Oh, it must be just about killing him. Bobo went on a field trip to see teh gummint in action. In “What Government Does” he says a trip to the Department of Housing and Urban Development provides a look at the state from the inside-out. Turns out that gummint ain’t all bad after all, folks, and it probably damn near killed Bobo to have to say so. Prof. Krugman, in “The Intimidated Fed,” says instead of addressing the dismal unemployment picture during Wednesday’s press conference, Ben Bernanke bent to the inflationistas. Which I guess means he obeyed his marching orders. Here’s poor Bobo:
We in the commentariat spend a lot of time reporting on the White House and the U.S. Capitol, but relatively little time reporting on the dozens of federal buildings around them where public policy actually gets executed. We engage in debates about the size of government but spend little time directly observing what government is and isn’t good at.
To help compensate, I spent some time this week at the Department of Housing and Urban Development. It is headquartered in a dispiriting 1960s building that is brutalist on the outside and dreary within — 10 stories of basement, as the employees say.
The secretary, Shaun Donovan, was trained as an engineer and is a numbers guy. He learned from his experience as New York City’s housing commissioner that you can’t fight social problems like crime and homelessness unless you have good data. So he helped create a program called HUDStat, which tracks homelessness among veterans and the results of the various efforts to combat it.
I observed a strategy meeting led by Donovan and Scott Gould, the deputy secretary of the Veterans Administration, with about 30 career personnel and political appointees. The purpose of the meeting was to see which regions were doing a good job of getting the veterans treatment and housing vouchers, and which weren’t. (Democrats seem to feel comfortable using vouchers to address housing problems but not education and health care problems.)
The career workers at the meeting were impressive. They made short, highly informed presentations and answered arcane questions about legislative history. They had achieved a herculean task of getting two government agencies to agree on a single data set, a single methodology and a single progress report.
Homelessness touches many government services, from housing to education, and the federal workers presented complicated flowcharts trying to organize overlapping programs into one coherent system. How do you set up services for a homeless female veteran who has a drug addiction, psychiatric problems and is a victim of domestic violence? If a federal agency issues housing vouchers, how should it alert the local housing authority that more residents are on the way?
The HUDStat report is blunt about which state and local departments are efficiently moving veterans into housing (Indiana and Ohio) and which is lagging behind (California).
The career people treated the political people with almost military deference. The career people often spoke about managing the organizational structures and establishing clear rules for case-workers; Donovan and Gould spoke more about the experience of the veterans on the street and probed for ways to move everything faster:
Can we use money from other voucher programs to get the veterans security deposits? Probably not, the accounting issues are too complex. How long does it take between a homeless veteran’s first contact and actually moving in? The norm is 127 days. Can we reduce that wait time to 10 days? No, but maybe 90 is possible. Even though the 2011 budget was passed late, can we use some of that money quickly so legislators will be pleased when budget time comes up again in 2012? Yes.
Unlike some political appointees, Donovan and Gould are deeply involved in the intricacies and are powerfully driving policy. Many government efforts are designed to minimize failure and avert scandal. In this program, each region has a clear numeric definition of success. There are clear standards for how quickly veteran homelessness should be reduced year by year. So far, the program is surpassing its targets by 46 percent.
The big question I had was this: How large is the gap between the neatness of data on a bar chart and the messy reality on the street?
For example, 75 percent of veterans in the program have psychiatric, drug or alcohol problems. Under the old policy, social workers tried to get the veterans treated first and offered free housing as an inducement. Now the Housing First approach prevails: Get them the stability of an apartment, then treat their drinking, drug and mental issues.
That produces good homelessness data, but are ill and addicted veterans off their meds and menacing apartment buildings? Does the approach work as well for the severely ill? Does it work as well in sparsely served areas?
Donovan notes that research supports the counterintuitive Housing First approach. Some studies do, indeed, show modest benefits, but I was struck by the vast difference between the way a government sees the world — numerically and organizationally — and the gritty and unpredictable way the world sometimes looks to, say, a crime reporter or a homeless veteran himself.
Over all, visiting HUD was tremendously useful. Amid the hot-rhetoric government wars, it was important to see the talent and commitment of real-life government workers running a successful program — and to see the limitations inherent in government planning.
Why do I have the feeling that Bobo went on his field trip with an entirely different column all planned out in his head that he had to scrap? Probably because I’ve read Bobo for years… Here’s Prof. Krugman:
Last month more than 14 million Americans were unemployed by the official definition — that is, seeking work but unable to find it. Millions more were stuck in part-time work because they couldn’t find full-time jobs. And we’re not talking about temporary hardship. Long-term unemployment, once rare in this country, has become all too normal: More than four million Americans have been out of work for a year or more.
Given this dismal picture, you might have expected unemployment, and what to do about it, to have been a major focus of Wednesday’s press conference with Ben Bernanke, the chairman of the Federal Reserve. And it should have been. But it wasn’t.
After the conference, Reuters put together a “word cloud” of Mr. Bernanke’s remarks, a visual representation of the frequency with which he used various words. The cloud is dominated by the word “inflation.” “Unemployment,” in much smaller type, is tucked in the background.
This misplaced emphasis wasn’t entirely Mr. Bernanke’s fault, since he was responding to questions — and those questions focused much more on inflation than on unemployment. But that focus was, in itself, a symptom of the extent to which Washington has lost interest in the plight of the unemployed. And the Bernanke Fed, which should be taking a firm stand against these skewed priorities, is instead letting itself be bullied into following the herd.
Some background: The Fed normally takes primary responsibility for short-term economic management, using its influence over interest rates to cool the economy when it’s running too hot, which raises the threat of inflation, and to heat it up when it’s running too cold, leading to high unemployment. And the Fed has more or less explicitly indicated what it considers a Goldilocks outcome, neither too hot nor too cold: inflation at 2 percent or a bit lower, unemployment at 5 percent or a bit higher.
But Goldilocks has left the building, and shows no sign of returning soon. The Fed’s latest forecasts, unveiled at that press conference, show low inflation and high unemployment for the foreseeable future.
True, the Fed expects inflation this year to run a bit above target, but Mr. Bernanke declared (and I agree) that we’re looking at a temporary bulge from higher raw material prices; measures of underlying inflation remain well below target, and the forecast sees inflation falling sharply next year and remaining low at least through 2013.
Meanwhile, as I’ve already pointed out, unemployment — although down from its 2009 peak — remains devastatingly high. And the Fed expects only slow improvement, with unemployment at the end of 2013 expected to still be around 7 percent.
It all adds up to a clear case for more action. Yet Mr. Bernanke indicated that he has done all he’s likely to do. Why?
He could have argued that he lacks the ability to do more, that he and his colleagues no longer have much traction over the economy. But he didn’t. On the contrary, he argued that the Fed’s recent policy of buying long-term bonds, generally referred to as “quantitative easing,” has been effective. So why not do more?
Mr. Bernanke’s answer was deeply disheartening. He declared that further expansion might lead to higher inflation.
What you need to bear in mind here is that the Fed’s own forecasts say that inflation will be below target over the next few years, so that some rise in inflation would actually be a good thing, not a reason to avoid tackling unemployment. Those forecasts could, of course, be wrong, but they could be too high as well as too low.
The only way to make sense of Mr. Bernanke’s aversion to further action is to say that he’s deathly afraid of overshooting the inflation target, while being far less worried about undershooting — even though doing too little means condemning millions of Americans to the nightmare of long-term unemployment.
What’s going on here? My interpretation is that Mr. Bernanke is allowing himself to be bullied by the inflationistas: the people who keep seeing runaway inflation just around the corner and are undeterred by the fact that they keep on being wrong.
Lately the inflationistas have seized on rising oil prices as evidence in their favor, even though — as Mr. Bernanke himself pointed out — these prices have nothing to do with Fed policy. The way oil prices are coloring the discussion led the economist Tim Duy to suggest, sarcastically, that basic Fed policy is now to do nothing about unemployment “because some people in the Middle East are seeking democracy.”
But I’d put it differently. I’d say that the Fed’s policy is to do nothing about unemployment because Ron Paul is now the chairman of the House subcommittee on monetary policy.
So much for the Fed’s independence. And so much for the future of America’s increasingly desperate jobless.
Yeah. The other day the headline in the Savannah Daily Disappointment touted the fact that unemployment was “down” to 8.8%. Of course, that’s the national average. The state figure? 10.0% in March, down from 10.2% in February.
