Wednesday, June 02, 2004

Today on Marketplace
"these priorities strike me as shameful."

Today's Marketplace broadcast mostly was about the issues of military recruiting during wartime.  Not a lot of controversy there.  Equally noncontroversial was their actual economic news.

The commentator, Robert Reich informed us that there will be cuts in Section 8 housing vouchers, which, he reports, will result in greater numbers of homeless persons  -- including children.  He reiterated the point, mentioned previously at Corpus Callosum, that the gap between rich and poor is growing.  He added something that I had not known previously:  the income gap is now the largest it has been in the USA in one hundred years. 

In this post, I elaborate on the serious consequences of the income gap, demonstrate why it is counterproductive and contrary to the values that are claimed by certain politicians, and ponder the question of why the average life expectancy in the USA is falling and the infant mortality rate is rising.

Dr. Reich's Marketplace report , Rich Man, Poor Man,  can be heard at Audible.com.  He describes the cuts in Section 8 housing, summer jobs for low-income youth, job training for low-income youth, after-school programs, and cuts in education funding that will affect primarily "poorer communities."

"That means millions of poor kids on the streets this August, with nothing to do...This is not trickle-down economics: nothing is trickling down...Pardon me, but these priorities strike me as shameful."

This is not the whining of some meddlesome idealistic advocate for the poor.  Dr. Reich happens to be a professor of Social and Economic Policy at Brandeis University, and is a former Labor Secretary.  He also served as an assistant to the solicitor general in the Ford administration.  The recent tax cuts will benefit him directly, yet he is critical of them.  He argues that the tax cuts should not be made permanent, if it means cuts to social services such as the ones he mentioned. 

I was curious about the cuts in Section 8 housing funding, so I went to the HUD website.  There is no mention of it, even though the site has news dated 6/2/2004.  Of course, the federal government is not always prompt about updating their web pages, as this example  shows.

http://yourtaxcutsatwork.orgDr. Reich is not alone among affluent citizens who are critical of the very economic policies that are profitable to the wealthy. The  NGO, United for a Fair Economy, has a membership that includes Bill Gates and Warren Buffet.  Another organization, Inequality.org, is sponsoring a national conference, Inequality Matters, on June 5 and 6 in New York City.  This is described in a CBS Marketwatch news article here  (free registration required.)  The Inequality.org features articles written by such luminaries as John Kenneth Galbraith (former president of the American Economic Association), and Robert H. Frank (Professor of Economics at Cornell University.)  Speakers at the conference include Bill Moyers (PBS journalist,) Robert Franklin (the sixth president of the Interdenominational Theological Center) and Barbara Ehrenreich (author of The Clinton Fiasco.) 

Curious about this?  Excerpts from the CBS Marketwatch article explain more:

Rich-poor gulf widens
'Inequality Matters' conference puts nations on alert
By Thomas Kostigen, CBS.MarketWatch.com
Last Update: 11:27 AM ET June 1, 2004 

[...]The Congressional Budget Office says the income gap in the United States is now the widest in 75 years.

While the richest one percent of the U.S. population saw its financial wealth grow 109 percent from 1983 to 2001, the bottom two-fifths watched as its wealth fell 46 percent.

Alarming? You bet. And here's why: The number of Americans without health insurance climbed 33 percent during the 1990's, according to the U.S. Census Bureau. The biggest indicator of a healthy society -- average life expectancy -- has dropped. People in the U.S. now don't live even as long as people in Costa Rica. Meanwhile the U.S. infant mortality rate has risen, so much so Cuba has a better success rate of bringing healthy children into the world.   [...]

In an election year, you'd think these issues would be on the "front burner" already. But these overarching social trends reflect poorly on politicians and the government -- those supposedly elected to protect those members of society who can't protect themselves.

Why should we care about inequality?  According to the UN General Assembly:

The broad consensus on addressing terrorism went hand in hand with a recognition of the need to deal in parallel with the many concerns that had been on the United Nations agenda before the 11 September events, including the fight against poverty, underdevelopment, inequality, disease, and other economic and social problems.

In December 2001, less than three months after 9/11, former winners of the Nobel Peace Prize went to Oslo when UN Secretary general Kofi Annan won the prize.  According to the Christian Science Monitor, one of the major themes that emerged from their discussions was the link between poverty and terrorism. 

 I don’t think that many people believe that poverty in general, and income disparity in particular, are direct causes of terrorism (see this essay  for discussion,) but it appears that many people think it is a contributing factor.  Indeed, some persons have tried to argue that there is a direct connection between US policies, inequality, and terrorism.   At least some of these arguments are downright offensive (example here.)  A more reasoned approach is taken by Strobe talbot in his article, The Other Evil - Poverty and Terrorism.   This implies that reducing poverty is necessary but not sufficient in the War on Terrorism:

[...]We must distinguish between, on the one hand, the assassins and those who mastermind and abet their operations and, on the other hand, their constituencies--those millions who feel so victimized by the modern world that they want us to be victims, too; those who see Osama bin Laden as a combination avenging angel and Robin Hood. As the mug shots and bios of the suicide pilots emerged, it became apparent that for the most part they did not come from the ranks of the world's desperate and aggrieved. Their fanaticism, like bin Laden's, was nurtured in privilege and in individual madness. During the immediate aftermath of the attacks on New York and Washington, the focus has rightly been on that species of menace, difficult to fathom, find, or deter, yet utterly deserving eradication.

However, the other set of images so memorable from September 11--Palestinians and Pakistanis dancing in the streets--is a reminder of a parallel challenge. Disease, overcrowding, undernourishment, political repression, and alienation breed despair, anger, and hatred. These are the raw materials of what we're up against, and they constitute a check on the willingness of Arab and other regimes to take effective action against networks of conspirators. [...]

See Global Terrorism after the Iraq War  for a more complete treatment of the subject. 

Anyone patient enough to have read this far will be wondering: why talk about terrorism and poverty, after leading with a discussion of cuts in social programs in the USA?  The Corpus Callosum is interesting in making connections, sometimes direct, sometimes not.   The connection is this: just as there is a link between poverty and terrorism abroad, there is a link between poverty and crime in the homeland.   It is not a direct causal link; sociopathy of the individual criminal is a necessary -- and more direct -- cause as well.   And the same policy of cutting social programs in the homeland is likely to lead to more crime, or to greater costs needed to control crime.  Neither outcome is desirable, and neither is consistent with a policy of compassionate conservatism or of fiscal conservatism.
Violent crime in the USA is a bigger problem, and a cause of more death, that terrorism.

(Note: The Rest of the Story/Corpus Callosum has moved. Visit the new site here.)
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