Recession

The eurozone crisis has re-emerged with rising borrowing costs in Italy and Spain and increasing concerns about the prospects for growth.

Federal Reserve chairman Ben Bernanke is looking hard for demand. Without a “more-rapid expansion of production and demand from producers and consumers,” the Fed chairman does not see the recent employment gains as “sustainable.” That’s an understatement.

The Supplemental Nutrition Assistance Program (“SNAP”) has become a major target this election cycle, largely because of persistent accusations of waste and fraud in its administration. However, it is well documented that SNAP fraud is minimal; furthermore, there is a logical disconnect between the problems defined and the expensive solutions proposed in the name of “efficiency."

The Economic Research Service of the USDA just released a new publication on its website documenting the reasons that participation in SNAP has risen so significantly over the past few years. Unsurprisingly, high rates of unemployment since the recession began are largely to blame; ERS research has shown that since 1980, a 1-percentage-point increase in the national unemployment rate is associated with about 1 to 3 million additional SNAP participants. Another factor is that some of the most burdensome policies put in place by welfare reform—which caused the SNAP caseload to decline 47% between 1996 and 2000—have been lifted or eased over the past decade. Additionally, though participation is up, the average SNAP benefit remains low, even with the Recovery Act boost. In 2010, the average 2.2-person SNAP household had a monthly gross income of $731, net income of $336, and a SNAP benefit of $287.

This piece is coauthored by Bruce Jentleson, Professor at Duke University, and Jay Pelosky, Principal of J2Z Advisory. It originally appeared on the Huffington Post.

Last week, Mother Jones ran an article I wrote on the growing wealth gap. It opens with a closer look at the Romney’s tax return, which shows not that they “make” a lot of money but that they “have” a lot of wealth.  Those at the very top have done quite well. Recent estimates indicate that the while the top 1 percent earn 21 percent of the nation's income, they possess 36 percent of total wealth.

I argue that, in the future, the wealth gap will be larger and more consequential than the income gap.

What's the primary cause of our current and growing wealth gap? Home values, the largest item on most families' balance sheet, remain depressed, while stock prices, the largest item on the balance sheet for those at the top, have rebounded. In short, Wall Street has recovered, Main Street has not. Consequently, in the last three years, the concentration of wealth has occurred at the expense of those in the middle…Without drastic changes in the market or in policy, the divergence between housing values and securities prices will be the main driver of wealth inequality for the foreseeable future.

On top of this, the growing racial wealth gap is one of the most dramatic and disputing trends that has taken hold since the recession.

Conditional clauses are very important. Mitt Romney's statement yesterday that he's "not worried about the very poor" is based on the supposition that "there's a safety net there," an "ample" safety net at that. This is similar to my saying that I'm not worried about whether my husband will starve to death when I leave town because he knows how to order a pizza.

Engagement with elected leaders by their constituents is a powerful accountability mechanism, and elections are a decisive expression of that function. In a year where poverty and inequality are at historic levels and the prospects for low-income families to improve their circumstances increasingly uncertain, how will these conditions influence both the rhetoric and policy proposals of those seeking elected office and the choices of voters?

There are many reasons why America’s system of economic security is not working. Chief among them is a common factor in almost all of our social policies: they are designed with the assumption that people are constantly employed. For example, most social insurance programs, from Social Security to Unemployment Insurance to Medicare, require people to build up years of contributions before they can access benefits.¹