Yes, poverty is worse than they ever admitted

Cross posted from DailyKos, but expanded

The National Academy of Sciences has issued its own estimates of the number of Americans in poverty, and yes, it’s much worse than the official statistics have been telling us for the past decade. The new NAS formula estimates nearly 1 in 6 Americans, 15.8 percent, are living below the poverty line. That’s 48 million Americans.

By comparison, the latest official Census Bureau statistics are that 13.2 percent of Americans, or 39.8 million, are impoverished. It should be noted that the Census Bureau is reportedly cooperating with the National Academy of Sciences to get this information out as quickly as possible.

According to the Associated Press, the NAS took into consideration the rising costs of medical care, transportation, child care, as well as geographical variations in living costs. Unbelievably, the Census Bureau calculations never accounted for these costs, since they were first used in 1955. My guess is that this was a convenient way to hide the destruction of the working class beginning with the oil price shocks and Volcker interest rate shock of the 1970s, and horrific human impacts of the de-industrialization of the U.S. economy that was rapidly accelerated by the usury and speculation unleashed by Ronald Reagan’s deregulation mania. Not to mention the vicious attack on organized labor initiated by Reagan’s destruction of the air traffic controllers union.

Particularly troubling is the NAS’s finding that poverty among elderly Americans is actually twice what the official figure is. The NAS finds that 18.7 percent of Americans 65 and older - nearly 7.1 million - are in poverty. The traditional Census Bureau measure is 9.7 percent, or 3.7 million, elderly Americans in poverty. The Associated Press notes that the dramatic doubling of this statistics under the NAS measure is attributed to the NAS taking into account rising Medicare premiums, deductibles and the coverage gap in the prescription drug benefit.

In addition, Michael Lind reports in Salon.com that while the official U.S. unemployment rate is currently 9.8 percent, Obama advisor

Leo Hindery Jr. infers an actual unemployment rate of 18.8 percent. In other words, nearly one in five Americans is unemployed or underemployed. The sound you hear is the sound of the social fabric in America rotting and beginning to snap. Thanks to the unemployment insurance system adopted during the New Deal years, and thanks in part to the stimulus that the Obama administration and Congress passed earlier in the year, we do not have hordes of out-of-work Americans standing in line at soup kitchens and riding the rails from town to town.

This is something I think should be shouted in the streets, to counter the complete bullshit that it is the Federal Reserve and the Treasury, with the various bailouts and rescues of the financial sector, that have saved us from a new Great Depression. What’s really saved us so far is the tattered remnants of the New Deal social safety net. What would the situation look like in the U.S. now if the following three programs did not exist?

  • Social Security
  • Unemployment Insurance
  • Food Stamps

I should note here that if you have been reading The Economic Populist for the past year or more, you probably already knew about the different measures of unemployment. What I think is significant is that one of Obama's top economic policy advisers is now discussing the actual rate of unemployment. At 18.8 percent, we are in the same territory as unemployment through most of the Great Depression in the 1930s. It's interesting that Hindery is taking up this issue at the same time that Paul Krugman is reporting that Obama's economics team is privately furious with Wall Street for it's bitter opposition to any type of meaningful financial reform.

Lind continues:

Mass unemployment has yet to spawn a wave of crime or social unrest. But those possibilities cannot be dismissed. And the desperation is real, even if it is not signaled by desperate acts. The psychological toll of prolonged unemployment is devastating on individuals who have lost their roles as breadwinners or productive, self-reliant citizens. Employers prefer not to hire people who have been unemployed for long periods -- and laid-off workers today are spending an average of 26.2 weeks without jobs, the highest average since the Great Depression. And then there are the new graduates of high schools and colleges, a lost generation whose members may be crippled throughout their careers by the lack of opportunities in their youth.

As Fact-esque notes (and they deserve credit because that is where I first found this news),

This is more or less what we here at Fact-esque have been saying for years. It's what economists unblinkered by Chicago School ideology have predicted for years, what we've been seeing on the streets for years, what agencies that work with the poor have reported for years - beseiged food banks, growing soup kitchen lines, way more homeless than there are beds in shelters, and so on. . . .

These numbers did not get this bad overnight or in the 10 months of the Obama Admin. It took the right wing fully 25 years of dedicated effort and a full two terms of unrestricted "free market" economic policy to bring us to the worst depression since the '29 crash. Even if Obama and his ex-Goldman Sachs advisors did a complete 180 and killed trickle-down in favor of an FDR-style NRA - which they're not even thinking of doing - it would take years to get out of the mess conservative movement free market ideologues have got us into.

As I was posting this to The Economic Populist, I remembered this article by Sara Robinson back at the end August:

A liberal democratic society is a complex system that's designed to be very resilient and self-correcting in the face of all kinds of extremism. But the health of that system -- especially its natural immunity to would-be attackers -- ultimately depends on just one factor. It cannot survive without people's ongoing confidence in a functioning political contract.

When it's working right, this contract guarantees the upper classes predictable, reliable wealth in return for their investments. It promises the middle class mobility, comfort, and security. It ensures the working classes fair reward for fair work, chances to move ahead, and protection against very real risk that they'll be forced into poverty if they can't work any more. Generally, as long as everybody gets their piece of this constantly re-negotiated deal, everybody stays invested in keeping the system going -- and a democratic society will remain upright, healthy, and moving mostly forward.

For the past four decades, conservatives have done everything in their power to dismantle that essential contract, and thus destroy our mutual confidence in the fundamental agreements that allow any democratic system to function. (None dare call it treason -- but a solid case could be made.) This isn't news: by now, most of us can recite the litany, chapter and verse, of the all the many ways they hacked away at America's essential ability to function as the Constitution intended.

But the biggest loser, as always, has been the working class -- the people whose only real power lies in their sweat and their numbers. Their faith in the promise of democratic self-government has been shattered through years of union-busting, farm foreclosures, factory exports, college grant cuts, subprime mortgage scams, and all manner of betrayal, treachery, neglect, and abuse. Over in the comments threads at Orcinus, we hear from these furious folks almost every day. The way they see it, representative democracy has repeatedly failed to deliver on anything it might have once promised them. At this point, the disgust runs so deep that anybody who's got other ideas -- theocracy, corporatocracy, anarchy, whaddaya got? -- has a fair shot at getting their attention.

 From Part three of a series, Fascist America III: Resistance for the Long Haul.

Read the rest of the series:
Fascist America: Are We There Yet?
Fascist America II: The Last Turnoff

This past April, American journalist and social commentator Bill Moyers hosted David Simon, the creator of HBO's graphically violent fictional crime series The Wire. Simon learned about the ugly underbelly of America's working class decline by spending twelve years as a crime reporter for The Baltimore Sun.

Here's a section from Moyer's interview of Simon that includes a very powerful scene, of waterfront union boss Frank Sobatka being offered a deal to cooperate with government prosecutors. :

 

DAVID SIMON: It's almost -- he's describing a capitalist pyramid. Where nobody moves. Where there is no improvement in anyone's station. And we were basically setting out a preamble for what the next five seasons would show, with regard to the city. You know, in second season there was a character who said, almost prescient of the of the Wall Street debacle. He said, "We used to make stuff in this country. Build stuff." He didn't say 'stuff' but it's HBO.

But he said, "Now, we just put our hands in the next guy's pocket." And ultimately, some things are serendipitous and you find themes and, you react and the story changes. And, you know, I'm not suggesting we have everything planned to the nth degree. But we knew, for example when we wrote that scene in the beginning of the first season, that by the end of the run those three characters would have been treated as pawns in a chess game.

And we knew that character that cited what was ailing post-industrial America, he happened to be a union captain and one of the longshoreman. That he would be speaking to, at the time, what we were reacting to with Enron and things like-- and WorldCom and the first sort of-- first shots across our bow, economically. That people were trading crap and calling it gold. And that's what THE WIRE was about. It was about that which is-- has no value, being emphasized as being meaningful. And that which is-- has genuine meaning, being given low regard.

BILL MOYERS: I haven't forgotten that moment in Season Two when the F.B.I. comes to the longshoreman, whose union is suspected of illegal activity and tries to make a deal with him. The answer he gives goes right to the heart of what you are saying about our economic system. Watch this.

[...]

FBI AGENT 1: Racketeering, wire fraud, conspiracy to import heroin, conspiracy to violate federal customs statutes, white slavery.

FBI AGENT 2: Today we're only charging the customs violations, Mr. Sobotka. But eventually a grand jury indictment will expose you to a lot more.

FBI AGENT 1: Name names and come clean. You help yourself and your union.

FRANK SOBOTKA: Help my union? Twenty-five years we been dyin' slow down there. Dry-docks rustin', piers standin' empty. My friends and their kids like we got the cancer. No lifeline got throwed, all that time. Nuthin' from nobody... And now you wanna help us. Help me?

[...]

BILL MOYERS: So, whose lives are less and less necessary in America today?

DAVID SIMON: Certainly the underclass. There's a reason they are the underclass. But in an area-- in an era when you don't need as much mass labor. When we are not a manufacturing base those people that built stuff, that made stuff-- that were-- that their lives had some meaning and value because the factories were open. You don't need them anymore.

But also unions and working people are completely abandoned by this economic culture and that's what Season Two was about. It was about one of the forces, one of the walls that basically make the corner culture.

 

To watch the entirety of the Moyers interview of Simon: http://www.pbs.org/moyers/journal/04172009/profile.html

 

Or, just watch the first two minutes of this clip from YouTube, which shows the arrest of Sobatka, and the dialogue where Sobatka spurns the FBI offer.

 

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Comments

I would hate to experience another summer of

high unemployment. What amazes me is the GOP brand is for shit but yet Blue Dog Dems and New Democrats Caucus want that conservative label. Oh, wait, its the corporate money they want from GOP.

Progressive economic policies work - Democrats shouldn't be afraid of them. Implement a little counter-cyclical fiscal policies when economy gets better and bam - Democratic sweep again. But no, they would rather have the corporate money then the support of their constituents.

RebelCapitalist.com - Financial Information for the Rest of Us.

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1 in 6 dollars of income now via government

So this is what prosperity looks like?

The recession is driving the safety net of government benefits to a historic high, as one of every six dollars of Americans' income is now coming in the form of a federal or state check or voucher.
Benefits, such as Social Security, food stamps, unemployment insurance and health care, accounted for 16.2% of personal income in the first quarter of 2009, the Bureau of Economic Analysis reports. That's the highest percentage since the government began compiling records in 1929.
In all, government spending on benefits will top $2 trillion in 2009 — an average of $17,000 provided to each U.S. household, federal data show. Benefits rose at a 19% annual rate in the first quarter compared to the last three months of 2008.
The recession caused about half of the increase, according to the report. Unemployment insurance nearly tripled in the past year. The other half is the result of policies enacted during President George W. Bush's first term.
Following the 2001 recession — when costs normally decline — social spending soared to pay for the Medicare drug benefit, expanded health care for children and greater use of food stamps.

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