The Poverty Scam In Action

Yesterday the AP generated a particularly egregious piece of pseudo journalism promoting the poverty scam.  Versions of it ran at outlets including Yahoo, CBS News, and the Daily Mail.

As readers of this blog know, what I call the poverty scam is this:  The Census Bureau defines "poverty" in a way that has nothing to do with physical deprivation, and only turns on "cash income."  That definition makes the "poverty rate" useless as a measure of physical deprivation, because it excludes all government in kind benefits and sweeps in all kinds of obviously non-poor categories like kids living on handouts from the well-off parents, Ph.D. students at Harvard, business owners having a losing year, asset millionaires taking a year off, and people getting in excess of $100,000 per year in in-kind government benefits.  But then journalists write stories about "poverty" that discuss the "poverty rate" and physical deprivation together as if they had something to do with each other.  Worse, journalists discuss the in-kind government programs as if they had some relationship to "poverty" or the cure of "poverty," when in fact they don't count at all in the measure of poverty.  Doubling the in-kind programs, or halving them, or eliminating them altogether, would have absolutely zero effect on so-called "poverty", because these programs are defined to not count in the measure.

With that background, let us consider this appalling AP story.  Here is the headline from the Daily Mail:

U.S. sees highest poverty spike since the 1960s, leaving 50 million Americans poor as government cuts billions in spending... so does that mean there's no way out?

Of course the "50 million [poor] Americans" refers to the Census Bureau definition that turns entirely on cash income.  But the "billions in spending" being cut refers to the "sequester," which cuts very little from "safety net" programs, and that part relates to in kind programs that have nothing to do with "poverty" as defined by the Census Bureau.  Let's see how AP deals with this issue:

As President Barack Obama began his second term in January, nearly 50 million Americans — one in six — were living below the income line that defines poverty, according to the bureau. A family of four that earns less than $23,021 a year is listed as living in poverty.

OK, that's clearly referring to the cash income definition.  Then this:

There is no question the national belt-tightening "will deepen and increase poverty," said McCarthy, citing the cuts in long-term care for poor seniors including assisted living and nursing care, and fewer low-income housing spaces, among other ripple effects.

Wait a minute, they're still using the word "poverty," but we just completely switched definitions.  Now we're talking about in kind government benefits that have nothing to do with the Census Bureau definition of poverty.

Under the spending cuts, Baltimore Housing Commissioner Paul T. Graziano said his agency faces a $25 million shortfall in funds to help poor people with housing.

More in kind benefits.  Then this from Stephanie Rawlings-Blake, the Mayor of Baltimore:

The austerity cuts "to housing programs_as well as those to public safety, health, and education_will have an adverse effect on Baltimore and throughout the country," she said.

None of this has anything to do with cash income or the alleviation of "poverty" as defined by the Census Bureau.

My innocent self would like to think that the AP writer (Steven Hurst) is just confused here and doesn't know much about his subject matter.  But I don't believe it.  I think this is a very intentional effort to use a definition of poverty to generate a very high number of people supposedly in poverty as a device to sell government spending that then has no effect whatsoever in reducing the poverty.

Here's the first comment to the story at the Daily Mail, from one mdinaz:

How can this be? The Feds have spent trillions on the War on Poverty. And yet, poverty rates have not only NOT gone down over 40+ years, they're going up! Where's the money gone? (that's a rhetorical question - it's gone into liberal bureaucrat pockets).

Well, sir, you are getting your news from the AP instead of the Manhattan Contrarian.  The answer to your question is that this is a complete and utter scam.