Desperate Efforts To Rescue The Poverty Scam

I spent the morning today attending a conference with the title "Can We End Poverty?", put on by the Cato Institute at Columbia University.  I came away disappointed.  This was a serious effort by some earnest and well-meaning people.  But in my opinion even the committed libertarians among the presenters gave way too much credence to the government's fake poverty measurements, and way too much credence to the idea that government "anti-poverty" programs are bona fide efforts to alleviate poverty as opposed to being intentionally structured to keep measured poverty from ever going down and thereby justifying and promoting never-ending ineffective expansion of the government.  All participants who addressed the subject agreed that governments (all levels) have spent over $20 trillion on the "war on poverty" since it began in the 1960s, and about $1 trillion per year today, and the rate of "poverty" by the official government measure started at about 15% and is still at about 15%.

The conference was structured in panels, with participants on the libertarian side balanced with others from the Left.  The participants from the Left seemed to view their role as figuring out a way to claim that the "anti-poverty" programs have actually accomplished something other than trapping the intended beneficiaries in a lifetime of poverty.

Most remarkable to me was a guy named Christopher Wimer, identified as a Co-Director of Columbia's Center on Poverty and Social Policy at its School of Social Work.  Wimer, along with several colleagues, claimed to have come up with a new and improved measure of "poverty" called the "Anchored Supplemental Poverty Measure."  He described it in qualitative terms, but without enough specifics to enable a detailed critique.  But the basic idea seemed to be to answer critics of the official measure by giving credit for the huge in-kind transfers passed out these days, and also to adjust the standard of deprivation poverty upwards to account for today's overall higher standards of living.  And the result: poverty today under this measure is just about exactly the same as by the Census Bureau official measure, about 15%.  But under this measure the poverty rate in the 60s would have been close to 30%, and much of the decline is credited to the handouts that have arisen since.  A couple of comments:

  • Since he could have picked whatever standard of "poverty" he thought appropriate for today, it is clear that his standard was reverse-engineered to come to approximately the same figure as the Census Bureau.  We must maintain the official party line that almost 50 million Americans are "poor"!
  • If the poverty rate in the mid-60s was close to 30%, then very likely he has defined my own family of the time into "poverty."  We lived in quite modest circumstances, but no way did we consider ourselves to be in or near poverty, and we would have found it insulting to suggest such a thing.

The guy gave an impression of being sincere, but all I could think was, how is this anything other than a completely cynical effort to keep alive the poverty scam?  For those who haven't read my prior articles, by the "poverty scam" I mean the intentional effort to keep the number of people supposedly in poverty high despite the trillions in government expenditures, in order to justify further growth of the government to cure the problem.

And along very similar lines, consider the op-ed from the Times's Thomas Edsall from Tuesday titled "How Poor Are The Poor?"  (Note that I have previously criticized Edsall for his "appalling ignorance" of the poverty scam.)  Edsall writes on the article appearing in the April 2 edition of the New York Review of books by Harvard's Christopher Jencks titled "The War On Poverty: Was It Lost?"  Edsall first notes that Jencks has analyzed the government's poverty rate calculations and made some simple adjustments to take account of the value of government handouts and inflation, and as soon as you do that the poverty rate gets cut to about a third, from about 15% to under 5%:

Jencks makes three subtractions from the official level to account for expanded food and housing benefits (3 percentage points); the refundable earned-income tax credit and child tax credit (3 points); and the use of the Personal Consumption Expenditures index instead of the Consumer Price Index to measure inflation (3.7 percentage points).  Jencks’s conclusion: “The absolute poverty rate has declined dramatically since President Johnson launched his war on poverty in 1964" [to 4.8%]

Edsall calls Jencks' 4.8% "the lowest poverty estimate by a credible expert in the field."  Well, I guess I have just been called "not a credible expert in the field" (OK, I wasn't very flattering toward Edsall either), but I would say that Jencks has only just begun with the needed adjustments to the so-called poverty rate.  He hasn't even started to account for the large numbers of affluent people counted in "poverty" because they don't have measurable "cash income" this year -- students living on scholarships and family support, early retirees with substantial savings and million dollar houses who haven't taken social security yet, people who take a year off from work to change careers or maybe travel.  Don't believe that these categories distort the statistics?  Take a guess what the official "poverty" rate is in affluent Ithaca, New York.  Ready?  It's 55.6%.  They just shamelessly count thousands of students (nationwide, it's millions), many from rich families, and hope no one will notice.

Wait a minute!  If you keep this up you're going to get the "poverty" rate down to about 1 or 2% -- how can that possibly justify additional trillions of government spending that I want for myself and my friends?  Well, Edsall says he went out and talked to a bunch of "experts," and they have the answer -- a measure of poverty that defines the concept in relative rather than absolute terms.

[An alternative measure of poverty] is to count all those living with less than half the median income as poor. There are strong theoretical justifications for the use of a relative poverty measure. The Organization for Economic Cooperation and Development puts it this way:

In order to participate fully in the social life of a community, individuals may need a level of resources that is not too inferior to the norms of a community. For example, the clothing budget that allows a child not to feel ashamed of his school attire is much more related to national living standards than to strict requirements for physical survival.

Using one-half of the median income estimates the number of poor people at over 70.6 million, far above the 45.3 million official number, according to Shawn Fremstad, a senior fellow at the Center for American Progress, a liberal think tank.

Sounds to me like they're getting desperate.  The American people have so far shown themselves remarkably easy to scam with the poverty statistics, but the purveyors of the statistics at least go to major effort to hide the scam in complicated survey techniques and program definitions that take a lot of work to penetrate.  When you go to the so-called "relative" measure of poverty, isn't it immediately obvious to everybody that the whole idea is to have something that by its very definition cannot go down no matter how much the government spends to fix it?

And I love that part from the OECD about a "child feeling ashamed of his school attire."  I lived the bulk of my childhood in hand-me-downs from friends and relatives -- and so did lots of other kids I knew.  Do they think I felt "ashamed"?  Really, that's obnoxious.  Now, if my family had taken government handouts to buy new clothes so that I wouldn't have had to wear hand-me-downs, then, yes, I would definitely have felt ashamed.