Saturday, September 18, 2010
The Poor Get Poorer "The moral test of government," Hubert Humphrey once said, "is how that government treats those who are in the dawn of life, the children; those who are in the twilight of life, the elderly; and those who are in the shadows of life, the sick, the needy and the handicapped." By that measure, we are failing. The Great Recession has ripped another huge hole in the fabric of America life and the poverty rate, as reported this week, is at a 15-year high and expected to go higher in 2010. More than 43 million Americans, one in 7 in the country, now officially live in poverty. Those numbers take us back to 1959 when about the same number of Americans were officially poor. The numbers are considerably worse for African-Americans and Hispanics, with a quarter of all Hispanics and 36 percent of African-American children living in poverty. The Institute for Research on Poverty at the University of Wisconsin, notes that poverty rates have been on a steady upward trend line since the late 1970's. The Institute's director, Dr. Timothy M. Smeeding, told the New York Times that the poverty numbers would be a lot worse if many people hadn't had someone to move in with during the recession. The Times also noted in its front page story that the temporary aid - the stimulus and extension of unemployment benefits, for instance - that has been so controversial in Congress, has undoubtedly "eased the burdens of millions of families." Meanwhile, the debate rages in Washington over whether to repeal the Bush-era tax cuts for the wealthiest Americans. The Miami Herald has put together a helpful Q-A format report on just what is involved with the great 2010 debate over taxes. It is worth a look if you are as confused as I suspect most of us are about the generally out of touch rhetoric about "tax cuts." One takeaway, extending or ending the Bush cuts for the wealthiest Americans - families with adjusted gross income of $250,000 or more - impacts about 2.9 million Americans. Or, put another way about 40 million fewer people than are reported living in poverty. In point of fact, the very, very rich pay taxes at significantly lower rates that most other Americans because so much of their income is in capital gains and dividends. The IRS has reported that the wealthiest 400 taxpayers in the United States in 2007, paid about 16.6 percent of their income in taxes. Also worth considering: America's income gap has been steadily growing since the late 1970's. One wonders if there is any correlation between that fact and the steady increase in poverty in the same period? "Each of America’s two biggest economic downturns over the last century has followed the same pattern" argues Clinton Labor Secretary Robert Reich in a recent essay. "Consider," Reich wrote, "in 1928 the richest 1 percent of Americans received 23.9 percent of the nation’s total income. After that, the share going to the richest 1 percent steadily declined. New Deal reforms, followed by World War II, the GI Bill and the Great Society expanded the circle of prosperity. By the late 1970s the top 1 percent raked in only 8 to 9 percent of America’s total annual income. But after that, inequality began to widen again, and income reconcentrated at the top. By 2007 the richest 1 percent were back to where they were in 1928—with 23.5 percent of the total." It is difficult - maybe impossible - to maintain for long a cohesive, forward-moving country with such a vast gap among the haves and have nots, with so many out of work, out of opportunity, worried about the next meal, the next need to visit the doctor or the next pair of shoes for the kids.The reality of this fact - the bleak circumstances of our fellow Americans in the shadows - is mostly lost in the current political debate over tax cuts, deficits and the struggling economy. As The Guardian noted - you gotta love those Brits - "in a strange paradox, the party that is accused of doing too little to combat the crisis is poised to suffer heavy defeats in the upcoming mid-term elections by the party accused of doing nothing at all." It was hard to miss the paradox - or is it irony - of the "jump" of the Times story on poverty, which began on Friday's page one and ended next to the Macy's, Bloomingdale's, Tiffany's and Tod's ads on page three. Macy's was touting an animal print mink jacket for $4,995 and Tod's had a really nice purse for $1,495. Marketing to the one percent, I guess.