on some cheaper units. But that's little more than a tiny one-off contribution to the community's housing needs for the poor and working poor.

Which brings us to "data."

Data

Schools don't just open their doors, let children wander in, and go to whatever room they please. Enrollment is limited by the numbers of classrooms, teachers, and desks. And there are precise records of each child, with information about parents or guardians, address, and perhaps special needs.

Successful businesses startups have business plans. The owners have at least some sense of traffic flow as well as revenue flow, the potential population from which they will draw, the competitors who will be offering the same or similar services.

It's not that those giving their lives to providing housing for the poor aren't aware of the value of comparable information about housing, or that they aren't making efforts to try to create it -- sometimes creative, impressive efforts. It's that they are simply not provided the resources they need to gather all the necessary data. They know, better than I, what they need. But here's how it looks from here.

Take Johnson County, Iowa, as an example. It's helpful to have another Habitat for Humanity house here, a shelter house there, a TIF requiring some below-market units in a condo project. But if we really want to get everyone housed, it's not enough to just "do something." We need some basic data about "supply" -- an inventory of what housing we have (whether occupied or not), such as, how many one-, two-, and three-bedroom apartments there are, with their locations and rent.

The Census Bureau does a pretty good job of counting and reporting housing units. But apparently the landlords and developers are sometimes reluctant to reveal their rental rates and the number of vacancies.

Equally important, is information about "demand" -- especially regarding persons who can't afford any housing available in the county, and those who are suffering from "severe housing cost burden" (rent exceeding half of their income).

It is the demand side that is the most problematical. Ideally there would be enough social workers that every individual in the county in need of one or another form of assistance would be identified, regularly visited, and assisted in finding, or improving, their housing. Unfortunately, in today's political climate that's not likely to happen anytime soon.

However, gathering one county's housing supply and demand is not a "big data" project -- like the recent White House effort to create a database record of every person registered to vote in America, along with their personal data.

There are only 62,000 housing units in Johnson County, and 59 percent of them are owner-occupied -- presumably most of them by owners who are not in need of housing assistance. The remaining 40 percent would be a number that could fit in a single Excel spreadsheet on anyone's laptop computer.

Conclusion

Meanwhile, four things might help. (1) Think about a county's housing challenges as a whole, rather than one dwelling unit, and occupant, at a time. (2) Prioritize the need to gather as much detailed data as possible about the county's housing supply and demand. (3) Recognize that housing is but one of many interconnected challenges for those in need that can most effectively, and efficiently, be met by recognizing how they are connected. (4) Manage the undertaking with measurable goals, timelines, and public accountability in the form of management information reporting systems.

# # #
Here is The Gazette's edited excerpt from this blog post (primarily the "Is there a right to housing?" section):

"Health Care, Housing Rights?"
Nicholas Johnson
The Gazette, Insight Guest Opinion, August 1, 2017, p. A5
There’s been discussion recently about housing (locally) and healthcare policy (nationally). Unlike government-funded programs used by all, these are programs for those most in need.

Developing public policy for social programs seems to be, as President Trump famously said, “an unbelievably complex subject. Nobody knew that [it] could be so complicated.”

That’s not precisely accurate. We are blessed with thousands of knowledgeable, caring individuals who do know how complicated it is.

Do you and I have (legally) or feel (morally) obligations to care for those beyond our family or community? To what extent do others have a "right" to expect such care?

Former Congressman Joe Walsh unambiguously put in his answer: "Health care is not a right. Housing is not a right. A job is not a right. College is not a right."

If healthcare is a product and housing is a privilege; if a majority believe, and act as if, the needy have no "rights," and we have no "obligations," that pretty much ends the discussion.

Where to find insight?

Religion? Jesus said, "Thou shalt love thy neighbor as thyself" and "Inasmuch as ye have done it unto one of the least of these my brethren, ye have done it unto me." The Bahai Universal House of Justice cites 16 major religions espousing the Golden Rule.

Founding documents? "We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness."

Virtually all the world's great religions, and nations, agree we have some obligations to fellow members of our species. And yet, Walsh speaks for many Americans.

That's somewhere between ironic and inexplicable, given more U.S. citizens say "religion is very important in their lives" than people elsewhere. How can we square denying healthcare with caring for "the least of these"?

Could it be our “representatives” have adopted their major donors’ belief that "my right to even bigger tax cuts trumps (so to speak) your right to come in out of the cold"?
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Nicholas Johnson is a former FCC commissioner and law professor who maintains the blog, FromDC2Iowa.blogspot.com. Contact: mailbox@nicholasjohnson.org

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Addendum: "Why Do So Many Christians Believe Lack of Effort is Cause of Poverty, or Jesus Would Oppose Government Social Programs?"

Since the publication of this column in the Gazette two categories of responses to my genuine puzzlement (how can our country be both the world's most religious, and so many believe that social programs are "not a right") have come to my attention. One is the disparity between the religious and non-religious regarding the cause of poverty (circumstances vs. lack of effort): Julie Zauzmer, "Christians Are more Than Twice as Likely to Blame a Person's Poverty on Lack of Effort," Washington Post, August 4, 2017 ("53 percent of white evangelical Protestants blamed lack of effort while 41 percent blamed circumstances, . . .. In contrast, . . . Americans who are atheist, agnostic or have no particular affiliation [31 percent blamed lack of effort while 65 percent] said difficult circumstances are more to blame when a person is poor . . ..")

The other came in the form of emails insisting I had misinterpreted Jesus' teachings. Advocating from a WWJD ("what would Jesus do") position, they seemed to be arguing that, (1) were Jesus around to state his case today, he would oppose, or at a minimum not encourage, government programs to help the poor. (2) All Jesus ever said was that individuals should care for "the least of these" -- something that many individuals and churches are doing.

I view this difference of interpretation as analogous to the "original intent" arguments around the "meaning" of the U.S. Constitution. The Constitution refers to an "army" and "navy" but makes no mention of an "air force." Yet no one I know of argues that the Air Force is unconstitutional. To the best of my memory the New Testament has little to say about governmental social programs for the needy -- the existence of such programs during Jesus' years, or even their proposal and rejection. If this was something beyond anyone's imagining at the time (even Jesus' imagining), one can't really fault him for a failure to advocate it.

Were Jesus around today he would probably be denied immigration status, and thus the issue would never arise. But if he was permitted to enter the U.S., it's not unreasonable to suspect -- given what he is credited with saying about caring for others, and the problems flowing from great wealth -- that he would adapt his role of activist to our culture, likely be a Bernie supporter, only be televised on Democracy Now!, and probably advocate for more (rather than less) taxpayer-funded programs for the poor.

# # #

Housing for the Wealthy Unemployment for the Poor

October 21, 2009, 6:15 a.m.

"It's the Unemployment, Stupid!
(brought to you by FromDC2Iowa.blogspot.com*)
Washington's corruption of our economic recovery efforts is painful, embarrassing and so obviously benefiting the rich while ignoring the poor and middle class that it's coming to be as depressing emotionally as it is economically.

Yesterday Tom Ashbrook's "On Point" program from WBUR offered one more example in, "The Housing Wild Card," October 20, 2009. Guests included Diana Olick, real estate correspondent for CNBC; Karl Case, Wellesley College professor of economics and co-author of the Case-Shiller Home Price Index; Thomas Lawler, housing economist and founder, Lawler Economic & Housing Consulting; and Mark Zandi, chief economist and co-founder of Moody’s Economy.com.

The show provided just one more example of corporate greed and a Congress favoring America's wealthiest -- and most generous campaign contributors.

Housing is where a lot of our current economics problems began. Remember?

It's like the story of the doctor who asks, "Have you ever had this before?" The patient nods, and the doctor provides the diagnosis: "Well, you've got it again."

We're about to get it again.

(1) While we took our eyes off of the Federal Reserve last March they went and put another $1.25 trillion into the housing market. ("To provide greater support to mortgage lending and housing markets, the [Federal Open Market] Committee decided today to increase the size of the Federal Reserve’s balance sheet further by purchasing up to an additional $750 billion of agency mortgage-backed securities, bringing its total purchases of these securities to up to $1.25 trillion this year . . ..") Press Release, Federal Reserve, March 18, 2009.

(2) Add to this the mortgage interest deduction that constitutes a $69 billion subsidy to help boost home sales -- a subsidy enjoyed by only 23% of taxpayers, and a disproportionate share of which goes to the wealthiest 1%, given that it applies to homes worth as much as $1 million.

Note that this means that Congress is willing to spend twice as much subsidizing housing for the wealthy as it's willing to spend on low income housing for the poor -- a program it says "we can't afford." Danilo Pelletiere, "Mortgage Interest Deduction," National Low Income Housing Coalition, May 6, 2009. ("In FY08, the Joint Committee on Taxation calculated the cost of the [MID] subsidy to be $67 billion. Though developments in housing markets may put downward pressure on the trend, the cost of the MID is expected to increase to as much as $112 billion by 2012.").

(3) Not satisfied with that largess, the housing profiteers got Congress to give them enough taxpayers' money to provide an $8000 cash subsidy to potential "first time buyers" -- some 355,000 individuals as it turned out who are sufficiently well-off to even contemplate buying a home at a time like this. It can fairly be assumed many of them would have bought homes without this additional $3 billion designed to further help the housing industry. Now the program is about to expire, so they're back with their hands out demanding it be extended, increased to a $15,000 subsidy per buyer, and opened to all (not just first-time) home buyers. And while most economists oppose the plan as folly at best and wasteful corruption at worst, the housing industry may well get its wish.

But where are all these houses coming from? Why, foreclosures, of course. So more of the unemployed, those facing bankruptcy because they've lost their health insurance, or those otherwise too financially strapped to pay their mortgages, will be out on the streets.

And how is this "housing program" going to help our recovery when 70% of the economy is driven by consumer spending? It won't, of course. But we will have wealthier real estate brokers and mortgage lenders, just as we have wealthier Wall Street bankers enjoying million-dollar bonuses as a result of our generosity.

The Wall Street Journal quotes Thomas Lawler's analysis as to why this level of subsidization is folly: "Of course, in the current environment home prices have . . . in most areas of the country, finally adjusted back down to more 'normal' levels . . .; the government is providing massive resources to ensure that mortgage rates remain low; and the biggest obstacle to a rebound . . . is the job outlook. The housing tax credit is an enormously inefficient use of government resources, and it does not really focus on what the economy needs: more job creation, and a return to “normal” growth of households." Nick Timiraos, "Weigh In: Should Congress Extend the First-Time Buyer Tax Credit?," Wall Street Journal, October 1, 2009.

New York Times columnist Bob Herbert agrees about the need for jobs:

[I]ncreasingly important is the idea of direct government job creation. The recession has absolutely crushed employment opportunities for unskilled, undereducated young people — not just in big cities and rural areas, but in suburban communities as well. Without direct government intervention, the recession is never going to end for them.

During the first half of this year in Illinois, to take one wretched example, just one in four black men in the age group of 20 through 24 had a job.

Nationally during that period, according to the Center for Labor Market Studies at Northeastern University in Boston, “the employment rate of males 16-19, 20-24, and 25-29 were at their lowest values over the past 61 years for which national employment data are available.” That’s for men of all ethnic groups.

“The past,” as William Faulkner told us, “is not dead. It’s not even past.” The lessons of the Works Progress Administration and the Civilian Conservation Corps of the 1930s are right in front of us, ready to be studied, analyzed, updated and applied to the present-day needs of the country.

Bob Herbert, "Igniting the Growth of Jobs," New York Times, October 10, 2009, p. A23.

It was a theme I'd advocated nearly a year ago when I urged a jobs program as the most efficient and effective "stimulus package." Nicholas Johnson, "Jobs, Not Unemployment, Key to Recovery; Why America Needs a Jobs Program: Because When Your Automobile (Industry) is in the River It Makes More Sense to Go For the Shore Than to Continue Bailing it Out," November 8, 2008.

My own view -- buttressed by [reports regarding] (1) the automobile industry (especially General Motors), (2) retail sales, and (3) unemployment -- is that the best interests of the business community, as well as the American people, will be served by providing public jobs programs, and economic support to the unemployed, rather than continuing to pour billions of dollars into failed and failing businesses. . . .

[A] major part of GM's problem is that laid-off GM workers, and the 10 million other unemployed Americans, don't have the money to buy anybody's cars right now . . ..

Enabling auto executives to have tens of billions of additional dollars to spend at their discretion in postponing bankruptcy doesn't strike me as a solution to anything . . ..

Another problem with Washington's willy-nilly giveaways, aside from the fact that they are unfair, don't work and will ultimately bankrupt our nation, is that they are irrational. . . .

[I]f Obama is looking for economic sectors to which to transfer taxpayers' money, wouldn't the one that represents "two-thirds of the nation's economic activity" make more sense in a recession/depression than bailing out the one that makes $30,000 new vehicles? . . .

Why We Need a Jobs Program

Look at the numbers. There are now over 10 million unemployed. Unemployment stands at 6.5 percent, and is projected to go to 8 percent next year -- 22 percent of whom have been out of work for more than six months, something we haven't seen for a quarter-century. The rates are increasing. Of the 1.2 million jobs lost this year 284,000 were in September and 240,000 in October. [These are, of course, the numbers from a year ago, when this blog entry was written.]

In the 1950s over 50 percent of the unemployed received benefits; today, because of various restrictions, only 32 percent qualify -- more unemployment, more holes in the safety net. . . .

[T]he answers seem, to me, rather obvious.

You can't improve business (profits, returns to shareholders, executive compensation) without improving retail sales; you can't improve retail sales without putting money in the hands, and confidence in the heads, of potential consumers; and unemployed consumers don't have money unless they are provided either unemployment compensation or wages from a public sector job (in an economy with a shrinking private sector). . . .

[E]ither makes more sense than trying to turn an economy around with "trickle down" -- whether tax cuts for the rich, or bailouts for the rich.

Nicholas Johnson, "Jobs, Not Unemployment, Key to Recovery; Why America Needs a Jobs Program: Because When Your Automobile (Industry) is in the River It Makes More Sense to Go For the Shore Than to Continue Bailing it Out," November 8, 2008.

Last July I wrote a blog entry about one American county that is using its money for a jobs program rather than further enriching its wealthy, "It's the Unemployment, Stupid! Perry County: If the Question is Economic Recovery The Answer is Jobs" July 29, 2009:

[If he was still in the wall poster business,] James Carville, the political consultant who once famously tried to keep presidential candidate Bill Clinton "on message" with the wall sign, "It's the economy, stupid!" . . . , I suspect his wall sign for President Obama might well be, "It's the unemployment, stupid!"

We did this in the 1930s and called it the "Works Progress Administration" and "Civilian Conservation Corps" -- the creations of which we are still enjoying to this day (for example, in our state parks).

Why are we not doing it today? Your guess is as good as mine. But my suspicion is that it has more to do with the big money corruption of our political system than with some new, Nobel-prize-winning insight into the mysteries of economic theory.

We may be Number 37 in the world in health care, but by golly we're Number 1 in greed and economic stupidity.
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* Why do I put this blog ID at the top of the entry, when you know full well what blog you're reading? Because there are a number of Internet sites that, for whatever reason, simply take the blog entries of others and reproduce them as their own without crediting the source. I don't mind the flattering attention, but would appreciate acknowledgment as the source, even if I have to embed it myself. -- Nicholas Johnson

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How To (And Not To) Grow Iowa's Economy

January 27, 2008, 11:30 a.m., 12:30 p.m.; January 28, 2008, 3:45 p.m.; January 30, 2008, 10:00 a.m.

"Our Quick Take on This Weekend's Stories
The Press-Citizen has a regular Sunday editorial page column called "Our Quick Take on Last Week's News Stories." Editorial, "Our View -- Our quick take on last week's news stories," Iowa City Press-Citizen, January 27, 2008, p. A9.

But its Saturday issue contained so many stories that relate to topics followed by this blog that I've decided we can have an "Our Quick Take on This Weekend's Stories."

The folly of corporate subsidies vs. the sure path to economic development.

We often comment about the folly of injecting taxpayers' money (in the form of tax breaks, TIFs, infrastructure development, and outright bribery) onto the bottom line of for-profit businesses -- sometimes in general, such as Nicholas Johnson, "Courage, Councillors," Iowa City Press-Citizen, October 3, 2007, and sometimes with specific examples, such as most recently, Nicholas Johnson, "Football, Skating and Corporate Welfare," January 25, 2008 (both Genencor and Burlington's sad mall experience with the disappearing developer).

So yesterday we learned that we must add a couple examples from North Liberty to the long list of disasters following in the wake of such giveaways. Kathryn Fiegen, "N. Liberty looking ahead after closings; Officials discuss what city can do," Iowa City Press-Citizen, January 26, 2008, p. A1.

A company called "Victor Plastics" has begun laying off its 420 workers, following Whirlpool's recent announcement that it is leaving North Liberty -- and its 92 local employees who will be left unemployed.

North Liberty Mayor Tom Salm "said he couldn't remember if any financial incentives were offered to Victor Plastics when it came to the community." However, "North Liberty officials offered Maytag [subsequently acquired by Whirlpool] incentives such as Tax Increment Financing [ a TIF], a tax abatement, construction of the water main and the etension of Jones Boulevard to 240th Street to locate in the community." So it's likely Victor Plastics was similarly bribed in some way.

It's scarcely one day later [Jan. 28] and already we have yet one more very sad story of the "tangled webs we weave" and the consequences of subsidizing for-profit enterprises with taxpayers' dollars: Lee Rood, "An Iowa town's 'gamble on future' stirs concern," Des Moines Register, January 28, 2008.

City Councils: "When will they every learn?"

. . . So how can we more effectively promote economic growth?

By providing the things that really do attract businesses -- as the linked blog entry, above, quotes a Genencor executive as stating its reasons for coming to Cedar Rapids, "because of its geographic location in the center of the country and its proximity to the fuel ethanol and corn sweetener manufacturing sector."

The Register editorializes this morning, Editorial, "Make Quality of Life Iowa's Edge," Des Moines Register, Des Moines Register, January 27, 2008, p. OP1. Certainly, that's a valid suggestion.

But much of quality of life, and the things that attracted Genencor, are attractions of geography over which we do not have total control.

A far more universal attraction is the well educated workforce that is dependent on things which we can control.

Iowa has well educated community college and university graduates. Unfortunately, because they leave the state after receiving that education, they don't constitute a workforce and therefore aren't much of an attraction for business. Kyle Carson, "Young Iowans Do the Math on Salaries -- and Leave; Commission Urges Higher-Ed Tax Credit and Help With Repaying Student Loans," Des Moines Register, January 27, 2008, p. OP1; "Commission Members Weigh In On Worker Shortage," Des Moines Register, January 27, 2008, p. OP6.

For a lawyer, Kyle Carson cuts to the core of the answer with an unusual economy of words: "So what should Iowa do? Pay them more."

And just how bad is it? Consider the recent report on "affordable housing":

The report said about 13 percent of people in the study area work in industries with entry-level wages of less than $15,000 annually, and another 40 percent work in industries with entry-level wages between $15,000 and $20,000. Almost 30 percent of all households in the study area have incomes less than $25,000.

The analysis determined that to afford a median-priced home in the area -- $162,000 -- a household income would have to earn about $53,150 and and not have much additional debt. The study said only 389 units were sold in 2006 that were valued at $100,000 or less, equaling about 15 percent of the total transactions that year.

Kathryn Fiegen, "Study warns of housing shortfall; Area prices outpacing incomes," Iowa City Press-Citizen, January 24, 2008. (The study, prepared by Mullin & Lonergan Associates, Pittsburgh, was described by Fiegen as a "127-page, data-intense report.) That report was the basis for a meeting reported in the paper on Saturday: Rob Daniel, "Summit: Housing policy needed; Lack of affordable housing reaching all area sectors," Iowa City Press-Citizen, January 26, 2008, p. A3.

And how can Iowa "pay them more"?

When was the last time you heard a boss say, "I'm feeling guilty about exploiting you guys with these low wages, seeing your kids go hungry, and without health care or new shoes, so starting next Monday everybody gets a 50% wage hike." It's not likely to happen.

A single person, out of work and desperately needing a job, is not in a very strong bargaining position when confronting a potential employer in front of him -- with 700 people standing in line behind that job applicant, all equally anxious to win one of five new job positions.

That's why they invented unions and "collective bargaining." "For the union makes us strong," is the old union song lyric; at least strong enough to get something more than the minimum wage for long hours at backbreaking work in unsafe working conditions.

Without unions professionals wages are driven down to those of skilled trades people; wages for skilled tradespeople that should be at union levels are driven down to those of unskilled labor; unskilled labor get paid what the working poor earn elsewhere -- and those in every pay category leave Iowa.

That being the case, I find it remarkable that neither Kyle Carson nor any other member of the Commission -- nor for that matter the Governor, members of the legislature, media, education leaders -- seem willing to mention, even as an "option," the possibility of Iowa becoming a little more labor union friendly. Nowhere in today's stories does the word "union" even appear.

In researching an op ed four years ago I discovered that Iowa was then 43rd of the 50 U.S. states in wages; that our State's anti-union "right to work" laws put us in a minority of states that included the solid South: Texas, Louisiana, Mississippi, Alabama, Georgia, Florida, North and South Carolina; that from 1950 until now, anti-union bashing has driven union membership nationally from 35 percent to 13 percent of the workforce, and even less in Iowa.

With corporate campaign contributions going to Democrats and Republicans alike, the disparity between the income of CEOs and hourly workers has gone from 42:1 in 1980 to 531:1 in 2000. Two million workers recently fired for the sake of profits and executive bonuses don’t even have that.

The Occupational Safety and Health Administration reports 70 percent of its investigations involve things management knew, or ought to have known, would cause serious injury or death. Nearly 6000 workers a year are killed, more than 5 million injured.

Even the most minimal efforts to help the working class and working poor are successfully resisted by Iowa businesses and their legislative representatives, most recently the "fair share" proposal (that those who get the benefits of union negotiations, while refusing to join the union, should at least pay their "fair share" of the costs for those union activities from which they personally enjoy increased wages and benefits). I could not get our local school board to support a "project labor agreement" for its new school construction projects. Nicholas Johnson, "Make School Projects Labor-Friendly," Iowa City Press-Citizen, May 15, 2003, p. A11 (with an appended list of sources). And see State29, "Viva La Slave Labor, Child Labor," January 26, 2008.

A mere three days later [Jan. 30] and we find the following in The Daily Iowan:

Union membership rates were down in Iowa and 29 other states in 2007, according to a recent report by the U.S. Bureau of Labor and Statistics.

. . .

[U]nion membership in Iowa is below the national average for a second-consecutive year.

Jennifer Sherer, a labor educator at the UI Labor Center, said . . .
"We're losing higher-paying jobs and gaining lower-paying jobs," . . ..

Sherer also attributed the low rates to employers who make it difficult for new unions to form by using threats and intimidation. The law protecting unionization has not been strongly enforced, she said.

"We need political changes to make it possible for people [to form new unions]," she said.

Ben Travers, "Union Membership Going Down in Iowa; Despite a Report Indicating That Union Membership is Up Across the Nation, the Percentage of Iowan Union Workers Continues to Drop," The Daily Iowan, January 30, 2008, p. A3.

Of course, Iowans and their governments have the political right to continue our anti-labor traditions and reputation. It's just that it's a little self-defeating and hypocritical to continue to do so while simultaneously complaining about the disappearance of the workforce needed to attract the businesses we think we need to promote genuine economic growth.

News From the West Bank

For many Iowans "The University of Iowa" is the athletic program (especially football and basketball) and/or "The Hospital" (UIHC) on the West side of the Iowa River.

And that's certainly where a lot of the news comes from.

And the lack of news. "No news is good news"? Well, not always. It's now over three months since an alleged sexual assault by alleged football players, and there's still not a peep from the University or the Johnson County Attorney as to what the hell's going on (or not).

Meanwhile, there have been enough Iowa football players in trouble with the law recently to make up a full team (11 or more). So we can be grateful (or not) that at least one more has gotten off light -- with the substitution of a "deferred judgment" and "probation" for a two-year prison term for theft -- essentially no penalty at all. (I simply don't know if that is ballpark-standard under these circumstances, or if the fact that this wide receiver "was ranked first in the country among freshmen in receptions and second in yards" played any role in the sentence.) Lee Hermiston, "Ex-Hawk Granted a Deferred Judgment," Iowa City Press-Citizen, January 26, 2008, p. A1.

. . . Build it and they will come -- and pay.

Nonetheless, our emphasis on athletics continues.

Former UI women's athletic director Christine Grant describes the Carver-Hawkeye Arena, built some 20 years ago at a cost of $18 million, as "one of the best in the country."

And yet UI Athletics Director Gary Barta, acknowledging that it's "still a great place" believes "we need to update" -- something women's basketball coach Lisa Bluder refers to as "a face lift."

The renovations he has in mind as an "update," and she calls "a face lift," are already projected to cost $40 million -- more than twice what it cost to build the entire structure initially -- costs Barta represents will be paid with "athletic gifts and earnings" thereby warranting his already having gone ahead with the hiring of a couple of architecture firms and having set a completion date of 2010.

And what will we get for our $40 million? A practice area, elevators, air conditioning, plus "premium seating, club seating rooms and renovating and expanding office space." Brian Morelli, "UI pushing forward with renovations," Iowa City Press-Citizen, January 26, 2008, p. A5; Brian Morelli, "Still a Hawk stronghold; 25 years in Carver-Hawkeye Arena," Iowa City Press-Citizen, January 26, 2008, p. A1

Far be it from me to suggest that the "scheduling" problems for practices could be resolved with the space available in the Field House, near-by recreation building, and additional facilities scheduled for construction on both the East and West side of the River. I don't know enough to document that.

But $40 million does sound like a pretty expensive "face lift."

Which is just one more reason why it might make sense to completely divest the athletic program/s from the University -- something that is already in progress with regard to their funding -- formalizing the independence that already exists once they are raising their own funds and making the decisions as to how to spend them. For a description of how that might work, see Nicholas Johnson, "Colleges and Universities" in "Athletics and Academics," September 30, 2006. That way, like any other business in "the marketplace," so long as their expenditures do not adversely affect others or otherwise violate the law there would be little basis for comments by others -- like this one.

And, Finally, What's Driving the Emphasis on School Safety?

As usual, Bob Patton's pictures on January 25 -- titled "Safety in Numbers-Crunching" -- are worth more than a blogger's many words (as in Nicholas Johnson, "The Limits of Duct Tape," January 9, 2008):


Copyright by Bob Patton and the Iowa City Press-Citizen, and reproduced here for non-commercial, educational and commentary "fair use" purposes only.

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