A Washington think tank, the Center for American Progress, has published a strategy for halving US poverty in 10 years. While I applaud their goal, I find it too timid and think their strategies wrong-headed. Their analysis fails to consider why we have poverty in the first place, and proceeds to design bandaids. If we are going to eradicate poverty, we must go to the root of the problem, and in my judgment, CfAP has not pursued the problem to its root and thus cannot do more than attempt to trim its branches. Pruning poverty's branches is not going to rid us of poverty. It may move some people we acknowledge as "in poverty" to "out of poverty" as we officially define it, and perhaps they can achieve half their goal, declare victory, and call the rest of the problem intractible.
But living just above the poverty line is little better than or different from living somewhat below it, and we're kidding ourselves if we accept the poverty line as a meaningful statistic. See this page and this page and the related pages linked there.
They start with some facts which I find to be well chosen and well stated
- One in eight Americans now lives in poverty. A family of four is considered poor if the family’s income is below $19,971—a bar far below what most people believe a family needs to get by. Still, using this measure, 12.6 percent of all Americans were poor in 2005, and more than 90 million people (31 percent of all Americans) had incomes below 200 percent of federal poverty thresholds.
- Millions of Americans will spend at least one year in poverty at some point in their lives. One third of all Americans will experience poverty within a 13-year period. In that period, one in 10 Americans are poor for most of the time, and one in 20 are poor for 10 or more years.
- Poverty in the United States is far higher than in many other developed nations. At the turn of the 21st century, the United States ranked 24th among 25 countries when measuring the share of the population below 50 percent of median income.
- Inequality has reached record highs. The richest 1 percent of Americans in 2005 held the largest share of the nation’s income (19 percent) since 1929. At the same time, the poorest 20 percent of Americans held only 3.4 percent of the nation’s income.
And then they move on to four principles:
The United States should set a national goal of cutting poverty in half over the next 10 years. A strategy to cut poverty in half should be guided by four principles:
- Promote Decent Work. People should work and work should pay enough to ensure that workers and their families can avoid poverty, meet basic needs, and save for the future.
- Provide Opportunity for All. Children should grow up in conditions that maximize their opportunities for success; adults should have opportunities throughout their lives to connect to work, get more education, live in a good neighborhood, and move up in the workforce.
- Ensure Economic Security. Americans should not fall into poverty when they cannot work or work is unavailable, unstable, or pays so little that they cannot make ends meet.
- Help People Build Wealth. All Americans should have the opportunity to build assets that allow them to weather periods of flux and volatility, and to have the resources that may be essential to advancement and upward mobility.
"People should work." Yes! "Work should pay enough" Yes! But their analysis fails to show why there isn't enough work available and why wages are insufficient to support a family. THESE ARE NOT UNKNOWNS!
Opportunity for all. Yes! But their analysis doesn't get to the reasons there is not currently opportunity for all.
Ensure economic security. Yes! I'm all for safety nets. But before that, I'm more concerned about creating the sort of economic environment where relatively few of us need them, and when we do, it isn't for very long.
Help people build wealth. Yes! But when we refer to wealth, we ought not to be treating "home equity" as wealth. (That will sound peculiar to most readers. And it will be the subject of another blogpost. But most home equity is land value, and land value is not something created by individual (or corporate) human effort, and therefore should not be treated as personal (or corporate) wealth -- rather, a just and logical and humane system would treat land value as our commonwealth, which would put us on the path to solving our poverty problem and a number of other problems. So what kind of wealth could people build other than home equity? Ownership in businesses of various kinds -- other than land ownership and natural resources -- that is, the products of one's own labor!!
But then they move on to their 12 key steps. Most of them are programs of one kind or another. Here they are ... I've omitted the details:
We recommend 12 key steps to cut poverty in half:
1. Raise and index the minimum wage to half the average hourly wage.
2. Expand the Earned Income Tax Credit and Child Tax Credit.
3. Promote unionization by enacting the Employee Free Choice Act.
4. Guarantee child care assistance to low-income families and promote early education for all.
5. Create 2 million new “opportunity” housing vouchers, and promote equitable development in and around central cities.
6. Connect disadvantaged and disconnected youth with school and work.
7. Simplify and expand Pell Grants and make higher education accessible to residents of each state.
8. Help former prisoners find stable employment and reintegrate into their communities.
9. Ensure equity for low-wage workers in the Unemployment Insurance system.
10. Modernize means-tested benefits programs to develop a coordinated system that helps workers and families.
11. Reduce the high costs of being poor and increase access to financial services.
12. Expand and simplify the Saver’s Credit to encourage saving for education, homeownership, and retirement.
I do not question their intentions -- that is, that they are well intentioned. But notice that they are careful not to rock any boats. No privileges that enrich some of us and therefore impoverish many others are questioned or threatened. The private sector's incentives are not changed. Poor people get subsidized, via income tax credits, housing vouchers, other benefits programs -- rather than us all doing the (radical!) work of understanding how our system is set up to bless some of us with perpetual gifts from the commons and curse others with funding those gifts -- and, further, of eradicating the blessing and the curse to set us all equal.
The proposal goes on to say that the effect of doing these things would be to halve the percentage of Americans who live below the poverty level within 10 years, and the annual cost of doing so would be $90 billion, considerably less than the tax cuts given to the highest-income and highest-net-worth folks in 2001 and 2003 legislation.
Wouldn't it be more effective to tear poverty out at the root, rather than merely trimming its branches a bit? Wouldn't it be better to undertake measures that will naturally raise wages? naturally create jobs? naturally share treat our commonwealth as the fountain for common spending, while permitting those who work to keep what they actually produce? The root of our problems is that we are permitting certain "privilege-holders" to pocket as private treasure that which rightly belongs to the commons. Until we reverse that, we simply aren't going to fix the problem. We're only going to put a few decorations on it.
We owe our children more than that. We owe each other better than that. Don't we?
I'll return to my favorite quote, and ask that we think and act radically, not in fear of special interests, whose boats do need to be rocked:
He who sees the truth, let him proclaim it, without asking who is for it or who is against it. This is not radicalism in the bad sense which so many attach to the word. This is conservatism in the true sense.
We ought to be conserving the commons as our common treasure, not permitting its privatization. If you doubt, remember how concentrated America's "net worth" is:
- Top 1% of us: 33.38% (Bottom 99%: 66.62%)
- Next 4% of us: 24.13% (Top 5%: 57.51% -- Bottom 95%: 42.49%)
- Next 5% of us: 11.99% (Top 10%: 69.50% -- Bottom 90%: 30.50%)
- Next 40% of us: 27.95% (Top 50%: 97.45% -- Bottom 50%: 2.54%)
- Bottom 50% of us: 2.54%
Make the case for me why the boat doesn't need rocking, please!
source: http://www.wealthandwant.com/issues/wealth/50-40-5-4-1.htm, Table 2, line 01 -- Federal Reserve Board Survey of Consumer Finances data for 2004. Currents and Undercurrents:
Changes in the Distribution of Wealth, 1989-2004.
I participated in the War on Poverty as a Vista Volunteer under Lyndon Johnson in the late 1960s and early 1970s. I lost interest and enthusiasm for that effort midway through my service and left it with a sense of failure, feeling sorry for myself and for the people I thought I was serving. I later encountered an explanation for the poverty I had seen and hoped to ameliorate and that explanation has inspired me everyday since then (going on 35 years). The justice and effectiveness of sharing community created land values as the first, primary and perhaps only source of revenue for government services (certainly all services that increase land value and I am hard pressed to find any such service that does not increase land value in some way) is obvious and self evident to me.
I finally realized that the War on Poverty and every other social welfare program merely helped, if it even did that, to make the great masses of poor people more comfortable in their poverty. I realized that none of these programs ever came close to rocking the boat of the privilege Wyn Achenbaum speaks of. Certainly many people will argue that some aspects of poverty have been ameliorated in some significant ways as a result of these many decades of huge expenditure and heart felt and properly motivated effort but no one can say that any of the problems have been solved. Not one. And now I find on the web and in public debate expressions of the idea that it is these very social welfare programs that are the root cause of the problems. That the history of poverty and privilege long predating our current public policies is forgotten and the very efforts to deal with it in some effective way are now turned on their head is appalling and beyond belief. The real problem is that the real root cause of poverty has never been addressed and only the most timid of efforts to get at it have been attempted. Timidity is weakness vulnerable to distortion as we have seen.
Although progress is slow in the acceptance of the idea of collecting community created land values to pay for public services, I am grateful for the legacy of previous generations that allows some of this value to be collected directly via that part of the property tax that falls on land values. I understand that most if not all of the 4,000 or so counties in the US administer a property tax and even if administered poorly (with malice aforethought in California under Proposition 13) that land value is collected to some significant extent thereby. Of course land value is not collected anywhere to the extent that it rocks the boat of real estate speculators and sprawl promoting developers looking to make a quick unearned buck with the connivance of local officialdom but it is collected and the mechanism for doing more is in place.
I understand that the extent to which a country collects its community created values for public purposes is the extent to which that country fares well economically, socially, environmentally and in world standing. It seems that America is in the process of being humbled in many ways. I expect some of us will realize the failure of public policy if the pain gets too bad and be glad of the fact that there is an existing well developed alternative theory backed up by a fair amount of practice worldwide to look to when the hard questions get asked.
Posted by: wtfitzgerald | June 19, 2008 at 10:08 PM