The Daily Caller

The Daily Caller

Welfare Queen Probed, Krugman Hardest Hit

I put off reading Josh Levin’s piece about Linda Taylor, the famous Chicago “welfare queen” of the ’70s, in part because I feared it would be so engrossing and revealing I’d be consumed with professional jealousy.  I’ve now read it. It’s engrossing and revealing and  I’m jealous. (Also, Slate‘s new format mysteriously makes reading a long article easier. You should go there immediately.)  But Dave Weigel’s idea that Levin’s piece somehow “vaporizes” Ronald Reagan’s use of the Taylor case in his campaigns is silly.**

Levin doesn’t vaporize Reagan’s story. He confirms Reagan’s story, as Powerline notes. Cadillac included. Here’s Levin:

“Though Reagan was known to stretch the truth, he did not invent that woman in Chicago. Her name was Linda Taylor, and it was the Chicago Tribune, not the GOP politician, who dubbed her the “welfare queen.” It was the Tribune, too, that lavished attention on Taylor’s jewelry, furs, and Cadillac—all of which were real. . .  As the Tribune and other outlets stayed on the story, those figures continued to rise. Reporters noted that Linda Taylor had used as many as 80 names, and that she’d received at least $150,000—in illicit welfare cash, the numbers that Ronald Reagan would cite on the campaign trail in 1976.”

What Levin documents with deadpan detail is that Taylor wasn’t that bad.  She was much, much worse–a multitasking con artist who, in addition to routinely bilking the welfare state, quite possibly murdered someone and kidnapped at least one baby and generally left a stunningly long trail of misery and death.

Old Lib CW:  Reagan was wrong because his “bogus” story was “a gross exaggeration of a minor case of welfare fraud.” (Paul Krugman)

New Lib CW: Reagan was wrong because his accurate story minimized Taylor’s crimes!

This new anti-Reagan line is of course perverse.  If the left had publicized, say, a gun dealer who’d repeatedly violated laws on the sale of firearms to minors–and it turned out that this person was also a murderer and a kidnapper, would you say the left’s argument had been weakened or strengthened?

But just because the argument’s perverse doesn’t mean it’s crazy.  Here is the gist of the thesis, as put by a commenter on Twitter:

Didn’t Reagan mislead by suggesting this master criminal wasn’t a rare aberration among welfare recipients?

Actually, Reagan called Taylor “the woman who holds the record,” making it clear she was an extreme case. But, the argument goes, if it took such an extreme “master criminal” to get undeserved payments, maybe the system was actually pretty secure for everyone else–like a locked door that keeps out everyone except one or two highly-skilled lock-pickers.

The problem is there’s little evidence for this in Levin’s piece. Taylor doesn’t seem to have had much trouble obtaining undeserved payments on repeat occasions, though some of her more ambitious feats of grifting (like stealing children) apparently required delayed birth certificates from a helpful doctor.  The impression you get is of a benefit-dispensing system that didn’t do much to stop fraud. Indeed, as Levin notes, the Chicago Tribune‘s original purpose was to blame that system. He seems to agree that Taylor was just the fur-wearing tip of the fraud iceberg in that respect:

For [reporter George] Bliss and the Tribune, the scandal wasn’t just that Taylor had her hand in the till and had the seeming ability to shape-shift. The newspaper also directed its ire at the sclerotic bureaucracy that allowed her schemes to flourish. Bliss had been reporting on waste, fraud, and mismanagement in the Illinois Department of Public Aid for a long time prior to Taylor’s emergence. His stories—on doctors who billed Medicaid for fictitious procedures and overworked caseworkers who failed to purge ineligible recipients from the welfare rolls—showed an agency in disarray. That disarray didn’t make for an engaging read, though: “State orders probe of Medicaid” is not a headline that provokes shock and anger. Then the welfare queen came along and dressed the scandal up in a fur coat. This was a crime that people could comprehend, and Linda Taylor was the perfectly unsympathetic figure for outraged citizens to point a finger at.

Now that the Tribune had found the central character in this ongoing welfare drama, a story about large, dysfunctional institutions became a lot more personal. The failure—or worse, unwillingness—to ferret out Taylor’s dirty deeds revealed more about the flaws of state and county government than any balance sheet ever could. In his report to his superiors at the Chicago Police Department, [detective Jack] Sherwin described ping-ponging from the Department of Public Aid to the state’s attorney’s office to the U.S. attorney, with none of the agencies expressing much interest in helping him out. The Tribune’s headline: “Cops find deceit—but no one cares.” [E.A.]

Why might the state have been uneager to ferret out fraud? It probably wasn’t just the “sclerotic bureaucracy.” Taylor’s case came at the end of a dramatic period in U.S. welfare policy, in which many state welfare agencies went from being moralistic gatekeepers to enthusiastic dole dispensers.  This was the era of the bipartisan “guaranteed annual income” consensus in which money was seen as the solution to all the problems of poverty.*** In many liberal Northern states welfare agencies took it as their mission to sign up as many people as possible–easier to do after the addition of Medicaid made going on the dole much more rewarding. The result: the number of Americans on AFDC, the basic welfare program, tripled in a little more than 10 years, from  3.1 million in 1960 to 10.8 million in 1974. This was the famous “welfare explosion” of the late 60s. It’s the context Levin leaves out.  It’s why Reagan got traction with his argument that (in Levin’s words) “The welfare state is broken, and I’m the man to fix it.” To many Americans, not just Republicans, the system seemed to be spinning out of control.

Was actual fraud a non-trivial part of this explosion? it certainly was in the public consciousness–but in reality? Levin pooh-poohs this possibility:

According to [scholar Julilly] Kohler-Hausmann, welfare fraud investigations increased 729 percent across the country between 1970 and 1979. This wasn’t because fraud was on the rise, she argues—it was because Illinois and other states criminalized welfare overpayments that had once been handled administratively. The rising level of prosecutions didn’t correspond to an increase in benefit levels either.

The type of fraud Kohler-Hausmann argues shouldn’t have been criminalized–basically not telling the government about income you’re getting on the side–arguably pales in comparison with Linda Taylor’s flat out phony applications. But it’s a type of fraud that has traditionally been pervasive, according to even liberal experts like Kathryn Edin and sympathetic journalists like Jason DeParle.  This is what Kohler-Hausmann, means when she admits, “The [fraud-busting] legislators were probably correct when they charged that welfare fraud was rampant in Illinois in the 1970s.” You can argue that this “work-on-the-side” shouldn’t be criminalized–that welfare payments alone aren’t enough to live on, and if recipients work it’s better than non working. Or you can argue that welfare becomes that much more attractive if you let recipients get full benefits plus off-the-books income when they need it. Either way it is technically welfare fraud.****

More important, just because prosecutors waged a war on this smaller-bore type of fraud doesn’t mean the bigger bore Linda Taylor-style frauds weren’t common (whether they were increasing or not).  If Kohler-Hausmann offers any statistics on the number of big-bore offenses, I can’t find them. (Double-checked: Not there!)  And she actually seems to acknowledge the existence of other big-ticket frauds before dropping the subject:

 In October of 1978, the Chicago Tribune remarked on how the pervasiveness of welfare fraud made Taylor’s case seem less remarkable and instead simply representative of a larger pattern.

Once the focus of national outrage, the flamboyant and mysterious Chicago woman has relinquished her throne to hundreds of others who have developed equally outrageous schemes to bilk the welfare system of millions of dollars.

Have I mentioned that Kohler-Hausmann’s paper is filled with conclusory, off-putting left-academic jargon? (Sample: “welfare bureaucracies’ struggles to limit costs while policing sexuality and racial, gender, and class hierarchies.”) If she is supposed to be Levin’s big gun to support of the idea that Linda Taylor was sui generis, not representative of a general problem, he needs to call in some backup.

Of course, fraud–big-bore or small-bore–wasn’t the main thing wrong with the welfare system. The scandal, as Michael Kinsley would say, wasn’t what was illegal but what was legal. The AFDC law was written to send cash payments to parents (almost always mothers) in broken homes whether or not they worked. Eventually it came to be seen–even when it was operating by-the-book–as subsidizing a dysfunctional culture of never-married mothers isolated from the broader labor market. Reagan hinted at this more important issue–he argued that welfare created “a new kind of bondage” for poor blacks– and in his actual policies he advanced constructive solutions to the broader problem, most obviously “workfare.”  But in speeches he emphasized the fraud. The fraud drove voters crazy–waste of tax dollars usually does. And it may have been easier to attack AFDC by playing the anti-fraud card in an era when the electorate perhaps wasn’t quite ready to confront the basic welfare dilemma and say that poor single mothers should work. (After a couple of decades in which most single mothers had to go to work, voters were ready!)

But we knew that Reagan overemphasized the fraud issue before Levin’s piece. Linda Taylor’s story wouldn’t change that even if she were a less apt symbol. And it was still a real issue, just not the main one.

What’s left of the case against Reagan is, likewise, nothing new–it’s the old argument that by emphasizing undeserving welfare recipients he benefited from racist resentments. Let’s call this the Racism Bonus debate. Yes, there was the legitimate issue of the welfare system exploding as liberals pushed to expand caseloads. Yes, there was the legitimate concern that this rapid expansion was subsidizing a hard-to-escape culture of poverty–which was in fact largely an African-American problem (well over half long-term welfare recipients were black, and most so-called “underclass” neighborhoods were black) . Yes, there was (and still is*****) a legitimate concern about big-bore fraud (and small bore fraud) and the waste of tax dollars working Americans struggle to pay. Reagan effectively raised all these legitimate issues. But in doing so he also got the votes of people who just resented blacks.

Should he not have raised the legitimate issues because of the racism bonus? As noted, this isn’t a new debate. I usually side with those who answer “no”–otherwise the legitimate issues never get discussed. Others seem to emphatically answer “yes.”  It’s a fine debate to have and one my side often loses. It’s also a debate that will go on after Levin’s astonishing piece as it did before, because Levin’s revelations–including that Linda Taylor may well not have been black, even if almost everyone thought she was, and that she was a really evil person–don’t change it one way or the other. They certainly don’t “vaporize” it.

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**–Weigel says it “vaporizes decades and decades of obfuscation about an era-defining political controversy.” I assume he’s talking about Reagan, whom he then discusses. But maybe Weigel’s just being fuzzy about what he means because then he doesn’t have to actually figure out what he means. “Obfuscation” by whom? “Vaporized” how?

***–An era that unfortunately seems to be coming back. [For the rise of the "just-give-everyone-cash" consensus, see James Patterson's excellent America's Struggle Against Poverty.]

****–We’re likely to see a lot more of this type of fraud–not declaring income--now that Obamacare has made the potential payoff larger and broadened the range (up to 400% of poverty) where the government will send you a bigger subsidy if you tell them you make less money.

*****–To this day big-bore fraud–ineligible people getting benefits–is reputed to be rampant in some immigrant communities. I’m not talking about Latinos!