In which I get seriously angry at Guardian argle gargle about poverty

Jeebus, thought Larry Elliott was better than this:

The share of national income of the richest 1% more than doubled between 1980 and 2008, from 8% to 18%. They make an average of $1.3m in after-tax income, while the poorest 20% take home $17,700.

Oh come on. The most basic thing to know about US poverty and income figures are that they are market incomes. They are incomes before the corrections made by the tax and benefit systems. German or French inequality is very similar to US by market incomes.

The growing gulf between rich and poor became a hot issue in 2011 as a result of the Occupy Wall Street protests, and the latest official figures show things getting worse, not better. Of the 34 rich-country members of the Organisation for Economic Co-operation and Development, only Chile, Mexico and Turkey are more unequal.

And that statistic suffers from the same problem. The official inequality statistics for the US are of market incomes. The official stats for everyone else are of post tax post benefit incomes. You see some list where the Gini for the US is .45 or whatever, then Sweden at .25. This is comparing before tax nd benefit incomes in one country with after tax and benefit incomes in the other.

This is just nonsense, this is either lying or gross ignorance. That the CIA World Factbook manages to do this just proves my point.

Robert Frank, economics professor at Cornell university says American corporations have forgotten Henry Ford\’s insight: workers need to be paid wages high enough for them to buy the goods they are producing.

And that wasn\’t Ford\’s fucking point either. If it were then Boeing would be in real trouble, eh? Ford wanted to reduce turnover among his workers: he was getting through 50,000 a year in order to have a permanent establishment of 13,500. By paying double the wages of everyone else he reduced his training and recruitment bills. Higher wages actually led to a lower total wage bill.

Freeman, Gilens and Frank said there were policies that could help: full employment, changes to the tax code to make it more progressive; much greater investment in education; reform of campaign financing to break the stranglehold of rich donors.

What would really help is getting a grip on the reality of the fucking numbers. Start counting US poverty the way we count it everywhere else, after the eforts at poverty alleviation, and you\’ll find there\’s an awful lot less poverty in America.

14 thoughts on “In which I get seriously angry at Guardian argle gargle about poverty”

  1. Also, the Left says it’s against poverty, widening the gulf between rich and poor, and whatnot, but also supports mass immigration that imports poverty and holds down the wages of low-skilled labour.

  2. Steve

    That’s a crass generalisation. Many on the left will tell you that immigration is a right-wing (neolib) policy to supress wages, and will support restrictions/protectionism that guard against that.

    Further, there’s a great many on the right who talk of wanting free markets where people can succeed on their own merit, but wish to restrict immigration because, er, they don’t like forrins.

    Inconsistencies abound, yes, but on all sides.

  3. The Thought Gang – Thanks.

    Of course you can find different shades of opinion anywhere but as a crass generalisation I am right.

    If the Left was a tug o’ war team, you’d find nearly all of them pulling the rope in the direction of mass immigration being a Good Thing, or at the very least, not pulling t’other way because they believe it would be racist to do so.

  4. The inconsistency is that, while the Left says it wants to reduce poverty, it tends to support policies that entrench it.

  5. The left wants people from poor countries not to be poor as well as people from rich countries.

    From what I have read, when the opportunity for better work is presented to peasants abroad, the Left in rich countries oppose it.

  6. “If the Left was a tug o’ war team, you’d find nearly all of them pulling the rope in the direction of mass immigration being a Good Thing”

    That’s because pretty much everyone, left or right, thinks it’s a good thing. Because it so plainly is. There may be some problems that arise as a result of free immigration, but to solve those problems so that we could allow free immigration would be of massive benefit. Increasing competition makes us all richer.

  7. That’s a crass generalisation. Many on the left will tell you that immigration is a right-wing (neolib) policy to supress wages, and will support restrictions/protectionism that guard against that.

    That is certainly not the leftwing position in the US, where any attempts to enforce existing immigration laws, let alone restrict legal immigration, are shouted down by the Democrats as “racist”.

  8. If I remember correctly, the $5-a-day that Ford was paying to get a loyal, industrious workforce was as manager of a facility whose majority stockholders were the Dodge brothers; whether they sued him or he sued over being removed I don’t remember. But the Dodges prevailed in the case (evidently $5 a day was substantially more even than was necessary to attain Ford’s goals–in the estimation of the Dodges (and SCOTUS).

  9. “you’ll find there’s an awful lot less poverty in America.”

    Yes, but if you did that the lefties @ the graun wouldn’t be able to continue their US-hating rhetoric.

  10. So Much for Subtlety

    Dave – “That’s because pretty much everyone, left or right, thinks it’s a good thing. Because it so plainly is.”

    A quarter of children in British primary schools now come from non-English speaking homes. Five of the top six origins being Pakistan, India, Bangladesh, Nigeria and Somalia. Simply giving time for these children to be assimilated and their birth rate to converge to the majority means that in a generation or two White British people will be a minority in a country full of people hardly known for their economic or educational excellence. That is even if we allowed no more immigration from now on.

    So by all means, explain to me how the extinction of the British is a good thing. I am dying to know. How is voluntarily becoming Lebanon a good idea?

  11. So Wrong It’s Guff

    More immigrants come from USA and Eire. Oh, but they speak your language.

    Also only a tiny proportion of those you cite can’t speak english after their efforts to hot house the native culture.

    Sure there’ll be a few, but then I know families in France that can just about ask for a coffee, usually in the wrong shop. And then giggle about garlic and berets.

    I really don’t know how you are so stupid. Must have been your education.

  12. Oh and Worstall, your opinions about poverty are rancid.

    I don’t know what sort of life you are surrounded by but there is real crushing poverty on my doorstep. And I life in Guernsey.

    It may be anecdotal, but your muses are based on nothing more than ideology, not reality.

    Food stamps are not a benefit they’re a cost, to use your parlance.

  13. Poverty in the UK has fallen dramatically during this recession. I know, because the Left’s own chosen standard of relative poverty tells us so.

    Rejoice!

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