The New Welfare State: Faster, Cheaper ... and Out of Control?

Clinton-era reforms are widely celebrated, but the recession has raised questions about whether they solved problems or just hidden them from view.

It's still soon to make a definitive judgment on how President Clinton's welfare reforms affected the U.S. (Reuters)

In 1996, President Bill Clinton ignored the protests of his liberal base and signed a reform bill written by congressional Republicans that abolished the existing welfare entitlement and replaced it with a new program, Temporary Assistance for Needy Families. In doing so, he fulfilled a 1992 campaign promise to "end welfare as we know it," by instituting strict time limits and work requirements for recipients and block-granting funds to the states.

Within a few years, the number of families on welfare had shrunk by more than 50 percent. When caseloads remained low and single mothers' employment numbers and wages rose throughout the 2000-01 recession, even the law's critics began to take notice. Rebecca Blank, a member of Clinton's Council of Economic Advisers and a skeptic of the reform, acknowledged in 2006 that "[e]ven the strongest supporters of welfare reform in 1996 would not have dared forecast the steep declines and continued low levels of welfare caseloads a decade later."

Despite being mostly won over by the law's robust performance, Blank issued a warning: "in the face of a major economic shock ... the current system of public assistance may not provide adequate support for many of our poorest families."

How Politicians Are Making You Stupid: Part 1

How Politicians Are Making You Stupid: Part 2

How Politicians Are Making You Stupid: Part 3

SEC shuts down $11-million Ponzi scheme

Regulators have charged a New York fund manager who was running an $11-million Ponzi scheme, federal court filings showed.

The Securities and Exchange Commission charged Jason Konior with defrauding investors by promising to match their investments in his fund many times over. In reality, he used $2 million of the money he collected to pay his own expenses and to cover redemption requests from previous investors, according to the SEC's complaint, dated Thursday.

Hedge Fund Got Most South Carolina Fees While Lagging on Returns

May 25 (Bloomberg) -- Mariner Investment Group LLC, a hedge fund founded by a former Bear Stearns Cos. fixed-income executive, charged South Carolina's pension fund more than any other manager while delivering returns that trailed competitors.

Mariner, started by William Michaelcheck, 65, got $38 million in fees from the South Carolina Retirement Systems in fiscal 2011, or 16 percent of all the compensation paid to the fund's money managers, which totaled $239 million, according to pension officials.

The performance of Mariner's investments for South Carolina lagged behind those of managers such as Bridgewater Associates LP, the world's biggest hedge fund by assets. Mariner funds returned from 2 percent to 13 percent last year, while Bridgewater's delivered 17 percent to 24 percent. Bridgewater collected $25 million in fees, or 34 percent less than Mariner, while managing $1.3 billion in assets compared with Mariner's $930 million.

"We take the risk and we pay the fees, but we don't get the reward," said South Carolina Treasurer Curtis Loftis, a Republican who was elected in 2010 with Tea Party endorsements and owns a pest control company. "I think it's systemic. I think it's happening all across the country."

Can Trees Actually Deter Crime?

 

Silly as it may seem to the public, there's an intense disagreement among scholars about the impact urban trees have on a city's crime rate. Some are convinced urban greenery increases crime — arguing that low trees and shrubs, in particular, create a natural hiding place for criminals.

A 2001 case study of auto thieves in Washington, D.C., found that offenders often target areas near dense vegetation because it can "reduce effort and risk by offering concealment."

Others are convinced that urban trees have exactly the opposite effect. This crowd argues that trees actually decrease crime either by attracting more people to public places (Jane Jacobs' "eyes on the street" theory) or by signifying to criminals that people care about their neighborhood (James Q. Wilson's "broken windows" theory). Another 2001 study, this one of public housing in Chicago, found that "the greener a building’s surroundings were, the fewer crimes reported."