April 15, 2008, 12:25 pm
The Fiscal Costs of Marriage and Divorce

By Justin Wolfers in the Freakonomics Blog in the NYT: (Again Done by Professional Economists):

[http://freakonomics.blogs.nytimes.com/2008/04/15/the-fiscal-costs-of-marriage-and-divorce/#more-2513]

This morning’s inbox leads me to two observations:

1) There is some excellent research out there about marriage and divorce.
2) There is no shortage of ways for imaginative advocates to distort the findings of this research.

Let me begin with the first point: an intriguing paper by Elizabeth Ananat and Guy Michaels, forthcoming in the Journal of Human Resources.

A key problem with research linking divorce and income is that we can’t tell whether divorce causes lower income, or whether lower income (or its correlates) cause divorce. This observation leads these economists to analyze a set of divorces that are somewhat random.

Following an idea developed by Gordon Dahl and Enrico Moretti, they note that people have a greater tendency to divorce if their first-born was a girl. Reasoning that the gender of the child is random, they explore the consequences of this higher divorce risk on income.

A similar approach led Kelly Bedard and Olivier Deschenes to a rather striking conclusion: divorce may not be financially harmful to women. They find that divorce actually led women to live in households with greater income per person. (To be more precise, they argue that the marginal divorces caused by the gender of the first-born led women to live in higher income households.)

And Ananat and Michaels agree, finding similar effects. They then slice and dice this surprising finding, concluding that divorce may raise incomes on average, but it leads some women to lower incomes, and some to higher incomes. Those who gain tend to be in a (slight) minority, but they tend to gain more, which explains the rise in average income.

And now the second point.

A new report was released this morning by the Institute for American Values, the Institute for Marriage and Public Policy, the Georgia Family Council, and Families Northwest, using the Ananat-Michaels result to argue that family fragmentation costs the U.S. taxpayer $112 billion per year, or $1 trillion each decade.

How do these personal gains add up to a taxpayer loss? It is simple: in “advocacy science” one can pick and choose what to count. In this case they counted costs and ignored benefits.

The advocates suggest that the Ananat-Michaels results imply that if poor single women were to marry, around 60 percent of them would no longer be in poverty, leading to a decline in total poverty of about one-third. Thus, they attribute one-third of the cost of anti-poverty programs to the costs of “family fragmentation”. Citing research by Harry Holzer linking childhood poverty to crime, they also attribute one-third of the costs of poverty-related crime to divorce, and also attribute further tax costs to the intergenerational transmission of poverty. Add enough of this stuff up, and you hit over $100 billion per year.

What’s the trick here?

The Ananat-Michaels result is that divorce seems to help the finances of about as many women as it hurts, and those who gain, may gain more than those who lose. But this report counts up the costs to the taxpayer from the women who lose income, but refuses to count even a single dollar of the rise in taxes linked to those who gain income. Moreover, these winners are not only paying higher taxes — their kids are probably also committing less crimes, and they hope to transmit their higher economic status to their kids, who in turn will also pay more taxes. Moreover, the link between divorce and crime is not so obvious — as dissolving violent marriages reduces domestic violence.

Amazingly, the advocates put together “fiscal” costs of divorce without even understanding the tax code. The U.S. tax system is structured so that when poor single mothers marry men with higher incomes, in most cases, the total tax paid by husband and wife would fall. Yet this isn’t counted.

Those poor single women aren’t robbing us of tax revenue, they are actually paying more than if they were married! (Yes, the tax code does include a marriage penalty for some couples who are both high earners, but for most couples, the U.S. gives you a tax break for getting married.)

And finally, the advocates fundamentally miss what marriage is about.

Many of the gains from marriage that they count are gains mainly from forcing poor single women to live with others, thereby realizing economies of scale. If there is a fiscal case to be made for encouraging such behavior, the same fiscal case suggests we should encourage them to live with just about anyone — a same-sex lover, a polygamous family, or even with good friends. Yet for some reason, the advocates seem reluctant to extend their argument to its natural conclusion.

Perhaps the fact that many women are willing to face the prospect of poverty to get out of their marriages tells us that, beyond fiscal implications, there are other, more important, costs and benefits of marriage and divorce that also need to be counted.

I must admit that I find the Ananat-Michaels result surprising and interesting. And there remains a lot to be learned about the effects of divorce on the income of divorcees, or on its fiscal impact more generally.

But the first law of advocacy science coincides with a well-known economic principle: any cost-benefit analysis that only looks at one side of the ledger will always come to a reliable conclusion.

[Thanks to Betsey Stevenson for her insights on this post.]

[http://www.mcclatchydc.com/homepage/story/33510.html]

McClatchy Washington Bureau
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Posted on Sat, Apr. 12, 2008
Polygamist sect gets millions from U.S. government
Jack Douglas Jr. | McClatchy Newspapers

last updated: April 12, 2008 07:56:07 PM

FT. WORTH, Tex. _American taxpayers have unwittingly helped finance a polygamist sect that is now the focus of a massive child abuse investigation in West Texas, with a business tied to the group receiving a nearly $1 million loan from the federal government and $1.2 million in military contracts.

The ability of the Fundamentalist Church of Jesus Christ of Latter Day Saints, or FLDS, to operate and grow is largely dependent on huge contributions from its members and revenue from the businesses they control, according to a former accountant for the church, and government officials in Utah and Arizona, where the sect is primarily based.

One of those businesses, NewEra Manufacturing in Las Vegas, has been awarded more than $1.2 million in federal government contracts, with most of the money coming in recent years from the Defense Department for wheel and brake components for military aircraft.

A large portion of the awards were preferential no-bid or “sole source” contracts because of the company’s classification as a small business, according to online databases that track federal government appropriations.

NewEra, previously known as Western Precision Inc. and located in Hildale, Utah, also received a $900,000 loan in 2005 from the federal Small Business Administration, the data show.

The president and chief executive of the company is John. C. Wayman, identified as an FLDS leader and a close associate to Warren Jeffs, the sect’s “prophet,” who was convicted last year as an accomplice to rape for arranging the marriage of a 14-year-old girl to her 19-year-old cousin.

When Jeffs, who was one of the FBI’s Ten Most Wanted Fugitives, was arrested in the summer of 2006, he was driving Wayman’s late-model red Cadillac Escalade, government officials say.

Wayman did not return phone calls seeking comment.

On NewEra’s Web site Wayman says the company is “an honorable and valuable asset to our country” in helping build military and commercial airplanes that carry people throughout the world. He does not mention its ties to the FLDS.

Steve Barlow, human resources manager for NewEra, said last week that it would be inappropriate to comment, “Given everything that’s going on. I could only give you the company motto: ‘Good parts on time.’. ”

U.S. Rep. Kay Granger, the Fort Worth Republican who sits on the House Appropriations Committee that deals with issues of defense, military and homeland security, said she is surprised that the federal government is doing business with a group accused of mistreating women and children.

“It makes me very uneasy,” Granger said. “It needs to be investigated without a doubt.”

To begin with, she added, federal authorities should look into NewEra’s financial records.

John Nielsen, who worked for the company when it was Western Precision in Hildale, said in a 2005 affidavit that he and other FLDS members were made to work for little or no wages, even as the company was bringing in lucrative government contracts and other work.

At the same time, $50,000 to $100,000 in company profits were going each month to FLDS “and/or” Jeffs, Nielsen said in the affidavit, filed as part of a civil lawsuit.

He said he and other sect members thought their working for free or for extremely low wages would bring them redemption. Instead, Nielsen said in the affidavit, he was found to be “wanting” by the sect’s leadership, ordered off the property and separated from his five young children and his wife. She was “reassigned” to another man, becoming the fourth of his six wives.

“It broke my heart,” Nielsen said in the affidavit. He declined to comment when reached by phone Friday.

In Texas, authorities raided the FLDS’ sprawling YFZ Ranch near Eldorado on April 3, beginning an exhaustive search of its 1,691 acres. Authorities were acting on a tip from a 16-year-old girl inside the compound who said she had been beaten and raped by a 50-year-old man whom she was forced to marry.

Since then, a state district court judge has ordered the removal of 416 children, many of them young girls who have children or are pregnant after forced encounters with their “spiritual” husbands in the sect’s towering white limestone temple, officials say.

“There’s a lot of bad shit in there,” said a high-ranking official with the federal Justice Department who did not want to be identified because of the sensitivity of the case. On Tuesday, the Justice Department executed a sealed FBI search warrant at the ranch.

While the men of the sect have held close rein on their “plural wives” and children, seldom allowing them to associate with the outside world, the male leaders have fanned out into successful public business ventures. They work as government defense contractors, dairy farmers, engineers, construction contractors, log-cabin homebuilders and suppliers of lanyards, the cords used on eyeglasses or nametags.

In addition, JNJ Engineering, a company owned and operated by FLDS leaders, has made millions of dollars in Las Vegas, the Las Vegas Review-Journal reported in September. The company won $11.3 million in contract work from the Las Vegas Valley Water District; all but one of the project workers came from the twin towns of Hildale and Colorado City, Ariz., where most of the sect’s 10,000 members live.

Jethro Barlow, a former accountant for the FLDS whom Warren Jeffs excommunicated in 2003, said Jeffs ordered sect members, their families and the companies they operated to “give till it hurts….

“And people did.”

Jeffs was able to rally church members to tithe heavily, even if it hurt them financially, because he had convinced them that they had to prepare for the end of the world, Barlow said.

The fever-pitched preparation continued, even after several apocalyptic deadlines had passed. It motivated the rapid construction of the temple at the YFZ Ranch and the erection there of manufactured cabin-like homes made by sect members in Canada, he said.

Barlow, who remains in Hildale, said he believes he and his family were kicked out of the FLDS because they were not among the favored ones in Jeffs’ flock.

Although Jeffs is now behind bars, sect members still consider him their leader and prophet, said Bruce Wisan, a nonmember appointed by the state of Utah to replace Jeffs as manager of a the FLDS’ trust. Established in 1942 to “preserve and advance the religious doctrines” of the church, it is now estimated to be worth between $100 million and $150 million.

Under Jeffs’ direction, Wisan said, sect households are required to tithe at least 10 percent of their gross income to the church, plus an extra $1,000 a month.

Tim Bodily, an assistant attorney over the tax division of the Utah attorney general’s office, said Wisan has received little cooperation from those within the sect, which has traditionally shown distrust for outsiders.

“He’s been provided no records at all, and no one inside the organization has provided any inside knowledge. … It’s a very difficult thing to do,” Bodily said. “Progress moves slow when dealing with these people. Texas has its hands full.”

Douglas is a staff writer with the Ft. Worth Star-Telegram.

McClatchy Newspapers 2008

But this was & is the politics of the past, blaming single mom’s for being such profligate harlots on the public dole! It’s been really going on since the year jot too. If it disgusts you as much as it does me, Then GET OUT & VOTE! These reactionary political developments don’t happen over night, and they don’t happen in a vacuum. Most single mom’s, and singleton’s in general just Don’t Vote! If you don’t Vote, you Don’t Count, your vioce is Not Heard in the Body Politic. If you don’t Count and make Your voice heard, you get scape goated for all of societal ills these Repug. men can think to invent to paste on you as a ’scarlet A’ as ‘instruction’ for the rest of the women not to dare to ‘get out of line’. You get your lifestyle questioned & threatened, then your benefits, and then your very lives. (Think health care here people). It’s as simple as that.

So I’ve always viewed this in a political frame of mind. When was the last time You Voted? Really now, fess up! Have you actually Contributed to the problem or are you part of the solution? How come there’s very few folks out there damning polygamy? (No really except for a few raids on their 60-75K adherents, you hardly ever hear much about them!) They VOTE! In Large numbers! And they’ve got Millions of sympathetic ears to listen to their case as they plead it. Who stands for & with single moms? Will You?

Cheers & Good Luck! ‘VJ’

grrrrr

Giving money to people who don’t work drains the goverment, not single or divorced parents. We too feel the strain of that as we’re forking over a chunk of our check to the goverment that we’ll never see when we’re old.

http://pandagon.blogsome.com/2008/04/15/conservatives-continue-to-raise-the-alarm-wives-are-escaping/#more-7054