Completely Taken In By The Poverty Fraud

In a post last month titled "The Malicious UN Addresses 'Poverty' In The United States,"  I recounted how the UN's "special rapporteur" on poverty had just issued a big report excoriating the U.S. for the persistence of poverty within its borders.  The only problem was, the "rapporteur," one Philip Alston, combined extreme malice against the U.S. and everything it stands for with complete ignorance of the subject matter on which he was "rapporting."  From all you could tell from his "rapport," he knew nothing of the arbitrary "cash income" limitations of the U.S. measure of "poverty," and nothing of the annual trillion dollars or so of in-kind benefits handed out to the "poor" that are systematically not counted in measuring their "poverty."  And then, in the malice category, Alston took the occasion of his "rapport" to deliver a self-righteous lecture to the U.S. on every issue from tax policy to the criminal justice system to income inequality to environmentalism to alleged racism.  I concluded:

Alston excoriates the U.S. for not adopting massive socialist-model "solutions" to ameliorate non-existent poverty, while seemingly remaining completely unaware that the socialist model, foisted on the world by the UN, is what keeps the real poor of the world poor.

It took a month, but it won't surprise you that the New York Times and some of its commenters and letter writers have now picked up on World Bank notions of "poverty" in the U.S., and on the Alston "rapport," and have swallowed these things hook, line and sinker.  This began with a January 24 op-ed by Princeton economics professor Angus Deaton (headline: "The U.S. Can No Longer Hide From Its Deep Poverty Problem"), followed by two letters in the January 28 edition.  There are also some 1102 comments (and counting), but I'll spare you from those.

Deaton proves once again that the way to get a fancy appointment as an economics professor at Princeton is to know nothing of what you are talking about.  (See, e.g., Krugman.)  Here's his lede:

You might think that the kind of extreme poverty that would concern a global organization like the United Nations has long vanished in this country. Yet the special rapporteur on extreme poverty and human rights, Philip Alston, recently made and reported on an investigative tour of the United States. . . .  The World Bank decided in October to include high-income countries in its global estimates of people living in poverty. We can now make direct comparisons between the United States and poor countries.

So, Angus, how many people are in this "extreme poverty" in the U.S., and how do you make that determination?  

According to the World Bank, 769 million people lived on less than $1.90 a day in 2013; they are the world’s very poorest. Of these, 3.2 million live in the United States. . . .   [And then, adjusting for cost of living issues,] when we compare absolute poverty in the United States with absolute poverty in India, or other poor countries, we should be using $4 in the United States and $1.90 in India.  Once we do this, there are 5.3 million Americans who are absolutely poor by global standards.

Who are these 5.3 million people in the U.S. supposedly living in "extreme poverty"?  Deaton of course tells us nothing about the methodology that came up with these numbers.  Does he know anything about the methodology?  Unlikely.  Spending some real time today trying to get some information on how they do this, I find this October 2017 "global poverty update from the World Bank," which contains a very inadequate description of some of the methodology.  Although never stated explicitly, it becomes clear that they have sent out some kind of a survey, and compiled the answers.  Then this:

We . . . include observations reporting zero incomes in these [wealthy] countries . . . .  These observations should not be interpreted as corresponding to zero consumption. This is a long-standing issue concerning the comparability of poverty statistics across consumption and income distributions. It has not been resolved, and further work is clearly needed, but data users interpreting poverty numbers for rich countries should bear it in mind.

How many of these "zero income" responses are there?  They don't say, but it's obviously enough to affect the results or they wouldn't mention it at all.  Do they do any follow up at all to determine if these "zero income" responses are real?  Again, they don't explicitly say, but the statements that this is a "long-standing issue" that "has not been resolved," and "further work is clearly needed" strongly imply that they don't.  (Note that on this very subject several years ago I interviewed the head of poverty statistics at the U.S. Census Bureau, and she admitted to me that as to "income" the Census Bureau takes whatever answer a respondent gives on the survey form without any kind of follow up or double check.)

In other words, these "zero income" responses could perfectly well be people who just don't want to reveal their income to someone they don't know and therefore they put down a zero.  Or they could be in one of many perfectly legitimate and not small categories of people who really do have zero "income" (by the arbitrary definitions of that term) and yet are not anything you would ever consider "poor":  disabled people living on full government support in a group home; students on scholarship; retirees living off savings or a reverse mortgage; young people living with family support while looking for a job, etc., etc.  So how many of the World Bank's and Deaton's 5.3 million Americans are in which of these categories?  The fact is, they have no idea.  And yet they treat the 5.3 million figure as some kind of legitimate indicator of a level of suffering.  

Meanwhile, to the extent that there actually are people who are striving in life but aren't earning anything meaningful right now and have no other resources to draw on, there is that $1 trillion of annual government "anti-poverty" spending.  Somehow Deaton completely omits to mention that spending.  Just for starters, any such very-low-income person would immediately be entitled to a federal food stamp subsidy of $192 per month, which is already well more than the $120 per month of this World Bank "extreme poverty" standard -- and food stamp spending is only about 7% of "anti-poverty" spending in the U.S.  Note that neither food stamps nor almost any other government "anti-poverty" effort counts as "income."  This goes for everything from public housing to Medicaid to clothing and energy assistance to multiple other food and nutrition programs.

And the World Bank specifically warns people using their numbers about the "long-standing issue" of these "zero income" reports, and to "bear [that] in mind" when using the data.  But even those explicit warnings do not stop the likes of fancy schmancy Princeton economics professor Deaton, wanting to play on our sympathies, grasping onto this very dubious data to claim that the U.S. "can no longer hide from its deep poverty problem."

Deaton then of course makes the usual call for collective response to the looming crisis (although he doesn't advocate for any particular government program in this op-ed):

[T]he social contract with our fellow citizens at home brings unique rights and responsibilities that must sometimes take precedence [over our obligations to the poor in other nations], especially when they are as destitute as the world’s poorest people.

The Times letter-writers step in to fix Deaton's failure to make the obligatory call for more government spending and programs.  For example, there is this from letter-writer Peter Singer (sometime Times ethics columnist):

My Princeton colleague Angus Deaton has done us all a service by pointing to the existence of extreme poverty in the United States, and especially the failure of this affluent society to provide adequate shelter for homeless people. There is no doubt that governments at all levels should be doing more to meet this need. 

OK Angus and Pete:  If $1 trillion of annual spending still leaves 5.3 million people in "extreme poverty" because next-to-none of the spending counts as relieving the poverty, what is the "more" that the government should be doing that could possibly make any difference?