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Wonkbook's Number of the Day: 50,000. That's how many new immigrants would settle in Detroit under a special visa program if Gov. Rick Snyder gets his way.
Wonkbook's Graphs of the Day: Check out all the graphs in Raj Chetty's new paper on inequality and economic mobility.
Wonkbook's Top 5 Stories: (1) inequality and mobility, front and center; (2) Obamacare leads to insurer downgrades; (3) you can be pro-business and pro-climate; (4) your fiscal forecast for 2014; and (5) why Detroit wants immigrants.
1. Top story: Income mobility has changed less than you think
Economic mobility hasn’t changed in a half-century in America, economists declare. "Children growing up in America today are just as likely — no more, no less — to climb the economic ladder as children born more than a half-century ago, a team of economists reported Thursday. Even though social movements have delivered better career opportunities for women and minorities and government grants have made college more accessible, one thing has stayed constant: If you are growing up poor today, you appear to have the same odds of staying poor in adulthood that your grandparents did. The landmark new study, from a group led by Harvard’s Raj Chetty, suggests that any advances in opportunity provided by expanded social programs have been offset by other changes in economic conditions. Increased trade and advanced technology, for instance, have closed off traditional sources of middle-income jobs. The findings also suggest that who your parents are and how much they earn is more consequential for American youths today than ever before. That’s because the difference between the bottom and the top of the economic ladder has grown much more stark, but climbing the ladder hasn’t gotten any easier." Jim Tankersley in The Washington Post.
Primary source: Read the study (PDF).
Map: Where do kids born to parents in the 25-th income percentile end up on average? The Washington Post.
A surprising map of mobility: "Which parts of the country do you think have done the best job ensuring that children born to working-class families do better than their parents? California, with its booming tech industry? New York, with its financial wizards? Utah, with its deep social ties and communitarian values? Try Iowa, Minnesota and Wisconsin. Meanwhile, Georgia, South Carolina, North Carolina, and Mississippi do the worst job helping kids advance." Ezra Klein in The Washington Post.
State of the Union to focus on inequality. "President Obama will try to pump some vitality into a lackluster second term on Tuesday when he delivers his State of the Union address. The address will include a “healthy dose” of the income inequality message the White House has focused on in recent weeks, according to one senior administration official familiar with the text. The president, who has yet to add to the big legislative accomplishments of his first term, will call for raising the minimum wage to $10 per hour and extending federal unemployment benefits that expired last month. He will also discuss energy and college affordability, two other issues that relate to the economic mobility message that is a major White House theme ahead of this year’s midterm elections." Amie Parnes and Justin Sink in The Hill.
@Goldfarb: one question raised by mobility study is: What about children born today, after more inequality and a major economic downturn
Rep. McMorris Rodgers to give Republican response to Obama's State of the Union address. "Rep. Cathy McMorris Rodgers will deliver the Republican response to President Barack Obama’s State of the Union address next week, GOP leadership announced Thursday. McMorris Rodgers (R-Wash.) is the chair of the House Republican Conference and is the highest-ranking Republican woman in Congress." Ginger Gibson in Politico.
...But Rand Paul and Mike Lee are flying solo. "The Kentucky Republican’s office will blast out his rebuttal to Obama’s speech via social media and his email list...Paul joins two other Republicans who will deliver reactions to Obama’s address Tuesday: Rep. Cathy McMorris Rodgers of Washington will deliver the official GOP response, while Sen. Mike Lee of Utah will deliver the tea party address." Burgess Everett in Politico.
KRUGMAN: The populist imperative. "[J]obs and inequality are closely linked if not identical issues. There’s a pretty good although not ironclad case that soaring inequality helped set the stage for our economic crisis, and that the highly unequal distribution of income since the crisis has perpetuated the slump, especially by making it hard for families in debt to work their way out. Moreover, there’s an even stronger case to be made that high unemployment — by destroying workers’ bargaining power — has become a major source of rising inequality and stagnating incomes even for those lucky enough to have jobs." Paul Krugman in The New York Times.
@vgmac: so another way of summarizing Chetty et al is the American Dream has long been a myth?
BROOKS: It takes a generation. "[W]hen President Obama talks about expanding opportunity in his State of the Union address on Tuesday, I’m hoping he’ll widen the debate. I’m hoping he’ll sketch out a stage-by-stage developmental agenda to help poor children move from birth to the middle class...[H]uman capital development takes a generation. If you really want to make an impact, you’ve got to have a developmental strategy for all the learning stages, ages 0 to 25." David Brooks in The New York Times.
THOMPSON: Why parents matter too much. "First, the income of your parents matters—not just as a strong predictor for your own income (given how weak social mobility is), but also as a nudge for your life path...Second, your parents' marriage (or living arrangement) matters. The single strongest predictor of a child's economic fortunes is the fraction of single parents in the area where she grew up." Derek Thompson in The Atlantic.
Music recommendations interlude: The Clash, "Career Opportunities," 1977.
DUNCAN: Better education 101. "In contrast to a national picture of gradual progress, Tennessee and the District of Columbia reported striking jumps — in both math and reading achievement and in both grades examined, fourth and eighth. We don’t know all the reasons why students did better in Tennessee and the District in 2013 than in 2011. But it is clear that they shared a similar approach to bettering education...[T]hese leaders invested in strengthening the quality of classroom instruction and revamping systems for teacher support and evaluation. They ensured that teachers could use good data from multiple sources to identify learning gaps and improve instruction. They also sought ongoing feedback from educators and others." Arne Duncan in The Washington Post.
KONCZAL: Washington has not quite yet defeated Wall Street. "All these rules do nothing if they aren’t consistently enforced. There are reasons to worry. The Volcker Rule was immediately adjusted in order to prevent a small bank from taking a loss on a complicated investment. Experts disagree on the consequences of weakening that part of the rule, but the precedent is terrible. The concern over the strength of enforcement is a key part of the current record-setting bank settlements over bad conduct." Mike Konczal in The New Republic.
KENNY: Factories aren't job factories. "Not really—at least not for the U.S. in 2014. Any attempt to draw lessons from the 1950s, when many a high school-educated (white, male) person got a job in a factory and joined the middle class, doesn’t account for the changes in the U.S. and global economy since the middle of the last century. While it’s smart to focus on creating more stable, remunerative jobs, few of them are likely to come from manufacturing." Charles Kenny in Bloomberg Businessweek.
Opinion list: Ten things that aren't panaceas. Brad Plumer in The Washington Post.
BEINART: Rand Paul 2016? "To understand the Kentucky senator’s hidden strength, it’s worth remembering this basic fact about the modern GOP: It almost never nominates first-time candidates. Since 1980, George W. Bush is the only first-timer to win a Republican nomination. And since Bush used the political network his father built, he enjoyed many of the benefits of someone who had run before. It’s the same with Paul. In both Iowa and New Hampshire, he begins with an unparalleled infrastructure left over from his father Ron Paul’s 2008 and 2012 campaigns." Peter Beinart in The Atlantic.
This is cool interlude: A soundmap of Mother Nature.
2. Obamacare leads to insurer downgrades
Moody’s downgrades health insurers, citing Obamacare. "Moody’s Investors Service analysts said Thursday that the administration’s repeated changes to the rules and problems with getting younger Americans to sign up for the new insurance “exchanges” make it difficult to know if health insurers will end up with the customer base they need to make the economics of Obamacare work out...“While all of these issues had been on our radar screen as we approached 2014, a new development and a key factor for the change in outlook is the unstable and evolving regulatory environment under which the sector is operating,” Moody’s said. “Notably, new regulations and presidential announcements over the last several months with respect to the [Affordable Care Act] have imposed operational changes well after product and pricing decisions had been finalized.”" Tom Howell Jr. in The Washington Times.
Court says Missouri can't block Obamacare navigators. "A federal court has temporarily blocked Missouri officials from restricting organizations in the state from helping people sign up for health insurance as part of the federal health-overhaul law. The U.S. District Court for the Western District of Missouri granted an injunction Thursday blocking the Missouri insurance department from enforcing a state law passed last year that limited the activities of people seeking to enroll the uninsured through new insurance exchanges." Louise Radnofsky in The Wall Street Journal.
The uninsured rate is dropping. Don’t thank Obamacare yet. "Gallup's new poll on the uninsured rate shows a modest decline in January. The monthly poll shows that 16.1 percent of Americans report not having health coverage. This is the lowest rate that Gallup has found since December 2012...At the same time, the small decrease in the uninsured rate is difficult to attribute directly to Obamacare right now. You'll notice in the chart above that the uninsured rate has been trending downward this entire year, likely a product of a declining unemployment rate and greater access to employer-sponsored insurance." Sarah Kliff in The Washington Post.
Trying to count Obamacare’s Medicaid enrollment? Good luck. "We don't know how many of those people gaining Medicaid because of the Affordable Care Act. There are lots of people who were eligible for Medicaid prior to the Affordable Care Act but didn't take action to enroll in the program. Maybe they never got around to signing up or found the paperwork too difficult. Maybe they hadn't heard about the Medicaid program--but did start hearing about it this past fall, when there was lots of focus on the health law's insurance expansion. When states send the federal government information about the number of people signing up for coverage, they don't specify whether it's "Obamacare Medicaid" or "normal Medicaid." They just tell the federal government that somebody signed up for Medicaid." Sarah Kliff in The Washington Post.
3. You can be pro-business and pro-climate
Industry awakens to threat of climate change. "Coke reflects a growing view among American business leaders and mainstream economists who see global warming as a force that contributes to lower gross domestic products, higher food and commodity costs, broken supply chains and increased financial risk. Their position is at striking odds with the longstanding argument, advanced by the coal industry and others, that policies to curb carbon emissions are more economically harmful than the impact of climate change."Coral Davenport in The New York Times.
U.S. to probe solar panel dumping claims. "The US is reigniting a trade battle over solar panels by launching a probe into allegations that Chinese manufacturers have tried to evade anti-dumping duties by making products in Taiwan. The US government said on Thursday that it would investigate a complaint that Chinese producers were exploiting a loophole in measures to stop the sale of panels at illegally low prices in the US." Barney Jopson and Shawn Donnan in The Financial Times.
Maybe oil really shouldn't travel by rail. "Federal safety investigators called on railroads to route oil-filled trains around heavily populated areas as part of a series of recommendations to reduce risks from the growing business of shipping crude by rail. The National Transportation Safety Board said Thursday that transportation regulators should work with railroads to reroute oil trains and should ensure that railroads have plans in place to handle "worst-case" accidents or spills. It also called for new testing practices for oil being shipped by rail, in the wake of several serious accidents recently in which crude oil exploded after trains derailed." Betsy Morris, Paul Veira and Laura Stevens in The Wall Street Journal.
No one tries harder than Europe to fight climate change. The recession is testing that. "The E.U.'s new proposal is already coming under criticism from environmentalists for being too weak (many greens were hoping for a 50 percent cut or more by 2030). On the flip side, policymakers have to worry about moves that hike energy prices at a time when Europe's economy is still struggling massively. And there's the nagging question of whether Europe's often-unstable cap-and-trade system is up to the job of cutting emissions." Brad Plumer in The Washington Post.
Wonkbook reads dozens interlude: A quarter of Americans didn't read a single book last year.
4. Your fiscal forecast for 2014: Partly cloudy with a chance of default
The Obama administration is finalizing its annual budget. "President Obama will send his annual budget to Congress on March 4, about a month late because of lawmakers’ tardy agreement on the current fiscal year’s federal spending...Last year, Mr. Obama’s budget arrived even later, in early April, because a fiscal fight between him and Congress delayed final action into January. Presidents are supposed to submit budgets in early February, but are often late." Jackie Calmes in The New York Times.
Meanwhile, Republicans say they're about to use the debt ceiling as leverage again. "[A]ides and lawmakers say party leaders believe a "clean" debt-ceiling bill, devoid of policy demands, can't pass the Republican controlled House...Prominent among the ideas being discussed are changes to an element of the Affordable Care Act known as "risk corridors," which some Republicans have derided as a bailout for insurers because the provision calls for the government to help insurers offset risks related to the law's requirement that they sell policies to all comers. Republicans might also demand repeal of the law's medical-device tax or its surcharge on insurance plans." Michael R. Crittenden in The Wall Street Journal.
Attention Tim Carney interlude: The crony-capitalist action figures.
5. Detroit wants its own visa program
Detroit: Send immigrants our way. "Gov. Rick Snyder of Michigan on Thursday announced plans to seek federal help in bringing 50,000 immigrants to the bankrupt city over five years as part of a visa program aimed at those with advanced degrees or exceptional abilities in science, business or the arts. Under the plan, which is expected to be formally submitted to federal authorities soon, immigrants would be required to live and work in Detroit, a city that has fallen to 700,000 residents from 1.8 million in the 1950s." Monica Davey in The New York Times.
Immigration is back on the Republican agenda. "The same House Republicans who punted on immigration last year are now privately crafting an intricate plan to try to pass it in 2014. Most people close to the planning expect votes on four bills by the end of the summer, including one that would give undocumented workers legal status...shadows and reintegrate into society.” That would include requiring immigrants learn English, civics, pay taxes and pay a fine — a process that is sure to be decried by opponents as amnesty. The other three Republican bills would cover legalizing children brought to the country illegally, the tracking of foreign nationals and visas for low-skilled workers. The House has already passed high-skilled worker and border security bills." Jake Sherman and Anna Palmer in Politico.
Good things happening in this world interlude: Building a better HIV vaccine through crowdfunding and machine learning.
Ten things that aren’t panaceas. Brad Plumer.
The uninsured rate is dropping. Don’t thank Obamacare yet. Sarah Kliff.
A surprising map of where it’s hardest to escape poverty in America. Ezra Klein.
No one tries harder than Europe to fight climate change. The recession is testing that. Brad Plumer.
Trying to count Obamacare’s Medicaid enrollment? Good luck. Sarah Kliff.
Virginia attorney general asks the Supreme Court to strike down its same-sex marriage ban, please. Ashby Jones in The Wall Street Journal.
Watchdog panel urges NSA to end phone program. Siobhan Gorman and Jared A. Favole in The Wall Street Journal.
Home sales are expected to cool after a big year. Eric Morath in The Wall Street Journal.
Walmart creates fund to support U.S. manufacturing. Emmarie Huetteman and Elizabeth A. Harris in The New York Times.
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Wonkbook is produced with help from Michelle Williams.