Poverty Up; Health & Social Problem Worse
Andrew Sullivan points to Ron Brownstein on the Census Bureau report on income, poverty and health insurance coverage in 2008 to find that on every major measurement…
…the country lost ground during Bush’s two terms. While Bush was in office, the median household income declined, poverty increased, childhood poverty increased even more, and the number of Americans without health insurance spiked. By contrast, the country’s condition improved on each of those measures during Bill Clinton’s two terms, often substantially. [...]
That leaves Bush with the dubious distinction of becoming the only president in recent history to preside over an income decline through two presidential terms, notes Lawrence Mishel, president of the left-leaning Economic Policy Institute. The median household income increased during the two terms of Clinton (by 14 per cent, as we’ll see in more detail below), Ronald Reagan (8.1 per cent), and Richard Nixon and Gerald Ford (3.9 per cent). As Mishel notes, although the global recession decidedly deepened the hole-the percentage decline in the median income from 2007 to 2008 is the largest single year fall on record-average families were already worse off in 2007 than they were in 2000, a remarkable result through an entire business expansion. “What is phenomenal about the years under Bush is that through the entire business cycle from 2000 through 2007, even before this recession…working families were worse off at the end of the recovery, in the best of times during that period, than they were in 2000 before he took office,” Mishel says.
I first came upon that census report via John Dickerson in The Slate Political Gabfest. Dickerson was struck by the increase in the poverty rate, to 13.2%, which is the first statistically significant annual increase since 2004. The definition of poverty used for the poverty rate, he explained, is $22,000 for a family of four; $17,000 for a family of three; $14,000 for a family of two.
Think about that for a second. 13.2% of Americans, more than 1 in 10 of us, make that little money.
But it was income inequality (which did not go up from 2007 to 2008) that appears to be why Dickerson paid particular attention to the census report. His example was this WaPo piece that asked 100 Washingtonians from all walks of life what they made. There you can compare Grover Norquist to Sonia Sotomayor or the police chief to the panhandler or Marion Barry to…
I was struck by Dickerson’s observations because back in April I sent the Gabfest folks an email pointing to the book, The Spirit Level: why more equal societies almost always do better. In it two British academics, Richard Wilkinson and Kate Pickett, find that almost every modern social and environmental problem — ill-health, lack of community life, violence, drugs, obesity, teen pregnancy, mental illness, long working hours, big prison populations — is more likely to occur in a less equal society.
The chart at the top of this post is from the book (click for a larger view). Jeff Ritterman, M.D., has read it. He observes:
In the Gilded Age of the robber barons, income distribution in the U.S. was very unequal (see the graphic below). This was one of the causes of the Great Depression. FDR’s New Deal can be interpreted, in large measure, as a program to reverse income inequality.
In a stunningly short time, called the Great Compression by economic historians Claudia Goldin and Robert Margo, America underwent a significant redistribution of income. While historians offer a variety of explanations for the Great Compression, what is clear is that income was much more fairly distributed.
This relative equality produced the middle class America that I grew up in. Of course, there were rich and poor people, but nothing like the extremes of wealth and poverty that we see today. This middle-class America lasted until the late 1970s, when the trend toward greater inequality began to accelerate.
Today, we are faced with the same degree of income inequality as existed during the Great Depression. We can take our cue from FDR. It’s time for another great compression.
I got an email back from Jefferson Pestronk, a now former Gabfest intern, thanking me for my thoughts and assuring me that “Emily, John, and David read every email that comes in to the Gabfest and really value the feedback they receive from all the loyal listeners.” I’m guessing they’ll talk about the book when it’s released in the U.S. on December 22.
Today the topic of income redistribution is red meat for the Palin crowd. But if Wilkinson and Pickett’s research holds up, greater equality holds the key to life expectancy, decreased infant mortality, improved child well-being, reduced obesity, lower homicide rates, decreased school dropout rates, lower teen pregnancy, increased levels of civic trust, improved voter turnout, decreased drug abuse, lower incarceration rates, decreased rates of mental illness, and improved social mobility based on merit.
For more on The Spirit Level, go to Wilkinson and Pickett’s Web site.
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70 Responses to “Poverty Up; Health & Social Problem Worse”
You forgot to quote Oliver Wendell Holmes: “Taxes are the price we pay for a civilized society.” But nobody here is arguing for anarchy. The more relevant version of Holmes today is, “Taxes are the price we pay for government spending.” If the value of the fire department exceeds its cost, that's wonderful. But there's a limit to how many fire trucks people are willing to pay for. Just saying “I like the fire department” doesn't get you very far.
I can be quite enthusiastic about the fire department without subscribing at all to your astonishing claim that “The government IS the people.” Bearing in mind Godwin's Law, I nonetheless have to say that a statement like yours comes a little too close to “ein reich, ein volk” for my taste. The government is an agency of a majority of voters. It can do some things well, but determining the allocation of all resources in an economy is way above its pay grade.
A model is not reality, Dr J. That's the point. And you set it forth — despite using the word “model” — as if that was the way it actually works. Let me remind you of what you wrote:
The above is a fantasy. It's not reality. First of all, the “free market” you describe here does not work for anyone who does not have the money to buy into it. If the “market” decides that you are not conducive to profit, your scenario does not do a thing to help. Thus, the concept of affordable housing is a complete non-starter for the “free market” unless government steps in to provide incentives. There may be, and in fact are, millions of Americans who need subsidized housing. Doesn't matter how many there are — the “invisible hand” is not going to have anything for those people.
That's just one example, but the bottom line is that any societal need that does not or is not likely to generate profit is not going to be adequately met by the “invisible hand” of the free market.
And by the way, nothing in what you wrote above even gives so much as a suggestion of a hint that you understand the “free market” cannot fix things it was not designed to fix. The entire thrust of your original comment is that the “free market” steps in to fill the public's needs in a highly efficient, focused way. A need comes up, the market responds and meets it. That's what you describe. And it just ain't so.
Politicians pass laws on the basis of what will make the best sound bites and which lobbyists are crossing their palms, leaving the system more wasteful and less fair than when they started. “Ha, see?” the liberals crow, “I told you free markets didn't work.”
Well, I'm glad to know that you are aware of how thoroughly intertwined government and private business are. I'm glad to know you want to end, or at least seriously reform, the incredibly corrupt relationship between corporate lobbyists and government. Dick Cheney's secret energy task force, top-level connections between the Enron scandal and the Bush administration, the savings and loan scandal in the Reagan administration, the millions of dollars oil companies give to the campaigns of friendly politicians — I would never have guessed you felt the same way about that as I do.
There is some common ground, at least, eh?
What exactly is the Y axis on the last chart? Income of the top 5% of tax payers? wealthy families?
You forgot to quote Oliver Wendell Holmes: “Taxes are the price we pay for a civilized society.”
Yes, I did forget that quote. Thank you for reminding me. It's a good one.
I can be quite enthusiastic about the fire department without subscribing at all to your astonishing claim that “The government IS the people.”
What an incredibly bizarre statement. Here, read this, maybe it'll sound familiar to you:
Bearing in mind Godwin's Law, I nonetheless have to say that a statement like yours comes a little too close to “ein reich, ein volk” for my taste.
Only if you think that Nazi Germany is synonymous with the very concept of government. And since you're new here, I'll just let you know that your comparison is not only ahistorical, but deeply offensive to me personally, since my parents were Holocaust survivors. My father believed deeply in the importance of government and governance, and in the ability of government to improve people's lives — and my father was not, as you might guess, an admirer of Nazi Germany.
The government is an agency of a majority of voters. It can do some things well, but determining the allocation of all resources in an economy is way above its pay grade.
Government can do a significant number of things better than the “free market,” and I did not at any point say or suggest that government should determine the allocation of all resources in an economy. I don't know where you picked that up from, but it wasn't from anything I wrote.
I agree, Kathy, insofar as the invisible hand does not always work to the benefit of each individual. And, I would also even agree that it is not always fair. The free market model is perfectly fair if we make certain assumptions, which are generally true but not always (that's what makes it a model and not reality, as you point out). The free market model has been proven very effective at generating economic growth. In general, that economic growth benefits everyone, but the benefit is not necessarily always fairly distributed. Thus, we have people like you, who although presumably you've made a good effort to be a successful and productive member of society, you have not been sufficiently rewarded by the free market.
So, yes, a balance does need to be struck. I support the free market, but government policy does need to step in to minimize the unfairness that can sometimes result. I've explained more about my views on this and why it means there is an important role for government, especially in the areas of education and health care, in this post: http://sovereignmind.wordpress.com/2008/10/11/f…
But, as we design government policy, we need to recognize that any attempt to level the playing field is implicitly restricting the free market's ability to generate growth (efficiency vs. fairness), so that means that we have to:
1) Balance the benefit of any particular goverment policy to create a more fair system against the detrimental affect to over-all growth. More fair does not always equal better (ie. if we're both poor, that's not better than one of us being poor and the other rich, of course. There are other more nuanced examples: if I can make a poor person 5% richer, but in doing so I make a rich person 25% poorer, is that a good trade-off? How about if I can make you 10% richer, but I have to restrict the freedom of everyone else? This is were the difficult questions come that separate most conservatives and liberals).
2) Design the government policy carefully so that we don't unnecessarily restrict growth (We are at risk of doing this when our motivation for the policy we want to enact is to punish the greedy free marketeers).
“Government can do a significant number of things better than the “free market,” and I did not at any point say or suggest that government should determine the allocation of all resources in an economy. I don't know where you picked that up from, but it wasn't from anything I wrote.”
I take your word for it, but when you write things like this, in response to Dr. J's description of the free market model and why it has merit, it leaves room for some to wonder:
“The above is a fantasy.”
I think there is room for both sides to be more clear in their positions, as I attempted to do in my last comment.
I read your blog post, AD. Very interesting and thoughtfully written. I didn't so much disagree with any of your points as I would have added to some of them, but overall I really liked your approach to this subject.
Point taken, although in my own defense, I did expand on that initial statement.
If you honestly think that quote from the Declaration of Independence is equivalent to saying “the government IS the people,” I see no point in trying to engage you further in this discussion. Actually, that passage makes Jefferson seem like a very dangerous “tea bagger” who lacks sufficient respect for and appreciation of the government. Which is pretty much what he was.
As for your views on the role of government in resource allocation, you wrote:
“We choose the people who make the government so that the government can carry out what *we* decide the priorities should be.”
You appear to be supremely confident in your ability to discern what “we the people” want in the way of all sorts of policies. I suggest that you google the phrase “Arrow's impossibility theorem” and give the whole concept of the “people's will” a bit of sober reflection.
Finally, you continue to categorize people as either “for” or “against” government. That's absurd, for reasons I've already pointed out and you choose to ignore. In fact, it's not merely absurd, it's a McCarthyite tactic.
If you honestly think that quote from the Declaration of Independence is equivalent to saying “the government IS the people,”
Sandy, what do you think the government is? People, right? And where do those people come from? Mars?
You appear to be supremely confident in your ability to discern what “we the people” want in the way of all sorts of policies.
Well, I have never taken the phrase “we, the people” so literally that I think I am the entire people, but YMMV. I'm really not sure why the concept of the American people deciding what the priorities should be, as individuals, as groups, via the people they elect and the pressure they bring to bear on their elected officials, is such a difficult one to grasp. It doesn't mean that 300 million people get together in a little meeting room. It means that we, as Americans, as citizens, as “the people,” get to decide what we think is most important to do in this country. I really don't know how to make it any more clear than that, and I don't know why it's such an alien or foreign idea.
I googled “Arrow's impossibility theorem” and it looks to me like it's about making up some faux-scientific-mathematical gobbledy-gook to declare impossible something that is the most basic element of a democracy: the people get to decide what kind of a country they want to have. Basically, what it seems to be saying is that you can't have social welfare policies because you can never get every last individual in the country to agree on any one particular goal and still at the same time decide how to rank priorities in order of preference.
And my response is, Say WHAT? I mean, what kind of garbage is that? We can't have a particular public policy because you can't have total agreement from 300 million Americans and people are going to disagree over ranked order preferences? That really is not a very well-thought-out conclusion there, Sandy. I would suggest that you take your own advice and think long and hard and carefully about what the implications might be of believing that it's not possible for the citizens of a democracy to shape public policy and decide what those policies should be.
“What an incredibly bizarre statement.”
What Soft Irony. [chuckle]
“We can't have a particular public policy because you can't have total agreement from 300 million Americans and people are going to disagree over ranked order preferences?”
Don't make that Soft Irony materialize again. We don't require unanimity. However, what we don't “require” and certainly don't want is the current year's experience of an increasingly extremist group of Democrats who are acting in ways that alienate the majority and do not do what the majority (fifty per cent plus one of the voters) want. The House climate bill was a remarkable example of this, and it and related misconduct has underpinned the broad intelligent public displeasure with the Dems and concern about what they may wish to do or threaten to do about health care.
I won't even bother adding much about the superiority of the approval vote, the applicability of proportional representation in a body like the House of Representatives, or what defines a supermajority where such a thing is appropriate in place of “fifty per cent plus one,” as you may not appreciate or even understand these or why they merit thought related to what is currently being discussed.
And the guy who really did make those wacky claims to support a guaranteed minimum income really was a Nutty Law Professor. Thank goodness we may not have many of them in ObamaCo (or at least one fewer now, with the loss of Van Jones due to embarrassment and disgrace).
“the whole concept of the 'people's will'”
Rosseauian, and more (worse).
The bottom line is that any societal need that does not or is not likely to generate profit is not going to be adequately met by the “invisible hand” of the free market.
Yes, Kathy, you've summarized it exactly. That's where the market's usefulness stops. The glass is half empty, or in other words half full.
So in other words, Dr J, this:
And this:
And this:
and this:
is not true. At best, it is a misleading half-truth. You have presented it as absolute truth, with no qualifiers or caveats, and it is not true with no qualifiers or caveats.
I have never argued that the free market is not good at providing goods and services to people who have good jobs and disposable income to spend. This entire discussion is about the societal needs that the free market CANNOT provide. And all along, you have been swearing up and down to me that the free market is absolutely and by far the best way and the only good way to provide, not just goods and services, but the necessities of life to those who cannot afford them. Like food, clothing, a safe and decent place to live, and, yes, access to basic health care if you have no money to pay for it, or if it's priced at astronomically high levels way beyond the means of most Americans. And that was — you should pardon the expression — a lie. I'm angry, because I feel like you're playing games with me. You know darn well that there are many human needs and public goods (goods as in benefits, not products) that the free market either cannot provide or cannot provide comprehensively or efficiently. Good public schools, public transportation, parks, bridges, highways, playgrounds, a place to live, garbage collection, police and fire services, are all things that government can provide more efficiently and comprehensively — far more so — than the free market, which functions around the principle of profit, not human need.
So if you're telling me now that you agree with me that this is true, that the free market is useful in only a limited circumscribed set of realities, then you've been playing games with me all this time, and I really resent it.
Please don't even post again to me on this if you're just going to play the same game of pretending it was obvious all along that you meant B when you wrote A.
Thanks so much for referencing my article in alternet http://www.alternet.org/story/141645 and the work of Professors Richard Wilkinson and Kate Pickett. Richard and Kate have shown the corrosive effects of rising income inequality. The more unequal the income distribution the lower the life expectancy, the more homicide, the more prisoners, the more infant mortality, the more high school drop outs, the more obesity, the more mistrust, etc…In the case of trust, the data best fits causality not just correlation.This is not an issue of left or right. Sweden and Japan are both leaders in income equality and they have done so by completely different means. In Sweden, income is redistributed after taxes while in Japan income is fairly equally dustruted before taxes. Our present economic meltdown is due in large part to this maldistribution of income. The US is now the most unequal of all of the wealthy countries except for Singapore. We are also more unequal now than at anytime since record keeping started around WW I. We need the moderate voices to come out in favor of redressing the maldistribution and the recreation of a middle class society
All, along, you have been swearing up and down to me that the free market is absolutely and by far the best way and the only good way to provide, not just goods and services, but the necessities of life to those who cannot afford them.
Sorry, Kathy, I've repeatedly said the opposite. A functioning market works to everyone's benefit, but it will not–and has no moral authority to–play a charitable role redistributing wealth from the rich to the poor. That's properly government's job, which it should not by donning a stethoscope itself, but by writing people checks. Remember our conversation about liquor and gigolos?
I have never argued that the free market is not good at providing goods and services to people who have good jobs and disposable income to spend.
Not precisely, no. But you've nevertheless lobbied long and hard against it, six times a day, for the “public good.” If it actually benefits the majority of the public that holds jobs and enjoys incomes, how do you justify trying so hard to tear it down?
Because not everything that benefits the public is profitable.
Government never proposed to “don a stethoscope.” That's absolute nonsense, and completely untrue. I do remember our “conversation” about writing people checks, but it made no sense then, and it doesn't make any more sense now.
I'm done with this particular discussion.
Kathy, Uncle Sam already sports a stethoscope at VA hospitals, and you're on record lobbying for him to take over the rest of the health care industry.
If you're now saying it's absolute nonsense, well, I'm glad you're coming around. Good night.
“I have never argued that the free market is not good at providing goods and services to people who have good jobs and disposable income to spend. This entire discussion is about the societal needs that the free market CANNOT provide. And all along, you have been swearing up and down to me that the free market is absolutely and by far the best way and the only good way to provide, not just goods and services, but the necessities of life to those who cannot afford them.”
I'd argue that the free market is generally very good at producing quality and driving down cost through competition, thus making products and services (including ones that are societal needs) more accessible to more people. Thus, the free market has an important role in providing even societal needs like health care.
But, all of us agree that that does not mean that the free market can provide a service to everyone, regardless of their ability to pay. So if we, as a society, determine that a particular product or service is essential for everyone to have, no matter what, then yes, we will necessarily need government policy to help out (lacking private charities, which at least when it comes to health care have proven inadequate). But even then, the free market has a role in keeping costs down in order to save the taxpayer money.
I think you and I probably disagree on the extent to which the free market keeps costs down in health care, and that's a fair disagreement. I'd argue that much of the cost control problem we have has actually result of too much government distortion of the free market, but I imagine you see it differently. That's fine. I'd be happy if you'd agree for now that, in general, the free market does have a role in providing people will basic needs (ie. keeping costs down to limit the amount of subsidies that the government has to pay to the poor).
I'd be happy if you'd agree for now that, in general, the free market does have a role in providing people will basic needs (ie. keeping costs down to limit the amount of subsidies that the government has to pay to the poor).
Yes, I agree with that, in principle.