Poverty

[Arkady]

There have been some shows of concern for the poor from Republicans lately. I assume this isn't because they actually care about the poor-- poverty is a topic they never seem to talk about except when they think they can use it as a hammer with which to hit Obama. But it's an important topic, nonetheless, so I'm not going to look a gift horse in the mouth. If they're willing to discuss poverty now, even for partisan reasons, then let's talk about poverty.

It's true that, so far, the Obama era has been a rough one for the poor. Although the poverty rate has declined over the last three reported years, it rose so much in the wake of the financial meltdown, in 2009 and 2010, that it's still worse than before Obama took office. And even if 2014, 2015, and 2016 each show the same rate of improvement as 2013 did, Obama will leave office with poverty barely lower than what he inherited.

So, what can we do to change this and get poverty falling rapidly as it has in some prior periods? Rather than arguing from a position of blind theory, where it's just a question of who can make his theory sound prettiest, I'd like to argue from the perspective of results. What types of policies have actually worked in the past?

To give you a quick lay of that land, here are the changes in poverty rates for each presidential era (from the start of the series in 1959). I've run Kennedy/Johnson and Nixon/Ford together, since I didn't know how best to treat the mid-year change of administration. All numbers are in points of change per year:

Eisenhower -0.2
Kennedy/Johnson -1.2
Nixon/Ford -0.1
Carter +0.3
Reagan 0
Bush +0.5
Clinton -0.4
Bush +0.2
Obama +0.3

Based on that, I would think we'd want to look primarily to the Kennedy/Johnson years for lessons on how to fight poverty.... and, to a lesser extent to the Clinton years.

One possible consideration would be the minimum wage. Using constant dollars, the rise in the minimum wage was much larger in the Kennedy/Johnson era than in any of those other eras: 1.15% annualized. No other era comes close.

Another consideration would be government spending. If you look at the annualized federal spending on "Education, Training, Employment, and Social Services" for each period, you again find that the increase was much larger in the Kennedy/Johnson era than in any of those other eras.

You could also look into less measurable indicators, like direct government intervention to fight known drivers of poverty -- for example, the Eisenhower/Kennedy/Johnson-period's use of federal power to end Jim Crow. Or, on the flip side, you could consider the use of federal power to stop efforts to address known drivers of poverty -- for example, the Bakke case, which made racial quotas illegal starting in 1978. Or the "Welfare Reform" law that, starting in 2001, began throwing people off government assistance if they'd been on it for five years total.

Do people have other ideas about what has been shown, in real-world experience, to succeed or fail when it comes to lowering poverty?

 

[Colorforms]

There have been some shows of concern for the poor from Republicans lately. I assume this isn't because they actually care about the poor-- poverty is a topic they never seem to talk about except when they think they can use it as a hammer with which to hit Obama. But it's an important topic, nonetheless, so I'm not going to look a gift horse in the mouth. If they're willing to discuss poverty now, even for partisan reasons, then let's talk about poverty.

It's true that, so far, the Obama era has been a rough one for the poor. Although the poverty rate has declined over the last three reported years, it rose so much in the wake of the financial meltdown, in 2009 and 2010, that it's still worse than before Obama took office. And even if 2014, 2015, and 2016 each show the same rate of improvement as 2013 did, Obama will leave office with poverty barely lower than what he inherited.

So, what can we do to change this and get poverty falling rapidly as it has in some prior periods? Rather than arguing from a position of blind theory, where it's just a question of who can make his theory sound prettiest, I'd like to argue from the perspective of results. What types of policies have actually worked in the past?

To give you a quick lay of that land, here are the changes in poverty rates for each presidential era (from the start of the series in 1959). I've run Kennedy/Johnson and Nixon/Ford together, since I didn't know how best to treat the mid-year change of administration. All numbers are in points of change per year:

Eisenhower -0.2
Kennedy/Johnson -1.2
Nixon/Ford -0.1
Carter +0.3
Reagan 0
Bush +0.5
Clinton -0.4
Bush +0.2
Obama +0.3

Based on that, I would think we'd want to look primarily to the Kennedy/Johnson years for lessons on how to fight poverty.... and, to a lesser extent to the Clinton years.

One possible consideration would be the minimum wage. Using constant dollars, the rise in the minimum wage was much larger in the Kennedy/Johnson era than in any of those other eras: 1.15% annualized. No other era comes close.

Another consideration would be government spending. If you look at the annualized federal spending on "Education, Training, Employment, and Social Services" for each period, you again find that the increase was much larger in the Kennedy/Johnson era than in any of those other eras.

You could also look into less measurable indicators, like direct government intervention to fight known drivers of poverty -- for example, the Eisenhower/Kennedy/Johnson-period's use of federal power to end Jim Crow. Or, on the flip side, you could consider the use of federal power to stop efforts to address known drivers of poverty -- for example, the Bakke case, which made racial quotas illegal starting in 1978. Or the "Welfare Reform" law that, starting in 2001, began throwing people off government assistance if they'd been on it for five years total.

Do people have other ideas about what has been shown, in real-world experience, to succeed or fail when it comes to lowering poverty?

There is only one solution to poverty, jobs. Any solution outside of that only perpetuates the problem.

 

[marvin martian]

Unsurprisingly (and no doubt intentionally), you omitted the actual prime factor in why Kennedy's presidency saw such a big recovery from the sluggish economy he inherited: he lowered taxes.

Here's a discussion on the matter from Obama-worshiping NPR, presumably a "safe" source for your tender sensibilities:

http://www.npr.org/2013/11/12/244772593/jfks-lasting-economic-legacy-lower-tax-rates

 

[Arkady]

There is only one solution to poverty, jobs. Any solution outside of that only perpetuates the problem.

OK. So, following that same line of thought, we could take a look at which eras had the highest rates of job creation and the lowest, to see what policies tend to work for job creation. Certainly we wouldn't want to return to what we were doing in the Bush era, since that was the longest run of poor job creation in our history, to that point. There was a very high rate of job creation in the Carter years. Could that be a template?

Unfortunately, I'm not convinced good job creation is enough. Lots of desperately poor countries have almost no unemployment, so jobs, alone, don't do it. For example, Thailand , Cambodia, and Vietnam all have unemployment rates under 2%. Mexico and Cuba are under 5%. Ghana is at 3.6%, which is lower than we've seen since the Johnson years, at least.

 

[Colorforms]

OK. So, following that same line of thought, we could take a look at which eras had the highest rates of job creation and the lowest, to see what policies tend to work for job creation. Certainly we wouldn't want to return to what we were doing in the Bush era, since that was the longest run of poor job creation in our history, to that point. There was a very high rate of job creation in the Carter years. Could that be a template?

Unfortunately, I'm not convinced good job creation is enough. Lots of desperately poor countries have almost no unemployment, so jobs, alone, don't do it. For example, Thailand , Cambodia, and Vietnam all have unemployment rates under 2%. Mexico and Cuba are under 5%. Ghana is at 3.6%, which is lower than we've seen since the Johnson years, at least.

Not to nitpick, but Thailand, Cambodia, and Vietnam are entirely different countries with entirely different economies. We, until liberals get their wish, are a capitalist society. In a capitalist society, the movement of capital is what is important.

Getting away from your circumstantial evidence and getting into hard realities, government dependence breeds learned helplessness. This perpetuates poverty. The only thing that fixes this problem is jobs. Jobs start capital flowing, both for private citizens and for businesses. The more capital flow, the more it's worth. Capital passed down by government is capital that was taken out of the economy to begin with, and is devalued.

Government stagnates capital. It concentrates it in one place and dilutes its value. Capital is always worth less when it comes out of government, because government doesn't add value to anything.

 

[Arkady]

Unsurprisingly (and no doubt intentionally), you omitted the actual prime factor in why Kennedy's presidency saw such a big recovery from the sluggish economy he inherited: he lowered taxes.

Here's a discussion on the matter from Obama-worshiping NPR, presumably a "safe" source for your tender sensibilities:

http://www.npr.org/2013/11/12/244772593/jfks-lasting-economic-legacy-lower-tax-rates

It's true that he lowered tax rates and I'm open to the idea that a top rate over 90% may have been high enough that it was choking economic activity, so that lowering it to 70% actually helped. If we had marginal rates that high today, we'd have some cause to think that lowering them would be beneficial. We don't, though. Right now marginal rates are much, much lower than the level to which Kennedy cut them. And judging by historical results, it does not appear that the further cuts helped the poor. The era between Reagan's tax cuts and Clinton's tax hike in 1993 was an era when poverty rose, and poverty rose again after GW Bush cut marginal rates. So, if we look to address this through tax policy, the "sweet spot" seems to be somewhere with top marginal rates below 90% but above 39.6%.

 

[Arkady]

In a capitalist society, the movement of capital is what is important.

We've always had the movement of capital, but we've also often had periods of significantly higher or lower poverty. I'm trying to figure out what, in practice, makes the difference between the two.

Getting away from your circumstantial evidence and getting into hard realities, government dependence breeds learned helplessness.

Let me put that a little more directly for you: "Setting aside any attempt to learn from actual evidence, my faith tells me that government dependence breeds learned helplessness."

There has actually been a study on this. They compared outcomes for kids raised in poor families in states that had different welfare policies. What they found was that the kids that were raised in poor families in states that provided more assistance grew up less likely to be dependent on government than kids who were raised in poor families in states that provided less assistance. That's the opposite of what we'd expect if we were breeding "learned helplessness."

Of course, knowing what we know about the impact of poverty, those results shouldn't be surprising. For example, we know that poor nutrition during childhood results in lower IQs. So it makes sense that a child that grew up in a poor family but had government assistance to get good nutrition would grow up to be smarter than a child who grew up in a similar family but without that assistance. And it makes sense that the higher-IQ adult would then be more likely to be able to make his own way without a lot of government help. Similarly, medical problems neglected in childhood would tend to increase the chance of the kid growing up to be an adult with serious problems that make him more dependent on government. Similarly, a kid whose learning challenges are neglected is less likely to get the kind of education that makes him independent as an adult than a child who had Uncle Sam's help in overcoming those challenges. And so on. Common sense would have predicted the results of that study, so it shouldn't be terribly surprising. But it certainly is at odds with the "learned helplessness" meme of right-wingers.

That meme also doesn't make sense on the most fundamental level. Nobody needs to learn helplessness. We all start out helpless. We're all born without even the ability to feed ourselves, such that we'd die if not actively kept alive by the constant efforts of other people for years. Helplessness is our starting condition. We naturally move beyond it as we develop more skills and knowledge. And government assistance can be part of the process of imparting those skills and that knowledge.

 

[BitterPill]

Unsurprisingly (and no doubt intentionally), you omitted the actual prime factor in why Kennedy's presidency saw such a big recovery from the sluggish economy he inherited: he lowered taxes.

Here's a discussion on the matter from Obama-worshiping NPR, presumably a "safe" source for your tender sensibilities:

http://www.npr.org/2013/11/12/244772593/jfks-lasting-economic-legacy-lower-tax-rates

Then we should go back to Kennedy's rates.

 

[as seen on tv]

the johnson administration "war on poverty" has largely been judged (by newspapers, presidential historians, economists, and sociologists) to have been a massive failure and waste of taxpayer dollars.

increasing the number of entitlement programs and their benefit levels doesn't break the cycle of poverty - it locks receipients into it.

the way to get out of poverty is to stay in school, stay off drugs, and get a job.

 

[marvin martian]

And it makes sense that the higher-IQ adult would then be more likely to be able to make his own way without a lot of government help.

This is interesting. Are you suggesting there is a correlation between IQ and a reliance on "government help"?

 

[Colorforms]

We've always had the movement of capital, but we've also often had periods of significantly higher or lower poverty. I'm trying to figure out what, in practice, makes the difference between the two.

Sure, we have always had weather too, but things still cycle from wet to dry. I really don't understand your thinking when you make statements like this.

Let me put that a little more directly for you: "Setting aside any attempt to learn from actual evidence, my faith tells me that government dependence breeds learned helplessness."

There has actually been a study on this. They compared outcomes for kids raised in poor families in states that had different welfare policies. What they found was that the kids that were raised in poor families in states that provided more assistance grew up less likely to be dependent on government than kids who were raised in poor families in states that provided less assistance. That's the opposite of what we'd expect if we were breeding "learned helplessness."

Of course, knowing what we know about the impact of poverty, those results shouldn't be surprising. For example, we know that poor nutrition during childhood results in lower IQs. So it makes sense that a child that grew up in a poor family but had government assistance to get good nutrition would grow up to be smarter than a child who grew up in a similar family but without that assistance. And it makes sense that the higher-IQ adult would then be more likely to be able to make his own way without a lot of government help. Similarly, medical problems neglected in childhood would tend to increase the chance of the kid growing up to be an adult with serious problems that make him more dependent on government. Similarly, a kid whose learning challenges are neglected is less likely to get the kind of education that makes him independent as an adult than a child who had Uncle Sam's help in overcoming those challenges. And so on. Common sense would have predicted the results of that study, so it shouldn't be terribly surprising. But it certainly is at odds with the "learned helplessness" meme of right-wingers.

That meme also doesn't make sense on the most fundamental level. Nobody needs to learn helplessness. We all start out helpless. We're all born without even the ability to feed ourselves, such that we'd die if not actively kept alive by the constant efforts of other people for years. Helplessness is our starting condition. We naturally move beyond it as we develop more skills and knowledge. And government assistance can be part of the process of imparting those skills and that knowledge.

Your post is exactly my point. These studies that you refer to talk about generational poverty. children who are raised with more resources have a better opportunity to get a better education and...wait for it...get a better JOB.

"Over 1.4 million youth ages 15–24 are out-of-school and out-of-work (OSOW) and are raising dependent children.1 When youth are out of the education system, lack early work experience, and cannot find employment, the likelihood is poor that they will have the means to support themselves and the needs of their children.1 Too often, this traps their families in a cycle of poverty for generations."
http://www.nassembly.org/knowledge/documents/NHSAFull_Report2GenOSOWFamilies.pdf

Ultimately, it's the ability to find and keep a job that is the answer to poverty. That is the baseline in a capitalist society.

 

[connieb]

There is only one solution to poverty, jobs. Any solution outside of that only perpetuates the problem.

Exactly. Anything else that may be contributing to it is a personal problem that the people will either be able to resolve or not. But, it is not up to us to continue to enable people when they could do better for themselves but don't.

 

[Colorforms]

That meme also doesn't make sense on the most fundamental level. Nobody needs to learn helplessness. We all start out helpless. We're all born without even the ability to feed ourselves, such that we'd die if not actively kept alive by the constant efforts of other people for years. Helplessness is our starting condition. We naturally move beyond it as we develop more skills and knowledge. And government assistance can be part of the process of imparting those skills and that knowledge.

By the way, let me help you with your lack of understanding of basic psychology:

"Learned helplessness is a behaviour in which an organism forced to endure aversive, painful or otherwise unpleasant stimuli, becomes unable or unwilling to avoid subsequent encounters with those stimuli, even if they are escapable. Presumably, the organism has learned that it cannot control the situation and therefore does not take action to avoid the negative stimulus."
http://en.wikipedia.org/wiki/Learned_helplessness

Learned helplessness is believed to run rampant in poverty stricken communities, and is the first obstacle to overcome when dealing with poverty.

 

[resident_evil]

Do people have other ideas about what has been shown, in real-world experience, to succeed or fail when it comes to lowering poverty?

Yes, wages will increase when illegals are not granted amnesty and return to their home countries. That will help the poor with more jobs with better pay.

 

[Arkady]

the johnson administration "war on poverty" has largely been judged (by newspapers, presidential historians, economists, and sociologists) to have been a massive failure and waste of taxpayer dollars.

Here in the real world, though, it was a big success. Check the poverty rates if you don't believe me. In 1963, before the War on Poverty began, the poverty rate was 19.5%, and it was likely over 50% for blacks (the last reading for blacks was 55.1% in 1959). A decade later, in 1973, the poverty rate was 11.1%, and 31.4% for blacks. We'd eliminated nearly half the poverty problem in a single decade. That is a STUNNING success by any sane measure.

Unfortunately, in the midst of that sweeping victory against poverty, Republicans had us surrender. As a result, not only did we make no further progress against poverty, we actually back-slid. In fact, after 1973, there was only a single presidency that had falling poverty rates: Clinton's. And that's because he was the first president since Johnson to at least make some half-assed attempt to continue the war on poverty. He focused on rebuilding our ailing cities (Americorps, money to put more cops on the streets, gun control), setting off a period when urban areas returned to being economic dynamos rather than blighted landscapes of despair.

increasing the number of entitlement programs and their benefit levels doesn't break the cycle of poverty - it locks receipients into it.

Do you have any evidence for that idea? Keep in mind that in Eisenhower era, 22.4% of Americans lived in poverty. What was locking people into the cycle of poverty then?

 

[Arkady]

This is interesting. Are you suggesting there is a correlation between IQ and a reliance on "government help"?

Yes. You seem to think you have some sort of "gotcha" there, but that's because you haven't really thought it through.

 

[SW48]

There have been some shows of concern for the poor from Republicans lately. I assume this isn't because they actually care about the poor-- poverty is a topic they never seem to talk about except when they think they can use it as a hammer with which to hit Obama. But it's an important topic, nonetheless, so I'm not going to look a gift horse in the mouth. If they're willing to discuss poverty now, even for partisan reasons, then let's talk about poverty.

It's true that, so far, the Obama era has been a rough one for the poor. Although the poverty rate has declined over the last three reported years, it rose so much in the wake of the financial meltdown, in 2009 and 2010, that it's still worse than before Obama took office. And even if 2014, 2015, and 2016 each show the same rate of improvement as 2013 did, Obama will leave office with poverty barely lower than what he inherited.

So, what can we do to change this and get poverty falling rapidly as it has in some prior periods? Rather than arguing from a position of blind theory, where it's just a question of who can make his theory sound prettiest, I'd like to argue from the perspective of results. What types of policies have actually worked in the past?

To give you a quick lay of that land, here are the changes in poverty rates for each presidential era (from the start of the series in 1959). I've run Kennedy/Johnson and Nixon/Ford together, since I didn't know how best to treat the mid-year change of administration. All numbers are in points of change per year:

Eisenhower -0.2
Kennedy/Johnson -1.2
Nixon/Ford -0.1
Carter +0.3
Reagan 0
Bush +0.5
Clinton -0.4
Bush +0.2
Obama +0.3

Based on that, I would think we'd want to look primarily to the Kennedy/Johnson years for lessons on how to fight poverty.... and, to a lesser extent to the Clinton years.

One possible consideration would be the minimum wage. Using constant dollars, the rise in the minimum wage was much larger in the Kennedy/Johnson era than in any of those other eras: 1.15% annualized. No other era comes close.

Another consideration would be government spending. If you look at the annualized federal spending on "Education, Training, Employment, and Social Services" for each period, you again find that the increase was much larger in the Kennedy/Johnson era than in any of those other eras.

You could also look into less measurable indicators, like direct government intervention to fight known drivers of poverty -- for example, the Eisenhower/Kennedy/Johnson-period's use of federal power to end Jim Crow. Or, on the flip side, you could consider the use of federal power to stop efforts to address known drivers of poverty -- for example, the Bakke case, which made racial quotas illegal starting in 1978. Or the "Welfare Reform" law that, starting in 2001, began throwing people off government assistance if they'd been on it for five years total.

Do people have other ideas about what has been shown, in real-world experience, to succeed or fail when it comes to lowering poverty?

Poverty has increased in my opinion because of the break up of the family. With men's wages stagnant for 40 years it forced women to start working to bring two incomes into the family. With two adults working the family isn't as happy as it used to be and the divorce rate went up. With broken single parent homes it is hard to keep up with the quality of life so those homes fall into poverty.

 

[resident_evil]

Poverty has increased in my opinion because of the break up of the family. With men's wages stagnant for 40 years it forced women to start working to bring two incomes into the family. With two adults working the family isn't as happy as it used to be and the divorce rate went up. With broken single parent homes it is hard to keep up with the quality of life so those homes fall into poverty.

http://www.amazon.com/Please-Stop-Helping-Us-Liberals/dp/1594037256

 

[fairsheet]

Unsurprisingly (and no doubt intentionally), you omitted the actual prime factor in why Kennedy's presidency saw such a big recovery from the sluggish economy he inherited: he lowered taxes.

Here's a discussion on the matter from Obama-worshiping NPR, presumably a "safe" source for your tender sensibilities:

http://www.npr.org/2013/11/12/244772593/jfks-lasting-economic-legacy-lower-tax-rates

How's about we just peg taxes back at those Kennedy rates, and call it good? From a historical standpoint, JFK lowered marginal rates significantly, resulting in an actual , albeit small INcrease in effective rates. Lowering marginal rates has always been a useful tool in our fiscal toolbox. Although, our history suggests that it's positive impact is limited. As soon as JFK and his peeps recognized that that taxcut had timed itself out, they moved on in a different direction.

We've got two problems with this these days. One of course, is the redwing "feeling" that taxcuts are always good under all circumstances. Thefore, why even bother analyzing their effectiveness? We know they're good and that's all we gotta know! Another problem, as elucidated in the Mitt campaign, is that the redwing refuses to even consider possible increases in effective rates. Clear up through the GHWB presidency, accepted Republican wisdom was that by cutting rates, we INcrease revenue. Alas nowadays, "increased revenue" are dirty words.

 

[resident_evil]

, is that the redwing refuses to even consider possible increases in effective rates. Clear up through the GHWB presidency, accepted Republican wisdom was that by cutting rates, we INcrease revenue. Alas nowadays, "increased revenue" are dirty words.

They have never stopped spending. National debt has increased every year. Year in and year out.