Poverty among plenty -- and it's getting worse

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Check out the news this week:

The Associate Press reports that there are increasing numbers of homeless and poor people in Silicon Valley. The piece almost sounds like something I would write:

Simply put, while the ultra-rich are getting even richer, record numbers of Silicon Valley residents are slipping into poverty. "In the midst of a national economic recovery led by Silicon Valley's resurgence, as measured by corporate profits and record stock prices, something strange is going on in the Valley itself. Most people are getting poorer," said Cindy Chavez, executive director of San Jose-based Working Partnerships USA, a nonprofit advocating for affordable housing, higher minimum wages and access to health care.

That will come as no surprise to people who lived through the last tech boom in San Francisco and are struggling to live through this one. Great wealth does not trickle down around here; it sucks up housing, drives up costs, and creates homelessness and poverty for the most vulnerable:

The causes for the growing disparity are complex, but largely come down to one thing: a very high cost of living. The median home price is $550,000, and rents average just under $2,000 a month for a two-bedroom apartment in this region that is home to many of the nation's wealthiest companies including Facebook, Apple Inc., Hewlett-Packard Co. and Google. For a family of four, just covering basic needs like rent, food, childcare and transportation comes to almost $90,000 a year, according to the nonprofit Insight Center for Community Economic Development. "The fact is that we have an economy now that's working well only for those at the very top," said Lawrence Mishel at the Economic Policy Institute in Washington, D.C. "Unless we adopt a new approach to economic policy, we're going to continue going down this path, which means growth that does not really benefit the great majority of people in this country."

Meanwhile, there’s a new study out, using a new approach to economic data, that shows that almost a quarter of all California residents live below the poverty line. The raw data, which is a bit thick, is here. There’s a state Senate report on it here. Sen. Leland Yee (D-SF) held a hearing on the data -- but uncovering the facts, while valuable, isn’t going to get anyone off the streets. And I don't understand why this isn't on the front page of every major newspaper in the state.

Before my trolls tell me that I hate the rich, let me repeat: I don’t hate anybody and I don’t blame rich people for what this country has created. That’s the fault of the policymakers who, since Ronald Reagan too office in 1981, have allowed the United States to embrace increasing social inequality.

Great wealth can make a country, well, wealthy. But if it’s allowed to stick entirely to the top, then if can do more harm than good.

And the reality is that, particularly in the South and the West, tax policy is designed to help the wealthy at the expense of the poor:

The fact is, the more the poor are taxed, the worse off they are, whether they are working or not. We all pay a huge price for this shortsightedness. Medicaid payments, food stamps, disability benefits — all of these federal programs swoop in to try to patch up a frayed safety net.

In other words, it’s not the Invisible Hand of Adam Smith causing the poverty in California. It’s not laziness that causes poor people to live on the streets. And it’s not just happening in San Francisco.

Now, some of the people who like to comment on this blog suggest that poor people just move somewhere else, that it’s too expensive to live in San Francisco and that’s just the way it is.

That's a bit of a harsh approach, and undermines the entire idea of a city as a community, where people of different income levels can live. But it’s also impractical; one of the reasons people come here, besides the weather and the scintillating level of intellectual dialogue (present company excluded) is that there are jobs here. Oh, and most poor people can' t just pack up, hire a moving van, relocate to another city, pay first and last month's rent, and live on savings until they find a new job.

There was a time when the federal government taxed great wealth, and used the money to invest in cities, building (and subsidizing) housing and infrasructure and funding jobs programs. Much of that is now gone; revenue sharing is a ghost of the past, eliminated in the Reagan era.

So now we have almost a parody of American economic news: The New York Times reports that the Dow Jones Industrial Average is setting new records, and on the same page notes that the numbers of homeless people and people living in poverty are also setting records.

This is by far the biggest issue, the most serious crisis, facing the country, and (unlike wealth) it trickles down to every level of government. And it seems as if nobody is paying attention.

Comments

You might want to check the facts before you open your piehole. Here you go: More than 16% of Americans are impoverished, while almost 20% of American children live in poverty (1 in 5 kids!). A quarter of all Californian residents live BELOW THE POVERTY LINE. What part of these stats (as Tim pointed out) didn't you understand??

http://en.wikipedia.org/wiki/Poverty_in_the_United_States

Posted by Guest on Mar. 12, 2013 @ 3:28 pm

The issue is what you want to do about that.

You no doubt favor taxing the rich with the deluded idea that all poverty is caused by inequality.

I would argue that would increase poverty, as the rich would invest elsewhere. If you really care about the poor, we should be investing in new businesses and job by reducing taxes.

Posted by anon on Mar. 12, 2013 @ 3:46 pm

"What we see is that the Bush tax cuts had little effect on the trajectory of job losses from the 2001 recession. We also see the effects of the housing bubble taking off in mid-2003 and its collapse into recession (December 2007) and meltdown (September 2008) with jobs falling below their 2003 lows. Here you could argue that the rich do create jobs, but these bubble jobs aren’t stable or permanent and are created at great cost to the non-rich. And while there is a recovery in private jobs from 2010 onward, we need to keep two things in mind. First, the quality of these post-bubble created jobs is generally poor. One sign of this comes from the Household survey where the growth in involuntary part time employment has increased from 3.332 million in January 2001 to 8.613 million in September 2012. Second, after 10 years of turning our economy over to the “job creating” rich, we are only just back to the level of private jobs we had in January 2001. In other words, the job creators in exchange for their trillion dollar tax cuts gifted the rest of us with a lost decade."

http://www.nakedcapitalism.com/2012/11/the-rich-create-bubbles-not-jobs....

Posted by Guest on Mar. 13, 2013 @ 3:31 pm

It's entirely possible that many are not doing so well but, by definition, that can only be because their skills are either not valued or are too expensive.

Posted by anon on Mar. 13, 2013 @ 4:57 pm

You're as bad as the leftists who insist on navigating by theory when all they need to do is look out the window to see that their theories are sending us into controlled flight into terrain.

Posted by marcos on Mar. 13, 2013 @ 6:07 pm

Thanks for sharing.

When we're wealthy we've already bought the boat and finished the kitchen remodeling in all three homes. And we already take four major overseas trips a year and don't have time for any more. If the government gives me an extra $100,000 in a tax cut, I'll just buy some more stock, or make another real estate purchase, or buy some other investment scheme my broker is always trying to sell.

When someone tries to combine tax policy and job policy discussions together, either hold onto your pocketbook or get ready for some free money from Uncle Sam since that's what's really being discussed.

Posted by Guest on Mar. 13, 2013 @ 5:52 pm

An income that would qualify you for poverty today would be solidly middle-class in the 1950s.

Posted by Guest on Mar. 12, 2013 @ 6:40 pm

What mechanism would you suggest makes the poor better off as income disparities increase while income for most is stagnant and/or falling in real terms?

Posted by marcos on Mar. 12, 2013 @ 3:51 pm

for poor people than, say, the wealthy all moving to the Caymans because they are over-taxed at home.

Your assumption is that there is a finite amount of money and so, if A has more, B must have less. The American experience is that if A has more, B probably has more as well.

How many African-Americans would return to Africa for economic reasons?

Posted by anon on Mar. 12, 2013 @ 4:24 pm

"Right now the official rhetoric of the right, and a fair number of people who consider themselves centrist, is that high-income individuals are “job creators” who must be cherished for the good they do.

"Yet textbook economics says that in a competitive economy, the contribution any individual (or for that matter any factor of production) makes to the economy at the margin is what that individual earns — period." ~Paul Krugman

Posted by Guest on Mar. 13, 2013 @ 12:48 pm

Yes, and the rich earn much more than you do because their contribution is much greater. That contribution creates jobs, goods, services, new technology, and so on

Posted by Guest on Mar. 13, 2013 @ 12:53 pm

If the rich are so good at creating jobs, where the hell are they (the jobs)? Right now, U.S. corporations are "sitting on close to $2 trillion in cash that is not being used to build factories, create jobs, or anything else" as David Cay Johnston points out. And the real job figures are abysmal. According to Mort Zuckerman, editor of U.S. News & World Report, "the broadest measure of unemployment today is approximately 14.5 percent, way above the 7.9 percent headline number you read about." Furthermore, encouraging companies to repatriate by offering tax breaks is hardly the solution. Read on:

“The 2004 American Jobs Creation Act, which passed with bipartisan support, allowed more than eight hundred companies to bring untaxed overseas profits back to the United States. Instead of paying the usual 35 percent tax, the companies paid just 5.25 percent.

“The companies said bringing the money home — "repatriating" it, they called it — would mean lots of jobs. Senator John Ensign, the Nevada Republican, put the figure at 660,000 new jobs.

“Pfizer, the drug company, was the biggest beneficiary. It brought home $37 billion, saving $11 billion in taxes. Almost immediately the company started firing people. Since the law took effect, it has let 40,000 workers go. In all, it appears that at least 100,000 jobs were destroyed." ~David Cay Johnston, Pulitzer-prize winning tax journalist

Posted by Guest on Mar. 13, 2013 @ 1:25 pm

The rich are on strike. How do you like getting a taste of your own medicine?

Posted by Guest on Mar. 13, 2013 @ 1:41 pm

Humans have always been clever at using technology to eliminate work. Consider how many millions of hours of labor were saved when humans first figured out they could build a canal from a water source rather than spend considerable time carrying the water themselves. It took significant effort to build the canal, but then future generations were forever freed from the long slog to get water, needing instead to only maintain and expand the canal. When humans learned they could grow plants themselves rather than trek long distances in search of food, this too saved countless hours of labor while providing more certainty to their food production.

While talented humans have been needed where judgment and analysis are important, the computer is quickly eliminating millions of these jobs too since it can produce faster and more accurate analysis. Computers also allow work to be divided up more easily, allowing lower skilled workers to perform much of the work with the assistance of computers. Factories in Asia, once the source of millions of lower skilled jobs, are also being rapidly replaced with automatically controlled technology that requires a fraction of the labor force.

Combine the tremendous technological acheivements over the last 100 years with a world population that has gone from 1 to 7 billion, and the need for much labor is being eliminated. Forever.

Work has often defined a person's life over the past few hundred years, but that world is virtually over. Rather than spend 40-60 hours a week at a job that is no longer needed since machines can go the job faster and better, we'll have to find other amusements to pass the time between birth and death. Most people don't really like their jobs anyway, so this should be a major improvement to the lives of billions.

Posted by guest on Mar. 13, 2013 @ 2:30 pm

I refute the idea that lower taxes on the rich translates into more jobs, and instead of dealing with the fact that you've lost the argument, you derail it with a non sequitur about technology and jobs. Why didn't you just admit in the first place that the rich are not creating jobs, PERIOD.

Posted by Guest on Mar. 13, 2013 @ 3:18 pm

both you have a skill that someone wants to pay for AND that I cannot get the same thign cheaper somewhere else.

If you meet those two criteria, you have nothing to worry about. Otherwise, you do.

Posted by anon on Mar. 13, 2013 @ 4:56 pm

better off just because there are also wealthy people. But rather that it's not a factor either way.

In Bangladesh, the vast majority of people are far poorer than the US, and yet there are no billionaires there. How can that be? Surely there are only poor people because some people are rich? If there are no rich people, then there mist be no por people, or so Tim believes,

See how silly that sounds?

Posted by Guest on Mar. 12, 2013 @ 4:38 pm

First of all, India's income inequality has doubled in 20 years. But that's not the point. You're trying to do an end run around Anon's argument, which is that the poor are better off because the rich create jobs, etc. Never mind that since '08, you only have to "look out your window" to see that that's not the case (as Marc has pointed out). The Dow is booming while jobs are disappearing as fast as you can say "corporate running dogs". In fact, the real unemployment figure is well above 14%! And the thing that is rarely acknowledged is that no one ever got rich on their own. The rich got help in one way or another from the government -- that is, from the rest of us (through our hard-earned tax dollars). As Elizabeth Warren said so eloquently,

“There is nobody in this country who got rich on his own. Nobody. You built a factory out there, good for you. But, I want to be clear: you moved your goods to market on the roads the rest of us paid for. You hired workers the rest of us paid to educate. You were safe in your factory because of police forces and fire forces that the rest of us paid for. You didn’t have to worry that marauding bands would come and seize everything at your factory and hire someone to protect against this because of the work the rest of us did. Now look, you built a factory and it turned into something terrific or a great idea. God bless. Keep a big hunk of it. But part of the underlying social contract is you take a hunk of that and pay forward for the next kid who comes along.”

http://www.youtube.com/watch?v=htX2usfqMEs

Posted by Guest on Mar. 14, 2013 @ 12:53 pm

Just because some inequal societies have poor economies does not imply that the two are related in any demonstrable way.

Posted by Anon on Mar. 14, 2013 @ 2:20 pm

What nonsense. We're talking about a nation's total income and the inequality of wealth distribution. So, if you look at total income, the larger the share going to the top, the less there is for those at the bottom and middle. And it becomes obvious that there's a direct correlation between unequal societies and increasing poverty. That's why the Gini-coefficient of Inequality is the most commonly used as a measure of poverty and inequality. The coefficient varies between 0, which reflects complete equality and 1, which indicates complete inequality (one person has all the income or consumption, all others have none).

Posted by Guest on Mar. 15, 2013 @ 1:01 pm

and so, if someone gets a bigger pizza slice, then someone else gets a smaller one. That's the envy argument.

But more successful economies bake a bigger pizza, meaning that even the small slices are bigger than the big slices in a poorer country.

There is not a fixed amount of pizza in the world, and there is not a fixed amount of prosperity to be shared either.

Ineqality isn't a problem; it's a sign of success.

Posted by Guest on Mar. 15, 2013 @ 1:33 pm

Yes, there is indeed a fixed amount of pizza in this finite world.

Posted by marcos on Mar. 15, 2013 @ 1:49 pm

"There was a time when the federal government taxed great wealth, and used the money to invest in cities, building (and subsidizing) housing and infrasructure and funding jobs programs. "

With a trillion-dollar federal deficit and national debt equal to GDP, we will have to tax ourselves heavily just to balance the budget, let alone "invest in cities" and subsidize housing.

Subsidizing low-income housing is counterproductive. Look at the items the government subsidizes like medical care, education. The result? Out of control price increases. If you want more low-income housing, let more housing be built.

Posted by Guest on Mar. 12, 2013 @ 1:14 pm

the products of wealth, such as investment income and capital gains. But, even so, if you own a billion in shares of Berkshire Hathaway shares, and have no other income, you will not pay a penny of tax. Unlike, say, France, where you are taxed on your net worth.

But the dirty little secret is that even if we doubled the tax on the rich, so that the richest 1% pay 50% of all taxes, that would still come nowhere near to closing the massive, unsustainable budget deficit. That cannot be fixed without ALL of us paying substantially more taxes. And the voters prefer spending cuts.

Obama is just starting to understand this.

Posted by Guest on Mar. 12, 2013 @ 1:25 pm

is based on "forgetting" sales taxes which fall heavily on the wider populace.

During WWII the top tax rate was 93% and since we've been engaging in wars around the world while *cutting* taxes over the last ten years, it's high time to reinstate such a rate to make up for lost ground.

Posted by lillipublicans on Mar. 12, 2013 @ 1:41 pm

Oh yes - that'll happen.

I imagine lil' lilz believes he's the perfect recipient for those expropriated tax dollars too.

Posted by Lucretia Snapples on Mar. 12, 2013 @ 2:12 pm

his minimum wage job. Easy for him to say.

Obama wants the top rate of income tax to continue to be below 40% and if a left-winger like him is happy with that, then it's a done deal.

Posted by anon on Mar. 12, 2013 @ 3:08 pm

the Bahamas or some such, and millions of jobs would vanish along with them.

Your idea that the poor can become rich by punitively taxing the successful is rightly rejected by the american voters, because they are not stupid.

Posted by anon on Mar. 12, 2013 @ 3:16 pm

Famed novelist Stephen King explains why our trolls (& the GOP) try so hard to defend tax cuts: "They simply idolize the rich. Don’t ask me why; I don’t get it either, since most rich people are as boring as old, dead dog shit. The Mitch McConnells and John Boehners and Eric Cantors just can’t seem to help themselves. These guys and their right-wing supporters regard deep pockets like Christy Walton and Sheldon Adelson the way little girls regard Justin Bieber … which is to say, with wide eyes, slack jaws, and the drool of adoration dripping from their chins."

http://www.thedailybeast.com/articles/2012/04/30/stephen-king-tax-me-for...

Posted by Guest on Mar. 13, 2013 @ 3:00 pm

goes to show that the average voter in the US is stupid, but hey so what? If they are thats tupid, they deserve to be stiffed.

Posted by anon on Mar. 13, 2013 @ 4:54 pm

so you finally decided to come clean. And in the process, you've just revealed your deep-seated cynicism of the American people (typical of the rich). Love it.

Posted by Guest on Mar. 14, 2013 @ 12:11 pm
Posted by Anon on Mar. 14, 2013 @ 12:22 pm

You're too busy cheerleading for the rich to know about the struggles of "most people". As NY Times editorialist Charles Bow put it, the rich "want to cast everyone at the bottom as lazy or jealous, without acknowledging the accident of birth and collusion of policies that helped grant them their perch." And I dare say that most hardworking people are outraged by the excesses and overweaning arrogance of people like yourself, which got us to this sorry pass in the first place.

Posted by Guest on Mar. 14, 2013 @ 1:15 pm

Your ideas routinely get rejected in elections while mine get vindicated.

Posted by Anon on Mar. 14, 2013 @ 1:53 pm

The federal government still taxes great wealth. This article came out today.

http://money.cnn.com/2013/03/12/news/economy/rich-taxes/index.html

Posted by The Commish on Mar. 12, 2013 @ 1:18 pm

"It's meaningless as the real tax rate is so much less because most profits are sheltered overseas then repatriated when enough government officials decide to allow a "tax holiday." Corporations do pay less tax than people - of that there is no doubt."

Word!

Posted by Guest on Mar. 12, 2013 @ 3:38 pm

It all gets passed on, else they would not make a profit and so go out of business.

But remember that corporations are also not really things. They are merely groups of people anyway.

Posted by anon on Mar. 12, 2013 @ 4:30 pm

A perfect example of onan's pollution.

The big troll lie is you can't tax corporations because "only people pay tax!"

The idea is that since "corporations pass their tax along to consumers" that it is pointless to try and tax them.

The *fact* is that prices are *not* set by cost of sales, but rather by what the market will bear. (Most of the time, anyway, with exceptions such as predatory pricing schemes as the SFWeekly was found guilty of.)

On some particular items, taxing corporations is particularly neutral or beneficial to the populace. Natural resource extraction, for instance.

Natural gas and oil are sold on the world market so tax-free status has done little benefit to the local economy.

And, of course, If corporations pass along their tax, so do individuals. Employees demand higher wages, tradesmen increase their hourly rates, etc. Another insipid troll lie.

Posted by lillipublicans on Mar. 12, 2013 @ 4:56 pm

I agree with you that it is a problem that US corporate taxes are very high by global standards as it drives jobs away from the US. Fair enough.

But if you imagine, even for a moment, that we could all pay zero taxes "if only" corporations paid more, then you are sadly deluded. All that would do is kill your job and move it to Mumbai or Shanghai.

Posted by anon on Mar. 12, 2013 @ 5:12 pm

kuru-diseased fascist; ass-clown.

This isn't ad hominem: it is simply naming that which is.

Posted by lillipublicans on Mar. 12, 2013 @ 6:45 pm

by young, talented and vibrant people like me while you remain - you. I understand your bitterness and pain - this city is definitely no longer the place you moved back in the 70s.

Posted by Lucretia Snapples on Mar. 12, 2013 @ 8:35 pm

You've been posting on this site for years, and half the time your cultural references are pure 70s. And as for bitterness, projecting much?

Posted by Guest on Mar. 13, 2013 @ 12:30 pm

I am sincerely sorry about your failed worldview

Posted by Guest on Mar. 12, 2013 @ 8:43 pm
Posted by anon on Mar. 13, 2013 @ 5:58 am

I refuted your troll lie that "corporations don't pay tax." Your reply was to claim that I was agreeing with your nonsense.

So -- once again -- what is the process by which "corporations don't pay tax" and how does that process differ from the cases on non-corporations that I cited?

Posted by lillipublicans on Mar. 13, 2013 @ 6:38 am

but those taxes are then built into the costs of everything you buy, thereby passing those taxes onto you thru inflation.

Econ 101.

Posted by anon on Mar. 13, 2013 @ 7:25 am

Onan, you are a ridiculous geyser of bullshit.

I've never misquoted you. I debunked the notion that Corporations have some special ability to pass taxes along. Everybody attempts to do that.

And in the specific case of resource extraction taxes I mentioned, the fact that these resources are largely *exported* from California means that the historically non-existent and now low tax rates involved means free money to corporations around the world at the expense of California citizens.

We only recently started taxing resources, but of course *you* were against that tax measure.

Debating you as though you are an honest person unfairly tends to confer a slight degree of credibility to you and your ilk; by mentioning it I want to avoid so doing.

Posted by lillipublicans on Mar. 13, 2013 @ 11:06 am

every time you buy their products or services while letting the dumber among you believe that you are somehow getting something for nothing.

The great unwashed fall for it every time.

Posted by anon on Mar. 13, 2013 @ 4:53 pm

After all, build something out of lumber and will the lumber pay the tax? Will the carpenter? No. The *end* *user* of the wood structure pays the tax.

How about cigarettes? Tax cigarettes all you want, but cigarettes don't pay taxes; the *smoker* pays the tax.

And there's a kink in that shift, because the smoker -- maybe our carpenter from the first example -- will demand higher pay from their boss or customers to cover the increased costs of smoking... strictly of course to the ability of the market to support his demands... which is of course *exactly* what optains for corporations attempting to "not pay taxes" as Big Troll Lie #11 goes.

lillipublican's Big List of Troll Lies
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

1 Presidents always move to the center

2 Progressive ideas are not popular

3 All politicians lie

4 "Purity progressives" can't compromise

5 Nader lost the election for Gore

6 Progressives have situational ethics

7 Progressives ignore pressing problems while promoting pet projects.

8 Progressives want to tell everyone else how to run their lives

9 Progressives call anybody a troll who doesnt' agree with them

10 Anybody who thinks the police must have proper civilian oversight is a "cop hater."

11 Corporations don't pay taxes

12 Poor people here are actually quite wealthy.

13 Rent control represents newcomers subsidizing those already here.

14 Social Security adds to the deficit

15 Non-criminals have nothing to fear from police investigation.

16 San Francisco "exceptionalism" is behind pro-democratic intitiatives

17 "Only whiners show up at public meetings"

18 Progressive leaders are crazy

19"Most Americans supported the war on Iraq."

20 Blacks Are Responsible for Prop 8

Posted by lillipublicans on Mar. 13, 2013 @ 10:09 pm