The origins of the Poverty Wars

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In 1959 Michael Harrington shocked America with the claim that 50 million of its citizens were living in poverty. His magazine article turned into a book and by 1964 President Johnson was standing outside a shack in Kentucky announcing that the nation was at war with poverty. Ever since, anti-poverty activists have cranked away at the same formula but without the same success. If the strategy worked then, why doesn’t it work now?

One reason is that small government activists are a lot more savvy these days. They know that if claims about widespread poverty are allowed to go unchallenged political leaders are likely to attach themselves to the problem. Politicians thrive on problems — creating a sense of crisis is an essential skill. As Johnson’s aide Harry McPherson explained:

The problem of democratic leaders, little "d" and big "D", is that they must grab the attention of the public; they must convince the public that there is an urgent problem that needs to be solved, and to do that they really have to hit him like the old farmer hits the mule between the eyes to get his attention. And once he has his attention, then they have to come along and say "But all is not lost. We have a solution." That’s the format that has always been used (pdf).

National capitals like Washington and Canberra are filled with people marketing problems and solutions to political leaders. Harrington knew how this game worked and never apologised for talking up his statistics:

If my interpretation is bleak and grim, and even if it overstates the case slightly, that is intentional. My moral point of departure is a sense of outrage, a feeling that the obvious and existing problem of the poor is so shocking that it would be better to describe it in dark tones rather than to minimize it. No one will be hurt if the situation is seen from the most pessimistic point of view, but optimism can lead to complacency… (p 171-172)

For Harrington, arguments about statistics were ‘dry, graceless, technical matters" and "any tendency toward understatement is an intellectual way of acquiescing in suffering" (p 172). Even in 1963 Dwight Macdonald was describing this tactic as "moral bullying."

Harrington’s campaign hit the media more than 40 years ago. Activists need to be more sophisticated in 2005. Today think tank researchers like Heritage’s Robert Rector are there to make sure the mule doesn’t get whacked with frightening poverty statistics. Like the Centre for Independent Studies’ Peter Saunders in Australia, Rector is always quick to discredit poverty research — "The average ‘poor’ person., as defined by the government, has a living standard far higher than the public imagines" he patiently explains — before lulling everyone to sleep with another chart-filled report devoted to dry, graceless, technical matters.

When anti-anti-poverty activists like Rector are successful, journalists, politicians and other gatekeepers are cautious about helping activists whack the mule. What might once have seemed to be facts now start to look like opinions that could put their credibility at risk. The effect is to keep the issue off the agenda and send politicians looking for other problems — preferably those caused by high levels of taxation and government interference in the market. In Australia ‘good’ Peter Saunders laments the effectiveness of the strategy. In his recent book The Poverty Wars, he explains that attacks on poverty estimates:

The criticisms have received extensive media coverage and left many confused about the issues and correspondingly doubtful about the voracity [sic] of claims that poverty remains high and is increasing (p 8).

The reason think tank intellectuals like the CIS’ Peter Saunders don’t want poverty on the agenda is that most of the intuitively obvious solutions to the problem involve expanding the size and scope of government. It’s far easier to create confusion about how poverty is defined and measured than it is to explain why smaller government and freer markets will make low income people better off. Once political leaders and the media are convinced there’s a problem, most of the damage is done.

When the Kennedy Whitehouse first started getting interested in poverty, Kennedy’s staff met with senior federal bureaucrats to look at ways to solve the problem. According to Nicholas Lemann:

Every government agency has a wish list of programs it has long been unable to get past the White House and Congress; the poverty idea brought out the wish lists, and a number of programs that hadn’t made the cut for the New Deal, thirty years earlier, came up. The Secretary of Labor, Willard Wirtz, a ponderous man who had been Adlai Stevenson’s law partner in Chicago, wanted jobs programs, run by the Labor Department. The key bureaucrat at the Department of Health, Education, and Welfare, Wilbur Cohen, an old New Dealer and a veteran lobbyist for social-welfare programs, wanted education and welfare programs, run by HEW.

When the problem gets lodged on the political agenda the game is on — bureaucrats, academics, and service providers will all pitch their favourite solutions. From a small government activist’s point of view this is a disaster — particularly when its combined with a hyperactive President like LBJ. After the Kennedy’s assassination, Johnson decided to go in hard against poverty. As Lenmann explains, "Johnson was by nature not interested in small, slowly developing programs, especially when his first major initiative as President was involved."

Unfortunately neither Johnson or anyone in his administration had any idea how to go about eradicating poverty. The experts suggested ‘Community Action’ and ‘maximum feasible participation’ by the poor and Johnson agreed to go along with this plan. But according to his biographer Robert Dallek, the President wasn’t entirely convinced:

In trying to sell Congress on legislating a fight against poverty, Johnson could rationalize his public rhetoric by private hopes that, even if what he proposed now did not work, there would be ample opportunity in the next eight years to find the means that would. Moreover, he understood from past experience that, once a major government program had been put in place, it would be easier for supporters to modify its workings than for opponents to dismantle it (p 80).

This is exactly what anti-anti-poverty activists like Rector and Saunders are afraid of. They don’t want to see politicians calling in the poverty experts because they know what the experts will recommend — higher taxes, more generous welfare benefits, work and training programs, and more money for research.

There was a time when small government activists didn’t pay much attention to funding experts on social policy and the price they paid was a lack of influence. When anti-poverty activists stirred up interest in their problem journalists and politicians turned to the experts. Since the experts weren’t exactly enthusiasts for small government the results were predictable. Poorly-informed conservative voices ranted in the wilderness as government spending mounted.

These days privately funded think tanks are staffed with market-enthusiasts bristling with credentials in social science disciplines. As Heritage vice-President Burton Pines explained: "Our role is to provide conservative public-policy makers with arguments to bolster our side. We’re not troubled over this. There are plenty of think tanks on the other side." Think tank researchers openly admit they’re engaged in a war of ideas where credibility matters. To win the war they need to protect their own credibility and attack that of their opponents. This has come as a shock to some academic researchers.

Once their credibility is established, think tank experts make ideal sources for journalists. To avoid appearing biased, journalists will seek out opposing views on issues like poverty or welfare dependence. And even if the majority of academic experts agree, quotes and opinion pieces from think tank experts can often make it look as if expert opinion is evenly divided. Writing in the US, Marty Kaplan explains, "Conservative think tanks manufacture debate. That’s what they do: their aim is to create controversy, even when the facts are indisputable, because they know how enslaved contemporary journalism is by the tyranny of false equivalence."

Unfortunately today’s anti-poverty activists sometimes act as if they are still living in the 1960s — as if it were possible to generate government action simply by producing scholarly reports showing that poverty is bad and getting worse. It’s not that simple anymore.

Note: the quote underneath the Churchillian Peter Gordon Saunders of the Social Policy Research Centre is from a book review by his nemesis — Peter Robert Saunders of the Centre for Independent Studies. At Catallaxy, Rafe Champion has a post on the latest Saunders vs Saunders controversy.

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cs
cs
2021 years ago

“the tyranny of false equivalence.”

Pay that Don. Nice essay, if I can put it that way.

Don Wigan
Don Wigan
2021 years ago

An excellent insight into how poverty has dropped from the agenda.

After surviving for 5 years at or below the poverty line in Oz, some things are pretty clear. On a relative basis (eg, compared with 3rd world countries) we’re not doing all that badly. On the other hand, it is a struggle, especially if you’re aiming to give your kids a higher education.

After a year back in the paid (albeit low-paid) workforce a few things have stood out to me. One is that the government’s idea of social security is similar to its ideas on public health: provide a barebones safety net for those without means, and after that it’s everyone for themselves. Sadly too, low-income earners and those dependent or partly dependent on some social security assistance provide a soft target for governments; much softer than high-influence tax dodgers.

In my case, Centrelink wanted to wipe out two thirds of my daughters’ youth allowance, which would have made it near-impossible for either to continue as students. I was told that this was based on our 2005 tax income statements. Since they showed a combined household income of just over $30,000 I was wondering if this govt had plumbed new depths of greed.

At a more lengthy interview, I discovered that this adjustment was based on our household spending (a 38 page questionnaire they sent us last Sept.). That showed we’d spent roughly $45,000 in the last year; so our daughters’ Youth Allowances were pared back from $240 per fortnight to $62. However, it turned out that a refinancing loan I’d taken out last Dec of $30,000 had been overlooked. When this was docked from our spending it was then only $15,000. So Centrelink reverted to our Tax statements (they go by whatever figure is higher) and adjusted us to $30,000. That was still just above the cutoff figure of $28,800, but meant that our daughters only lost about $8 a fortnight. So a happy ending in my case.

However, it occurred to me that a combined household income or consumption of $45,000 is hardly affluent these days. And losing two thirds of the Youth Allowance is a pretty savage penalty for offspring.

If Labor wants to reclaim the Battlers (and they’ll already get a boost with Workchoice IR)
they could have a hard look at how the working poor are coping. Restoring fairness to the Youth allowance for offspring of low-income working parents would make a lot more sense than the usual Swan prattling about the need for tax cuts.

Bring Back EP at LP
Bring Back EP at LP
2021 years ago

Don W you have my sympathies.

My advice from Centrelink re Family Tax Benefit was different on three occasions I phoned.

every time something unusual happens I ring up to find out why and get three different answers!

Funny thing is the low income types know every which of the payments and give you far better advice!

Nicholas Gruen
2021 years ago

Thx for that Don.

I always enjoy your posts (at the same time as having a nagging doubt that there’s more to be said – about which maybe I’ll try and say something if I get the time.)

And yes I agree with CS – “the tyranny of false equivalence” is a great expression. Or as I think Paul Krugman puts it, if George W said the earth was flat, the papers would report ‘disagreement on shape of the earth’.

The form dominates the substance – a motto for our post-modern age.

D Plumb
D Plumb
2021 years ago

“It’s far easier to create confusion about how poverty is defined and measured than it is to explain why smaller government and freer markets will make low income people better off’
I think the confusion is created to influence the decision making process . Not to avoid explaining how less government is better for the low income person.
The low income person is responsible for themselves and knows best what works in their particular situation. The “intuitively obvious” isn’t always the most effective at changing their situation.They will be.

derrida derider
derrida derider
2021 years ago

Your points about the motivation of the right’s think tanks is true. But just because someone is biased doesn’t automatically make their statements untrue.

Academics who studiously overlook the severe limitations of their data in order to do the sort of sophisticated number-crunching that gets the apporval of their peers, and welfare lobbyists who are none too scrupulous about the science behind their statements so long as it gets a headline and a burst of donations, leave themselves wide open to the sort of riposte “evil” Peter Saunders made.

Effective policy requires honest assessments of problems and honest evaluation of policy, otherwise you’ll never get support for policies that work – in fact you won’t even know yourself which ones work. And claiming the problem is getting ever worse no matter what we do just invites people to shrug their shoulders and say “the poor ye have always with you”.

Don
Don
2021 years ago

Marty Kaplan’s: “the tyranny of false equivalence” is a neat turn of phrase isn’t it.

DD – As you say “just because someone is biased doesn’t automatically make their statements untrue.”

The Smith Family and NATSEM left themselves wide open to attack when they chose to headline their report with a half-the-mean measure of poverty. It’s not that anything they said was false, but it did mean that the CIS was able to raise some awkward questions about the definition and measurement of poverty. The fact that it suits the CIS to prevent agreement about how to measure poverty doesn’t mean than many of their concerns aren’t justified.

Nicholas – Yes there’s a lot more to be said. What issues in particular were you thinking of?

whyisitso
whyisitso
2021 years ago

The “bad” Peter Saunders isn’t against Government action to assist people in poverty. He makes that clear in his articles. He wants Government action against poverty directed to that part of the population that is suffering from “real” poverty, which he estimates is no more than 3 to 5% of the population, rather than the 15 to 20% defined by the anti-poverty activists.

This would ensure that resources that are concentrated on a real problem rather than dissipated on people who are simply uncomfortably conscious that they aren’t as “successful” as people in the “better” streets in their suburb.

What is “real” poverty? “Bad” Saunders deals with the question of absolute versus relative poverty very lucidly.

blank
blank
2021 years ago

Don,
The Family Actual Means Test applies to Youth Allowees whose parents are self-employed or involved in trusts/private companies or have OS income. It is an admission that the taxation system heavily favours such people.

If your child is “independent”, those parental income tests don’t apply.

Independence can be achieved by living in a de facto relationship. Part of the ludicrous rules of Social Security legislation is that couple can be in a “marriage-like relationship” even though they are under the legal age for marriage. A couple can be ‘de facto’ once they reach of age of consent for the state they live in.

So, if you live in Vic/ACT/NSW/NT/WA, get your daughter into a ‘relationship’ at 16. Normally, it takes a year to become ‘independent’, but if your daughter claims that the relationship broke up because he was violent, then a six-month relationship is enough. In Tas/SA she’ll have to wait until she is 17.

If the young people are burdened by old-fashioned ideas of morality, they can wait until they are 18 and legally marry. That makes them ‘independent’.

It’s sightly easier for a boy in NT. The age of consent for a boy is 15 there, so move to the NT, set your lad up with a girl of 16 or more, and by the time he’s 16 – age for claiming YAL- he’ll get the full rate, regardless of parental income.

The other easy way is for the child to claim “homelessness”. There are some apalling cases of parental child abuse, where the young person needs to leave home, but it’s not that hard to sham up.

The third alternative is slower.
If a young person has left high school and been working for 18 months, and earned $17,667 (it goes up each year), the young person is “independent”.

So arrange to employ your young person in your business, or have a business associate employ her. The young person will be 19 and a half before she achieves independence.

The ‘de facto’ method is the quickest and easiest.

Don Arthur
Don Arthur
2021 years ago

‘”Bad” Saunders deals with the question of absolute versus relative poverty very lucidly.’ Lucidly? Maybe. Adequately? Not really. All Saunders (CIS) will usually say is that:

“A family lives in ‘absolute’ poverty when it struggles to make ends meet (e.g. it cannot find adequate food, shelter, clothing, etc.)”

From a measurement perspective, this isn’t any more enlightening than saying:

“‘relative poverty’ is said to exist when people’s living standards fall a long way short of what is ‘normal’ in their society”.

These definitions hinge on how words like ‘adequate’ and ‘normal’ are interpreted.

Researchers who’ve used absolute definitions of poverty have always included ‘social necessities’ like tea and coffee. The early poverty researcher Seebohm Rowntree tells an interesting story about an English workhouse for the poor. The local government board’s decision to replace tea with gruel caused a near riot. In the end Rowntree’s ‘absolute’ poverty line included tea — not because people would starve to death if they didn’t drink it, but because it was socially expected that tea drinking was part living decently.

There’s nothing at all obvious about what ought to be included on a list of necessities and, as a result, no easy consensus about where you’d draw an absolute poverty line. Absolute poverty lines vary from place to place and time to time.

Don Wigan
Don Wigan
2021 years ago

Thanks for that info, blank. You got it pretty right. I am classed as ‘self-employed’, although as a taxi driver you are more like an underpaid subcontractor. My wife is a normal wage-earner.

I believe you are right in concluding that the tax system heavily favours self-employed and trust-type setups. Which reminds me that I should haave another talk to my accountant.

It is common gossip where I live (country Vic) that one leading light (who was actually a local govt Commissioner for a while when Kennett sacked all local governments), apart from being a prominent restaurant and motel owner, has her finance affairs arranged in such a way that she can still claim a Commonwealth Health Care Card, and uses it whenever possible.

It is interesting advice you have on defacto relationships, but it would be hard to get this past my wife, who still does not approve of such. However, it does offer a bit more weaponry against Howard, who pretends to be strong on old-fashioned family values.

Failing some creative advice from my accountant, our family could be in trouble this time next year. And that was really my concern. Consumption of $45,000 in a year is hardly in the ‘last of the big spenders’ category. Why are they penalised so brutally?

I was hoping that this story might interest Chris Shiell and a few that still have Labor connections. It is my guess that the Working Poor (ie, those having work and not reliant on benefits) are doing it pretty tough. In the outer suburbs of Sydney and Melbourne there are high mortgages and high transport and petrol costs. If their children are to be skinned as well under the assumption that the parents ought to be contributing, things are going to get tougher. If enough attention and concern was given to it, they could be won back from Howard’s Battlers. Job and income security are every bit as important as mortgage interest rates.

whyisitso
whyisitso
2021 years ago

“Chris Shiell”! Hell Don, this is worse than my effort over at LP. The correct spelling is Sheil if you don’t mind. And yes, the man is sensitive about it, just like the rest of us, Mr Wiggon.

Gummo Trotsky
2021 years ago

I don’t know that I’d call it lucid but, to give Saunders of the CIS his due, he certainly knows how to work a metaphor to death:

“Trudging through craters left by the enemy’s empirical bombshells, and deftly avoiding the debris of his own side’s collapsed arguments, [Saunders] laments the ‘lack of funding for research into the causes and consequences of poverty,’ and he sketches his plans for post-war reconstruction …

Who are the protagonists in this ‘war’? Standing alongside Saunders on the side of the poor we find the usual rag-tag battalion of socialist academics, armed to the teeth with rhetoric and clich

Gary
2021 years ago

“has her finance affairs arranged in such a way that she can still claim a Commonwealth Health Care Card, and uses it whenever possible.”

She maybe doing something dodgy,Don. But such assistance is assistance on income not the type of job.

One of the reasons I left the delivery business is the compony I contracted for was calculating low income assistance as part of the package for some drivers. This made it hard to negotiate a better deal.

Don Wigan
Don Wigan
2021 years ago

“The correct spelling is Sheil if you don’t mind.” My apologies – maybe I better stick to his signature CS.

Still, the point remains: will Labor ever pause long enough in its factional deals to have a hard look at its constituency and potential support? The current approach of poll sampling and softly softly doesn’t make much much sense.

And going on about the need for tax cuts (which is different from tax fairness) only seems to be making it easier for the ‘smaller govt’ brigade.

Pretending to be as nearly rednecked as Howard’s Liberals is not going to win or save a single vote. Those deciding their vote on such issues will prefer to settle for the real thing.

Thanks for that, Gary. I’d sort of guessed it was income, and as blank suggests it is loaded in favour of the self-employed. I’m speculating on whether I can exploit that situation next year and still remain ethical.

I wonder (after all those attacks on Latham’s ‘class envy’ style for trying to stop those transfers of public resources to the GPS) if there’s not some reverse class envy at work in wanting parents to pay more of the costs for kids on youth allowance.

If we look at all the variants sited by blank, it must cost a bundle to administer and even to consider each case. It would seem far simpler not to have the system at all and use those resources instead for helping people find work or get qualifications.

I also thought that the same amount of resources spent in tackling tax avoidance would net a far greater return for the government.