Feed on

Just a few days ago the US Census released its annual estimates of poverty counts in the United States, along with updates in various income measures. The data were not pretty. Poverty rates are at levels not seen in 20 years and it appears that the income of a typical household has not budged much in real terms in quite some time.

You are going to see a lot of apoplexy on the right trying to defend their views of the world by arguing against these data. It is certainly possible to do it, and despite common defenses of the left, it is not a task without merit. However, color me puzzled by the reaction from the right, especially the classically liberal side of it all.

Isn’t it one of “our” core beliefs that the role of the state has been advancing during the last 40 years? Isn’t it our contention that despite a few visible moves toward deregulation that the economy is far more cartelized, credentialized and regulated than 40 years ago? Isn’t it “our” contention that welfare programs have not worked, that the state education system is bloated and inefficient, that the health care system is far from being market oriented (or even market paid for), that the tentacles of governments at all levels are reaching into places no one in their right mind would ever imagine, that immigration policy is a disaster, and so on and on and on?

If that is what we truly believe, then it is completely shocking that the reaction to the current data (and the data coming out for the past decade or so) has not been, “Exactly, what else would you expect?”

But I have not seen such an argument made by many people. Now I have pretty much stopped watching TV with the exception of college football on late Saturdays so it is possible I am missing something here, but even if some people were making this argument I am sure I would be moderately aware of it.

So what we will see for the next 14 horrible months running up the election is a bounty of blathering about whether the data is right or not, rather than an impassioned and reasoned defense of ideas which point to stagnating income and living standards and increased inequality as an outcome. Commercial society has not failed here folks. Not one bit.

5 Responses to “My Two Cents on the New Census Poverty and Inequality Estimates”

  1. […] will point you to wintercow20 at The Unbroken Window: Isn’t it one of “our” core beliefs that the role of the state has been advancing during the […]

  2. Rod says:

    A huge unmentioned and often unconsidered phenomenon in this country’s economy is the underground economy, something that ought to get larger as unemployment benefits grow. Certainly a good percentage of those people with family incomes of $25,000 or less per year are the large number of out of work construction workers, many of which have marketable skills that can be used for things like handyman repairs. How many of these people report the money they earn in the underground economy? (Suddenly a scene in It’s a Mad, Mad, Mad, Mad, Mad World comes to mind when Milton Berle and Mickey Rooney think about the underground status of the money under the big dubbayah.)

    I’m not talking about the underground economy as it exists for the Mob and the drug dealers. These are just regular hard-working people who, when knocked on their backsides by life just don’t get around to including handyman income on their tax returns.

    When tax rates are low, not only do more of these people report their cash income, but regular folks with good tax attorneys and accountants do the same. The Laffer Curve speaks to an immutable truth.

  3. RIT_Rich says:

    I’m pretty sure many people have made this argument. Of all places, I’d say Republican politicians would make this argument (for precisely the reasons you mentioned), while economists I would expect to make the opposite argument that, despite government growth, in the long term the market still manages to get positive results.

    And they’re not mutually exclusive. They are both right arguments, I think. But they are trying to answer two different questions, and maybe reach two different results. If we are interested in the result of getting people to agree to a scale down in government size and scope, it doesn’t matter what argument we use to get to it. Given the nature of politics and democracies, your argument may or may not work. I don’t know. It would convince those on the edge of the Tea Party types, but it would not convince NPR types. What will convince them?

  4. Aaron McNay says:

    One of the things that bothers me the most when people attempt to compare the levels of income growth over the past 40 years relative to the 50s and 60s is that it fails to take into consideration other types of compensation. I am not talking about health care, vacation days, and retirement compensation, although those do matter. What I am talking about are things like environmental quality. By nearly every measurable standard the environment in the United States has improved considerably over the past 40 years. The improvement in the environment is not surprising if we assume that environmental quality is a normal good (a good that we consume more of as our income increases). Given that the environment is a normal good, we would expect us to spend a larger amount of income on environmental quality as time progresses. However, standard measures of income do not adjust for this type of compensation. What I find most surprising about this is that you will regularly hear environmentalists complaining about how countries such as China are over stating their GDP numbers, given that environmental damage is not included in the GDP estimates. However, you never hear the same people disagreeing with the income growth estimates for the United States, as these estimates do no include things like improved environmental quality either.

  5. chuck martel says:

    Poverty is relative. Just about all of us are impoverished next to Bill Gates but even the poorest American is better off materially than a Jivaro tribesman. And that’s the point, really. Why is wealth only measured in material terms? How about knowledge, awareness, mental health, family bonds, and other things that are difficult to measure in monetary units? Isn’t it possible to be destitute of ideas?

Leave a Reply