Search This Blog

Tuesday, October 02, 2007

poverty, charity and safety nets

There are people in need of help, but a realistic sense of the nature and the magnitude of the matter are needed if helping is truly our objective. Bill Steigerwald discusses poverty in america with Robert Rector of Heritage Foundation:
When you look at the people who John Edwards insists are poor, what you find is that the overwhelming majority of them have cable television, have air conditioning, have microwaves, have two color TVs; 45 percent of them own their own homes, which are typically three-bedroom homes with 1.5 baths in very good recondition. On average, poor people who live in either apartments or in houses are not crowded and actually have more living space than the average person living in European countries, such as France, Italy or England.

Also, a lot of people believe that poor people are malnourished. But in fact when you look at the average nutriment intake of poor children, it is virtually indistinguishable from upper-middle-class children. In fact, poor kids by the time they reach age 18 or 19 are taller and heavier than the average middle-class teenagers in the 1950s at the time of Elvis. And the boys, when they reach 18, are a full one inch taller and 10 pounds heavier than the GIs storming the beaches of Normandy. It’s pretty hard to accomplish that if you are facing chronic food shortages throughout your life.

Q: How many Americans would you define as “truly poor”?
A: If you are looking at people who do not have adequate warm, dry apartments that are in good repair, and don’t have enough food to feed their kids, you’re probably looking at one family in 100, not one family in eight.

Part of the reason the Census Bureau is telling us that we have 37 million poor people is that it judges families to be poor if they have incomes roughly less than $20,000 a year. But it doesn’t count virtually any welfare income as income. So food stamps, public housing, Medicaid -- all of the $600 billion that we spend assisting poor people (per year) is not counted as income when they go to determine whether a family is poor.

All of the data I provide come directly from government surveys. Those government surveys are not heavily publicized by the media, because since the beginning of the War on Poverty the politically correct thing to do is to just exaggerate the amount of poverty that exists in the United States as a way of encouraging more welfare spending.

Most of the money goes directly to poor people either as services or as something like a food stamp or medical care. The problem with these programs is that they reward individuals for not working and not being married. Essentially, they set up a very negative set of incentives that tends to push people deeper into poverty rather than helping them climb out of it.

The problem with the welfare state is not that it has huge overhead costs. In fact, the overhead costs are only about 15 percent of total costs. The problem is that aid is given in such a way that it encourages dependence rather than helping people to become self-sufficient.

Basically, we have spent a lot of money but we spent money in such a way that we displaced the work effort of the poor, so that we did not get very much net increase in income. Rather than bringing people’s incomes up, what we’ve done is supplanted work with welfare.

In 1996, we reformed one small welfare program -- Aid to Families with Dependent Children -- by requiring the recipients or part of the recipients to perform work in exchange for the benefits.

As a result of that, we got a huge decline in welfare rolls, a huge surge in employment and record drops in black child poverty. Unfortunately, the rest of the welfare system -- the remaining 69 programs -- remained unreformed. Until we reform those programs in a similar way, we will make no further progress against poverty.

In his Memoir on Pauperism Alexis Tocqueville gives us some salient ideas to the last point:

He starts out by surveying human history to determine why it should be the case that pauperism arises in advanced industrial societies, rather than in relatively backwards agrarian ones. He concludes that the phenomenon is paradoxically a result of the advances. Where a subsistence society requires the labor of the whole population just to feed itself, an industrial society can do so with less and less laborers.

The combination of idled hands among the many and a growing amount of disposable wealth among the few then leads to a situation where people will create new products in the hope that the wealthy will desire them. These endeavors are inherently more risky than basic food production, which must obviously go on regardless of changing tastes or hard times. In addition to forcing a significant portion of the population into a tenuous economic position, this manufacture of what are essentially superfluous goods creates a series of artificial desires. No one actually needs all of the consumer products of the modern economy, but once produce them and get the rich to buy them and soon they are viewed as necessities by the society as a whole. So, though the poorest in an industrial economy may be better off in terms of their standard of living than even the richest in a pre-industrial economy, they will nonetheless perceive themselves as destitute because they don't have all the gewgaws and doo dads that others have. Thus, societal wealth breeds desires, wants, "needs", which are unknown in cultures which must devote all of their energies to just satisfying true physical needs.

In the second part of the Memoir, Tocqueville considers what forms of welfare will best attenuate these evils. As a starting point it is important to note Tocqueville's rather blunt assessment of human nature :

Man, like all socially organized beings, has a natural passion for idleness. There are, however, two incentives to work: the need to live and the desire to improve the conditions of life. Experience has proven that the majority of men can be sufficiently motivated to work only by the first of these incentives. The second is effective only with a small minority.

It should also be noted that he does accept the notion that there is a legitimate role for charity :

I recognize not only the utility but the necessity of public charity applied to inevitable evils such as the helplessness of infancy, the decrepitude of old age, sickness, insanity. I even admit its temporary usefulness in times of public calamities which God sometimes allows to slip from his hand, proclaiming his anger to the nation. State alms are then as spontaneous as unforeseen, as temporary as the evil itself.

As is so often the case, de Tocqueville seems to have perceived social trends and understood where mankind's character would lead with the clarity of a prophet. To a remarkable degree, the arguments he presents in the Memoir have become the accepted wisdom that lay behind Welfare reform and ideas like President Bush's Faith-Based Initiative. We can only imagine how much different, how much better and more productive, the last two hundred years might have been had the industrialized world heeded his warning :

I am deeply convinced that any permanent, regular administrative system whose aim will be to provide for the needs of the poor will breed more miseries than it can cure, will deprave the population that it wants to help and comfort, will in time reduce the rich to being no more than the tenant-farmers of the poor, will dry up the sources of savings, will stop the accumulation of capital, will retard the development of trade, will benumb human industry and activity, and will culminate by bringing about a violent revolution in the State...

Precisely such a fate did claim many of the states of Europe, and most of the rest still groan beneath the suffocating weight of their cradle to grave welfare systems. As Tocqueville expected, America has been able to slow the onset of this fate, and the current climate of enthusiasm for privatizing social services offers some hope that we will be able to avoid it altogether, but until we actually do privatize Social Security and re-privatize health care, this sword of Damocles still dangles overhead.

If progress is to be made, we should keep in mind the same point reiterated about the poverty of welfare:
The citizenry are taught to distrust capitalism, distrust business, distrust successful people (except Liberal Fundamentalists), distrust religion and to place all responsibility for control of their lives in the government. The intellectually elite Liberal Fundamentalists control the government, as they largely control the media and the bureaucracy, but they remain aloof. They assign blame when things do not go right. They are never wrong, and technically they don't exist as an entity. Their ranks change with the wind.

In the 1960s the Liberal Fundamentalists came up with a "solution" called welfare. I once heard a Black man on television refer to welfare are one of the most poorly thought-out government programs of all time, as it took away self-respect. He went on to say that Affirmative Action was the worst program of all. That's because it caused people to achieve positions they were not due, and took away their pride of accomplishment. He also added that it caused every successful Black to acquire a stain, the question being whether the success he or she had achieved was deserved or not.
It would be nice to see how far we can advance if citizens and elected officials can learn.


erp said...

Welfare and affirmative action are worse than slavery because it took away hope and dignity. Why aren't the continued calls for more and more of the same falling on deaf ears?

Bret said...

"...since the beginning of the War on Poverty the politically correct thing to do is to just exaggerate the amount of poverty..."

Less the politically correct thing and more the thing to do for petty bureaucrats to increase their power.

In addition, as Thomas Sowell repeatedly notes, if there weren't many poor, there would be much less reason to vote for democrats.

erp said...

I like Ann Coulter's quip (sorry no link) that if women couldn't vote, we'd never have another democratic president. If I could be sure of that, I'd be glad to turn in my voter registration card.