The Destruction of Arthur Andersen and the Use of DPAs in FCPA Enforcement

I really enjoyed this article. I think my readers will too.

tfoxlaw's avatarFCPA Compliance and Ethics Blog

Arthur AndersenThe debate over the efficiencies of Deferred Prosecution Agreements (DPAs) continued this week with additional criticism of their use. I have argued that DPAs are in a corporation’s interest because they can bring certainty to the conclusion of an enforcement action and allow it to make remedial changes and move forward. However yesterday I came across an article by Larry Katzen, a former partner at Arthur Andersen and author of “And You Thought Accountants were Boring – My Life Inside Arthur Andersen.” Katzen’s piece is entitled “A Business World Massacre – What Can Happen 
When Government Needs a Scapegoat” and it details the destruction of the firm after it’s guilty verdict surrounding the Enron scandal. Katzen articulates the human costs for the total wipeout of the firm and sets out clearly what can happen when a company goes to trial and sustains a guilty verdict. I…

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Women = Terrible Negotiators?

007-1Women = Terrible Negotiators?

Is this a comforting belief? Does it make you feel better to think that men are just naturally more violent or any of thousands different stereotypes and labels? 

Women are said by the executive director of the Texas Republican Party to be terrible negotiators. You realize this is the one-half of the population that according to science is more verbally skilled than their male counterparts. However, it appears that some individuals believe that a male grunt is superior to the multi-syllabic utterances of the female.

I don’t think so.

For one thing, my personal experience indicates women negotiate quite well. I have a colleague at my college who is something of a verbal Muhammad Ali. I never know where the next verbal impact is coming from.

For another, since Jane Austen, there is firm evidence of female verbal capabilities.

Believing that women are what they are not is very useful if you wish to deny them equal protection under the law. If women are bad negotiators, then what’s the point of all this equal pay nonsense? Obviously, it’s one of those sexually based behaviors that crazed leftists disconnected from reality don’t understand because if they did they would understand that women get what they deserve.

As a business ethics matter, this falls into business beliefs and customs versus or aligned with “traditional” customs. Traditionally women have to be virginal, coy, the powers behind the throne (definitely not on the throne) nurturing, etc. Business wise, those customs have diminished because women have succeeded so well but these ideas are only diminished to an extent. Beliefs in female deficiencies are comforting. They take a host of actions which would be considered wrong or actually evil and transform into “rational” choices. For instance, it’s wrong to deny a woman promotion to CEO but it’s the correct decision if women are just bad negotiators. So, custom, even if it no longer makes any sense or is scientifically ridiculous, can still trump ethics and truth. Business ethics demands rational thinking because if we believe what is convenient, any action can be justified.

We are all comforted at one time or another by irrational beliefs. “It’s always darkest before the dawn.” (No, there is no limit to darkness. It can just keep on getting darker.) There really isn’t as much harm in “darkest before the dawn” as opposed to the more serious claim that women are poor negotiators.  

Here, the harm is obvious. A necessary law to give women equal opportunity to pay is considered unnecessary due to an irrational belief in female weakness and incompetence.

I find women neither weak or incompetent in comparison to men. Women are not terrible negotiators. They don’t get paid less than men by some natural law. They are paid less than men because of past beliefs that won’t die and convenient beliefs that justify unethical actions.

James Pilant

The right’s ideal modern woman: Fiery, independent and easily confused! – Salon.com

Less than 24 hours later, the executive director of the Texas Republican Party agreed that equal pay laws aren’t the answer for today’s women. The real problem, according to Beth Cubriel, is the fact that women are terrible negotiators. Don’t try to get legal recourse once you find out your employer is paying your male colleagues more money for the same work (Texas will fight you on the statute of limitations, anyway). Instead, host a viewing party of “Glengarry Glen Ross” for your friends and absorb the timeless wisdom of “Always be closing” if you want to make a living wage. You can do it, girlfriend! Bootstraps, or whatever! (Cubriel, besides being an apologist for discrimination, is also wrong about women as negotiators.)

via The right’s ideal modern woman: Fiery, independent and easily confused! – Salon.com.

From around the web.

From the web site, Double XX Economy.

http://www.doublexeconomy.com/2013/04/02/individual-choice-poor-negotiating-skills-clever-entrepreneurs-and-the-wage-gap/

The AAUW study shows that young women straight out of school make 82%  of what young men who are otherwise comparable make:  ”just one  year out of college, millennial women are paid 82 cents for every dollar paid to their male peers.  Women are paid less than men even when they do the same work and major in the same field.”  The report shows several possible comparisons, such as hours worked, and the pay gap remains.  The AAUW soberly points out that college girls take out the same huge student loans that boys do, but will have to pay them back with less money.  Sommers brushes the 18% difference aside as miniscule, but actually this is a big gap when all controls have been engaged, the measures are large aggregates (n=15,000 in this case), and the study was done in a place where equal pay for equal work is the law.  Personally, I think it’s shocking, as did the AAUW.

Importantly, other data consistently show the really big effects of gender begin at the moment the women choose to have children.  So, these girls are starting off, at the gate, making 18% less, but this gap will widen, if only from the demands of family.  I say “if only” because there are other influences that depress the wages of women, such as their tendency to forsake out-of-hours client entertaining (we can call this the “lap dance effect”).

Unskilled and destitute are hiring targets for Fukushima cleanup — The New York Times

Does this give you confidence in the safety of nuclear power?

Melanie's avatarJapan Safety : Nuclear Energy Updates

” NARAHA, Japan — “Out of work? Nowhere to live? Nowhere to go? Nothing to eat?” the online ad reads. “Come to Fukushima.”

That grim posting targeting the destitute, by a company seeking laborers for the ravaged Fukushima Daiichi nuclear plant, is one of the starkest indications yet of an increasingly troubled search for workers willing to carry out the hazardous decommissioning at the site.

The plant’s operator, the Tokyo Electric Power Company, known as Tepco, has been shifting its attention away, leaving the complex cleanup to an often badly managed, poorly trained, demoralized and sometimes unskilled work force that has made some dangerous missteps. At the same time, the company is pouring its resources into another plant, Kashiwazaki-Kariwa, that it hopes to restart this year as part of the government’s push to return to nuclear energy three years after the world’s second-worst nuclear disaster. It is a move that…

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From Idea to Reality

Anything Paul Kiser thinks is a good idea has my backing.

Paul Kiser's avatar3rd From Sol

Our project leader has begun meetings to research and establish a plan for development of a water storage project in Nepal. This project is needed to collect and store water in the rainy season for crops and animals during the dry season. Other aspects of use and scope of this project are pending and will be finalized as the initial research is completed.

If you have any questions about this project or would like to help please contact Narayan Adhikari at 

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Radiation Lies

nuclear reactor pd 1000643523Radiation Lies

What a surprise! It seems both the Japanese government and the United States Navy lied to the sailors aboard the USS Ronald Reagan about how much radiation they were exposed to. Please be aware the Fukushima crisis continues on day after day. The reactors continue to leak radiation. Every day workers have to go in and try to keep the situation under control. It’s a slow-speed crisis demonstrating the power of a nuclear disaster as opposed to other man made destruction.

What kind of ethical judgement was at play here? Surely a high radiation level is going to have long term effects? And in real life, conspiracies of silence only work for so long. 

This is a failure here to discern right from wrong. This is a failure to do everything possible to safeguard the lives of Americans on a rescue mission. And most of all, this is a failure of the Japanese government whose continued lies and incompetence have created an ongoing crisis for which they may be no cure in our lifetimes or even the lifetimes of our children. 

 

James Pilant

US sailors exposed to Fukushima radiation levels beyond Japan’s estimates | Al Jazeera America

Crew members of the USS Ronald Reagan’s March 2011 Fukushima relief mission encountered radiation levels that far exceeded the Japanese government’s estimates, according to a report in the Asia-Pacific Journal.

The revelations contained in the report could have a bearing on the lawsuit against Tokyo Electric Power Company by more than 70 U.S. service members who say they suffer from long-term health effects from their participation in the U.S. navy’s response to the nuclear disaster.

Kyle Cleveland, a Temple University professor based in Japan, obtained documents showing military officials aboard the carrier detected radiation levels that were 30 times greater than normal and significantly greater than what the Japanese government told them to expect.

Navy officials have maintained that the radiation levels service members were exposed to during Operation Tomodachi were not enough to cause health effects.

via US sailors exposed to Fukushima radiation levels beyond Japan’s estimates | Al Jazeera America.

From around the web.

From the web site, Japan Safety.

http://japansafety.wordpress.com/2014/03/01/atomic-suicide-the-tale-of-the-sailors-and-the-seals-climate-viewer-news/

March 11th, 2011 would have begun like any other day for the crew of the USS Ronald Reagan, except this particular day would go down in history, as the world learned of the 9.o earthquake and devastating tsunami that had struck Japan. The ship, which was already relatively close to Japan, would be changing course for the coastline of Honshu to assist in humanitarian efforts needed for the tens of thousands of people now displaced by this enormous disaster. The rest of the 7th fleet would join in the mission as well. In total, 70,000 members of the US military would participate in some way during the course and became known as “Operation Tomodachi”. Tomodachi happens to mean ‘friend’.

Over 1000 miles away, Alaskan ringed seals stretched lazily on ice floes, perhaps aware of a disturbance in the earths’ geomagnetic field, perhaps not. Either way, not much changes from a seals point of view, one day is not much different from another. You wake up, swim around, find food, and go back to sleep. The only time seals deviate from this schedule is if it is mating season, a tsunami is coming, you are being chased by a polar bear or killer whale, or if you have cubs to look after.

In Japan, as the 7th fleet anchored off Honshu, helicopter flights were readied, supplies prepared, gear was checked, and orders received from Naval Command stateside, who were taking their direction from the Japanese government, and later the NRC. What may have first seemed like an in-and-out mission, was immediately and drastically expanded. The widespread damage was much worse than first feared. It would be weeks, even months, that Japan would need help. The sailors prepared themselves accordingly. But it didn’t take long to see this mission may not go as planned. Within the first days, things started going really, really wrong on the ship. You could say, they went rather critical.  As well as a few nearby nuke plants on the coast of Honshu, and especially at Fukushima Daiichi.

I Liked Notting Hill.

ill_067_smlI Liked Notting Hill. 

I was reading The Guardian this morning. One of the writers admitted to liking the film, Notting Hill. He was embarrassed. It was as if he had clubbed a baby seal. Well, I like the film too. 

I love a sappy, happy ending love story and this one fills the quota of “love will win out over every obstacle.” Love doesn’t win out all the time and my life is testament to that. But I still believe in love against all evidence and all experience. 

Please read the full review below. 

James Pilant

My guilty pleasure: Notting Hill | Film | theguardian.com

Films are there very largely to give you pleasure: they are pleasure-giving devices, and if a film succeeds in giving you pleasure, shouldn’t you have the courage of your convictions and own up to it? So it is with mixed feelings that I nominate Notting Hill in this category, directed by Roger Michell and written by Richard Curtis — his 1999 followup to the 1994 smash-hit Four Weddings and a Funeral. It is widely panned but I enjoy it, and whenever it is showing on ITV4 as I flick channels I always find myself stopping to watch. It was in fact the first film I ever wrote about for the Guardian.

Cast: Hugh Grant, Julia Roberts, Rhys Ifans, Richard McCabe

It is the story of a shy, floppy-haired bookshop owner (Hugh Grant), a lonely divorced guy who has a wacky Welsh mate called Spike (the role made Rhys Ifans a star) and who falls in love with a Hollywood A-lister, played by Julia Roberts. His heart gets broken. So does hers. Then they get unbroken.

via My guilty pleasure: Notting Hill | Film | theguardian.com.

From around the web

From the web site, Timothy Haslett’s Blog.

http://timothyrhaslett.wordpress.com/2014/02/03/why-we-all-love-notting-hill/

Like most good British romantic comedies, it’s the cast. In this case the two lead actors: Hugh Grant and Julia Roberts. Hugh Grant is the quintessential romantic comedy lead. If he had been in the troop of travelling players in Hamlet he would have been the actor for  Plautus but not for Seneca. He is perfectly pitched for this film, as is Julia Roberts.

Who else could deliver the line (ranked as one of the top 10 corniest lines of all times) “I’m also just a girl standing in front of a boy asking him to love her”? Can you imagine Cate Blanchett being able to do that? I suspect it would be completely beyond her.

An Examination of Voter ID Laws

titlepageAn Examination of Voter ID Laws

I was fortunate to have found a substantive article on voter ID. It cites its claims and has many facts and stories about alleged voter fraud. I am placing the first three paragraphs here for your viewing but for the entire article you need to travel to the web site of A Liberal Thinker.

James Pilant

What’s the deal with State voter ID laws? | aliberalthinker

Voter ID laws are being introduced in a number of states across the United States, the majority of them being red States. The purpose of these laws are supposedly to combat voter impersonation fraud that apparently has become a serious problem in the view of conservative lawmakers and advocates. Liberal groups are calling foul, claiming that these laws do nothing but discriminate against minorities and the poor, those eligible voters who typically do not possess any form of photo I.D.

There shouldn’t really be a problem with requiring people to present identification in order to vote provided that state governments are willing to issue I.D’s to those without them, at no cost. If governments can demonstrate that they are willing to transition their constituents to get the necessary I.D in order to vote then I fail to see an issue. So how do we define “cost barriers” when it comes to voter I.D laws? Well to state the obvious, state governments will need to provide I.D’s to those requiring them at no cost. The assumption here may be that because State governments are offering free I.D’s to those who need it, the problem is solved, right? Well as the old saying goes, “there is no such thing as a free lunch”.

Cost barriers

To provide “proof” to attain those free government issued cards it may still cost those individuals to apply for them as those applications may in turn require documents not in possession by those individuals concerned. The application process may also daunting as, believe or not, many of the less fortunate do still work and they may not have the spare time to apply for those I.D’s due to work and family obligations. Another cost barrier to those individuals concerned may be their inability to travel to apply for those I.D’s (many of the poor live in isolated rural settings away from State buildings or post offices, many do not have access to the internet either). None of the State I.D laws that I am aware of offer a cost free solution to those less fortunate. Washington Post referred to a particular study that demonstrated the costs to eligible voters under voter ID laws (14):

via What’s the deal with State voter ID laws? | aliberalthinker.

From around the web.

From the web site, Propublica.

http://www.propublica.org/article/everything-youve-ever-wanted-to-know-about-voter-id-laws

Why are these voter ID laws so strongly opposed?

Voting law opponents contend these laws disproportionately affect elderly, minority and low-income groups that tend to vote Democratic. Obtaining photo ID can be costly and burdensome, with even free state ID requiring documents like a birth certificate that can cost up to $25 in some places. According to a study from NYU’s Brennan Center, 11 percent of voting-age citizens lack necessary photo ID while many people in rural areas have trouble accessing ID offices. During closing arguments in a recent case over Texas’s voter ID law, a lawyer for the state brushed aside these obstacles as the “reality to life of choosing to live in that part of Texas.”

Attorney General Eric Holder and others have compared the laws to a poll tax, in which Southern states during the Jim Crow era imposed voting fees, which discouraged blacks, and even some poor whites — until the passage of grandfather clauses — from voting.

Given the sometimes costly steps required to obtain needed documents today, legal scholars argue that photo ID laws create a new “financial barrier to the ballot box.”

From around the web.

From the web site, Milam Blues.

http://milamblues.wordpress.com/2011/11/07/voter-id-disenfranchising-democrats-all-across-texas/

One of the arguments in favor of voter ID is that most people have to show a photo ID in order to accomplish all sorts of normal, every day tasks like cashing a check or buying an airline ticket. Why should it be easier to vote than to cash a check?

Well, here’s why: those every day tasks that normally require an ID are privileges, not rights guaranteed under our Constitution.  Check cashing is a privilege. Voting is a right. The trend toward universal suffrage has been part of our democratic civilization for generations. Most democracies work to extend voting rights. Our state is actively trying to suppress voting rights.

Making it difficult to vote is the same as curtailing your rights to speak your mind, practice your religion, assemble peacefully, or (for some) own a gun. And while we all agree that society has an interest in making sure that only “responsible” people should own a fire arm, I doubt that anyone would want to apply the same argument to going to church or reading a newspaper.

Arkansas Disenfranchises Legitimate Voters

1859_Colton_Map_of_Arkansas_-_Geographicus_-_Arkansas-colton-1860Arkansas Disenfranchises Legitimate Voters

The curse of fake voter fraud strikes innocent Arkansans. I went and had a look at the opposing sides on this controversy. Those who say there is hardly any voter fraud at all can call forth an utterly impressive array of factual data. How about the other side? They explain with breathless enthusiasm that millions and millions of dead Americans are on the voting rolls and therefore there could be a lot of voter fraud although the cases prosecuted number in the tens.

Maybe I’m just not the kind of bold thinker that the proponents of voter ID are, but it seems to me that if you are worried about dead people on the voting, it should be simple matter of computer matching of state databases to remove them from the roles. Am I mistaken? Wouldn’t it just be simpler to let state and county computers go through the voting rolls and remove the dead than taking the risk of disenfranchising legitimate voters?

Of course, a cynical person might believe that the legislature is seeking to make it more difficult to vote for the young, the poor, the old and minorities. However, it is obvious that the upstanding members of the Arkansas legislature would not attack any right as sacred as the right to vote. So, there must be another explanation.

James Pilant

Arkansas County Disenfranchises 1 In 5 Absentee Voters Thanks To Voter ID | ThinkProgress

Last Tuesday, voters in Pulaski County, Arkansas voted on whether to approve a tax that would fund improvements at a local technical college. Yet, nearly 20 percent of the voters who cast an absentee ballot were disenfranchised thanks to the state’s new voter ID law.

In 2013, the Arkansas legislature enacted a voter ID law containing a provision requiring absentee voters to include a copy of their ID along with their ballot. The result, according to a statement Pulaski County Election Commissioner Chris Burks gave to the Arkansas Times, is that 76 of the 384 absentee ballots cast in last Tuesday’s election were not counted. Burks added that, “[i]n my opinion, those absentee ballots returned without ID were 76 real people’s votes that would have otherwise counted but for the sloppily drafted Voter ID bill.”

via Arkansas County Disenfranchises 1 In 5 Absentee Voters Thanks To Voter ID | ThinkProgress.

From around the web.

From the web site, Charles O’Halloran Boyd.

http://charlesohalloranboyd.wordpress.com/2014/02/14/reflections-on-voter-id-laws/

Another reason I have for opposing voter ID laws is their disproportionate impact on minority voters. Any policy that is enacted with the goal of preventing people of a certain race from voting obviously ought to be vehemently opposed. But given the history of racial discrimination and disenfranchisement in this country, it is also imperative that we try to avoid policies that have even an unintentional impact disproportionately on voters of a certain race. In order to continue to move closer toward a more racially egalitarian society, it is important to have a multitude of voters of all races. I would also state that while, as I mentioned earlier, some supporters of voter ID laws are well meaning and non-racist, others are certainly racist and working to disenfranchise minority voters. Not long ago, Mississippi had a governor named Haley Barbour who venerated Jefferson Davis and the Confederacy and had documented ties with the white supremacist Council of Conservative Citizens. Barbour was also in support of voter ID laws, and I do not think I am being overly judgmental to conclude that he had nefarious motivations. A somewhat similar case exists in my native state of Georgia. Back when he was making an unfortunately successful attempt to get elected, our current Governor Nathan Deal was championing our state’s voter ID law and let his true feelings be known. “We got all the complaints of the ghetto grandmothers who didn’t have birth certificates and all that,” Deal said, derisively. While in office, he has promoted “Confederate History Month” and called an attempt from a liberal organization to gain his endorsement for a racially integrated prom (frighteningly, segregation of high school proms is still an issue in the South) a “silly publicity stunt.” Again, Deal’s motives don’t look so good. The country has made a great deal of progress when it comes to achieving universal suffrage and breaking down racial barriers to voting. But voter ID laws are a step in the wrong direction, and they must be repealed.

Pilant’s Business Ethics Gets a Facelift!!

James Pilant
James Pilant

Pilant’s Business Ethics Gets a Facelift!!

I have revised the web site to improve your viewing and reading experience. My new upgrades put me on the cutting edge of blog design. I am looking forward to another year of blogging and I hope you come along for the experience.

I try to look at business ethics from a macro point of view. It is not just the individual act that must worry us but the international and national effects of corporate policy and unethical behavior. We live in a time of massive power shifts, large economic units competing with nation states for political influence and control. We live in a time where the rules that govern our behavior are under challenge. There are those that believe that religion, the great philosophies, and the moral beliefs of the large population are irrelevant. They believe that each moral decision must be considered under all circumstances by individuals.

No. Some things are wrong, evil per se. You don’t have to analyze them. You don’t have to consider them in the light of all the circumstances. You have an obligation to act responsibly to every other human being. We all have a duty to our nation and our fellow citizens. What’s more, religion is a guide in many people’s lives and is relevant. The great philosophies like virtue ethics will always be effective and intelligent guides to human behavior. And there is a wisdom that resides in the general populations about ethics matters.

My writing is along those lines and I don’t have any apologies for not writing about these issues in a purely academic style. There is a certain pleasure in being plain spoken.

Nevertheless I believe as time goes by that as I learn more about the subject in an academic format that my writing may turn more in that direction. We’ll see.

My thanks for your kind patronage!!

James Alan Pilant

 

Minimum Wage is Pathetically Low

c27aMinimum Wage is Pathetically Low

You can read it below: last years banker’s bonuses were twice the entire income of all those making the minimum wage.

Certainly, this should be considered evidence that the minimum wage is set too low. A good argument can be made that the social utility of what minimum wage earners do is far superior in benefits for our larger society than investment banking and some of the practices of regular banking.

It’s important to think about fairness and just deserts when dealing with this issue. In this country, the game is tilted toward those with influence and power. The minimum wage workers hardly register on either of those scales.

It is for the rest of us to add to their voice, to sometimes be their voice. What isn’t fair for our fellow Americans is a part of our responsibility.

We are not individual atoms floating in some kind of cosmic vacuum. We live, work and thrive with other people and those connections are important and a big part of what we consider civilization.

James Pilant

New report: Bankers’ bonuses more than double full-time minimum wage workers’ pay – Salon.com

The $26.7 billion spent on Wall Street bonuses last year was greater than the entire 2012 income of America’s full-time minimum wage workforce, according to a new report from the progressive Institute for Policy Studies.

Had that $26.7 billion instead gone to increased wages for the country’s 1,085,000 full-time minimum wage workers, writes report author Sarah Anderson, those workers’ wages ($15.1 billion total in 2012) would have more than doubled. Anderson estimates that such a raise for minimum wage workers would have done much more than bank bonuses to spur economic growth: In contrast to a $10.4 billion multiplier effect from the payouts to bankers, she calculates a $32.3 billion multiplier if the cash had gone into the pockets of those now making $7.25.

via New report: Bankers’ bonuses more than double full-time minimum wage workers’ pay – Salon.com.

From around the web.

From the web site, Arindrajit Dube.

http://arindube.com/2014/01/22/the-poverty-of-minimum-wage-facts/

So to take stock, if you consider the Sabia and Burkhauser simulation results  as “facts” you also are claiming that no worker reporting a wage below the old minimum will get a raise, and no one above the new minimum will get a raise. These are not very good assumptions, and they certainly are not facts.

Of course, you don’t have to make these assumptions. You could allow for spillovers. You could allow for wages to rise below the minimum. You could allow for measurement error in reported wages and other sources of income. But then you are not in a world where tabulating survey data gives you simple facts that are beyond reproach. You need to make additional assumptions to make causal claims. And we have not even begun to talk about behavioral effects—be they on labor demand side, or on labor supply side such worker search effort, etc. (And by the way those do not all go in the same direction.)  So you could add a lot more assumptions and continue with the simulation route, or you could use quasi-experimental approach used in almost all of applied micro-economics to empirically estimate the effect of minimum wages on poverty and other outcomes.  Of course, you would want to subject your identifying assumptions to specification checks and falsification tests to ensure you have reliable control groups; and you would account for possibly confounding policies such as state EITCs. And when you do all of that, and some more, you would probably end up with a paper like this one.

So where does this leave us?   As I said in my paper, policies like cash transfers, food stamps, and EITC are better targeted to help the poor, although even there minimum wages are better thought of as complements and not substitutes. More generally, however, motivations behind minimum wage policies go beyond reducing poverty. The popular support for minimum wages is in part fueled by a desire to raise earnings of low and moderate income families more broadly, and by fairness concerns that seek to limit the extent of wage inequality, or employers’ exercise of market power.  And the evidence suggests is that attaining such goals through increasing minimum wages is also consistent with a modest reduction in poverty, and moderate increases in family incomes at the bottom.