Tuesday, September 17, 2013

Obama Ignores the Poor

The Census Bureau just reported that "median" household income dropped again, from $51,100 in 2011 to $51,017 in 2012 (household incomes these days usually means dual-income households.)

According to the report, the national poverty rate was unchanged for the second consecutive year, standing at 15 percent (the poverty rate is still 2.5 percentage points higher than it was in 2007 before the Great Recession).

Will the 2016 elections again ignore the problem of poverty in the US?

Hillary Clinton is Methodist and Joe Biden is Catholic --- Catholics, at about 24% of the population, are already technically "over-represented" in elected and appointed government. Some 27% of the Senate and 31% of the House of Representatives is made up of self-identified Catholics, as does a super-majority of the Supreme Court (six of nine justices).

National polls consistently find that Catholics say helping those in need is the most important thing to their sense of what it means to be Catholic. With at least a few Catholics likely to be in the 2016 elections, might we expect some revival of discussions about the poor and poverty in the next election cycle?

President Obama rarely talks about poverty, preferring to focus on those struggling to join the middle class. "The middle class will always be my number one focus."

This seems a bit difficult to reconcile with the reality of over 46 million people living in poverty, more than 47 million relying on the food stamps and almost 12 million people out of a job and looking for work --- or 20 million if you count part-time workers who prefer full-time work --- or almost 30 million if you count all those that are no longer considered part of the labor force because they gave up looking for non-existent jobs.

Out of a workforce of about 151 million, 61 million Americans earn $20,000 a year or LESS --- and 50% of all wage earners had net compensation less than or equal to $26,965 a year (the latest data from Social Security comes out next month.)

But the Brookings Institute is optimistic that poverty rates will decline over the next ten years because the unemployment rate is projected to decline over the next ten years --- so therefore, a more robust economy would mean more people joining the labor force and finding jobs and working more. But so far, there hasn't been much improvement since the onset of the Great Recession.

On "social mobility", the NCCP says: "Of individuals who spent more than half of their childhood in poverty, 45 percent were poor at age 35 (compared to 0.6 percent of individuals who spent no time in poverty as children).

And another study from Stanford reports that poverty in early childhood is a particularly mobility-crushing experience, because the lack of resources. In short, reducing the number of children growing up in poverty is strongly related to the broader goal of social mobility.

But will the 2016 elections again ignore the problem of poverty in the US? JFK and LBJ mentioned the poor the most, whereas Obama has made much more references to "the middle-class" than any other president in history --- but Obama mentions "the poor" the very least.

Meanwhile, cuts to food stamps are already happening starting this November, and the Republicans are introducing bills to drastically cut food stamps more --- even though we still have very high unemployment and high poverty rates. The top 1 percent has been distracting everybody about inequality by pretending that our safety net is too generous for the bottom 1 percent.

Republicans want to cut funding food assistance programs that will keep 4 to 6 million from going hungry --- but would rather defend corporate tax breaks and loopholes that allows corporations to deduct more than $30 billion in executive pay for multi-millionaire CEOs. Just by closing this one loophole would bring in $50 billion in revenue over the next 10 years --- that's $10 billion more than the $40 billion Republicans want to cut from food assistance. But where’s the GOP outrage for tax deductions given to companies that ship jobs and profits overseas? The GOP’s cruel austerity agenda is holding our economy back and hurting the most vulnerable families, children, seniors and veterans in our communities. 

Why doesn't Obama ever way in on any of these issues? Why does he rarely mention the poor? From the Economic Populist:

We’ve seen just how personally connected Obama has been to the Clinton brain trust that he brought in during his first term to deal with the financial crisis – men like Larry Summers, Tim Geithner, and behind the scenes Robert Rubin – who supposedly saved the world from Depression. Despite all the evidence that these men, with their hands-off approach to regulating Wall Street, were as much a cause of the financial crisis as they were the saviors of the world afterwards.

Obama does not have a good feel for how angry the general public has become over Wall Street, big bankers, bank bailouts, the mortgage mess, and the lack of any accountability on the part of these people for the problems they caused [and] Larry Summers is just one of many poster children for the Washington-Wall Street revolving door that makes it appears as if big finance is running the show, not the politicians...The new environment that is beginning to gel is that of the American people in opposition to the Washington establishment, because so many people feel the political cards have been stacked against them in favor of corporations, lobbyists, Wall Street, the military, the surveillance state, the wealthy --- whoever has the money to buy the politicians’ votes. At the moment, President Obama is part of the problem, and it is questionable whether he has begun to realize that.

In 1989, the median American household made $51,681 in current dollars. That means that 24 years ago, a middle class American family was making more than the a middle class family was making one year ago. This isn't a lost decade for economic gains for Americans. It is a lost generation.

And the next time someone lectures you about the virtues of "free markets", have them read these 3 very significant and informative posts:

Robert Reich - The Myth of the Free Market

Free Markets are Fraudulent Markets

Capitalism Requires Government (Pages: 1 2 3 4 5 6 7)

1 comment:

  1. Dean Baker:

    "There is one last place to look for private-sector demand: the secret place that the business press agrees never to mention. That would be net exports. Currently our net exports are negative, meaning that we import more than we export to the tune of more than $500 billion a year --- or 3.0 percent of GDP. This deficit has created an enormous hole in demand since it means that income being generated in the United States is not being spent in the United States. If we could get trade close to balanced it would raise output to near full employment. [Instead] we get over-hyped trade deals [like NAFTA, and now TPP] that are mostly about giving corporations more protection against environmental and safety regulations, and increasing protections in the pharmaceutical and software sectors [and offshoring more domestic jobs]. The people in control of economic policy [Obama, Congress and the Fed] have no interest in taking the steps necessary to bring the economy back to full employment."