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Angus Deaton on inequality: ‘The war on poverty has become a war on the poor’

93 points by hhs 3y ago

dsh22 3y ago
[flagged]
- Qwertious 3y ago
  >user: dsh22 created: 58 minutes ago karma: -4 This comment is this user's only comment and it reads like computer-generated gibberish, I think it's a bot.
neilv 3y ago
This looks like a worthwhile post for HN discussion, so I hope it doesn't disappear too quickly after this Friday night.
- ebcode 3y ago
  Sometimes the mods will repost something at a more opportune time to stimulate the discussion. Maybe that'll happen here.
- lapcat 3y ago
  HN readers flagged it.
  - wtfwhateven 3y ago
    why did they flag it? odd
    - somenameforme 3y ago
      I did not, but I assume it's because it's like to just start an ideological war. One group will claim inequality can be solved by government handouts, another group will claim that government handouts are a major driving factor in said inequality. Both sides have reasonable and logical arguments as well as sufficient evidence to make either side a completely justifiable view. Ask 10 economists to comment on this issue and you'll get 11 different answers! I enjoy debating such issues, but clearly - some do not!
VirusNewbie 3y ago
This guy is failing at basic math: Inflationary monetary policy enriches debt holders who are leveraged into assets with said debt. The amount of debt rich people have comparable to the rest per capita means the rich will get richer when money is printed. Printing money transfers wealth from the poor to the rich, and exacerbates wealth inequality. This is basic fucking math.
- lapcat 3y ago
  > This guy is failing at basic math To clarify: by this guy, do you mean the Nobel Prize winner in economics?
  - HideousKojima 3y ago
    Macro economics though, so I'd trust his insights about as much as rolling dice, maybe less.
  - Natsu 3y ago
    I mean, we've had one Nobel Peace Prize winner bomb another Nobel Peace Prize winner, so it's better if you disagree in terms of the ideas instead of credentials.
    - karmakurtisaani 3y ago
      They probably disagreed on a but more complex topic than basic math. In theory you're correct, in practice, delusional.
      - Natsu 3y ago
        I am not the OP. We kinda did see mass inflation recently, we did see billionaires getting richer by investing in things like farmland while everyone else saw their real wages go down due to lack of sufficient raises and inflation, etc. So if I have to go between someone who can explain things that are happening and point at things that have just been observed in the real world and fancy credentials and unclear ideas, well, the credentials and $5 will buy you less than they did a few years ago.
marcusverus 3y ago
I'm kinda baffled by this and I'd love to hear y'alls thoughts. > Deaton said the evidence of successful state intervention is all around even if governments sometimes get it wrong. He points to president Lyndon B Johnson’s 1964 “war on poverty” legislation pulling families back from the breadline and improving lives with food stamps, housing assistance, and federal health care for the poor and elderly among other programmes. The way poverty is measured means that the war on poverty can never be won by sending money to the poor. Deaton said {{rightwing}} politicians and economists fixed the numbers so they could claim, in the words of Ronald Reagan, that in the war on poverty, poverty won. Official income statistics left out welfare payments so those receiving them often appeared to still be living below the poverty line when, by other measures, government assistance demonstrably helped. No matter how successful antipoverty cash transfer policies are at reducing want, their effects do not show up in the official counts,” Deaton writes. "The way poverty is measured means that the war on poverty can never be won by sending money to the poor. This statistical stupidity, which the politics makes so hard to fix, is a constant source of mischief and misunderstanding.” As a libertarian-leaning conservative I agree with literally every word (with {{one}} exception) so far. > The way poverty is measured means that the war on poverty can never be won by sending money to the poor. He's referring to the fact that the US Census explicitly excludes the vast majority of welfare transfers. It excludes all in-kind transfers (Housing, Food Stamps, Medicaid, etc) and all de-facto cash transfers (such as "refundable tax credits", which are deemed "negative taxes" and so are not counted as cash income, even if they result in a check in the mail). In other words, if your pre-tax income puts you $1 below the poverty line, the US government announces that you are in poverty--even though you are eligible for (and presumably receive) tens of thousands of dollars in welfare support in the form of free housing, free healthcare, free food, free early education for your kids, free cash through tax credits, and subsidized cell phone and internet access. Which is nuts! Having made this critical insight, he apparently spins a lottery basket full of random leftist rhetoric and pulls out: > Put another way, Deaton said, “the war on poverty has become a war on the poor”. How does one come to this conclusion? The status quo benefits the poor more than an accurate reporting of the numbers would. The over-reporting of the poverty level enables the left to continue to harangue the need to solved a largely-solved problem. How could this possibly be construed as "a war on the poor"? The figures for incomes-by-quintile, once adjusted for wealth transfers and median household size, are not going to help the left. In "The Myth of American Inequality", Gramm et. al. argue that adjusted incomes for the lowest- and second-lowest are higher than the middle quintile, which is absolute insanity when you consider the massive difference in hours worked and taxes paid by the households in each quintile. Shining light on this will not help the left, who are already losing ground with the working class precisely because they have first-hand exposure to the insanity of these wealth transfers. In my view, the only rational move for the left has already occurred, which is their general transition of their economic rhetoric from one focused on addressing the (actual) problem of poverty to one focused on addressing the (contrived) problem that is wealth inequality.
2devnull 3y ago
“I think Americans are learning that there’s more than one way of thinking about the world,” he said lol. Imagine being a person who says such things. To the press. To sell your book. And people buy it!
- kome 3y ago
  he is right. he is sincerely right.
  - ImAnAmateur 3y ago
    Asking sincerely as an American: How? An example would help. The best I can come up with is that plenty of companies right now have horse blinders on and suicidally seek an always growing profit margin. If something can't continue forever, then it won't.
  - 2devnull 3y ago
    lol. Go buy his book then! Think of the great value it will bring you, all that economic (?) insight.
yieldcrv 3y ago
> although many Americans will deny it – is fuelling the rise of a class system even that’s a charitable take, there has always been a class system here and generations of people were lied to

93 points by hhs 3y ago

dsh22 3y ago

[flagged]

Qwertious 3y ago
>user: dsh22 created: 58 minutes ago karma: -4 This comment is this user's only comment and it reads like computer-generated gibberish, I think it's a bot.

neilv 3y ago

This looks like a worthwhile post for HN discussion, so I hope it doesn't disappear too quickly after this Friday night.

ebcode 3y ago
Sometimes the mods will repost something at a more opportune time to stimulate the discussion. Maybe that'll happen here.
lapcat 3y ago
HN readers flagged it.
- wtfwhateven 3y ago
  why did they flag it? odd
  - somenameforme 3y ago
    I did not, but I assume it's because it's like to just start an ideological war. One group will claim inequality can be solved by government handouts, another group will claim that government handouts are a major driving factor in said inequality. Both sides have reasonable and logical arguments as well as sufficient evidence to make either side a completely justifiable view. Ask 10 economists to comment on this issue and you'll get 11 different answers! I enjoy debating such issues, but clearly - some do not!

VirusNewbie 3y ago

This guy is failing at basic math: Inflationary monetary policy enriches debt holders who are leveraged into assets with said debt. The amount of debt rich people have comparable to the rest per capita means the rich will get richer when money is printed. Printing money transfers wealth from the poor to the rich, and exacerbates wealth inequality. This is basic fucking math.

lapcat 3y ago
> This guy is failing at basic math To clarify: by this guy, do you mean the Nobel Prize winner in economics?
- HideousKojima 3y ago
  Macro economics though, so I'd trust his insights about as much as rolling dice, maybe less.
- Natsu 3y ago
  I mean, we've had one Nobel Peace Prize winner bomb another Nobel Peace Prize winner, so it's better if you disagree in terms of the ideas instead of credentials.
  - karmakurtisaani 3y ago
    They probably disagreed on a but more complex topic than basic math. In theory you're correct, in practice, delusional.
    - Natsu 3y ago
      I am not the OP. We kinda did see mass inflation recently, we did see billionaires getting richer by investing in things like farmland while everyone else saw their real wages go down due to lack of sufficient raises and inflation, etc. So if I have to go between someone who can explain things that are happening and point at things that have just been observed in the real world and fancy credentials and unclear ideas, well, the credentials and $5 will buy you less than they did a few years ago.

marcusverus 3y ago

I'm kinda baffled by this and I'd love to hear y'alls thoughts. > Deaton said the evidence of successful state intervention is all around even if governments sometimes get it wrong. He points to president Lyndon B Johnson’s 1964 “war on poverty” legislation pulling families back from the breadline and improving lives with food stamps, housing assistance, and federal health care for the poor and elderly among other programmes. The way poverty is measured means that the war on poverty can never be won by sending money to the poor. Deaton said {{rightwing}} politicians and economists fixed the numbers so they could claim, in the words of Ronald Reagan, that in the war on poverty, poverty won. Official income statistics left out welfare payments so those receiving them often appeared to still be living below the poverty line when, by other measures, government assistance demonstrably helped. No matter how successful antipoverty cash transfer policies are at reducing want, their effects do not show up in the official counts,” Deaton writes. "The way poverty is measured means that the war on poverty can never be won by sending money to the poor. This statistical stupidity, which the politics makes so hard to fix, is a constant source of mischief and misunderstanding.” As a libertarian-leaning conservative I agree with literally every word (with {{one}} exception) so far. > The way poverty is measured means that the war on poverty can never be won by sending money to the poor. He's referring to the fact that the US Census explicitly excludes the vast majority of welfare transfers. It excludes all in-kind transfers (Housing, Food Stamps, Medicaid, etc) and all de-facto cash transfers (such as "refundable tax credits", which are deemed "negative taxes" and so are not counted as cash income, even if they result in a check in the mail). In other words, if your pre-tax income puts you $1 below the poverty line, the US government announces that you are in poverty--even though you are eligible for (and presumably receive) tens of thousands of dollars in welfare support in the form of free housing, free healthcare, free food, free early education for your kids, free cash through tax credits, and subsidized cell phone and internet access. Which is nuts! Having made this critical insight, he apparently spins a lottery basket full of random leftist rhetoric and pulls out: > Put another way, Deaton said, “the war on poverty has become a war on the poor”. How does one come to this conclusion? The status quo benefits the poor more than an accurate reporting of the numbers would. The over-reporting of the poverty level enables the left to continue to harangue the need to solved a largely-solved problem. How could this possibly be construed as "a war on the poor"? The figures for incomes-by-quintile, once adjusted for wealth transfers and median household size, are not going to help the left. In "The Myth of American Inequality", Gramm et. al. argue that adjusted incomes for the lowest- and second-lowest are higher than the middle quintile, which is absolute insanity when you consider the massive difference in hours worked and taxes paid by the households in each quintile. Shining light on this will not help the left, who are already losing ground with the working class precisely because they have first-hand exposure to the insanity of these wealth transfers. In my view, the only rational move for the left has already occurred, which is their general transition of their economic rhetoric from one focused on addressing the (actual) problem of poverty to one focused on addressing the (contrived) problem that is wealth inequality.

2devnull 3y ago

“I think Americans are learning that there’s more than one way of thinking about the world,” he said lol. Imagine being a person who says such things. To the press. To sell your book. And people buy it!

kome 3y ago
he is right. he is sincerely right.
- ImAnAmateur 3y ago
  Asking sincerely as an American: How? An example would help. The best I can come up with is that plenty of companies right now have horse blinders on and suicidally seek an always growing profit margin. If something can't continue forever, then it won't.
- 2devnull 3y ago
  lol. Go buy his book then! Think of the great value it will bring you, all that economic (?) insight.

yieldcrv 3y ago

> although many Americans will deny it – is fuelling the rise of a class system even that’s a charitable take, there has always been a class system here and generations of people were lied to