Weekend Economists at War! January 10-12, 2014

[Demeter]

2. 50 Years After the War on Poverty, Will the Middle Class Become the New Poor? Lynn Stuart Parramore

http://www.alternet.org/economy/50-years-after-war-poverty-will-middle-class-become-new-poor

Fifty years ago today, LBJ threw down the gauntlet on poverty in his famous State of the Union address of 1964. Fired with passion and buoyed by bipartisan support, his anti-poverty team kicked off new health insurance programs for the old and the poor, increased Social Security, established food stamps and nutritional supplements for low-income pregnant women and infants, and started programs to give more young people a chance to succeed, like Head Start and Job Corps.

Americans have greatly benefited from big-picture economic changes like the minimum wage; investments in worker training and education; civil rights policies; social insurance; and programs like food stamps and Medicaid. As Georgetown University’s Peter Edelman pointed out in the New York Times, without these programs, research shows that poverty would be nearly double what it is today. According to economist Jared Bernstein, Social Security alone has reduced the official elderly poverty rate from 44 percent, which it would be without benefits, to 9 percent with them.

Some of our most prominent citizens have enjoyed protection from life’s vagaries through one or another of these measures. President Obama’s family once survived on food stamps. Congressman Paul Ryan was able to pay for school with Social Security survivor benefits when his dad died. A mere generation before, the workhouse or the orphanage might have been their fates.

Yet middle-class Americans are increasingly in danger of learning about poverty firsthand. The gaps between the rich and poor are the widest they have been in a century, and the middle class is disappearing into the chasm. According to research by economist Emmanuel Saez, the share of income that goes to the top 1 percent has more than doubled since 1964. In the aftermath of the Great Recession, the top 1 percent has sucked up nearly all of the income gains in the first three years of the “recovery" — a stupefying 95 percent. The fluidity of American society used to be taken for granted, but now the U.S. lags behind Europe in measurements of mobility. Not only is the climb to middle-class stability increasingly steep, the fall into poverty is more likely. The Great Recession brought home an ugly reality: nowadays it only takes one pink slip, foreclosure notice or catastrophic medical bill to push economically secure people into the ranks of the poor — even people with college diplomas and impressive resumes.

Why is this happening? Not because of some cosmic forces beyond our control, but because of misguided policies put into place by our elected officials and paid for by an increasingly out-of-touch business elite. Energized by Ronald Reagan’s famous declaration that government is the problem, not the solution, conservatives in recent decades have sought to reduce the government’s vital role in creating opportunity and keeping hard-pressed Americans afloat. Simultaneously, they have unleashed the wild horses of deregulated capitalism, which have trampled working people. Labor unions have been crushed, wages have declined, safety nets have frayed, medical expenses have risen, and millions of Americans are now teetering on the edge of poverty....

.................................

The thing is, we know how to fix this. We’re not starting from scratch, as we did in the Great Depression. The tests of time have demonstrated that when the government invests in its citizens, society and the economy are rewarded many times over. There are a few signs that the message is getting across. For example, increasing the minimum wage has growing support. But a great deal more is required if we want to avoid a giant — and wholly unnecessary — social experiment in poverty creation. Here are a few suggestions for a new anti-poverty agenda:

Make the rich pay their fair share by ending unfair tax breaks.

Expand Social Security, as Sen. Elizabeth Warren and others have demanded.

Protect people from going hopelessly into debt through medical expenses.Obamacare has failed to put a tight lid on potential total medical costs. Eventually, we must join the civilized world with single payer healthcare.

Increase state-supported education. It’s absurd that people have to go into debt just to pay for their educations.

Strengthen regulation so irresponsible companies do not rob ordinary Americans.

Restore the rights of workers, like collective bargaining and protection from wage theft.

Understand that austerity policies do not work, and only exacerbate economic woes.

Aggressively attack unemployment and remember the lesson learned in the Great Depression: when the private sector can’t come up with jobs, the government must fill the breach.

Protect the reproductive rights of women.

Protect civil rights, such as access to voting, in places where such rights are under attack.

MORE

Lynn Parramore is an AlterNet senior editor. She is cofounder of Recessionwire, founding editor of New Deal 2.0, and author of 'Reading the Sphinx: Ancient Egypt in Nineteenth-Century Literary Culture.' She received her Ph.d in English and Cultural Theory from NYU, where she has taught essay writing and semiotics. She is the Director of AlterNet's New Economic Dialogue Project. Follow her on Twitter @LynnParramore.