Warren and the MIddle Class

29 thoughts on “Warren and the MIddle Class

  1. The Boston Globe likens a Warren-Brown election choice to the Weld-Kerry election. I don’t think so. She’s never run for office.
    Also, the recent history of female candidates for governor in Massachusetts is miserable: Shannon O’Brien, Jane Swift, Kerry Healey, Martha Coakley.

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  2. I am totally in love with Elizabeth Warren, which probably means she will never win. But her points about taxes and the rich are well-taken. I know it’s a cliche, but apparently it needs to be repeated to people who think Ayn Rand is kewl: we’re all in this together. We have a better economy when money is shared a little. We have a worse economy when a few people hog all the money. And if I hear one more thing about the rich being fucking job creators, I might … ok, use the word “fuck” more often.
    We have a real problem when we cut government jobs because it’s somehow economically unfeasible, but instead we end up paying either for corporations not to hire people or to pay people barely subsistence level wages, or for these people to go on welfare. How does that help? If we’d kept the frickin’ government jobs to begin with, these people would have more money to spend and would thus create demand for products and services, and then other people would have jobs, too.
    And if you want to be horrified and cancel your Amazon Prime membership (I am seriously close to doing so, and I *live* by Amazon Prime), then read this: http://www.mcall.com/news/local/mc-allentown-amazon-complaints-20110917,0,7937001,full.story
    What especially gets me is that Amazon hires people as temps so that they can save money. And the way unions and workers’ rights have been weakened, they don’t have the power to demand living wages. The right thing would be for “our Galtian overlords,” as Atrios calls them, to think less of how badly they need $200K *at least* to feed their kids and more about how to sustain a community, but apparently it’s not “in” in America any more to give a flying fuck about anyone else.
    As you can tell, I am so fucking annoyed, and if Elizabeth Warren feels only half of what I feel and shows only 1/10th of the rage I feel as she campaigns, she has got to be superhuman enough to survive 6 years in the Senate.

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  3. She’s good. She has that down-to-earth, folksy demeanor that most politicians try but fail miserably at yet from her it seems sincere. I have no idea if she has a chance but it would be a nice change to have a Wellstone-type person back in the Senate.

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  4. “What especially gets me is that Amazon hires people as temps so that they can save money. And the way unions and workers’ rights have been weakened, they don’t have the power to demand living wages.”
    And unions hire low-wage workers to picket for them.
    I think Warren’s heart is in the right place, and her personal finance book “All Your Worth” is not bad at all (it has an interesting 50-30-20 budget, where at most 50 of budget goes to unavoidable expenses, 30 percent goes to wants, and 20 percent goes to savings). She’s also very interesting on the subject of how the two-income family enables a housing-and-schools arms race. However, as Megan McArdle explains in brain-numbing detail here:
    http://www.theatlantic.com/business/archive/2010/07/considering-elizabeth-warren-the-scholar/60211/
    you really cannot trust Elizabeth Warren on numbers. For one thing, according to Warren, a bankruptcy filing with $1k in medical debt is a medical bankruptcy. Warren is very earnest and I’m sure she means well, but you have to watch her very carefully.

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  5. Hey Amy, isn’t it true that Warren claims medical bankruptcies for situations where loss of income is caused by health problems? I’m reading your statement as implying a bankruptcy should only be considered medically-related if it involved large unpaid medical bills. (This would, for example, rule out a construction worker who hurts his/her back and needs no surgery, yet can’t continue with their former profession.)

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  6. “how the two-income family enables a housing-and-schools arms race”
    I wish Elizabeth Warren would get together with Linda Hirschhorn and fight it out. My wife works because she wants to work. Of course, a good chunk of her salary gets chewed up in paying an array of babysitters, housekeepers, tutors, delivery men, decorators, contractors etc. to do things she might otherwise do–and of course a huge chunk gets chewed up in income taxes–but that’s a choice. She doesn’t need to be saved by some patronizing Harvard professor.

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  7. “a construction worker who hurts his/her back and needs no surgery, yet can’t continue with their former profession.”
    But Warren implied that health care reform would reduce “medical” bankruptcies. Obviously this hypothetical construction worker will not be helped at all by health care reform.

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  8. Obviously this hypothetical construction worker will not be helped at all by health care reform.
    Is this true? Today’s uninsured construction worker would be impacted in the same way by an injury, the only difference would be who foots the hospital bills? I find this hard to believe, personally … isn’t it true that people forego care until it becomes a crisis if they’re concerned about payment?

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  9. However, as Megan McArdle explains in brain-numbing detail here:
    On any dispute between McMegan, queen of intellectual dishonesty, and Elizabeth Warren, my money is on the Harvard professor.
    Actually, I apply the same rule to disputes between McMegan and my garden gnome, but in this case discounting McMegan is even more compelling.

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  10. “On any dispute between McMegan, queen of intellectual dishonesty, and Elizabeth Warren, my money is on the Harvard professor.”
    There’s a technical term for what you’re doing: the argument from authority. Wikipedia says, “Although certain classes of argument from authority do on occasion constitute strong inductive arguments, arguments from authority are commonly used in a fallacious manner.”
    http://en.wikipedia.org/wiki/Argument_from_authority
    “Hey Amy, isn’t it true that Warren claims medical bankruptcies for situations where loss of income is caused by health problems? I’m reading your statement as implying a bankruptcy should only be considered medically-related if it involved large unpaid medical bills.”
    I listen to a lot of personal finance radio, and I’ve never heard the situation you describe–guy neglects health due to being uninsured, then goes into bankruptcy because he can’t work. And a lot of very similarly situated guys are calling in, it’s just that somehow that’s never the problem.

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  11. It’s not really an argument from authority as it is an argument from the lack of authority. I mean, how many times does MM have to be wrong about stuff before we’re allowed to stop taking her seriously?

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  12. Statistically, being wrong more often than you’d expect from chance is just as predictive as being right more often than you’d expect from chance. Multiplication by -1 is about as easy as it get for variable transformations. You need to show that MM is wrong exactly as often as a random number generator before you aren’t arguing from authority.

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  13. “Hey Amy, isn’t it true that Warren claims medical bankruptcies for situations where loss of income is caused by health problems? I’m reading your statement as implying a bankruptcy should only be considered medically-related if it involved large unpaid medical bills.”
    On second thought, I think the reason the hypothetical situation sounds so improbable is that if you are sick and uninsured, it is as easy as falling off a log to wind up with medical bills in the $5k-$30k range, so $1k as a cut-off is kind of weird.
    Also, judging from what I’ve heard, people tend to be pretty aware of the fact that medical debt is dischargable in bankruptcy, so it’s a much less scary form of debt than say, student loans, IRS liens or child support. So I think that there’s going to be relatively less anxiety about contracting medical debt, and hence our construction worker is probably not afraid of spending the rest of his life paying medical bills. And the worse financial shape he is in (i.e. the closer he is already to bankruptcy), the less he is going to worry about running the numbers up a bit. An additional wrinkle on this is that a lot of construction companies have the life span of fruit flies, so construction workers might well be unusually savvy about the bankruptcy system.

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  14. There’s a technical term for what you’re doing: the argument from authority. Wikipedia says, “Although certain classes of argument from authority do on occasion constitute strong inductive arguments, arguments from authority are commonly used in a fallacious manner.”
    Even if I was doing that with McMegan and Warren (which I wasn’t, as McMegan has a long history of intellectual dishonesty and Warren doesn’t), you still don’t address why I should take McMegan’s statements more seriously than those of my gnome.

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  15. “McMegan has a long history of intellectual dishonesty and Warren doesn’t”
    My perception is that McMegan has a history of sloppiness and occasional stubbornness, but nothing I would call intellectual dishonesty. In any case, ad hominem arguments like this are much less persuasive than actual engagement on the merits.
    Reading and considering McMegan’s points on the merits, she makes a pretty good prima facie case. If someone has a response on the merits, rather than an attack of McMegan’s character, that would be interesting.
    Also, it’s not allowed to bring up hypotheticals not mentioned by Warren, such as the person who might not have sought preventive care because he or she lacked health insurance, and now has a serious injury causing financial distress. There may be such people, but Warren’s measurement methodology isn’t designed to find them.

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  16. My perception is that McMegan has a history of sloppiness and occasional stubbornness, but nothing I would call intellectual dishonesty.
    Making sloppy arguments and stubbornly defending them is the very essence of intellectual dishonesty.

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  17. re: Megan. Knock it off. It takes a lot of courage to put your shit up on the web everyday and invite criticism. You can disagree with her, but no character assassinations allowed. Besides, this post is about Warren.
    Every statistic, not just ones coming from Warren, show that the middle class is much worse off than it was in the 1970s. Individuals in Washington seem to be more concerned with lining their own pockets, than dealing with that huge mess. (Didn’t Palin just make the same point last week?) Middle class families are struggling in part because of 2 income families. That doesn’t mean families like yours Y81, which could survive on 1 income and has enough income to pay for tutors and such. It means the school teacher/middle manager family, which are barely getting by on 2 incomes. The standard of living has increased, but salaries have gone done. Women are working not because of Hirshman-type of job satisfaction, but because they HAVE to in order to live in a town with a good enough school system.

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  18. It’s certainly possible (even likely, actually), that medical debt may have been converted into credit card debt or a home equity loan or a payday loan. However, you’d want to ask the questions that would elucidate how many people had done that.

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  19. Here’s a post going through some problems with McArdle’s criticism of Warren’s work. The biggie, in context, is that in the study being discussed Warren was explicitly talking about bankruptcies to which medical expenses had contributed, rather than something like bankruptcies that certainly would not have happened in the absence of medical expenses. McArdle’s criticism comes down to an assertion that not all of the bankruptcies identified were caused by medical expenses, leaving her refuting a claim not made by Warren.

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  20. And to those objecting to personal abuse of McArdle: you’re right, everyone should be polite about these things, it’s much easier to be clear about the issues when no one gets personal.
    It would be nice if McArdle abided by the same standards toward her targets. This, from the linked post: “Her [Warren’s] work gets so much attention because it comes from a Harvard professor. And this isn’t Harvard caliber material–not even Harvard undergraduate.” That sort of Olympian disdain toward Warren certainly isn’t justified by McArdle’s work as an economist, and would be out of place from anyone.

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  21. “Every statistic, not just ones coming from Warren, show that the middle class is much worse off than it was in the 1970s.”
    Now there, we totally agree. But that doesn’t mean that working women–even the waitresses and secretaries–are helpless victims of a heartless economic system. It seems much more plausible to me that most of them prefer working outside the home, and having a second car, a flat screen TV, and a bigger house than their parents had, to the lives their mothers or grandmothers led. Because nobody is stopping anyone from getting rid of the items I mention, and spending her days darning socks, washing clothes in the coin-op (or sometimes in the kitchen with a mangle and drying rack), cooking every meal from scratch, and doing all the things my mother did. Admittedly, even if you do that, you still have to pay today’s high property taxes, but somehow I doubt that reducing property taxes is on Prof. Warren’s list.

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  22. Gee, it’s not like certain things like durable goods have dropped in prices in the past 30 years, while other, arguably more important things (education, healthcare) have skyrocketed, and services that used to be free are now crumbling or privatizing (roads, libraries, police & fire departments). The problem with poor people is they won’t darn 50 cent socks, not that a trip to the emergency room will set you back $12,000, or that kids are getting shot in public schools and private school is 10k a year and a 2 hour bus ride away, or that the potholes on your street knocked your car out of alignment and you can’t afford to get it fixed. I mean, when we live in a country where people still die of toothaches, the biggest problem we face is that everyone wants a flat screen TV and a second car and just won’t sock their money away in a savings account. (Oh wait…didn’t our grandparents’ savings accounts have a fixed interest rate of 5%, which the banks lobbied to do away with? Aren’t interest rates now on savings accounts less than 1%, which means you lose money with inflation if you put it in a savings account?)

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  23. http://www.theatlantic.com/business/archive/2011/09/welcome-to-middle-class-poverty-does-anybody-know-the-way-out/245447/
    This article is apropos of the topic.
    Relatedly, my sister knows a freelance journalist who will die of breast cancer. If she had health insurance, she could get probably life saving treatment, but since she doesn’t, she has to take what free treatments she can get (not cutting edge or timely), or find a practice or clinic willing to treat her knowing she cannot pay off the treatments or a bank willing to loan her the money knowing she will never pay it back, over the course of several months if not several years. Although her cancer is at a stage where, theoretically, it is treatable, it is not for her and she is going to die of breast cancer. She is middle class and college educated, and will die of a treatable illness in an industrialized nation.

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  24. It’s not really an disagreement from power as it is an disagreement from the deficit of power. I mean, how many periods does MM have to be incorrect about products before we’re permitted to quit getting her seriously?

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