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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 s

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.

zozbot234 3y ago
The general rule of thumb is that consumption is a lot more equal than income (whether pre-tax or post-tax) and if you care about living standards for the poorest you should care about consumption. Wealth inequality is probably a real issue, but the root problem there is people having very different cultural/social attitudes to spending down vs. accumulating wealth. There are also forms of wealth that don't show up in official statistics, such as the enduring social capital that protects many established communities from marginalization and fraying relationships.
- PrimeMcFly 3y ago
  > Wealth inequality is probably a real issue Probably? Try definitely.
orwin 3y ago
I know! (and BTW, in "The Myth of American Inequality", the authors conveniently talk about direct income inequality, but forget about expenses like loan repayment and the effect of initial wealth like owning your home. Also focusing on direct income allows him to count retired people in his statistics, and if you translate a bit what that means, and it's obvious, the book said 'retired people who earn almost no money are in the last income quintile, and after taxes and wealth transfers earn more than people in the 3rd quintile! (no shit Sherlock). It's a bit worthless imho, and unlike Piketty who, at least in his last book, directly share on a website the raw data he used, data in that book is weirdly hard to find). But that's not the question. It's because if you cannot solve poverty with wealth transfers or public services, you can only solve it one way, it's by lowering taxes and baseline expenses (like minimum wage) on companies so they can put everyone to work and make the economy run smoothly. You remove job programs, make food stamp, public transit, or free school meals so bad and hard to get it's a 20 hours a week job to get those small benefits, so less people use it, so the overhead on those programs grow and it be unsustainable. They're doing the same in my country.
- marcusverus 3y ago
  > but forget about expenses like loan repayment and the effect of initial wealth like owning your home. It’s a ~300 page book with a very specific thesis. There’s a lot they don’t talk about. > Also focusing on direct income allows him to count retired people in his statistics, and if you translate a bit what that means, and it's obvious, the book said 'retired people who earn almost no money are in the last income quintile, and after taxes and wealth transfers earn more than people in the 3rd quintile! (no shit Sherlock). I don’t follow. Why does the distinction between retirement income and work income matter? > It's a bit worthless imho, and unlike Piketty who, at least in his last book, directly share on a website the raw data he used, data in that book is weirdly hard to find). This was a beef of mine as well. But then, we’re in a thread about about an article quoting a renowned economist who agrees with their thesis on income inequality, so it’s obviously a stretch to say it’s “worthless” for reasons that have nothing to do with their actual argument. > It's because if you cannot solve poverty with wealth transfers or public services… But you can. We already have. That’s the whole point! For the most part, poverty only exists on paper. All the left has to do is push for an honest reporting of poverty statistics—-one which takes their hard-earned transfer programs into account! They refuse to do this because they understand that the working class in America would revolt if they knew that their taxes were being used to gift the (largely idle) poor a standard of living that’s higher than the one they work for! There is no “war on the poor”. The poor have the highest ratio of dollars-spent:dollars-earned ratio of any class, second only to a tiny cadre of idle rich. If our poor are oppressed, they are surely the first people in history whose oppression has taken the form of a never-ending torrent of other people’s money.

zozbot234 3y ago

The general rule of thumb is that consumption is a lot more equal than income (whether pre-tax or post-tax) and if you care about living standards for the poorest you should care about consumption. Wealth inequality is probably a real issue, but the root problem there is people having very different cultural/social attitudes to spending down vs. accumulating wealth. There are also forms of wealth that don't show up in official statistics, such as the enduring social capital that protects many established communities from marginalization and fraying relationships.

PrimeMcFly 3y ago
> Wealth inequality is probably a real issue Probably? Try definitely.

orwin 3y ago

I know! (and BTW, in "The Myth of American Inequality", the authors conveniently talk about direct income inequality, but forget about expenses like loan repayment and the effect of initial wealth like owning your home. Also focusing on direct income allows him to count retired people in his statistics, and if you translate a bit what that means, and it's obvious, the book said 'retired people who earn almost no money are in the last income quintile, and after taxes and wealth transfers earn more than people in the 3rd quintile! (no shit Sherlock). It's a bit worthless imho, and unlike Piketty who, at least in his last book, directly share on a website the raw data he used, data in that book is weirdly hard to find). But that's not the question. It's because if you cannot solve poverty with wealth transfers or public services, you can only solve it one way, it's by lowering taxes and baseline expenses (like minimum wage) on companies so they can put everyone to work and make the economy run smoothly. You remove job programs, make food stamp, public transit, or free school meals so bad and hard to get it's a 20 hours a week job to get those small benefits, so less people use it, so the overhead on those programs grow and it be unsustainable. They're doing the same in my country.

marcusverus 3y ago
> but forget about expenses like loan repayment and the effect of initial wealth like owning your home. It’s a ~300 page book with a very specific thesis. There’s a lot they don’t talk about. > Also focusing on direct income allows him to count retired people in his statistics, and if you translate a bit what that means, and it's obvious, the book said 'retired people who earn almost no money are in the last income quintile, and after taxes and wealth transfers earn more than people in the 3rd quintile! (no shit Sherlock). I don’t follow. Why does the distinction between retirement income and work income matter? > It's a bit worthless imho, and unlike Piketty who, at least in his last book, directly share on a website the raw data he used, data in that book is weirdly hard to find). This was a beef of mine as well. But then, we’re in a thread about about an article quoting a renowned economist who agrees with their thesis on income inequality, so it’s obviously a stretch to say it’s “worthless” for reasons that have nothing to do with their actual argument. > It's because if you cannot solve poverty with wealth transfers or public services… But you can. We already have. That’s the whole point! For the most part, poverty only exists on paper. All the left has to do is push for an honest reporting of poverty statistics—-one which takes their hard-earned transfer programs into account! They refuse to do this because they understand that the working class in America would revolt if they knew that their taxes were being used to gift the (largely idle) poor a standard of living that’s higher than the one they work for! There is no “war on the poor”. The poor have the highest ratio of dollars-spent:dollars-earned ratio of any class, second only to a tiny cadre of idle rich. If our poor are oppressed, they are surely the first people in history whose oppression has taken the form of a never-ending torrent of other people’s money.