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BillMoyers.com / By Lauren Feeney

America's ‘Inexcusable’ Indifference to Extreme Poverty -- Frances Fox Piven Speaks

An interview with Frances Fox Piven, a political scientist and activist whose writings on poverty, welfare rights, and protest movements have infuriated the Right.

Photo Credit: Luna Vandoorne/ Shutterstock

March 15, 2012 |  Frances Fox Piven is a political scientist and activist who has been writing about poverty, welfare rights and protest movements for nearly half a century. The Nation, where Piven has been a long-time contributor, calls her “legendary.” Recently, Piven has become well known to another audience. Since Glenn Beck placed her at the root of one of his famous chalkboard graphs, accusing her of plotting to “intentionally collapse our economic system,” Piven has been covered throughout the conservative blogosphere. We talked to Piven about rising inequality, poverty, and the condition of the safety net, as well as her sudden and un-intentioned notoriety.

Lauren Feeney: There’s been a lot of talk recently about growing inequality — how the richest of the rich just keep getting richer. But what’s going on with the poorest of the poor?

Frances Fox Piven: Poverty has been increasing pretty rapidly, at least since 2000, and then there was another big spike with the financial crisis. The official poverty rate is about 15 percent [but] I think the most reasonable estimate is that one out of three Americans are now poor. The official poverty line in the United States is set much lower than it is in other rich countries. That’s because it’s based on the cost of a market basket of basic foods multiplied by three to cover all other costs, and those other costs have inflated much more rapidly than food costs. I want to count people who in other prosperous countries would also be called poor.

We have another measure which we call extreme poverty — people who are living at half of the official poverty line — and the numbers in extreme poverty are increasing rapidly too. It’s a big problem, an inexcusable problem. Profits are increasing; the aggregate amount of wealth in this country does not in anyway justify having such a large pool of poor people and near poor people. We’re wiping out whatever progress has been made in the last half century in decreasing poverty.

Feeney: Mitt Romney recently said in an interview with Soledad O’Brien that he’s not worried about the very poor because they have a safety net. What’s the state of that safety net?

Piven: Dismal. It’s torn in many places.

There was something like a safety net put in place gradually between the 1930s and the 1960s — that included the program we call welfare, the food stamp program, Medicaid, WIC (a nutritional program for pregnant women and infants), unemployment benefits. By the end of the 1960s, these programs had expanded to the point that they provided at least minimal assistance to the majority of the poor. It was a ragged safety net, but there was a safety net. After the protests of the 1960s subsided, there were steady cutbacks in the main program that is welfare, Aid to Families with Dependent Children we called it then. The cutbacks took mainly the form of failing to raise the benefit levels to take account of inflation, so in real terms the benefits sank.

This was accompanied by an enormous outpouring of rhetoric blaming poor people — and black people and Hispanic people — for their own poverty. The culmination of all this occurred in 1996 when Congress passed and Bill Clinton signed the Personal Responsibility Act, which essentially eliminated the old Aid to Families with Dependent Children program and replaced it with another program know as TANF. Under TANF, the states have been given much more license to refuse people, and the consequence has been that far, far fewer people get any assistance from TANF than they did from Aid to Families with Dependent Children. And this is of course called a success.

Feeney: My understanding is that, under TANF, there are work requirements, time limits, restrictions for immigrants, talk of drug testing ….

Piven: Finger printing, all sorts of things. They have criminalized the act of applying for or receiving government benefits. And people shrink from that, people shrink from the humiliation.

Feeney: If you pass the 60-month time limit on TANF benefits, is there any safety net for you?

Piven: Food stamps. You can still get food stamps. The truth is, we don’t even know how these people are surviving.

Feeney: By lumping everyone — or almost everyone — together, does the meme of “the 99 percent” overlook the problems of the extremely poor?

Piven: Well, not as much as the rest of us do. The encampments that the Occupy movement established did welcome the homeless, feed the homeless at their food kitchens; I think they behaved in a very ethical and inclusive way.

Something else is beginning to happen now. There are organizations of the poor, some of them who trace their origins back to the 1960s, and these organizations are very supportive of Occupy. This is not just a movement of college kids whose futures have been destroyed. This isn’t just a movement of workers who find their wages reduced. This should be a movement of all of the people who suffer the burdens of extreme inequality, especially the poor.

Poor and minority people in the United States have been singled out, basically since about 1980, as the targets for right wing and Republican rhetoric — tremendous amounts of castigation of the poor, as if it were poor people’s fault that things are going wrong in America. The argument has been that the big moral problem of the United States is that “those people” don’t get up and work hard, “those people” have babies out of wedlock, “those people” hang out on the stoop and drink beer…. It’s relentless. This kind of propaganda is mainly designed for the great mass of working people in the U.S. to quell whatever sympathies they might have for the poor, but also to instill fear in them of the risk of falling into poverty, the risk of having to depend on a government program or a handout. But the poor are also an audience for this kind of castigating propaganda. It has an effect — it makes people shrink into themselves, and that’s a very bad thing, because then they can’t be citizens, they can’t be political, they can’t protest the conditions under which they live.

If they — when they — link up with the larger protests, this will be an enormous boost to their sense of themselves, of their rights, and of their capacities to fight back against the policies that have brought them this low.

Feeney: Glenn Beck talks about you as though “Frances Fox Piven” were a household name. What’s he saying about you?

Piven: Richard Cloward and I wrote an article published in The Nation in 1966 called “A Strategy to End Poverty” which proposed a big mobilization by community organizers, social workers and poor people to get full benefits under the welfare system, because we had done research showing that the welfare system operated by denying people their legal benefits.

They got hold of this article and labeled it a blueprint for bringing down American capitalism.

I didn’t know that Glenn Beck was featuring me on his television program until my students at the City University of New York put a Glenn Beck chalkboard up on the door of my office which showed that Richard and I were at the trunk of what Glenn Beck called the “tree of revolution,” and the branches went off to include SDS, the financial crisis, Barack Obama — I mean, it was amazing. Then I began to pay attention and Googled myself from time to time, and realized something about the nature of propaganda in contemporary America — things are so confusing, you can tell people anything. The Tea Party believes this. I have gotten many, many hundreds of death threats. They put my address on the Internet. Then I decided, they are drawing on a tradition that goes back to the Inquisition — they must think I’m a witch, because how else could I be responsible for so much?

Lauren Feeney is an award-winning documentary filmmaker and multimedia journalist.

Obama and Democrats in Congress want to extend unemployment benefits, but Republicans say the federal deficit can't bear the $33 billion cost. However, they are offering this compromise: They will allow extention of unemployment benefits in return for a two-year extention of tax cuts for the richest 1% ...worth about $130 billion!!! (Compassionate conservatism?)

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The American Jobs Emergency

By Robert Reich, Robert Reich's Blog

04 December 10

The American Jobs Emergency Requires Action

his is not a recovery. It's a continuing jobs emergency and it demands action.

We learned this morning that unemployment rose to 9.8 percent in November and employers added only 39,000 jobs. Private employers added 50,000 - the smallest gain since January. Government employment continued to shrink.

We're heading in the wrong direction. In October, the jobless rate was 9.6 percent, and employers added 172,000 jobs. Private-sector job growth totaled 160,000.

At this rate unemployment won't return to its pre-recession level for more than a decade, if ever.

Over 15 million Americans were jobless in November. This doesn't include those who are working part-time but would prefer to work full time. Nor does it include a record 1.3 million who are too discouraged even to look for work.

Nor does it take account of the fact that most families are dependent on two breadwinners. So to figure out the true impact on most families, all these numbers have to be doubled.

Nor does it reflect the fact that the level of unemployment tracks level of education. Only 5 percent of those with college degrees are now unemployed, while more than 20 percent of everyone else is without work.

Maybe that's why Washington doesn't get it. The Washington echo chamber is filled with college degrees.

The Big Money economy on Wall Street and in corporate suites doesn't get it, either. They're doing marvelously well because they're tied to rapidly-growing markets in China, India and Brazil.

But the Average Worker economy on Main Street continues to wallow.

The Problem

Let's be clear about this. The problem is lack of sufficient demand for workers.

There are only four sources of demand. The biggest source is American consumers, who comprise about 70 percent of economic activity.

But the vast American middle and working class can't and won't buy enough to get people back to work. They're still under a huge debt load.

Even if and when they pay it off, their buying days are gone. The Great Recession took away their last means of coping with years of stagnant wages - going deeper into debt by using their homes as collateral. The housing bubble burst, and home prices continue to drop.

The second source of domestic demand is business. But businesses won't hire more workers without more customers.

(Republican supply-siders say businesses are not hiring because they're uncertain about the effects of the new healthcare law and don't know how much taxes they'll have to pay. This is political claptrap. Supply-siders also say businesses would start hiring if their taxes were lower. But businesses are sitting on almost a trillion dollars of cash. They don't need lower taxes in order to hire more Americans. They need more American customers.)

The third source of domestic demand is net exports. But they're going nowhere. Although China, India and Brazil are buying goods and services from American companies - and thereby boosting US profits - those US companies are making most of what they sell there in those countries. GM is selling more cars in China than in the US now, and manufacturing them in China.

That leaves the fourth source of domestic demand - government. But it's not nearly filling the gap. To the contrary, state and local governments are broke, and are cutting spending and raising taxes to the tune of over $110 billion this year. The federal government's much-maligned stimulus is about gone (almost all economists believe it saved over 3 million jobs).

The Fed is pumping $600 billion into the economy, but without an expansive fiscal policy this is only fueling speculation.

Instead, austerity and deficit reduction are the new buzz-words in Washington, as well as in Europe - which is absurd given what's happening to the economy.

Republicans won't even vote to extend unemployment benefits for the record number of Americans - almost half the unemployed - who have been out of work for six months or more. Starting today, 800,000 of the long-term unemployed lose their benefits. Unless Congress moves quickly, by the end of December, 2 million more will lose them.

What Must Be Done

Extend unemployment benefits. Not only do unemployment benefits help families who are hurting; they also put money into their pockets that they'll then spend - and their spending will keep other Americans in jobs.

I was on television yesterday debating a Republican who insisted unemployment benefits deter the jobless from finding work. Another partisan bromide. When, as now, five people are out of work for every job opening - and when, as now, unemployment benefits in most states are a small fraction of someone's former wage - it's bizarre to argue that unemployment benefits are causing unemployment.

Create a new WPA and National Infrastructure Bank. Not only do we need extended unemployment benefits. We need a new WPA, modeled after the WPA of the Great Depression, to put jobless Americans to work. We need a national infrastructure bank to rebuild our crumbling highways and water and sewer systems, thereby putting additional people back to work.

Cut payroll taxes and enlarge the EITC. We should exempt the first $20,000 of income from the payroll tax, thereby putting more money into the pockets of lower-wage workers - which they'll spend. We should extend the Earned Income Tax Credit - a wage subsidy - upward through the middle class, and reduce taxes on everyone up to $80,000 of income.

How to pay for this. Not in 70 years has so much of the nation's income been at the very top. Pay for all of this with a 2% surcharge on incomes between $1 million and $2 million, a 3% surcharge on incomes between $2 million and $5 million, and a 5% surcharge on all incomes over $5 million. Add in a .5 percent transaction tax on all financial transactions.

Why Would Republicans and Conservative Dems Ever Agree?

They'll agree to measures like this when they understand that our choice is either such reforms or continued economic stresses for millions of American families - stresses that will translate into an ever angrier and more divisive politics.

(When I wrote my new book, "Aftershock," I hoped what I saw unfolding would not become the new reality. It is.)

They'll agree when they see that we can not go back to the old "normal" of an unprecedented concentration of income and wealth at the top, because that old normal got us into the present fix.

It undermines the purchasing power of the rest of America. It invites speculation on Wall Street.

And it translates into extraordinary political power of a moneyed elite hell-bent on gaining even more power and wealth, and preventing the rest of America from flourishing.

But why would this moneyed elite ever agree? They'll agree when they understand this is a lousing strategy even for them.

Those at the top would do better with a smaller share of a booming economy that elicits a positive politics, than they will do with an ever-larger share of an anemic economy that fuels the politics of anger.

They should convey this message to their bought-for representatives in Congress.

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Robert Reich is Professor of Public Policy at the University of California at Berkeley. He has served in three national administrations, most recently as secretary of labor under President Bill Clinton. He has written twelve books, including "The Work of Nations," "Locked in the Cabinet," "Supercapitalism" and his latest book, "AFTERSHOCK: The Next Economy and America's Future." His 'Marketplace' commentaries can be found on publicradio.com and iTunes.

Robert Reich: "A record number of Americans is unemployed for a record length of time. This is a national tragedy."

Unemployed Americans in line for a job fair. Only one in five will find one.

Why A Civil Society Extends Unemployment Benefits

By Robert Reich
posted on Saturday, 4 September 2010

I have the questionable distinction of appearing on Larry Kudlow’s CNBC program several times a week, arguing with people whose positions under normal circumstances would get no serious attention, and defending policies I would have thought so clearly and obviously defensible they should need no justification. But we are living through strange times. The economy is so bad that the social fabric is coming undone, and what used to be merely weird economic theories have become debatable public policies.

Tonight it was Harvard Professor Robert Barro, who recently opined in the Wall Street Journal that America’s high rate of long-term unemployment is the consequence rather than the cause of today’s extended unemployment insurance benefits.

In theory, Barro is correct. If people who lose their jobs receive generous unemployment benefits they might stay unemployed longer than if they got nothing. But that’s hardly a reason to jettison unemployment benefits or turn our backs on millions of Americans who through no fault of their own remain jobless in the worst economy since the Great Depression.

Yet moral hazard lurks in every conservative brain. It’s also true that if we got rid of lifeguards and let more swimmers drown, fewer people would venture into the water. And if we got rid of fire departments and more houses burnt to the ground, fewer people would use stoves. A civil society is not based on the principle of tough love.

In point of fact, most states provide unemployment benefits that are only a fraction of the wages and benefits people lost when their jobs disappeared. Indeed, fewer than 40 percent of the unemployed in most states are even eligible for benefits, because states require applicants have been in a full-time job longer than most jobless had one. A majority of the jobless typically have moved from job to job before they failed to find a new one, or have held a number of part-time jobs.

So it’s hard to make the case that many of the unemployed have chosen to remain jobless and collect unemployment benefits rather than work.

Anyone who bothered to step into the real world would see the absurdity of Barro’s position. Right now, there are roughly five applicants for every job opening in America. If the job requires relatively few skills, hundreds of applicants line up for it. The Bureau of Labor Statistics says 15 percent of people without college degrees are jobless today; that’s not counting large numbers too discouraged even to look for work.

Barro argues the rate of unemployment in this Great Jobs Recession is comparable to what it was in the 1981-82 recession, but the rate of long-term unemployed then was nowhere as high as it is now. He concludes this is because unemployment benefits didn’t last nearly as long in 1981 and 82 as it they do now.

He fails to see – or disclose – that the 81-82 recession was far more benign than this one, and over far sooner. It was caused by Paul Volcker and the Fed yanking up interest rates to break the back of inflation – and overshooting. When they pulled interest rates down again, the economy shot back to life.

The Great Jobs Recession is far more severe. It’s continuing far longer. It was caused by the bursting of a giant housing bubble, abetted by the excesses of Wall Street. Home values are still 20 to 30 percent below where they were in 1997. The Fed is powerless because consumers cannot and will not buy enough to bring the economy back to life.

A record number of Americans is unemployed for a record length of time. This is a national tragedy. It is to the nation’s credit that many are receiving unemployment benefits. This is good not only for them and their families but also for the economy as a whole, because it allows them to spend and thereby keep others in jobs. That a noted professor would argue against this is obscene.

Robert B. Reich is Professor of Public Policy at the Goldman School of Public Policy at the University of California at Berkeley. He has served in three national administrations, most recently as secretary of labor under President Bill Clinton. He has written eleven books, including The Work of Nations, which has been translated into 22 languages; the best-sellers The Future of Success and Locked in the Cabinet, and his most recent book, Supercapitalism. His articles have appeared in the New Yorker, Atlantic Monthly, New York Times, Washington Post, and Wall Street Journal. Mr. Reich is co-founding editor of The American Prospect magazine. Reich has been a member of the faculties of Harvard’s John F. Kennedy School of Government and of Brandeis University. He received his B.A. from Dartmouth College, his M.A. from Oxford University, where he was a Rhodes Scholar, and his J.D. from Yale Law School.

Food for Thought: A Graphical Peek at Income Inequality in the United States

By David L. Griscom

Ever since my post on the the unemployment situation in the U.S. last Sunday, I have been trying to get up to speed on what is known about income equality. My starting point was "15 Mind-Blowing Facts About Wealth And Inequality In America" comprising 15 graphs, the most impressive of which I reproduce below in a slightly modified form to make the comments at the top and bottom legible.

Because the fine print in this figure could scarcely be read even in its web-published version, I reproduce those comments in the quotes below, which refer to the three vertical green bars in the top graph and then the two red bars in the lower graph.

The greater the gap between the rich and everyone else, the more dangerous economics becomes.
In 1928, a year before the U.S. economy nose-dived into depression, the top one-hundreth of 1 percent of U.S. families averaged 892 times more income than families in the bottom 90 percent.
In 1980, the last pre-Reagan year, families in the bottom 90 percent averaged $30,446 in income, after adjusting for inflation, $72 more than the the $30,374 comparable families earned in 2006. The top 0.01 percent in 1980 took home an average $5.4 million, less than one-fifth the $29.6 million average income of the super-rich in 2006.
In 2006 the top 0.01 percent averaged 976 times more income than America's bottom 90 percent.
In 1944 the top marginal tax rate -- the rate on income in the highest tax bracket -- hit 94 percent. In that year, taxpayers making more than $1 million, in 2005 inflation-adjusted dollars, paid Uncle Sam 65 percent of their total income in tax.
In 2005 taxpayers making more than $1 million faced a top marginal rate of 35 percent. These deep pockets paid just 23 percent of their income in federal tax.

Still, this nicely colored and annotated visual is a second-hand product. So I searched the web to find the authors of the two graphs. It turned out that the bottom graph was relatively well known (here for example), whereas the upper one was exclusively the result of relatively recent research by Professor Emmanuel Saez and his coworkers. The main publication on the subject authored by Thomas Piketty and Saez is entitled Income Inequality in the United States 1913--1998 and was published in the February 2003 issue of The Quarterly Journal of Economics. It has since been updated to 2006. These papers are based on study of individual income-tax returns that have been published by the IRS ever since 1913. The authors have carefully studied these returns in order to separate the shares of each source of income, such as wages, business income, and capital income. Their plotted data are for "tax units" defined as a married couple living together or a single adult, including dependents if any. Because of the much larger exemptions prior to 1944, uniting these data with the more recent data restricted them to studying only the top decile. However, they innovatively broke out the top decile into progressively smaller fractiles (see table below), where income is defined as gross income excluding capital gains and before individual taxes.

Inspired, I decided to search for recent tax data covering all deciles. The best I was able to find in the short time I spent looking were published by the U.S. Census Bureau as their Current Population Survery (CPS), and the latest CPS data available were for tax year 2008. These data are based a sampling of 117,181 households, sorted into bins incremented by $2,500 up to $99,999, with all of the higher earners (those studied in great detail by Saez) being binned simply as " $100,000 and over." Columns of data were presented for each of 15 definitions of income (plus 3 variants of Definition 1 and one variant of Definition 14) and were broken out only as quintiles.

I played around with graphing the CPS data and finally settled on a comparison of two of my plots, representing the "Definition 3" pre-tax data (where the rich pocketed all their capital gains while the poor were yet to receive government aid) and "Definition 15" (where the capital gains had been taxed and low-income households had become the benefactors of government transfers).

Note in my graphs below that the tall "spike" on the right (centered at $125,000) represents the percentage of households earning $100,000 OR MORE, rather then the percentage earning between $100,000 and $250,000, which would have been consistent with this style of graph. That is, to have been correct, the data for each $2,500-wide bin should have been plotted all the way out to Bill Gates. But this would have required a graph 10 times as long as those shown merely to pick up the first millionaire and 10,000 times as long to pick up the first billionaire on the present linear scale -- thought it could have been done on the same page by use of a logarithmic scale, had all those data been available (in this case they were not).

However, the left-hand "spike" centered on $1,250 is real and indicates that 12.7% of U.S. households were acutely stressed in 2008. Who can live on $100 a month? And what has become of those who became homeless? Have they been taken away to FEMA internment camps?

The top 2008 CPS quintiles (top 20%) are 96% and 87% comprised of the greater-than-$99,999 share for the Definition-3 and Definition 15 cases, respectively, and as listed in my graphs above they account respectively for 51.9% and 40% of the pre-tax and after-tax household incomes. The 2006 study by Saez found the top decile (top 10%) to include all households earning at least $104,700, and thus was 100% comprised of the greater-than-$99,999 share. Saez found this top decile to equal 49.7% of the total U.S. before-tax household income in 2006, a level higher than any other year since 1917.

In the figure below, Saez has decomposed this top decile income share into 3 progressively smaller, yet richer groups using data from 1913 through 2006.

Although less instructive, the two CPS-based bar graphs for 2008 that I've shown above do give a good impression of the results of progressive taxation in combination with government cash transfers to the impoverished.

So maybe the U.S. government is truly altruistic after all? Well, not exactly ...although in the graph below the U.S. is seen to beat out Italy, Greece, and Turkey.