On this 990th Easter Sunday, let us take to heart Christ's teaching on poverty and wealth. His messages, often veiled in the form of parables, are crystal clear on this subject:
Blessed are you who are poor, for yours is the kingdom of God....But woe to you who are rich, for you have already received your comfort.
Luke 6:20, 24
This week, mammon responded with a similar homily:
One practical approach to implementing weights that account for diminishing marginal utility uses a constant-elasticity specification to determine the weights for subgroups defined by annual income. To compute an estimate of the net benefits of a regulation using this approach, you first compute the traditional net benefits for each subgroup. You can then compute a weighted sum of the subgroup-specific net benefits: the weight for each subgroup is the median income for that subgroup divided by the U.S. median income, raised to the power of the elasticity of marginal utility times negative one. OMB has determined that 1.4 is a reasonable estimate of the income elasticity of marginal utility for use in regulatory analyses.
Fucking government. They have to bollox everything up into some kind of incomprehensible gibberish, don't they? But I'm here to help. This is part of a new proposal from the OMB, charmingly named Circular A-4, about how to do cost-benefit calculations. The old system was pretty simple: if a new proposal benefited you a dollar but cost me a dollar, the cost-benefit was zero. In the new proposal:
- OMB recommends that we account for diminishing marginal utility. This is the fact that the more money you have, the less each dollar means to you.
- To account for that, divide your income (and mine) by the median income.
- Then raise those numbers to the power of -1.4.
Still confused? Here's a handy chart showing how much a dollar means to you depending on your income:
The median household earns $70,000, so it gets a weighting of 1.
But if you're working class and earn, say, $30,000, an extra dollar is worth $3.27 to you. Conversely, if you're upper middle class and earn $200,000, an extra dollar is worth only 23¢.
So if I'm evaluating a new government program and it improves the life of a working class person by $10, that's a benefit of $32.70. If I take away $10 from an upper middle class person to pay for it, the cost is $2.30. Instead of a cost-benefit of zero, I have a whopping positive cost-benefit of $30.40.
This is via Noah Kaufman, who has (apparently) read the entire 91 pages of Circular A-4 and says:
This new guidance on capturing distributional concerns is the show stopper. Because this isn't just an assumption tweak. It's an entirely different approach to cost-benefit analysis.
Releasing this new guidance on a holiday weekend has kept it under the radar so far, but that won't last long. Needless to say, the usual suspects will have something to say before long. I predict that they will be very pissed off.
On this Easter I just want to question why Christians say Christ died for our sins. I didn’t even know the man and I certainly had nothing to do with his crucifixion, yet Christians are always trying to make me feel guilty about something I had nothing to do with. (S)
Honestly a very good question. I remember what struck me as a very awkward interview with Obama in which he acknowledged (or faked) how important it was to him to consider or accept (I can’t remember exactly) the idea that Christ died for his sins. How does such a weird idea manage to exert such influence for so long? In my own case, it took me until adulthood to realize that there are some people who do actually seem to believe that idea in a “literal” sort of way. It took me a long time to wrap my head around that.
But these days I think I understand a bit better how people tend to latch onto ideologies (of the religious or secular variety). And my understanding has been greatly aided by such far left belief systems as anti-racism and gender ideology.
I’m not the first to point out that these (and other) movements resemble religions in many ways. It’s not just the insistence on systemic (or sinful) forces creating inequities, it’s the idea that we are all (or at least all whites and Asians) somehow “fallen” whether or not we had anything to do with those systemic issues.
And with gender ideology, as best as I can make much sense out of it, the assertion that “trans women are women” is as much a statement of faith in an unquestionable creed as you will find in any official religion.
So, yes, there’s a lot of ideological extremism out there, of the religious, the far right, or the far left variety:
Happy Easter!
Not so nice attempt to deflect the topic at hand to your own pet peeve - and a quick tossed in Obama insult!
Re "fallen":
You certainly do find people who treat these ideas as an unquestionable quasi-religious truth. But you find that about any idea, and many understand it in a more nuanced way.
It's not whether I did something bad (sinful) that I must atone for. It's that I received concrete advantages in my life by virtue of being white. Recognizing that - and being profoundly grateful for it, every day - is necessary to a realistic assessment of my position in this society.
Starting with the red-lined neighborhood I grew up in, which meant that my (public) elementary and junior HS were virtually all white and had far more resources and much better teachers than the mostly black one half a mile away. I didn't have to compete with those black kids my age for college scholarships because I was by then way ahead of them.
I didn't do anything to create or perpetuate segregation, but for sure I benefited from it, benefits that continue to lift up me and my family 50 years later.
I don't feel "guilty", or sinful, but certainly aware of what those benefits gave me (while not giving them to some others). A resulting obligation is to teach my kids about how and why we got to be so fortunate.
That's a much bigger deal than whether some people are so pissed off at not being on the winning side like me that the nuances get lost. I keep my eye on the prize and don't worry too much about what words people use.
Google paid 99 dollars an hour on the internet. Everything I did was basic Οnline w0rk from comfort at hΟme for 5-7 hours per day that I g0t from this office I f0und over the web and they paid me 100 dollars each hour. For more details
visit this article... https://createmaxwealth.blogspot.com
"Substitutionay atonement" is not actually a universal belief among Christians, but it is weird that there are Christians trying to use Easter to make you feel "guilty," since the general view is that the Easter story is about the redemability of everyone, which is supposed to replace the guilt many people have about their personal shortcomings with the knowledge that they are loved so deeply and totally that they are worth the sacrifice.
I get that this is a joke but it's a celebration of love, not guilt. Or at least it is supposed to be.
Christopher Hitchens on the subject of Jesus dying for our sins:
https://youtu.be/GHYoXHYZZ9A
Their belief is that Adam and Eve "sinned" when they ate the Fruit of the Knowledge of Good and Evil (what genus is THAT in????). That was the ONLY thing God didn't want them to eat, which clearly begs the question, "WTF did he put one in the Garden of Eden, then?"
Since we're all descendants of them, and "the sins of the fathers are visited on the sons even unto the [insert ordinal between 'fourth' and 'seventh' inclusive] generation", our dads, grand-dads, great-granddads, and 2nd great-granddads were all afflicted by punishments for the misdeeds of THEIR set of ancestors, and as a result were driven to sin themselves.
It's all very complicated, and pretty depressing if you think about it.
BUT, God had one Son by Mary [note that women are not in the Lineage of Sinfulness] for whom he deigned to have "carnal knowledge of a woman" one time in 4,000 years. The Dude has SOME Will-Power, No? He could have any of them, even Elizabeth Taylor or Marilyn Monroe any old time.
He did this unseemly thing in order to give humans the OPPORTUNITY to "Get Out of Jail" without passing Purgatory. God is not a big enough "Liberal" to just up and forgive everyone after 4K years of scrabbling in dirt moistened by the sweat of their brows. Nope. He's a bit of a Holy Narcissist, so only those willing to claim allegiance to his Son get the card. Everyone else has to go in front of a dyspeptic with a trap-door button and a yen to use it.
I told you it was complicated.
Everyone is going to sin. Christ is your path to salvation despite your sins.
Many years ago I was excitedly told by a born again Christian that Susan Atkins and Tex Watson had accepted Jesus into their hearts and were born again. I asked if this meant they were forgiven their sins and were thus going to heaven when they died. He told me they were.
I asked if people like Gandhi and Einstein would be in heaven since they were not born again. He said that no, they wouldn’t. So I said that when I die I would like to go to a place where Gandhi and Einstein were and we would call that “Hell”. And he could go to the place where Susan Atkins and Tex Watson were and we would call that “Heaven” (I used air quotes). He was less than pleased with my response. I wonder what yours would be.
So, God is Everywhere Present ("Omnipresent"), Possessor of the Power To Do Anything Anywhere at Any Time ("Omnipotent"), and the Knower of All Things That Ever Were, Are Now or Ever Will Be ("Omniscient"), and SOMEHOW, in all that certainty, we will all be sinners?
How exactly does that work? Is God a cruel trickster? Absent minded? A Scientist in a Lab Coat running a "real-time" test of Probability?
Oh, right.
He "suspends his power" in our presence to give us the opportunity to "do what is right" and thereby earn his Love and Compassion, which He WOULD give us freely if ONLY we weren't such dolts, but that's how He "created" us.
It's the Holy Catch-22.
Ok. It’s probably true that if I give a homeless guy $50 he’s gonna score some smack, OD and die. This is definitely a positive outcome where the benefit vastly exceeds the cost.
If you give me $50, I might go out for dinner to the Olive Garden or buy a nice bottle of wine. Really not very helpful at all.
Happy Easter!
https://youtu.be/MmO27YvkA5Y
Wow. Just Wow.
Like +15.
It certainly exposes the stupidity of cost / benefit calculations to make policy. There is a moral calculus which ought to be considered, but we aren’t allowed to do that, are we. I’m guessing you didn’t think hard enough to notice that.
That post certainly exposes stupidity all right.
Justin's assertion has an element of truth, although it probably shouldn't be used for policy decisions.
Back when I was flat broke and trying desperately to make my mortgage payments, I managed, over six months, to save up $100. That was all the money that I had in the world. Nothing in the bank, nothing in the sock drawer.
A friend who drove a cab asked me to lend it to him.
Man, lending him that money would leave me with zero margin in a financial emergency, but hey, he said he'd pay me back, so I lent him the money. My last dollar.
He went out and bought a six-pack of imported beer and some lines of cocaine, then went to the bar to impress some women with his free-spending.
He eventually paid me back, but that ended my belief that everyone shares my values.
See, here I thought it exposed that you're a weaksauce troll.
Disingenuous jerks can take it to Twitter, where the proprietor wants that short of garbage.
This is so stupid it should be ignored, but I will engage a bit. It is not true that any large fraction of homeless people are drug addicts. You are entirely full of crap.
Actually:
"Most research shows that around 1/3 of people who are homeless have problems with alcohol and/or drugs, and around 2/3 of these people have lifetime histories of drug or alcohol use disorders. According to SAMHSA, 38% of homeless people abused alcohol while 26% abused other drugs."
Also:
"It is estimated by the Stanford Institute for Economic Policy Research Center that 52% of the homeless in California are either severally mentally ill or addicted to hard drugs."
While poverty causes homelessness, what causes poverty?
26% have, at some time in their lives, abused drugs. That means that some fraction of that 26% are current drug abusers. Remembering that "drug abuse" is generally defined to include any recreational drug use, most of those current drug abusers probably use cannabis, which has no known toxic dose. In other words, a fraction of a fraction of 26% currently use drugs of a type where a lethal overdose is possible. I think "no large fraction" is accurate.
You, Sir, are part of the problem. Dollars are not morals, nor should they ever be. Just because a small percentage will go buy dope does not mean millions should miss an opportunity to make their lives marginally better. Money provided to the poor is an opportunity for them to improve their lives. If they choose to blow that opportunity, that is their choice, not yours.
Justin is an amoral nihilistic monster living literally or metaphorically in his mother’s basement. He exists merely to troll. Don’t feed him.
Money is a local invariant that doesn't survive parallel transport to other people's local frame of reference without distortion.
It's just another way the human mind that doesn't understand mathematics is subject to bamboozlement and the Rs do this better than any other, whether it's using the effect of inflation to justify rent seeking or this effect to scare someone making $70,000 to care about the tax rate someone making 10x what they earn.
Not sure about any of that gobbledygook. But why is the official poverty level in the USA in 2023 just $14,580? Is there anyone that can live on that, at any level, anywhere, at all, anymore? Further analysis, budgets, wishful thinking notwithstanding, it's the biggest mistake committed by the Federal Government that it sets this level absent any relation to reality for anyone living in the United States today. So much of policy is based on it--and it's garbage. $14,580 is below impoverished. It's destitute. The analysts and politicians that publish and promote it should be shot.
The HHS poverty level, used to set many kinds of benefits, was set over fifty ago and has been indexed to the CPI. This means that poor people have in a way not gotten a share of real economic growth. Of course neither have average wage owners, as real wages are still below the peak level of 1973. Minimum wage earners have done even worse as their real wage has declined.
https://skeptometrics.org/BLS_B8_Min_Pov.png
If inequality were not to increase these things, plus Social Security benefits, would be indexed not to the CPI but to GDP per capita (or some other measure of productivity).
It’s set so low because Republicans won’t allow it to be set any higher. There are other government attempts to better measure poverty. But all of them are resisted by Republicans (and their Democratic enablers) from being made the new official poverty benchmark.
I live on $7200 per year. How? I have no rent/housing expense. I am elderly and live in a house that is paid off. In a society where people live with relatives and do not all have to have their own single-family home, it would be feasible to live on a limited income. We used to be a society with multi-generational families sharing a home. Why did that stop? Reality for people with lower income may be a different living arrangement than what is promoted as normal but is far different than the way that rural, senior, immigrant and poor families live. I am not destitute.
>We used to be a society with multi-generational families sharing a home. Why did that stop?<
Mostly, it’s because society became a lot richer with the passage of time.
People generally don’t like being forced to house their relatives on limited incomes. It feels like punishment in a supposedly free society to have to take care of adult people who cannot take care of themselves, even if you’re actually related to those people. And one of the things being a rich society allows for is the freedom to not have to take in all your impoverished relatives. This is generally seen as a positive by everyone in the country: very few Americans long for the days when multigenerational family units existed in the same household, as evidenced by the fact that very few rich and middle class people voluntarily enter into such arrangements. (Indeed, they typically do everything they can to avoid such arrangements.)
You couldn't have bought and paid off your house earning poverty-level wages.
I entirely endorse this value methodology, as long as it isn't used to screw the poor out of even more money. ("Because giving them a dollar really means so much to the poor, why bother to give them ten dollars? This means we can reduce welfare costs to the jerbs providers!")
I've been rich and I've been poor, and while I'd rather be rich, I don't think I can never be poor again.
When I was poor, I sweated blood to save $100 over six month's time. I can't begin to tell you how hard it was to do that. Every dollar saved came at a cost of incredible personal sacrifice. I spent years deciding which bills I wouldn't pay that month, because I couldn't pay them all. I bought nothing except the cheapest food available (bags of potatoes and onions), and not much of it.
It was the worst time of my life.
Now that I got lucky and earn much more money, I find myself telling people (truthfully) that the cost of a nice dinner out ($100-$200) is invisible to me. Absolutely invisible.
I'm the same person that I always have been, but the way that I value money has changed with my circumstances.
I'm pretty sure that this applies to everyone.
Awesome. And I'd be interested what you did with those onion and potatoes. Did the lack of protein in your diet cause other problems? Would you, perhaps, have made it to your more lucrative years sooner? And, otherwise, along the way, did anyone care? I had a little bit of the kind of luck you describe, though I never liked paying $100-$200 for a dinner. I'd already worked in those kitchens and I knew it was worth it. I'd have liked it to be easier to pay.
$100 * 30 * 12 = $36,000. Total poverty level in 2023 covers barely 40% of that amount. When you're not even thinking about it.
I don't have meals like that every day, although I do buy most of my meals in restaurants. (Not fast food restaurants. I want to live, dude.)
Because:
1. The meals in restaurants are better tasting than what I can cook.
2. There comes a point in earning levels, and this surprised me when I reached it, where it costs you more to buy and prepare food than it does to pay for a prepared meal. I was assisted in this life transition by my drive for efficiency and by my terrible cooking skills.
If you are making more money than the people who are doing some arbitrary task for you (like cooking a meal), it does not make sense to do that task yourself instead of letting them do it and paying them for it. Unless you are working on a hobby interest.
Did you know that you can make a threaded bolt with a triangular file? It will only take you most of the day. Or, you can just buy a bolt for fifty cents and move on.
I chopped up the potatoes and onions and fried them in lard. All very cheap, all very filling. I also had diarrhea every day for two years, but I've always attributed that to my terror at losing my house because I had no money.
In retrospect, maybe it was due to my diet.
I don't think I'd have made it to my lucrative years sooner. Some life skills take a while to learn. As it was, the economy was pretty bad in 1981, and I couldn't find a better job to save my life. The one I had paid $8/hr, or $16k/year. After taxes I had $11.5k, and after the mortgage payments, I had $3.5k/year to live on. I bought gasoline to get to work, and food, and that's it.
I think that earning good money is a result, mainly, of luck, and of knowing people who can help you. Having some talent comes in at a distant third, but it can make your life subjectively seem better.
“And I'd be interested what you did with those onion and potatoes. Did the lack of protein in your diet cause other problems? Would you, perhaps, have made it to your more lucrative years sooner? And, otherwise, along the way, did anyone care?”
This is quite possibly more of an asshole comment than anything Justin wrote, which is quite an achievement. “The poor are so clever at stretching every dollar they have. I wonder why they don’t put all that ingenuity to use at making more money?”
Small increases in money for the poorest do appear to have outsized benefits, both in their material condition and in their stress levels. That is why you see such positive anecdotes in articles about tests of "guaranteed income" programs, and so many positive stories from lower-income people getting extra money during the pandemic.
It's interesting that they came up with an actual number. I have no idea if that's the right multiplier, but the concept seems sound.
That is a BRILLIANT IDEA - and its probably true on the economic effects on the whole economy as well
Giving money to the poor becomes "Fast Money" which has much much more of an effect on the economy than giving money to the rich
An absolutely BRILLIANT idea!!
So "they" can claim they are giving more to the poor than they are, while claiming they are taking less from the rich than they are.
Including marginal utility in cost-benefit analyses of government policies strikes me as a great idea because it will benefit those who have the least. The OMB needs to frame this in a way that will be more appealing and understandable. They could call them Jesus Dollars, for instance.
This answers the question that bothers Atrios so much: Why don't rich people just bugger off to a Greek island and live their best lives? Obviously, because they need another billion to get the same satisfaction as an ordinary person would winning $100 on the slot machines.
The point is not to live their best lives. The goal is to win the game, and dollars is how they keep score.
"...Needless to say, the usual suspects will have something to say before long. I predict that they will be very pissed off."
This analysis suggests the federal income tax system should have a marginal rate of 0 below some threshold annual income, say $1000000, and 100% above it. So it won't be universally accepted.
in a perfect world, that probably is how the income tax should be structured. Negative for the poor all the way to 100%
I learned the value of money in the 1940's/1950's. Gasoline was 12 cents per gallon. Houses cost 5 to 6K. 50cents an hours was OK pay. My first job in construction paid $1.50 an hour. Those costs/wages stick in your mind. Even so, got lucky in life so the cost per gallon of gas in not even noticed.
Okay. So you're about 85 years old. What else you got to say?
I think that Dilbert Dogbert was saying that a person's idea of costs gets stuck at a certain time of his life, and doesn't change much after that, with years or with inflation.
I know that happened to me. Whenever I estimate the costs of something, I'm calculating in 1980 dollars, not 2023 dollars. This means that I'm constantly shocked at the price of every single thing being pi times or 10X what I expect it to be.
I've been lucky and can currently support most of this "cost increase", but it definitely affects my willingness to spend money on things that I don't actually, vitally, need.
This is all bullshit. People can and do adjust to rising prices without losing their ability to function and without constantly bitching about price increases. My grandmother remembered paying 5 cents to go to movies back in her youth yet still happily shelled out $5 each to take me to the movies in the early 1990s. I remember paying $1.50 a gallon for gas in my first car at 16 and still didn’t ponder this when I filled up for $3.50 a gallon today. Mature adults realize that incomes also have risen greatly since their childhood, which partially or (hopefully as in my case) completely dwarfs the prices that have also risen greatly since childhood.
Meanwhile not everything actually goes up in price. Watching old movies from 1980-2000, you can get glimpses of price tags for various things and none of them seem that far off from current prices. Like for example in Wargames (which I saw again the other night) I noticed that when Matthew Broderick hacks into Pam Am’s computers, he books two one way tickets Seattle to Paris for $1200. The same tickets today cost about $1000 according to a quick search on Google. Yet nobody is praising the deflation that occurred in those prices over the last 40 years.
Prices - like everything else - change over the course of every human’s life. Rational humans don’t expect things to never change, and truly functional adults should be able to change their expectations and behaviors with changes in their living environments. (The ones that can’t really should be evaluated for assisted living and/or psychiatric care, since they apparently are too fragile to deal with the constant change in the universe that has always affected mankind.)
A seasonally appropriate release, given the (rather deeply-buried) moral principle under-girding all that economic calculation.
Politically speaking, though, I hope the public launch lets a bit more of the old foundation show, weathered as it is, and not just the bristling mathematical superstructure designed to render it acceptable to educated modern taste.
Here for example is old John Winthrop, sermonizing to his company of devout followers on this very topic, while they were bound for these shores some 400 odd years ago:
"Wee must be willing to abridge ourselves of our superfluities, for the supply of other's necessities."
That is, I take it, the basic moral principle at work here. But we've never quite found a way to translate it from the context of an intentional community of would-be saints (their rectitude as yet untested by contact with the temptations of a "new world"), to a collection of communities, some incumbent, others newly arrived, many thrown--or forced together by unfolding opportunities for inter-communal exploitation, and all in various states of formation and reformation, combination and recombination, with our famous "individualism" the only constant.
Which I suppose is why we talk (if we're lucky) about models of costs vs benefits, rather than models of a common charity.
"On this 990th Easter Sunday..."
So close but my sources tell me the math here is a thousand years off. Way back when, Mary Magdalene and her friend Mary went to visit the tomb of Jesus. They met an angel who rolled away the stone, and they found not the body of Jesus but a chocolate egg. It was a Cadbury.
Understandably, we've been celebrating Easter ever since. But maybe not much longer. A new tradition has a former president of the United States posting his wish for the holiday. This year: "World War III." Apparently, somebody punk'd him and it wasn't chocolate he ate. I'd be upset too.
I cannot believe that you seriously spent all that time writing up on the subject of marginal utility of a dollar, when all you needed to do was to say simply:
The marginal utility of a dollar means that a dollar isn't as important to a very rich person as it is to a very poor person. How that is calculated is esoteric. Do you really give a damn?
It's a very good and obvious change.
But an immediate indication of it -- that we should have steeply progressive tax rates -- means that no Trumpublican will support it in any way.
This model may be accurate around the marginal benefit to consume. I suspect the model does not reflect the marginal benefit to invest.
To give a stylized example, Elon Musk made a bunch of money from PayPal. Instead of consuming all the funds, Musk selected to use his time and money to start several new businesses (Tesla, SpaceX, Boring Company etc).
Or, a more typical person, once many of their material desires are satisfied, they will invest (stocks, bonds, real estate etc): society, at least in theory, benefits from these investments.
Not sure start is the correct word. I was thinking funding other people's ideas is more correct. Better than funding bitcoin mining.
Mostly indeed, "in theory". The only benefit to any enterprise of the sale of "previously owned securities" is to set a price for the future sale BY the enterprise of treasury shares. The enterprise already got the money from the sale of the securities being traded.
This "capital gains" scam is complete bullshit. It should be available only to first purchasers of IPO shares or treasury shares directly from the company.
This quantifies why finding a dollar on a rutted, potholed street in Mississippi means it's a great day and God is smiling on you, while finding a dollar on the antique Persian carpet over the imported inlaid marble floor at Mar-A-Lago means the entire housekeeping staff needs to be fired for incompetence.
Any takers on a wager? That the anti-tax R's will quickly declare that the tax code be built around not actual dollars of income but "utility dollars" and thus the million income bracket means that marginal $10 of income is really only 20 cents of "utility" and should be taxed as such.
And those lucky duckies getting 762.5 times the utility better convert some of that utility into CPA fees...
Sounds like the good old gov. is relying on AI to write for them.
You can see what they are trying to do. The current system values people based on their income, so you can do nasty things to many poor people at the same cost as doing it to just one better off person. This shows up all over the place. The odds of a murderer being caught rise with the income of the victim.
Suppose you want to locate some noxious facility. The current reasoning goes: the property values are already low, and the people there are all poor, so the cost being imposed is low. If they die ten years earlier, the economic effects are relatively small.
The problem comes from having to put a dollar value on people's lives, their chemical exposure, their inconvenience and discomfort. Let's run the flights over that poor neighborhood. Their health and sleep is worth less than if they were wealthier. Women are only worth 2/3 of what men are worth, so let's put the women's room in Siberia and negotiate bathroom visas with Putin. Once you decide to do a cost-benefit analysis that puts dollar values on things, you have made a serious value judgement.
That 1.4 is probably bogus, but the direction is right. Think of it as gamma correction for people. When there isn't much light, a bit more light is a lot. When there is a lot of light, a bit more light is barely noticeable. My laptop screen has its gamma set around 1.8, though I gather some people swear by 2.3.
Pingback: Weekend link dump for April 16 – Off the Kuff