Karpas: A Passover Lesson on Freedom, Perspective, and Moving Forward from Tragedy

Passover is a time for great spiritual insight and growth. The sheer number of rituals involved with the holiday of Passover are so numerous and meaningful that it boggles my mind every year that the holiday arrives. Passover is also a time for asking questions and even singing questions in the song Ma Nishtanah (מה נשתנה). In the song Ma Nishtanah, there are four questions.  I would like to use the third question as a springboard for today's blog entry:

מה נשתנה? שבכל הלילות אין אנו מטבילין אפילו פעם אחת. הלילה הזה שתי פעמים

How is tonight different from other nights? On all other nights, we do not dip our vegetables even once. On this night, we dip them twice. 

The Talmud (Pesachim 114b) says that we should dip this vegetable, known as karpas (כרפס), twice so there is something noticeable for the children. Rabbi Yoel Sirkes, who was also known as the Bach (ב״ח), was a prominent Rabbi in early 17th-century Poland. R. Sirkes' take on it was both an expression of freedom since from his view, free people dip beforehand to increase their appetite (presumedly because free people could better afford more food). These traditional explanations leave something wanting. Couldn't we eat something else to express freedom? If it's to pique the children's interest, why not have something different each year? Why don't we eat more than some green leaves before the meal? An even better question: why eat karpas at all? To answer that last question, I came across a few explanations:

1. The most common traditional responses is that the salt water in which we dip the karpas is to symbolize the tears that the Israelites shed while in slavery. This is to teach a few lessons, particularly on how we handle difficult times. We can look back and re-victimize ourselves again by adding onto the suffering. Alternatively, we can look back and learn from the past so we can make a better future since we better know our strengths and weaknesses. In short, the rough times have a role to play. I can say that from my personal experience that although my rough times were quite rough, they were also the moments that truly defined me.
2. Karpas can symbolize the bounty of the springtime harvest. Interestingly enough, if you reverse the three-letter root in the Hebrew, you get the Hebrew word for "hard labor" (פרך). What can this teach? That life is typically a mixed bag, and that joy comes hand in hand with difficulty.
3. With the act of blessing and eating the karpas, we acknowledge G-d's role in creating something as seemingly mundane as a green vegetable that grew from the ground. As R. Shraga Simmons states that the purpose of dipping the karpas into the salt water is that even something seemingly bitter is "ultimately for the best." I don't believe in the Jewish concept of "this too is for the good" (גם זו לטובה). What I will say is that when we focus on the details, we can find reasons to be grateful. Take the karpas: if we marvel at how the vegetable grew or how through a complex supply chain, the karpas ended up on your table for consumption, or even how food prices have decreased over the years. The Hebrew phrase for gratitude is hakarat hatov, which literally means "to recognize the good." It does not mean we ignore the bad or look at the world through rose-colored glasses, but also be ever mindful of the good that exists in the world. To be able to view the world in more ways and creative ways is a form of liberation. 
4. What is interesting is that the Exodus passage does not mention כרפס. Even more interesting is that the only time that the word כרפס is used in the Tanach (Hebrew Scriptures) is in the Book of Esther (1:6). In that context, the word כרפס means "fine linen." Even when looking at the Talmud (Megillah 12a), the Rabbis only recognize the word to mean "fine linen." Going off of Rashi's commentary on Genesis 37:3, twelfth century Talmudist Rabbenu Manoach connects the Esther story to the Joseph story. It's a long story, but essentially, the mentioning of karpas in Esther is similar to the technicolor dream coat that Joseph wore. In summation, we are supposed to look back to remember what the origin of the Israelites being enslaved was in the first place: baseless hatred (שנאת חינם). To understand our past and how to do better in the future, we have to understand how we arrived. That means taking a look at our past, a past that is bound to have at least some bitterness. We shouldn't dwell in the past, but if we do not bother to even look at our past and examine it in earnest, we do not learn and we do not grow.
5. Another interpretation is based on the nature of vegetables themselves (Slovie Jungreis-Wolff). Vegetables grow in the dark ground. We never know if that little seed will sprout into something more. Similar to the seed, the Israelites grew out of the depths of slavery in a land of idolatry. The Jews grew out of a very dark moment. It's a lesson that we also learn on Chanukah, which is that out of darkness can come light. Much like a plant having the best chance to grow is to give it water, sunlight, and healthy soil, we have to give ourselves the condition to best succeed. 

There are a few themes running through these traditional interpretations. One is that we cannot ignore our past: we have to tackle it head-on. However, if we are to grow, we cannot wallow in our past, either. We have to learn from our past and move forward. In order to do so, we need to cultivate the best circumstances under which we can grow. I don't know your obstacles and suffering, whether they are past or current. Some things seem insurmountable. I'm not going to give anyone the "G-d doesn't give us anything we can handle" because I don't like hearing that myself. I don't think everything will be pollyannish or perfect because it won't. What I can tell you is that we have more control than we think, a point which I brought up on Purim. According to research on happiness, the average person has control over 40 percent of their happiness. Only 10 percent is our circumstances! Much like people tend to their garden so the plants can grow, we can tend to our own well-being in a way where we can flourish. Free will is daunting. It means we are responsible for our choices. It was daunting for the Israelites when then they left the land of Egypt. It was so daunting that they wanted to go back to slavery (e.g., Exodus 14:12). However, that is the point. Free will is daunting. Exerting greater control over our lives can be daunting because it is easier to give into slavery than to be free. That is the main theme of Passover: G-d freed us so we could exercise our free will, which also means we are free to live our lives. While the free will was granted, what we do with it is not handed to us. How we respond to tragedy, even when we don't have any control of the tragedy that is inflicted upon us, is a choice. How we choose to view the good in this world is a choice. The path we make for ourselves is not "set in stone." In short, how we respond to outcomes and how we live is a choice, not a destiny or inevitability. What choices will you make with your freedom to make for a better tomorrow?

"Ban the Box" Laws: Should Employers Ask About Criminal Background at the Beginning of a Job Interview Process?

If someone commits a crime, I believe not only that people should be held responsible for their actions, but that the punishment should be proportionate the the crime committed. This idea of proportionality has more or less become standard in criminal law, at least in the developed world. The offender does their time, and afterwards, the individual comes back into society through what is known as prisoner reentry. The truth of the matter is that this transition from prison to society is tricky. It is more so the case in the United States since the United States incarcerates more people than China does, not to mention that the United States has the highest incarceration rate out of any major country (see International Centre for Prison Studies data here). As of year-end in 2015, there were 70 million with a criminal record, 6.7 million of which were either incarcerated or on parole or on probation. If we take that smaller number of 6.7 million, that is still about 3 out of 100 adults in the United States!

The high incarceration rate combines with another complication about integrating U.S. ex-offenders into society: getting a job. I say this because in the United States, it is commonplace to ask an applicant if they have committed a felony or has a criminal record. Employers use it as a screening question, which is easier than before because of the declining cost to conduct a criminal background check. After all, it is hardly the only factor potential employers use to screen out potential employees. There are a fair number of employers that would rather have a potential employee with a college degree or has a certain number of years of experience. It makes sense for an employer wants the best qualified and most motivated workforce possible. If an employer has a workforce that lacks discipline, honesty, integrity, it will directly impact business. And in certain fields, it makes absolute sense to screen a potential employee for a criminal record. A bank is not going to want to hire a former robber as a bank teller, and a fire department is not going to want to hire a former arsonist to be a firefighter. However, there are plenty of jobs out there where the position is unrelated to the past crime. Plus, if the crime were committed years ago and the ex-offender has become a better person, that is not reflected in checking that box on the job application. The simplified nature of this filter does not provide potential employees the opportunity to contextualize their former crime.

Combine that with ex-offenders more likely to have a lower level of education, lower set of job skills, and more likely to have mental and physical health issues, not to mention that they are more disconnected from the labor market on account of being in prison, it becomes a considerable challenge to find a new job (Doleac, 2016). As such, it takes longer for an ex-offender to find a job than your typical citizen. It takes 60 percent of ex-offenders at least one year to find a new job after leaving prison, which is important since employment is the single largest factor that prevents recidivism (Raphael, 2014; Berg and Huebner, 2010). In addition, there is evidence showing that ex-offenders who cannot find a job are more likely to reoffend. Due to the fact that this integration is difficult, about two-thirds of ex-offenders commit another crime within three years (Bureau of Justice Statistics), thereby perpetuating the cycle. This increase in crime and incarceration rates ends up costing us all.

One suggestion to break the cycle is referred to as "ban the box." Ban the Box (BTB) laws make it illegal to remove from their initial hiring applications the question of whether someone has a criminal record. This question is postponed to later in the hiring process, typically during the background check right after the conditional job offer (see flow chart below). The idea is that by postponing that consideration, ex-offenders will have a better chance at gaining employment. I ask about BTB laws in the first place because a study from the National Bureau of Economic Research (NBER) was released on how BTB laws affect crime rates (Sabia et al., 2018). With that said, I would like to observe the effects of BTB laws and see if proponents are correct in their optimism.

Callbacks and Employment Rates for Overall Ex-Offender Population
One question is how this affects ex-offenders. After all, the purpose of BTB laws is to make sure that ex-offenders can integrate back into society and be productive members of society, as opposed as to returning to a life of crime. A literature review from the Urban Institute (Stacy and Cohen, 2017, p. 11) shows that BTB laws increase the likelihood that an ex-offender receives a callback for employment. The same Urban Institute literature review also finds that there is little evidence that it actually increases the overall employment rate for ex-offenders (p. 12). A study from the Federal Reserve Bank of Boston confirms these findings. This study found that BTB laws decreased ex-employer employment by 4 percent (Jackson and Zhao, 2016). Their reasoning is that the BTB laws emboldened ex-offenders to apply for jobs for which they thought were previously out of reach, thereby lowering the employment rate. Semi-conflicting research from the Right-leaning American Enterprise Institute shows how BTB laws increase employment in high-crime areas by 4 percent (Shoag and Veuger, 2016).An interesting caveat is that it increases employment in the public sector (Craigie, 2017; Atkinson and Lockwood, 2014), but again, on the whole, the information we have suggests that it does not help with the overall ex-offender population.

Employment Prospects of African-Americans
I ask about African-Americans in particular because they have been disproportionately and adversely affected by the U.S. justice system. An African-American male without a criminal record is statistically less likely to get a job than a Caucasian male with a criminal record (e.g., Pager, 2003).

Even with that being said, the problem is that BTB laws do not remove an employer's reluctance to hire an ex-offender. An employer would rather have an honest, peaceful, agreeable individual. Not only is it good for the employer's reputation within the market, but because ex-offenders are more likely to reoffend, an ex-offender is more likely to be taken off the job by another arrest or conviction. When you remove an observable piece of information, such as a criminal record, employers have to use other information. Employers will use unobservable information that is related to the potential employee being "job-ready." Employers do this with college degrees. College degrees are not necessarily sought after because of the knowledge, but because of the correlated qualities of greater motivation and diligence required to acquire a Bachelor's degree. This "statistical discrimination" happens also with BTB laws.

Using a criminal record is a filter that is far from perfect, but what happens when it is removed? Employers use other information that is even less perfect. Men are much more likely to commit crimes than women. And as the Brookings Institution points out, an African-American male has a 32 percent chance of serving time in prison, a 17 percent chance for Hispanic males, and a 6 percent chance for Caucasian males (see Brookings Institution information below for breakdown by educational attainment).

Essentially, one of the unintended consequences is that rather than use criminal record to determine whether or not a candidate committed a crime, they go ahead and do something racist and sexist by using one's skin color and gender as ways to guess who is more likely to have previously committed a crime. One study from NBER (Doleac and Hansen, 2016) goes as far as suggesting that BTB laws make it more likely for an employer to hire a young, low-skilled Hispanic or African-American male when criminal records are not observable. This has a particularly negative impact on African-American males that do not have criminal records. There are other studies that confirm that statistical discrimination exists (Agan and Starr, 2016; Stoll, 2009; Holzer and Raphael, 2006). A recent study showed that while BTB laws can increase overall ex-offender employment, it still negatively affects African-American males (Flake, 2018).

How Do BTB Laws Affect Crime Rates?
There is some evidence that BTB laws decrease crime rates (Craigie, 2017). On the other hand, there is the NBER study I had cited at the beginning (Sabia et al., 2018). The NBER study found that it lowered crime rates for those who already have lower probabilities of having a criminal record (e.g., women, older individuals). This is consistent with the labor-labor substitution toward those who are perceived to have lower criminal records. The study found that BTB laws did increase property crime rates for working-age Hispanic males. Aside from suggesting an increase of crime rates, what the study does more importantly is confirm that BTB-induced statistical discrimination exists.

Conclusion
There is a desire on my end to have more evidence because some of it is suggestive but not conclusive. Nevertheless, based on the evidence, my opinion is that a "ban the box" policy should be left up to the individual employer. Policy alternatives should be explored because the price of not being able to successfully integrate ex-offenders into society is too great. Instead of ignoring criminal records, what we should do is find ways to show that ex-offenders can be successfully and safely employed. What would help in this case is to provide employers with more information, not less, about a potential employee's job-readiness. There could also be investment in these individuals' job-readiness, something which would most assuredly cost less than recidivism. A certification program signaling that the ex-offenders are indeed job-ready would help: Ohio's job-readiness certification program is showing preliminary success (Leasure and Andersen, 2016).

Some other policy alternatives offered (see Urban Institute's list below) have been improving the background check to better contextualize the ex-offender's history, transitional employment opportunities with supervisor references, providing companies that hire ex-offenders with liability insurance, expunging criminal records [for those with relatively minor crimes], or scaling back occupational licensing (see Slivinski, 2016), the latter of which I have discussed before. While considering these policy alternatives is important, we have to remember that this problem ballooned because of mass incarceration. To solve the issue of integrating ex-offenders, we also need to create a society without over-criminalization that caused the prevalence of the problem in the first place.

A Look at the Italian Economy and Ramifications of the 2018 General Election

Last week, Italy had its General Election for its parliament members after the Italian Parliament was dissolved by President Sergio Mattarella. No single party won the majority, and there is not even enough consensus at the moment to form a coalition government. Even so, it became clear that the influence of the center-left is greatly diminishing in Italy, and that anti-establishment populism is surging, much like it has in other developed countries. While the hung parliament is figuring out what sort of coalitions to build, I would like to take a look at the state of the Italian economy. Over the years, I have heard criticism about the Italian economy, but have never personally taken a particularly deep look at the economic data to make my own determination. Today, I would like to take a look at the Italian economy because it is the third largest economy in the Euro Zone. Italy took a particularly huge hit since its economy shrunk by nine percent and subsequently dealt with a triple-dip recession. If the Italian economy takes a downturn, its effects on the Euro Zone, as well as the global economy, would make Greece's government-debt crisis look like a cake walk in comparison.  With that being said, I would like to examine the state of the Italian economy, followed by a preliminary take on what the elections could mean for Italy's economic future.



Italy is in the process of a recovery that is gaining traction. As the OECD points out in its November 2017 report, the growth in business investment and export demand has helped the Italian economy (p. 178). Lending to non-financial rate corporations has are also helping with the recovery, as is Italy's booming manufacturing base. What's nicer is that the Italian government is repealing the value-added tax hike (which is good considering how high it is already) and providing businesses with tax incentives to invest in the Italian economy. Standard and Poor's felt confident enough in the Italian economy that in October 2017, it raised Italy's credit rating to BBB, the first such increase in three decades because of greater economic growth, growing investment, and increased employment.

Nevertheless, I do have concerns about the Italian economy. The OECD finds that Italy's greatest vulnerabilities are the high levels of non-performing loans (NPLs) and its high level of public debt (p. 180). Italy has a higher NPL ratio than its European counterparts. In its 2017 report, the European Systemic Risk Board (ESRB) covers the topic of NPLs and why they are a risk to the stability of the European financial system. At the very least, tying up resources in NPLs detracts from investing in productive sectors of the economy. More to the point, high levels of NPLs stifle lending and investment. If it does not get better, banks would be less likely to give loans, which could reverse Italy's progress. The quicker the resolution to Italy's NPL problem, the better.

The OECD also views debt-to-GDP ratio as a threat. The bad news is that Italy's debt-to-GDP ratio is already high. The good news is that the OECD does not anticipate the debt-to-GDP ratio getting higher. Nevertheless, the OECD realizes that Italy is prone to higher interest rates, which is why it recommends that "continuing pro-growth reforms and gradually raising the primary surplus are key to reducing the public debt ratio (ibid.)."

Dismal levels of GDP growth have fed insecurity. Demographics imply that Italy could use more immigrants based on its really low fertility rate of 1.34. However, given how the elections went and how anti-immigration sentiment has been growing in Italy, good luck with that! That set aside, the Italian GDP grew 0.4 percent last quarter. Although that is better quarter-to-quarter growth than in recent years, it is still below the Euro Zone average (Banca d'Italia), not to mention that its GDP is still below pre-crisis levels. While IMF, the European Commission, and Banca d'Italia are anticipating higher short-term GDP growth (see EC projections below), Fitch is anticipating lower medium-term GDP growth due to economic slack, declining wages, and a highly fragmented political landscape.

The International Monetary Fund (IMF) points out additional concerns in its July 2017 Article IV Consultation for Italy. The IMF is concerned that the risks to Italy are significant, most notably because of weak productivity and low aggregate investment. Much like the OECD illustrated, the IMF points out that until Italy can deal with its NPLs and high debt-to-GDP ratio, economic growth in Italy will be stalled (IMF, p. 4). And as much as Italy has maintained its debt-to-GDP ratio, which is the second-highest in the EU, there is no sign of Italy being able to slow down the spending buildup that has amassed over the years (p. 10). At least from the IMF's point of view, risks are significant and tilted to the downside because of political uncertainty, financial fragility, and possible setbacks to reforms (p. 11).

Conclusion: What does this mean for the Italian government? That remains to be seen. It is difficult to speculate on what exactly the parties would compromise in order to form their coalitions. Some of the larger parties had Euro-skepticism as part of their party platform. The good news is that Italy is most probably not going to cause volatility by leaving the Euro Zone. Brexit shows us that it is difficult enough to leave the European Union when you're not even part of the Euro Zone. Italy would have an even more difficult time doing so since it is part of the Euro Zone. Limiting its contagion effect on the global economy is always nice. There is also the worry that the Italian economy could tank and crash out of the Euro Zone, as this report from the American Enterprise Institute alludes (Lachman and Nabil, 2018). To reiterate, so much of this depends on the coalitions formed and how they enact economic policy.

I still wonder if it would have a major impact on the Italian economy itself. After all, Italy has a habit of churning through governments. Italy has had 65 governments since 1945, which suggests that changes to the economy might not be so everlasting. A coalition government means that the Italian parliament will have to compromise more, which means less likelihood for more drastic economic policy. This is not to say that Italy does not need economic reforms because it clearly does. However, given the major parties that won a plurality of the votes, it is unclear as to how much of that reform would be in Italy's favor. The greatest challenge for the Italian government post-election is to ensure economic and financial stability. As the OECD already pointed out, that includes pro-growth reform and keeping the debt-to-GDP ratio low. If Italy could manage to do that without doing anything radical, the results of the Italian election should not be particularly worrisome.


Main Sources
Organization for Economic Co-Operation and Development (OECD)
Banca d'Italia [see here and here]
International Monetary Fund (IMF)
European Commission (EC)

Trump's Steel and Aluminum Protectionism: Let the Tariff Torture Begin

Last week, President Trump announced that he is going to impose a 25 percent tariff on steel and a 10 percent tariff on aluminum. The President framed his move both in economic terms of helping out the manufacturing industry (U.S. steel in particular) and as a national security concern. I have written on this topic myself in the past, so at least I don't expect my remarks on Trump's biggest international trade policy shift since withdrawing from the Trans-Pacific Partnership to be terribly long. I can say with confidence that tariffs are generally a deficient way of going about international trade policy. Since I looked at the issue shortly after Trump initially announced his intent in 2017 vis-à-vis a Section 232 investigation to analyze the potential of such a trade barrier, I concluded that it would be unacceptable, to say the least. Not only did I conclude that there was no national security justification, I scrutinized what happened the last time we imposed such tariffs in 2002. The answer? 200,000 jobs lost and less economic growth. Rather than re-analyze something I have scrutinized, I will simply add links to the latest studies and analysis of the topic below:

1. Net loss of jobs. An economic consulting firm, Trade Partnership, examined what the effects of the tariff would be (see report here). Their estimation was that a net 146,000 jobs would be lost.  What their calculations mean is that for every job gained in steel production, five jobs would be lost for those who use steel in their manufacturing process. This matches up with the economic theory that tariffs cause a net loss in employment. 
2. Effects on state economies. The centrist Brookings Institution analyzes how this could have a ripple effect for states that are more reliant on the steel and aluminum industries. 
3. Macroeconomic effects. Moody's stated that the tariffs could exacerbate inflationary pressures, tighten [profit] margins, and increase supply chain disruptions in the manufacturing sector. Barclay's is anticipating that the tariffs will cause inflation to increase by 0.1 percent.
4. Increased likelihood of trade war. While we were able to avoid a trade war in 2002, Trump's tariff is different in that of scope. In the past, it has been limited by country. Also, Trump is using a more opaque investigation process than past presidents, which gives Trump more latitude, not to mention that using Section 232 means that they won't decline over time like they do Section 201 [à la President Bush]. A broader tariff, as opposed to one that targets a country such as China, means that all countries are affected. Some of the largest steel importers are the United States' allies: South Korea, Germany, Canada, and Japan.  Per World Trade Organization (WTO) laws, allies could retaliate to a point, as the Peterson Institute points out. The European Union already expressed the possibility of trade retaliation in the amount of $3.5B. A tariff is what a country does to itself in a time of peace what a foreign nation intends to inflict with a blockade in a time of war. As the Cato Institute illustrates, no one wins in a trade war, and I wish Trump would have realized that before making this into law. 
5. Articles about the economics and economic history of tariffs written in response to Trump's tariffs: see here, here, here, and here. Oh, and here is one article going into how we have tried tariffs before and how little they prevented economic decline in the targeted industry.

There is the economic theory, historical precedent, and considerable amount of empirical evidence showing how such a tariff would be awful for the United States. There is no economic or national security basis for Trump's decision. What we see here is that the amount of evidence disproving Trump's ideas about tariffs is piling up. The most probable outcomes of these tariffs will be fewer jobs, less economic output, significantly higher prices for products with steel and aluminum, and trade retaliation that could very well lead to an all-out trade war. All I can say to conclude at this juncture is that it is a shame that Trump's faulty decision is going to negatively affect millions.  

3-9-2018 Addendum: The Council on Foreign Relations is estimating that the tariffs will eliminate 40,000 auto industry jobs, which is equivalent to a third of the steel industry.

3-13-2018 Addendum: A panel of prominent economists were asked whether these tariffs would improve Americans' welfare. None of them said "yes." And then there is this letter from the Department of Defense in response to Trump's tariffs. The Pentagon has an incentive to overstate the "national security." If the DoD is opposed to the scope and severity of Trump's tariffs, it shows just how unnecessary the tariffs really are.

7-20-2018 Addendum: According to the Right-leaning American Action Forum, these tariffs are expected to cost American consumers $7.5 billion a year. 

"Harvest Box": Food Boxes Are a Terrible, Paternalistic Form of Food Assistance Reform

The Trump administration recently released its FY2019 Budget Proposal. One of the budget reforms that caught my eye was with regards to the Supplemental Nutritional Assistance Program (SNAP), colloquially known as food stamps. Right now, the 42 million Americans who receive SNAP benefits have a special debit card, known as an EBT card, with which they can buy unprepared food at authorized stores. I wrote a lengthy piece on how we need to reform SNAP. Although I wrote it about four years ago, the reforms I suggested are essentially still relevant since they have not been implemented. Trump's Budget Proposal does not simply have a $200 billion cut in SNAP benefits over the next decade (To put that budget cut into context, the U.S. Department of Agriculture [USDA] spent $70.9 billion on SNAP in 2016, and $68.1 billion in 2017). In addition to the budget cut, Trump added a SNAP reform to the Budget Proposal. He wants to replace some of the food stamps with what has been referred to as a Harvest Box. What is a Harvest Box?

SNAP is currently under a voucher system. Instead of getting all of their benefits to spend on groceries, Trump proposes that recipients receive a Harvest Box. A Harvest Box is a food box with "shelf-stable" products (e.g., milk, cereals, pasta, canned meat, canned fruits and vegetables) that are "100 percent American produced and grown." For recipients who currently receive $90 or more in SNAP benefits, the recipients would pay for the Harvest Box with their benefits and get the remainder on the EBT card. This Harvest Box change is expected to affect 81 percent of SNAP recipients. The Trump Administration's reason for this is twofold. One is to cut back on fraud rates, even in spite of the fact that SNAP-related fraud is at a low 1.5 percent. The second is for those receiving benefits to have a healthier diet. Prior research shows that those on SNAP have a slightly less healthy diet than those not on food stamps. Additionally, the USDA estimates that Harvest Box would save $130 billion over ten years because the USDA can buy the food items at wholesale prices. What could possibly go wrong? Given the criticism out there, a lot. It is bad enough where both the Right and Left are less than pleased with Trump's Harvest Box idea.

One issue with the Harvest Box is severely limiting food choice for a demographic that already has limited food options. It is not simply displacing the private sector and running a parallel, state-run distribution center that is reminiscent of low-income socialist countries. It is not only the government being intrusive or hubristic enough to tell people that they know what diet is best for millions, when these millions of people have different consumer preferences, dietary needs, and variety in ethnic cuisine that allows for a more expansive palette. It is not only that food pantries have shifted from providing food boxes to allowing for individuals to peruse the pantry's shelves for what they need. It will increase food prices because that is what happens when you constrict supply to American-only products from select suppliers. As I brought up when discussing the "buy local" movement, not only is it unfeasible to determine if a product is "100 percent American" since value chains are so complex, but limiting free trade is bad both from an economic growth standpoint and a consumer welfare standpoint.

The food choice also makes me question the health claims. Let's forget for a moment that the USDA has yet to study the health effects of the Harvest Box. The Harvest Box is not going to be sending fresh foods like Blue Apron does. It will be sending shelf-stable items, ready-to-eat cereals, and canned items. More non-perishable items and less fresh produce is less likely to improve nutrition. The food decisions SNAP recipients currently make might not be the best. For example, SNAP could bar sugary drinks. At the same time, they are relatively good choices given the context: low-cost items that fit within the monthly budget, easy to cook, and are reasonably filling.

There is a matter of increasing stigma for SNAP recipients. One of the nice features of switching from actual food stamps to an EBT card is that a SNAP recipient can go into the grocery store and purchase food as any other consumer would. Having SNAP recipients required to visit a food distribution center or have a Harvest Box delivered on their front doorstep will increase the likelihood of stigma. This stigma could also deter recipients from wanting benefits in the future.

Another criticism I have is that there is little reason to trust the government to deliver these Harvest Boxes. This would be the same Administration that contracted with an incompetent company to deliver pre-made meals to Puerto Rico after Hurricane Maria, only to have the vast majority of those meals not delivered. This is the USDA that told us back in the 1990s [with the Food Pyramid] that we should eat a lot of carbohydrates and avoid all fats. It turns out that the government was wrong, and that such advice arguably increased the obesity rate in this country (see video below). Plus, Harvest Boxes are less reliable than SNAP benefits since food delivery can be more easily disrupted than an EBT card.

Then there is the matter of creating a new distribution network for delivering the Harvest Boxes. The USDA estimates that it would only cost $2.5 billion a year. I am skeptical of this figure in part because the USDA doesn't provide detail on how it will purchase, package, and ship these Boxes to millions of Americans. USDA spokesperson Tim Murtaugh even admitted that the projected savings do not include shipping door-to-door for all recipients because such decisions will be left at the state level. That's a pretty big expense to omit! Looking at the Commodity Supplemental Food Program (a USDA program implemented at the state level that helps the elderly), administrative and distribution costs amount for 25 to 33 percent of overall costs. Those costs are much higher percentage wise than with SNAP at 6.8 percent, which gives reason to believe that the USDA is underestimating distribution costs. Plus, the current SNAP program piggybacks off the already-existing distribution centers in the private sector, whereas the USDA very well would have to create its own. The USDA has never done anything like this on such a scale. Aside from creating a whole new distribution network, here are some other logistical questions:

• Who will be delivering these boxes? USPS? UPS? FedEx? Some new government entity? And how will the government absorb the increased costs when Trump is looking to cut the SNAP budget?
• Would boxes be delivered door-to-door? Do recipients need to be home? Would recipients pick them up at a distribution center?
• What happens to recipients who move around frequently or are temporarily homeless?
• What if food is stolen or delayed?
• What happens in the event of a snowstorm, hurricane, or other natural disaster?
• How will USDA deal with delivery in remote, rural areas?
• How will this distribution account for dietary needs and food allergies? How about children who are picky eaters?

I have plenty of criticism about SNAP, don't get me wrong. At the same time, more central planning and using fewer market forces is not efficient. Fortunately, there is not much likelihood that this will pass Congress. If Trump wants to reap the harvest on this one, he will need to think of another way to approach food assistance reform.


3-3-2018 Addendum: If you need more verification that the Harvest Box is a bad idea, here is a survey of prominent economists stating that a Harvest Box would lower SNAP recipients' well-being and lower their food security.