Last Call For Finding The Problem

The Pew Charitable Trusts put out a survey last month on American household debt.  The figures are pretty shocking by generation (Gen Xers like myself owe six figures as a median point) but they are even worse by race and income.

The substantial wealth gap between white families and families of color has been well documented by researchers. According to the Pew Research Center, white families had a net worth in 2013 that was 13 times more than that of black families and 10 times higher than that of Hispanic families. Net worth comprises assets and debt, so the racial wealth gap can be understood by examining each component individually. 

Among respondents to Pew’s Survey of American Family Finances, black and Hispanic households are as likely to have debt as white households. However, white households’ median debt is more than twice as big (Table 1) and differs in important ways from that of families of color—for example, including more mortgage debt—which often helps white households build even greater net worth. 

White households also typically hold more assets than black and Hispanic households. The typical white household has nearly seven times more assets than black households and over three times more than Hispanic households. These differences are magnified among low income households: The typical white household making less than $40,000 a year has nearly 18 times more assets than black households at the same income bracket and seven times more than Hispanic households. Because of its low asset holdings, the typical lower-income black household has no net worth. At a fundamental level, the racial wealth gap is about a lack of assets in black and Hispanic households, rather than an abundance of debt. 

Let's rewind that statement.

The typical black household with income less than $40,000 has no net worth.



None.

Compare that to the typical white family with income less than $40,000, which still has a net worth of $22,200.

Your typical black person, with all levels of income included, has a net worth of just $6,000.

The system is designed to keep black America poor and always has been.

 

A Close Win For The Dems In 2016?

That's what Moody's Analytics is predicting (just not which Democrat beats which Republican) but going strictly on the parties, they find the Democrats winning a razor-thin electoral college victory in 2016.

It will be an extremely close race, but the next president will be a Democrat, according to Moody's.

This doesn't mean that Hillary Clinton is on her way back to the White House. The model that Moody's uses doesn't focus on individual candidates. Instead, it predicts which party will win in every state, so it forecasts the results of the Electoral College.

Moody's says the Democratic nominee will get 270 electoral votes -- the minimum number of votes needed to win -- while the Republican nominee will accumulate 268 votes. The model correctly predicted every state in the 2012 election and has a nearly 90% success rate in forecasting each state accurately since 1980.

It will all come down to Virginia and Ohio this time because Moody's predicts that Republicans will win Florida. At the moment, Moody's says Virginia will go Democratic and Ohio will swing Republican, but that could change.

"If President Obama's approval rating falls by any more than 2 percentage points by Election Day, Virginia will swing and the Republicans will win the president," the report says.

A race that close will be drowning in recounts, frankly, and will almost certainly go to the Supreme Court again, so who knows which party would actually win.  Florida and Ohio going to the Republicans gives them a pretty big boost on the way to winning too.

So what is the key to such accurate predictions? Moody's says it's all about economics.

The model takes into account how the economy is doing in each state. The researchers have tested a lot of variables over the years, but the best ones are family ("household") income, home values and gas prices. If those three variables are going up, it favors the incumbent party. If they're not, people want change in Washington.

"The economy's performance strongly favors the Democratic nominee for president," says Moody's.

Moody's points out that household incomes have been steadily improving lately and are likely to go up further before Election Day.

"The only missing ingredient is stronger wage growth, which is expected to pick up in the coming months as the job market approaches full employment," the authors wrote.

So the better the economy gets, the larger the Dem lead becomes.  Republicans know this, so their best chance to win is to continue to block any spending that will improve the economy, and blame Obama.  It's worked for them in 2010 and 2014, and would have worked in 2012 if Romney hadn't been the worst candidate since Dukakis.

On the other hand, if the GOP nominee is still this guy...




Maybe it won't be so close after all.

Sunday Long Read: The War On NC Schools

Washington Post education writer Valerie Strauss posts this detailed carnage from a NC teacher that Republican Gov. Pat McCrory and the NC GOP legislature have inflicted on North Carolina public schools since the red state backlash against Obama in 2012.  It's heartbreaking and very personal to see this, as I grew up and attended both school and college in the state, only to see that education infrastructure being ripped to pieces.

Among their first targets: reductions in unemployment benefits, cuts to public schools, including laying off thousands of teachers, and a massive, nearly half-billion dollar slash from the University of North Carolina system.

Two years later, in the last budget cycle, 2014-15, the legislature providedroughly $500 million less for education than schools needed.

Later in the 2013 session, though, the most radical changes in state financing fell into place. Republicans reconstructed the state’s tax code, relieving the burden on corporations and wealthy residents. They continued to take aim at other parts of the education budget, cutting More at Four program dollars and decreasing accessibility for poor families. The state lost thousands more teacher and teacher assistant positions. The bloodletting was fierce. More on that in a minute.

Across the state, local education districts were faced with budget deficits of considerable proportion after legislators hacked away their funding. School systems raided fund balances, rainy day funds set aside for things like natural disasters, not political ones. Elsewhere, employees were furloughed, teachers were laid off, teacher assistants were forced to take other jobs or lose their classroom positions, and so forth. Non-personnel funding disappeared. Textbooks stayed in circulation another year. Buildings were patched together instead of replaced. Education Week called ours “The Most Backward Legislature in America.”

Republicans defended these austerity measures by saying that lower taxes would eventually yield fiscal growth. And they were right. This year, the government is enjoying a $445 million surplus–a clear victory in light of those multi-billion dollar deficits of yore–but still a statistically small number in light of the state’s $21 billion budget (about two percent), especially after considering that our state budget is still smaller than it was in 2011.

In fact, by 2014-15, North Carolina was still spending $100 million less on public education than it had before the economic recession. And over the past ten years, public schools added more than 150,000 additional students. No Republican legislator can honestly say that per pupil expenditures across the state have increased in the last six years.

The budget fix came at a cost, a steep one.  NC teachers now are the lowest paid in the nation, veteran teachers have been forced to retire, Republicans have completely eliminated the state's Teaching Fellows program in the UNC system that trained new teachers, then created a voucher program to pay for-profit charter schools and religious schools with taxpayer dollars and leave the poorest schools in the state drowning in red ink.

And then they came for the college system I went to.

In four years Republicans have destroyed education in my home state.  It's a depressing read, necessary to drive home that there is a difference between the two parties.