The American Way of Poverty: How the Other Half Still Lives (3 page)

Poverty is, in other words, as diverse as the United States itself. What the poor have in common, however, is an increasingly precarious existence in a country seemingly unable—or at least unwilling—to come to grips with their collective despair.

Yet if the lives of America’s poor are increasingly desperate, the desire to make something of those lives remains a force to be reckoned with. That leads to the third thing that fascinated me in my travels around the country: the sheer resilience of people who, battered by tough economic times, could be excused for thinking that life never gives them any breaks. Instead, many of the men and women I talked to were doing everything they could to ensure that their futures would look brighter than their pasts. They were going to school, taking job-training classes, looking for any and every source of income, and struggling to make sure that their kids had enough food to eat and little extras to enjoy. It was, in many ways, a humbling, inspiring experience.

WHOSE FUTURE?

The poverty being stockpiled in the early twenty-first century, at the back end of a forty-year stampede toward ever-greater economic inequality, will leave generational legacies affecting current workers, their children, and as likely as not their children’s children. What starts off as a temporary hiccup too often results in a permanent downgrading of family prospects.

How we as a society deal with this challenge will determine what kind of a country we become in the years and decades ahead.

As I detail in the second part of this book, we already have the contours outlined for a credible and fair new social compact. That the first Obama administration didn’t focus on poverty to the extent that the issue deserved was, I believe, largely the product of a political calculus. Assuming power in the midst of a financial system meltdown, the new administration had to stabilize a collapsing economy early on; they did so, but in so doing they churned up a roiling, ugly opposition. As a result, by the time the free-fall stopped, they had to swiftly start navigating one of the most treacherous political landscapes in modern history en route to the 2012 election. Now that that election is over, however, in his second term Obama will have to not simply enact technocratic anti-poverty measures but also take the country with him as he explains the moral imperative of a fairer social compact. He will have to employ all of his extraordinary narrative powers to craft a new American story in which tens of millions of citizens feel that they have a stake. If Obama accomplishes this, he will secure for himself a legacy as one of the country’s great progressive presidents. If he doesn’t, it will be a serious blot on his tenure in the White House.

Were we as a society to implement this new story in affordable and equitable ways, the result would be a fundamental reimagining of the American economic landscape. We can use four major revenue sources: (1) a public works fund to protect against mass unemployment; (2) a new educational opportunity fund to dramatically expand access to, and affordability of, higher education; (3) a poverty-mitigation fund built up from the introduction of a financial transaction tax and energy profit taxes; and (4) money to stabilize Social Security and start reducing the national deficit, made available from higher taxes on capital gains, high-end inheritances, and the income of the most affluent of wage earners. I detail the mechanisms of these in Part Two. If we used these revenue sources, we could change both our expectations of society and our long-term financial calculus in a way beneficial to tens of millions of people.

Too often in recent decades, our political leaders have ignored what’s staring them in the face and instead enacted policies that make economic hardship worse for those already on the margins or starting the long slide into destitution. As detailed in this book, they do so because America’s political process is increasingly beholden to powerful financial interests, its priorities shaped by what used to be seen as Southern mores: a belief not just in the inevitability of inequality, but in the
desirability
of oligarchy as a social structure, in the usefulness of poverty as a social control mechanism, its reaction to that poverty punitive and unforgiving. Increasingly, it is a democracy in which the voices, and the basic economic needs, of ordinary Americans are drowned out by the noise generated by advocates and lobbyists for the well-heeled and already-influential. It is an economy that, to a large extent, revolves not around the making of things but around the shuffling of money—hence the overblown impact of financial sector, insurance, and real estate instability on the broader economic system. And it is one in which, for the last several decades, ordinary Americans have borrowed against home equity, run up credit card debt, and taken out loans to go to school, all just to survive on a daily basis. Data compiled by the Federal Reserve show that just before the financial crash of 2008, the average American household was spending nearly 19 percent of its disposable income servicing debt.
³

Increasingly, our leaders either ignore the scale of poverty present in our midst—or, tacking to the Southern winds, they seek to blame or to punish those who fail to economically thrive. For proof of the former, witness the fact that throughout the three televised presidential debates in 2012, the plight of the tens of millions of Americans living below the poverty line was
never
meaningfully addressed, nor were the implications of proposed cuts to Medicaid, food stamps, and other safety net programs properly teased out.

That Obama’s first administration was unable to fully break out of this mold after 2008, leaving largely untouched the scourge of poverty and inequality that as an insurgent, grassroots candidate he had talked about tackling, was a source of bemusement to many of
his supporters. The election of 2012 gave him a new opportunity to so do, which can only be a source of hope. After all, few political leaders are given the sort of second chance to rewrite their story that Obama was granted by the electorate. Unhappy with the status quo, voters nevertheless reelected him as president. One can argue that they did so, at least in part, in the expectation that his second term would deliver on promises never followed through on in the first four years.

THE MINERS’ CANARY

Shake a stick in post–financial collapse America, and one hits poverty. It’s everywhere: tent cities in municipal parks, under freeway overpasses, along river walks. Food lines stretching down city blocks. Foreclosure signs dotting suburban landscapes. Overstretched free clinics providing a modicum of healthcare to people no longer insured. Elderly people whose pensions have vanished and whose hopes for a decent old age have evaporated. Unemployed men and women looking for clothes for their kids at thrift stores and food for their families at pantries. Mothers begging for free turkeys from churches so they can at least partially partake in the national ritual of Thanksgiving.

By the end of 2010, according to the U.S. Census Bureau, 15.1 percent of Americans were living below the federally defined poverty line, an increase of approximately fifteen million people since the start of the century. Fully 34.2 percent of single mothers and their children were in poverty, up from 28.5 percent in 2000. Some of the poor lived in traditionally deprived communities; many others lived in the suburbs. In fact, according to Georgetown University’s Peter Edelman, in his book
So Rich, So Poor
, in the first decade of the twenty-first century, suburban poverty increased by fully 53 percent.
⁴
Much of that was due to an extraordinary collapse in the worth of assets owned by middle-class African American and Hispanic families. In 1984, the median value of household asset ownership for African
American families was $6,679. By 2009, as the recession destroyed the worth of homes, that number had declined to a mere $4,900—thirty years of asset accumulation vanished. White households, despite suffering during the recession, by contrast still had a median net worth of $92,000.
⁵

The disparate impact of the crisis could be measured in soaring regional unemployment numbers and age- and race-specific poverty data. In Imperial County, California, for example, residents were experiencing a collapse on a scale that most of the country didn’t witness even at the height of the Great Depression. Nearly one in three workers were unemployed, and for the 68 percent of the working population in the county who had jobs, average income was abysmally low, hovering not far above the poverty line.
⁶

In Detroit, more than one-third of the total population was in poverty, and upward of two-thirds of children were in families living below the poverty line.
⁷
New Orleans fared almost as badly: there, more than four in ten kids were in poverty, and, in the African American community, fully 65 percent of children five and under lived below the poverty line.
⁸
These numbers were so extraordinary that they made Philadelphia’s abysmal data look almost good in comparison: there, a mere one in three children lived at or below the poverty line.
⁹
In Indiana, nearly one in ten kids lived in “extreme poverty,” meaning their family incomes didn’t even reach half of the poverty line threshold.
¹⁰
In northern St. Louis in 2010, the poverty rate for kids stood at a dispiriting 30 percent.
¹¹

Not surprisingly, in May 2012, UNICEF reported that of the world’s developed countries, the United States had the second highest rate of child poverty, with more than 23 percent of its kids officially poor. Only Romania, still struggling to shed itself of the awful legacy left by Nicolae Ceauşescu’s dictatorship, had worse numbers.
¹²

We look at the scale of misery unleashed; shake our heads; listen to that inner voice saying sadly, “What a tragedy”; and then, assuming we’re fortunate enough not to be poor ourselves, we try to get on
with our lives. Yet, if we thought a little harder, we’d realize that what we’re witnessing isn’t so much a tragedy as a scandal.

It’s a subtle difference, but an important one. What turns poverty into a scandal rather than a tragedy is the political landscape out of which it bubbles. “It makes a difference if we treat it as a bug or a feature,” argued longtime community organizer and Harvard Kennedy School of Government senior lecturer Marshall Ganz. “Is it a bug in the system for which we provide a safety net, or a
feature
of the system? It’s a moral, political, and economic crisis. It’s a process of suicide. When countries stratify themselves into a wealthy few and an impoverished many, they go down the tubes.”

For Ganz, poverty was akin to the “miners’ canary.” It was the warning signal of a more general malaise—of school systems in disrepair, healthcare delivery mechanisms that were no longer delivering healthcare to large swaths of the population, a degraded environment, and more. “As long as people think poverty is the problem,” Ganz explained, “they’re missing the whole point. Poverty is
evidence
of a problem; it’s not the source of the problem. They’re all based on the weakening of collective institutions—the decline of labor, of common interests. The core question is not about poverty, it’s really about democracy. The galloping poverty in the United States is evidence of a retreat from democratic beliefs and practices.”

When people go hungry because of, say, drought or a plague of locusts; when thousands die in an epidemic; when natural disasters convert whole countries into wastelands, religious people say these are acts of God—the less religious might say they are acts of nature. But the process of casting around for someone to blame takes a back seat. Tragedy is, somehow, beyond the realm of the deliberate, the product not so much of malign decisions as of confounded bad luck, of happenstance.

By contrast, when poverty flourishes as a direct result of decisions taken, or not taken, by political and economic leaders, and, either tacitly or explicitly, endorsed by large sectors of the voting population,
then it acquires the rancid aroma of scandal. It is a corrosive brew, capable of eating away at the underpinnings of democratic life itself.

My aim in writing
The American Way of Poverty
is to shine a light on this travesty; to bring poverty out of the shadows; and, ultimately, to suggest ways for moving toward a fairer, more equitable, and more truly American social compact. For what is caused by human choices can, mostly, be solved by human choices. Tragedies, quite legitimately, tend to generate hand-wringing; scandals, by contrast, ought first and foremost to lead to action.

The American Way of Poverty
is a plea for a more morally cogent political approach to poverty, for an acknowledgment of a crisis that existed
before
the 2008 financial collapse and shows every sign of continuing to exist even as the broader economy slowly recovers
from
that collapse. It is more than a technocratic discussion of poverty; rather, it is a portrait of a political system in crisis, of a democracy that has ceased to be able to address the basic needs of a growing proportion of its population.

At the same time, my book also offers a blueprint for change, exploring how a new politics could emerge that prioritizes poverty as a moral challenge, and how once that politics takes root, we could retool our welfare systems; better craft our tax policies; set up new social insurance systems as ambitious as that of Social Security; rethink our strategies on private and public debt; invest more thoroughly in education, housing, healthcare, and other vital parts of the public commons; and set in place wage and pension protections all aimed squarely at providing basic security to the American population.

It is, after all, of little use to identify problems if one doesn’t also spend time exploring solutions. The second part of
The American Way of Poverty
details a comprehensive, and creative, set of policies to be rolled out over a period of years, which would not only tackle the consequences of wholesale poverty but would go a long way toward dealing with its underlying causes. I explain how support for such policies can be generated—how many of the organizing methods and
outreach used by Barack Obama’s campaign team in both 2008 and 2012 lend themselves to just such a mission—and how the rigid anti-government, anti-tax rhetoric popularized by conservatives over the past few decades can over time be successfully neutralized.