Long Lines For Free Holiday Food Vouchers « CBS Miami

EXCERPTS:

"LITTLE HAVANA (CBS4) – Hundreds of South Floridians lined up in Little Havana overnight for a chance to feed their families this holiday.

As part of the Latin Chamber of Commerce’s annual holiday basket giveaway, representatives from the organization handed out food vouchers on Flagler Street between 14th and 15th Avenues in Little Havana.

Some people began to line up last Friday. Many of those who waited in line for hours were either unemployed or they live on a fixed income and can’t afford any extras.

“It’s very, very hard,” said Mosas Hernandez. “We need something free because right now, I lost my job, I need to pay my rent, so believe me it’s very hard.”

The line wrapped around the block outside the voucher distribution location. Concerned about safety, the City of Miami Police Department was in attendance to keep order and look after the sick and elderly.

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Those who received a voucher Wednesday will have to return on December 14th and exchange it for bags of food. Each voucher can be redeemed for five bags of groceries worth $120. They are filled with pork, rice, beans, milk, bread and other delicious items which are often used in a traditional Noche Buena dinner.

This is the 26th year the Latin American Chamber of Commerce has given Christmas food away. It began with a holiday gift bag for just ten families. The organization now provides families with food bags, truckloads of food that are  donated by several companies.

Perhaps no one symbolized the change in economic fortunes more than Angela Llamas who, with her friends and family, stood in line for more than 24 hours.

The Chamber finished giving away all 3,000 vouchers in two hours. Even so, the line of people continued to snake around the block leading organizers to conclude they could have given away twice as many vouchers this year, because the  need is that great.

QUESTIONS:

Let's assume that you believe it's a good idea to help the poor.

1. Using economic analysis to support your ideas, do you think this food basket giveaway is a good way of achieving that objective?
2. Can you think of a plan that might be more effective at helping the poor?

Doctors Question Disability Decisions As Agency Moves To Speed Up Process - WSJ.com

EXCERPTS:

"Earlier this year, senior managers at the Social Security Administration in Baltimore, frustrated by a growing backlog of applications for federal disability benefits, called meetings with 140 of the agency's doctors.

The message was blunt: The number of people seeking benefits had soared. Doctors had to work faster to move cases. Instead of earning $90 an hour, as they had previously, they would receive about $80 per case—a pay cut for many cases which can take 60 to 90 minutes to review—unless the doctors worked faster. Most notably, it no longer mattered if doctors strayed far from their areas of expertise when taking a case.

"The implication there was that you really didn't have to be that careful and study the whole thing," said Rodrigo Toro, a neurologist who analyzed cases for the Social Security Administration for more than 10 years. Some doctors, including Dr. Toro, quit following the changes. Others were fired. In all, 45 of the 140 left within months, the agency said.

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In February 2010, the inspector general, as part of a probe investigating complaints by a doctor, discovered a doctor in the Alabama disability determination office who approved between 80 and 100 decisions a day. Another Alabama doctor signed off on 30 cases an hour after performing only a "cursory review of each case." The investigation said several doctors complained of pressure from superiors to approve a higher number of applications to meet statistical goals.

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The federal disability system is designed to help people who can no longer work. For many, it represents the social safety net of last resort. Successful applicants receive a monthly stipend and access to federal health-care programs, often for life.

QUESTIONS:

Split Over ECB Reflects Europe's Divisions - WSJ.com

EXCERPTS:

"Established in 1998, the ECB [European Central Bank] was founded on a German principle that strictly separates central bankers from governments, a principle rooted in Germany's own history. In the early 1920s, its Reichsbank bought massive amounts of government bonds it paid for by printing money.

The result was hyperinflation, an episode that scars Germany's psyche as much as the Depression does in the U.S. The Reichsbank's successor, the Bundesbank, safeguarded Germany's postwar recovery by focusing on a single mandate to keep inflation low, a duty enshrined in the ECB's charter.

Its first president, Dutchman Wim Duisenberg, was so grounded in the tradition of central-bank independence that he was known to tell politicians "I hear you, but I don't listen."

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Proponents of a broader ECB role say Europe's politicians lack the means to cope with a crisis of this severity even if they could overcome their differences. They contend the only way to forestall a collapse of the euro is for the central bank to declare that it will underpin the bond markets of all euro-zone governments.
Germany's worry is that such a move would spark a debilitating inflationary spiral. Germans' visceral rejection to printing money is so strong that endorsing such a course could amount to political suicide for Ms. Merkel and her coalition.
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"They need to go into the market and say we have a wall of money here and no matter how much speculation there is, we are going to keep buying Italian bonds and any other euro bonds that are threatened," Irish Finance Minister Michael Noonan has said.
That would mark a dramatic departure from the central bank's charter, which restricts its role to maintaining price stability through monetary policy, the setting of interest rates.
The euro zone's architects purposely limited the ECB's purview to shield it from political influence. Independence, they believed, would instill confidence in the long-term viability of the common currency, convincing both investors and ordinary Europeans that the bank's power to create money wouldn't be used to remedy political folly.
By testing the limits of its charter, the ECB has opened itself to accusations that it has traded principle for expediency, inviting disaster. Within the ECB, opponents of further action argue that the moves have already put the central bank's reputation at risk.

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Others warn that the bond purchases could invite reckless fiscal behavior by governments, a phenomenon often referred to as "moral hazard."
The credibility issue is central for skeptics of ECB bond buying. If the ECB were to give in to government demands for more aggressive action, the German public could lose confidence in the euro as a stable currency.
German economists contend that since the ECB prints the money to buy bonds, the extra funds it injects into financial markets when it makes bond purchases threaten to increase inflation. European inflation is currently about 3%, versus the ECB's 2% target.

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Other big central banks, particularly the Fed, have interpreted their mandates more broadly to preserve financial stability. The Fed, which unlike the ECB also has a mandate to maximize employment, has purchased large amounts of Treasury bonds to keep long-term interest rates low and has bought mortgage-backed securities to help housing.

The Surge in Money Growth: Meaningful or Meaningless? | Bob McTeer's Economic Policy Blog | NCPA.org

The Surge in Money Growth: Meaningful or Meaningless? | Bob McTeer's Economic Policy Blog | NCPA.org

Over the last few months, both M1 and M2 have increased significantly. Does that mean an increase in inflation is near? This short article by Bob McTeer, former president of the Federal Reserve Bank of Dallas, provides a useful discussion of this issue.

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