Institute Notes: A Dialogue on Overcoming Hunger and Poverty

Food Stamp Nation

A lot of news lately about the Food Stamp Program. Let’s start with today’s story in the New York Times pointing out the Congressional Budget Office (CBO) expects 2008 to register the highest amount of food stamp usage since the program was established in the 1960s. “Driven by a painful mix of layoffs and rising food and fuel prices, the number of Americans receiving food stamps is projected to reach 28 million in the coming year,” the Times article reports.

Most states can’t keep up with rising demand for food stamps. One in six residents of West Virginia are now getting food stamp benefits. In Michigan, it’s one in eight. In New York, one in ten. Arizona, Maryland, Nevada, and North Dakota all experienced a 10-percent rise in food stamp usage in the last year. In Oklahoma, one out of three children were eligible for food stamps at some point during the last year.

A two-generation approach to economic mobility

Economic mobility makes for a great story. Allow me to share a little bit of my own family background to illustrate this point. My dad graduated high school and joined the Navy during World War II. Afterwards, he did not go to college but took advantage of the GI Bill to study a trade, carpentry. After meeting my mom, they left New York City and bought a house on Long Island (not far from the actual Levitown), where they raised a family that included my brother and me. Through hard work, savings and the good fortune of being a member of a union, he was able to provide for all of us and send my brother and me to college. Here I am now, sitting behind this desk, writing this blog once a week, helping Bread for the World Institute work to end hunger. Not all that uncommon an example of the American Dream at work.

Ah, that golden age of economic mobility, some readers may be saying—if ever it could be that way again. My response: Why can’t it? This question, “Why can’t it be that way again?” has been eating at me ever since I left a discussion at the Brooking Institution last week on economic mobility in America.

Time to Reinvent the Wheel?

In a recent article in the Foreign Service Journal (“Don't Reinvent the Foreign Assistance Wheel;” FSJ, March 2008), Gordon Adams, professor of international relations at American University and former OMB associate director, lays out the case for continuing with the “F Process” (shorthand for the transformational diplomacy initiative of the current administration), maintaining that, “The F process is half a loaf, and only half-baked at that,” but was still an important first step toward meshing U.S. foreign assistance spending with our strategic goals. He argues that in order to preserve civilian control of foreign assistance, the government needs to revise and reinforce this initiative. In his view, a separate, cabinet-level Department for Development would isolate development from its political support and confound the current problems of coordination and consistency.

As Adams notes, the F process does have some positive features:  It has made planning and budgeting more transparent, and forced a greater degree of strategic program integration in foreign assistance. However, his assessment is flawed by some fundamental misconceptions: 

Obama and Race

We should all be thankful to Barack Obama for the thoughtful speech he gave two days ago. It seems about time Americans started having a frank discussion about race, and I can’t imagine who else is going to be the catalyst for this right now.

I hope the speech will provoke a deeper discussion about race in this country. I realize however this could make many people uncomfortable, both white and black, so I’m not holding out a lot of hope. But the opportunity is here for us now, and it would be a shame to let it pass.

Race relations are an ever unfolding saga in the United States. So many past chapters are painful and ugly. For that reason, few presidents or presidential candidates have been willing to address race overtly. Obama’s candidacy and this conversation he has initiated suggests some real national healing could occur, and that’s why I think it would be a shame if our squeamishness forces us to clam up.

Hayekian Insights on Economic Development

On Wednesday the CATO Institute hosted an event on Hayekian Insights on Economic Development. The presenters’ were the well known economic development expert William Easterly and Arvind Subramanian. Drawing insights from Nobel Prize winning Economist Friedrich Hayak’s work, the two presented differing views on paths to economic development. Easterly and Subramanian focused the majority of their remarks on the clarifying the nature and role of government in economic development.

Easterly’s work is widely known and his discussion at CATO followed his recent writings (in the White Man’s Burden for example). He reiterated his opposition to the role of governments in seeking to direct economic development and in providing foreign assistance. He spoke in favor of decentralized decision-making to discover what works best in the market and in public policy; and the need to rely on dispersed and local knowledge, rather than government planning, for poor countries to achieve growth. Drawing from Hayak’s view of free market, Easterly highlighted the helpful observation that there is no secret to development and attempts to locate a secret to development will remain fruitless. Freedom (to act, to explore, to fail) was the watchword of his remarks.   

Remittances and Development

The World Bank released a new report today, Migration and Remittances Factbook 2008. Attending the book launch today two interesting facts emerged. The first is that Mexico is among the largest, but notably not the largest, recipient of remittances. That honor falls to India which the World Bank estimated received $27 billion in remittances in 2007. At $25 billion in returns from abroad, Mexico also falls behind China ($25.7 billion) and just ahead of the Phillipines ($17 billion). In total, the Bank counts a total of $240 billion in remittances flowing to developed countries. This is more than double the $104.4 billion in official development assistance flowing from OECD countries.

The second interesting fact has to do with the size and scale of migration. While debates in the United States tend to consider only the issue of south-north migration (and specifically migration from Mexico and Central American countries to the United States), it is clear that this is only one aspect of migration flows. There is also a lot of south-south migration. As Uri Dadush noted, in Sub-Saharan Africa 70 percent of migration is between SSA countries. This kind of migration was highlighted recently by NY Times reporter Jason DeParle (who also was a panelist at the book launch) in an article entitled A Global Trek from Poor Nations to Poorer Ones.

As Dadush noted at the beginning of the session, the work of Dilip Ratha, helped the Bank to recognize the importance of remittances, and the World Bank is beginning to think more systematically about migration and its role in development. Much more remains to be done in this area. For example, how are remittance dollars used (for personal consumption versus the acquisition of productive assets for example). What is the impact of remittances on health, nutrition, education, poverty alleviation, etc. Then there are broader questions about migration that are worth examining as well. How does migration impact sending communities for example? 

Ratha is the lead author of the report. He is also an Indian migrant and contributor of remittances back home. He was featured in this recent NY Times piece.

Is inequality making us sick?

The United States spends more on health care than any other industrialized nation and yet ranks 30th in the world in life expectancy and 31st in infant mortality. How do other countries manage to do better and spend less? Policies that mitigate inequality are the key, starting with universal access to health care.

When we talk about our dysfunctional health care system, we tend to fix on access issues. But lack of aspirin is not the reason people get headaches. For sure, access is a big, big problem, but dig deeper to the root of the health disparities in our society and you’ll find a lot of other issues clustered there.

The social determinants of health are the subject of an upcoming PBS documentary, Unnatural Causes: Is Inequality Making Us Sick? I had a chance to view the first episode in this four-part series that begins airing next week. I highly recommend it. The screening of Unnatural Causes that I attended was hosted by the Joint Center for Political and Economic Studies. One of the nice things about living in Washington is there are countless events like this. It makes up for the many other liabilities.

GDP and Ordinary People

An interesting segment about GDP and whether it means much at all aired this morning on Market Place, the NPR show about business and the economy. To cut to the chase, GDP doesn't tell ordinary people  much about their own economic conditions. Martin Collier of the Glaser Foundation has the best line. "You get what you measure." What you get, I take to mean, is the kind of society you have.

I have some ideas about what should be measured and discussed at least as often as GDP. Job quality, for example. Millions of people have jobs that don’t pay enough to live on and don’t provide the benefits that all jobs should, basic benefits like health insurance, paid sick leave, vacation pay, and overtime pay. And those are for starters.

In a follow-on commentary to the segment on GDP, Will Wilkinson of the Cato Institute talked about the relationship between wealth and happiness. "According to a 2006 Pew Research Center survey," said Wilkinson, "Americans making over $100,000 a year were more than twice as a likely to say they are "very happy" than those making under $30,000." Well, duh man.

People in low-wage jobs have other reasons to be unhappy about their situations besides the pay. Everything that can be summed up in a word, dignity. The less you make, the more marginalized you are. The more marginalized, the less power you have over your fate.

I work in an office building in downtown Washington, DC. The people who clean the offices here don’t make a lot of money, as you might guess. Recently some of them were forced to take a pay cut when management of the building's cleaning services was changed. Some of the workers have been doing their jobs for years. Do those years of experience make a shred of difference if they leave this employer to find a job with another clearning service? Whether they stay with the new boss or move on to somewhere else, years of hard work and dedication won't count for much when negotiating with a new employer.

The DOD and Agricultural Development

An interesting story aired yesterday on Morning Edition. The piece described efforts to promote agricultural development among Afghan farmers (about 70 percent of the population lives in rural areas in the country). After more than two decade of conflict and civil unrest, the country is extremely impoverished:

• Has experienced very little increase in agricultural output (omitting poppy production, agricultural output has increased by .4 percent annually 2000-2005);
• Is a major recipient of WFP food aid (the agency plans to assist 1.41 million people this year);
• And consistently ranks among the bottom for basic human development indicators such as child and maternal mortality (257 deaths per thousand and 1,900 per 100,000 respectively). (Unfortunately, little data is available for many other important indicators such as as percentage of the population living in extreme poverty or suffering from hunger).

Noting the importance of agriculture for the livelihoods of many poor Afghans, the story and suggested that the lack of functioning agriculture markets in the country have contributed to the steep rise in poppy production. Getting agricultural development working is clearly an important strategy to help improve the lives and livelihoods for Afghans.

What was interesting about the piece was not the focus on agriculture, but the group charged with providing this support: the Department of Defense.