Check out Jeff Cornwall contra “entrepreneurial welfare” over at The Entrepreneurial Mind.
In 1936 Congress passed the Aid to Dependent Children Act to help widows stay home and raise their children. From 147,000 families on welfare in 1936 the number rose to five million by the 1994, the peak year. Ten years ago today, August 26, President Clinton signed into law the Welfare Reform Act. Last year the number of families receiving welfare had declined to 1.9 million. Contrary to the cries against the bill in 1996, which were numerous, the reform in welfare promoted in a bipartisan manner by President Clinton and the Congress, has generally proven successful.
Various measures of success can be applied to the question of welfare reform. Here are a few. 69% of single mothers are employed today, up from 62% in 1995. In 2000 the number employed actually reached 73%. Another measure of the success of the 1996 Welfare Reform Act is the poverty rate among children. In 1994 the poverty rate among children was 22%, today it is 18%, still much too high I am sure. At the same time there are some numbers that show that we still have a major problem. An average of 1.2 million single mothers a month, who live in homes where there was no wage earner and no Social Security, received no welfare in 2003, up from 700,000 in 1996. Many of these have disabilities, or mental-health and/or substance-abuse problems, reports the Wall Street Journal. (more…)
The Indiana Youth Institute will present the workshop “Raising Resources for Faith-Based Youth-Serving Organizations” from 9 a.m. to 3 p.m. Sept. 6 at the League for the Blind and Disabled, 5821 S. Anthony Blvd., Fort Wayne, IN 46816.
The workshop will feature Karen Woods, director of the Center for Effective Compassion, which is a part of the Acton Institute for the Study of Religion and Liberty. Cost of the program is $20; to apply for the session, call 1-800-343-7060 or go to their website.
Anthony Bradley, a research fellow for the Acton Institute, looks back on the effects of the welfare reform of 1996. Many people criticized this legislation as it was being passed and predicted that the result would be increased poverty. However, the results of the legislation have been overwhelmingly positive.
Poverty, especially amongst single mothers, has declined significantly. Employment among people formerly claiming welfare has increased dramatically. The number of welfare cases has dropped from 4.3 to 1.89 million — that’s more than 50% fewer cases — and poverty has decreased as well! These results cannot be only attributed to economic factors (although a good economy obviously helps poverty). As Mr. Bradley puts it: “When our society provides incentives encouraging work, marriage, family, and accountability—which are central to human dignity—we see people thought to be helpless rise to the occasion.”
We’re working through the meaning of the tenth anniversary of welfare reform, debating important ‘next phase’ issues like marriage and fatherhood and what those mean to helping people leave poverty…permanently. That debate about government’s appropriate role in addressing social need is important. At least equally important is the work or private citizens at the local level, ‘on the street’–figuratively and literally.
A Way Out Victim Assistance, a program of Citizens for Community Values of Memphis run by George Kuykendall and Carol Wiley, is designed “to assist any woman, regardless of race or religious preference, who desires to leave her profession in the sex for sale industry, namely topless dancers and prostitutes, to permanently escape the industry and re-enter society and the work force with a value system that promotes a healthy lifestyle physically, mentally, emotionally and spiritually.”
NPR’s program Marketplace posted an interview on Tuesday about this same great program (audio here): “Citizens for Community Values started as an anti-pornography organization in 1992 and began ministering to strippers three years later. Now it helps all sex workers leave the business. Carol and George get referrals. Sometimes the girls call them directly. And sometimes they drive right up to a hooker on the street and hand her a business card, which is dangerous. Both for them and for her.”
Local help on the street truly can make a life-changing difference for another human being.
“I’ve got a bunch of government checks at my door / Each morning I try to send them back / But they only send me more.”
–Nelly Furtado, “Hey Man,” Whoa, Nelly! (Dreamworks, 2000).
Here’s a question maybe our own Karen Woods can address: Does the second phase of welfare reform make it harder for people to get off welfare for good?
That seems to be the implication of this article in today’s WaPo, “Welfare Changes A Burden To States,” by Amy Goldstein.
Having grown up on welfare, Rochelle Riordan had vowed never to ask for a government handout. That was before her hard-drinking husband kicked her and their young daughter out of their house near Lewiston, Maine, leaving her with a $300 bank account, a bad job market and a 15-year-old car held together in spots with duct tape.
Maine’s welfare agency, she heard, was offering help for poor parents to go to college full time. With the state paying for day care and $513 a month in living expenses, Riordan, 37, has been on the dean’s list every semester at the University of Southern Maine, expecting to graduate and start a social work career next spring. But this summer, her plans — and Maine’s Parents as Scholars program — suddenly are on shaky ground; under new federal rules, studying for a bachelor’s degree no longer counts by itself as an acceptable way for people on welfare to spend their time.
A decade after the government set out to transform the nation’s welfare system, the limits on college are part of a controversial second phase of welfare reform that is beginning to ripple across the country. The new rules, written by Congress and the Bush administration, require states to focus intensely on making more poor people work, while discouraging other activities that might help untangle their lives.
In this Beliefnet interview conducted by Charlotte Allen, conservative firebrand Ann Coulter references the work of Acton senior fellow Marvin Olasky:
Is it possible to be a good Christian and sincerely believe, as Jim Wallis does, that a bigger welfare state and higher taxes to fund it is the best way in a complex modern society for us to fulfill our Gospel obligation to help the poor?
It’s possible, but not likely. Confiscatory taxation enforced by threat of imprisonment is “stealing,” a practice strongly frowned upon by our Creator. If all Christians and Jews tithed their income as the Bible commands, every poor person would be cared for, every naked person clothed and every hungry person fed. Read Marvin Olasky’s “The Tragedy Of American Compassion” for further discussion of this.
Very often Coulter comes off sounding crazy, and her rhetoric would certainly be more at home in the sixteenth rather than the twenty-first century. Even so, I found this interview eye-opening on a number of levels, and in her answer to this question she makes a lot of sense. Ron Sider makes the same point about tithing a number of times in his recent book, The Scandal Of The Evangelical Conscience.
Also, Rod Dreher doesn’t approve of Coulter’s “schtick”.
At least, the title of this post is typical of the mantra against the practices of drug pharmaceutical companies, according to Peter W. Huber’s “Of Pills and Profits: In Defense of Big Pharma,” in Commentary magazine (HT: Arts & Letters Daily).
Huber, a senior fellow of the Manhattan Institute, summarizes in brief the anti-drug company argument, and then goes on to examine what truth there is in such claims. He says of the difference between creating and administering drugs, “Getting drug policy right depends mainly on getting that difference straight—the difference, that is, between ministering to the sick and making medicines—and grasping its implications from the start. Big Pharma’s critics do not even try.”
He goes on:
Pricing is indeed the key. Whether the first pill typically costs $100 million or $1 billion to develop, replicating it costs less—a thousand times less, or perhaps a million times less. This slope—precipice, really—is far steeper than most of the other hills and valleys of economic life. It complicates things immeasurably. It also largely explains the gulf between the industry’s perception of reality and that of the critics.
Huber gives some explanation of the function of the price mechanism in pharmaceutical markets, and says, “Economists have established—as rigorously as things ever get established by the dismal science—that there is no efficient price, no ‘right’ price. Any scheme is, from one perspective or another, inefficient, unreasonable, or worse.” He argues that the high prices for boutique drugs like Viagra in the developed world help fund the provision of desperately needed drugs in the developing world. This is the situation created by so-called “price discrimination”.
The situation he says, is similar to that of airline travel: “Business travelers get soaked, college students fly almost for free, and the jumble of prices in between drives most people nuts. But the planes are packed full, and that drives the average price of a ticket way down. The rich fly, and the much less rich fly, too.” There is, I would think, a similar model at play in the work of plastic surgeons who charge Hollywood millionaires huge sums to do face lifts and tummy tucks, and then use a portion of the money they make doing that to do pro bono work for burn victims and deformed children.
The complexity of the pricing situation is what critiques of drug companies tend to ignore. Concludes Huber, “This kind of behavior is not aberrant or anomalous—it is an inevitable and essential part of groping toward the right price where there is no right at the end of the tunnel. Somehow or other, the average price of the pill has to end up high enough to pay off the up-front cost.”
If Huber’s analysis is correct, it is interesting to see how a nonprofit drug company, like the one profiled in today’s New York Times article, “A Small Charity Takes Lead in Fighting a Disease,” fits into the picture. The NYT article itself exemplifies many of the criticisms against pharmaceuticals that Huber summarizes.
Huber points to the vagaries of government regulation and private insurance, which greatly affect the drug market. One explanation for the situation that a nonprofit drug company like OneWorld Health attempts to address is that “big drug companies shun some drugs and embrace others because, collectively, the FDA, doctors, patients, insurers, and juries push costs higher, and prices lower, on some categories of drugs and not on others, to the point where some make economic sense and some do not.”
Indeed, OneWorld Health is working with a drug for black fever that, according to the NYT, administered “a series of cheap injections was identified decades ago but then died in the research pipeline because there was no profit in it.” There is, effectively, a partnership at play between for profit and nonprofit drug companies. OneWorld Health didn’t develop the drug in the first place, but on that point is dependent on the work of for profits.
Universities and small biotechs license their innovations to Big Pharma because they lack the capital, scale, and expertise required for mass manufacturing, because they wouldn’t know how to sell the same drug five times in succession (to the FDA, doctors, patients, insurers, and juries), and because a vast and swampy system separates pharmaceutical innovation from the treatment of real patients at prices that will cover cost and earn a profit. The little guys just don’t have what it takes to finish the job.
But OneWorld Health, in the case of the drug mentioned above (paromomycin), “has conducted the medical trials needed to prove that the drug is safe and effective. Now it is on the verge of getting final approval from the Indian government. A course of treatment with the drug is expected to cost just $10, and experts say it could virtually eliminate the disease. If approval is granted as expected this fall, it will be the first time a charity has succeeded in ushering a drug to market.”
Huber concludes that in the future “we will fare better, much better, if we streamline regulation, curb litigation, and unleash prices to make vaccines as alluring to Big Pharma as Viagra and Vaniqa.” But in the meantime, it may be that efforts like OneWorld Health can help at least some of those who fall through the cracks. Says Dr. Ahvie Herskowitz, one of the backers of OneWorld Health, “We fill a gap pharma companies cannot because they have to make a profit.”
And on the biggest obstacle to getting vaccines and drugs like paromomycin to those who need it, for profit and nonprofit drug companies seem to agree: “The government will be the biggest challenge,” says Dr. C. P. Thakur, a former Indian health minister who oversaw a OneWorld Health trial of paromomycin.
No, we’re not talking about Elmore James’ Blues hit covered by the likes of George Thorogood, Fleetwood Mac and The Black Crowes nor its racy subject matter.
Rather, it’s how members of the other oldest profession in Kenya and Tanzania power the irrigation pumps that extend both their growing season and range of crops. This foot-powered move beyond subsistence farming to much more profitable harvests, such as vegetables, is facilitated by the aptly named MoneyMaker series of pumps.
KickStart (previously Approtec) 10 years ago produced the Original MoneyMaker Pump; the over 4,000 in operation still generating $3.9 million in profits annually. Since then the Super MoneyMaker Pressure Pump, resembling and operated much like a Stairmaster, can push water uphill 7 M (23 ft.) to irrigate 2 acres. The newest – and most affordable – version, The MoneyMaker Plus Pump relies on swinging one’s hips side to side on a skateboard-like platform, a motion that, unlike arm-powered pumps in particular, can be performed all day. Costing $34, KickStart officals claim it generates $1000 in profits the first year.
Though even this amount can be out of the reach of the world’s poorest, KickStart co-founder Martin Fisher, insists on a business model. Along with enriching “farmerpreneurs”, Kickstar has created a private supply chain though hundred of farming supply shops that sell the pumps and spare parts. Undercutting these local merchants and removing their incentive to stock parts would be one of the serious disadvantages of giving away the pumps.
Beyond the pragmatic concerns, their ultimate goal is to “create dignity,” Fisher said on NPR’s Weekend Edition. He concluded, “When you give things away, you are really just creating dependency and people hanging out waiting for more handouts.”
An article in today’s New York Times, “Push for New Tactics as War on Malaria Falters,” coincides nicely with Acton’s newest ad campaign (see the back cover of the July 1 issue of World). The article attacks government mismanagement of allocated funds in the global fight against malaria. Celia Dugger, the author, writes:
Only 1 percent of the [United States Agency for International Development's] 2004 malaria budget went for medicines, 1 percent for insecticides and 6 percent for mosquito nets. The rest was spent on research, education, evaluation, administration and other costs.
The game is now changing, however. The White House has initaited new campaigns, boosting allocation for medicines, insecticides, and mosquito nets to over 40% of the agency’s total malaria budget. The new government push is also raising awareness among private donors, including the Bill and Melinda Gates Foundation.
Acton has begun a media campaign to raise awareness of available and economically sound solutions to the malaria epidemic. Among possible solutions is the indoor residual spraying of insecticides, including DDT (proven to be highly effective and safe in South Africa), distribution of treated mosquito nets, distribution of medication, and educational programs that explain where malaria comes from and how to avoid it.