Wednesday, February 1, 2012

Hey Gov. Romney, the poor are Americans too!

Looking to erase the stigma of Romney-care, former Gov. Mitt ("Honey Badger") Romney unveiled a new social agenda--Romney-don't-care.

Gov. Romney: I'm in this race because I care about Americans.

With you so far Governor. It would be better to care with all of humanity, but voters will understand that you can only do so much and that someone whose heart is already two-sizes too small has to start somewhere.

Romney: I'm not concerned about the very poor. We have a safety net there. If that needs repair I'll fix it. I'm not concerned about the very rich. They're doing just fine. I'm concerned about the very heart of America. The 90-95 percent of Americans who right now are struggling, and I'll continue to take that message across the nation.

Whoa, whoa, whoa.

The poor aren't Americans? They're not included in "the very heart of America?" Governor Romney, who has previously criticized liberals, the Occupy movement, and his Republican rivals for sowing class warfare, has effectively disinherited the poor from America.

With respect to the Governor's 90-95 percent figure, he might be surprised (if he cared) to discover that 46.2 million Americans, 15.1 percent of our population, were officially poor in 2010. One third of Americans--more than 100 million people--lived in households with incomes below 200 percent of the poverty line and were considered poor or near poor.  6.7 percent of American were in deep poverty, meaning that they were living in households with incomes that were less than half of the poverty threshold. Those are sizable groups that Governor Romney is tagging as un-American and unworthy of his concern.

Also,  the very poor would take issue with whether we have anything near a safety net. All of the poverty figures account for cash transfers, like welfare and social security. So, that's a 15.1 percent poverty rate after those safety net checks have gone out. An alternative poverty measure that accounts for in-kind transfers, like food, medical, housing, and energy assistance, but that also accounts more accurately for households' needs, indicates that 16 percent of Americans are poor. A safety net that lets nearly one out of every six people fall through seems moth-eaten and in serious need of repair.

But, at least it's not Americans who are falling through those holes.


W.E. Heasley said...

The “poor”, an arbitrary class in a supposed classless society. Maybe a better description is low income earner as “poor” is a rather political word used in verbal virtuosity arguments based upon class warfare.

One needs to ask oneself: are the low income earners of today the low income earners of tomorrow? No. The vast majority of the low income earners move from low income to other income brackets over their life times. Only a small minority remain within the low income bracket for an entire life time.

Movement among income brackets also holds true for high income earners. The high income earners of today were past low and/or lower income earners. These same high income earners will move to lower income earner brackets for many reasons with the major reason being retirement. Hence the high income earner today many times is found in low income earner brackets one year, one decade, or two decades hence.

The argument in this blog post [essay] eludes to a perpetual low income earner class [“poor”] made up of the same perpetual players. Nothing could be further from the truth. That is, the post [essay] is peddling an economic fallacy through political dupery.

The next part of the essay frames the social safety net as a perpetual social safety net for a perpetual low income earner class. Food stamps, welfare, Medicaid, housing and energy assistance, etc. are meant to be temporary measures which the essay purposely disregards. Further, the essay fails to show that these temporary measures come at a cost. The implicit assumption is that such measures merely exist. Regardless of what ever level of measures are deemed necessary, a cost is borne by some other person or entity. Failure to purposely show the opportunity cost is a form of political nitwitery.

Possibly this places this particular essay’s base argument within the light of day:

“It is commonly asserted that there are in the United States no classes, and any allusion to classes is resented. On the other hand, we constantly read and hear discussions of social topics in which the existence of social classes is assumed as a simple fact. "The poor," "the weak," "the laborers," are expressions which are used as if they had exact and well-understood definition. Discussions are made to bear upon the assumed rights, wrongs, and misfortunes of certain social classes; and all public speaking and writing consists, in a large measure, of the discussion of general plans for meeting the wishes of classes of people who have not been able to satisfy their own desires.”

“So far as I can find out what the classes are who are respectively endowed with the rights and duties of posing and solving social problems, they are as follows: Those who are bound to solve the problems are the rich, comfortable, prosperous, virtuous, respectable, educated, and healthy; those whose right it is to set the problems are those who have been less fortunate or less successful in the struggle for existence. The problem itself seems to be, how shall the latter be made as comfortable as the former? To solve this problem, and make us all equally well off, is assumed to be the duty of the former class; the penalty, if they fail of this, is to be bloodshed and destruction. If they cannot make everybody else as well off as themselves, they are to be brought down to the same misery as others.”

- William Graham Sumner, sociologist, economist, and Episcopalian minister, Yale University professor, from the book What Social Classes Owe to Each Other, 1883.

Dave Ribar said...


While people do change positions in the income distribution, the U.S. has one of the lowest levels of economic mobility in the developed world.

Today's "high-income earners" come disproportionately from high-income backgrounds. Likewise, folks who currently have low incomes come disproportionately from low-income backgrounds.

So far from being an "opportunity society" the U.S. is increasingly becoming a class-perpetuation society. Once you've convinced Rick Santorum and Paul Ryan that the U.S. has economic mobility, maybe you can convince the rest of us.

Dave Ribar said...


Also, few anti-poverty programs are "perpetual." The median length of a spell of cash welfare (TANF) receipt is a few months; the median length of a spell of food stamp receipt for someone who isn't elderly or disabled is around a year.

I'm not sure how you read "perpetual" into my post (it doesn't appear and isn't implied). And all of the statistics refer to people whose annual incomes were below the government's poverty thresholds.

Many people who've looked at data after the 1880s are familiar with these issues.

W.E. Heasley said...

The income mobility argument above is ala Thomas Sowell who has explained the movement among income brackets on many occasions and most famously in his book Economic Facts and Fallacies . The class argument was William Graham Sumner from What Social Classes Owe to Each Other. And yes, that observation from Sumner is from 1883 which is still of value in 2012.

Moreover, both Sowell and Sumner’s observations have managed to flush you out regarding your essay on low income earners or your term “poor”. You have in fact come forward with the temporary aspect of social safety net program, complete with statistics, refuting your own implicit assumption/assertion of the existence of a mass long-term under-class [poor] e.g. “more than 100 million people--lived in households with incomes below 200 percent of the poverty line” and “deep poverty, meaning that they were living in households with incomes that were less than half of the poverty threshold“.

If these are temporary situations addressed with the temporary use of the social safety net, then what is the point of the essay of painting a picture of the existence of a mass long-term under-class [poor] when in fact it’s a temporary situation for most social safety net participants?

This statement is also notional: “ Today's "high-income earners" come disproportionately from high-income backgrounds. Likewise, folks who currently have low incomes come disproportionately from low-income backgrounds.” The concert pianist who’s child inherits talent should be disallowed to use such talent. Archie Manning, a famous NFL quarterback who’s child is Peyton Manning should be disallowed to play in the Super Bowl?

When an exogenous commenter introduces economics to the economic professor, exposing completely notional arguments, then the professor back tracks and suddenly find economics. Why indeed bill yourself as an economist if you merely engage in notional propositions, holding forth notional propositions as fact, denying opponents legitimacy through vilification, arguing through verbal virtuosity, and ending by merely painting the world in your own self image.

Exactly where is the insight? Why not bill yourself as Edward Bellamy and cut to the chase and tell us all your version of his utopian novel Looking Backwards from 2000 to 1887.

However, let us agree to disagree about what constitutes insight regarding economics, political economy, and public choice theory.

Dave Ribar said...

If I'm recalling correctly, Sowell's income mobility argument largely ignored experiences of unemployment (it was limited to individuals with earnings at different periods of time). It was also based on data from 1975-1991, not data from the last twenty years.

The argument about talents being inherited is fine so far as it goes, but it can't explain why intertemporal (cross-time for the same person) and intergenerational (cross-generation for people from the same family) economic mobility is lower in the U.S. than other developed countries. If genetics were the only cause of these patterns, we would expect similar patterns across countries.

The post indicated that a sizable proportion of people in the U.S. fall into the category of being poor. Even if we accept that poverty is temporary for many or most of them, poverty is still a worse outcome than non-poverty. If I pinch you for a second or pinch you for a minute, you would still be worse off than not being pinched at all.

Second, people are in this condition even after we take the safety net programs into account--these are their outcomes post-safety-net not pre-safety-net.

Third, the number of people in this category has grown--it's now 50 percent higher than before the Great Recession.

A large and growing number of people in demonstrably bad circumstances should be a source of concern for all of us. However, these things are not for the former Governor of Massachusetts.