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Let Them Eat Cake: The Forgotten Class

By       Message David Model       (Page 1 of 1 pages)     Permalink    (# of views)   3 comments

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Apparently 37,276,000 (U.S. Census Bureau, 2007) Americans are not considered to be human, have no value and hence unworthy of any consideration in the formulation of policy.  Just as cats and dogs are regulated by the government for unacceptable behavior but are not the recipients of any government transfers, those living in poverty are perpetually mired in a morass of neglect and indifference by all levels of government who often discover that the only free "public housing tract"- (Mumia Abu Jamal) available to them, is prison.


Partly to blame for this paucity of government assistance is the neoliberal ideology which dictates that the "invisible"- hand of the omnigenerous, omnibenevolent, and omnicompassionate market will distribute sufficient wealth to those who are deserving and hardworking.  Perhaps those who worship at the alter of free markets ought to read The Wealth of Nations more carefully and add The Theory of Moral Sentiments also by Adam Smith to their reading list.  Since poverty is a social construct as demonstrated by those countries who view the poor as people who are victims of the system, both leadership candidates should commit themselves to policies that transcend tokenism.  For example, Barack Obama, arguably the more progressive of the two candidates, should rethink his constant and annoying reference to the middle class when discussing the hardships which Americans are undergoing.


Poverty in the United States is not an inevitable outcome of capitalism as is evident when the poverty rates of Western industrialized countries are compared.  Examining child poverty rates in 26 OECD countries in 2007, based on children living below national poverty lines, reveals that the United States has a rate of 21.9%, second last to Mexico.  Poverty rates in countries who actually believe in egalitarian economic policies include: Demark (2.4%); Finland (2.8%); Norway (3.4%); Sweden (4.2%); Switzerland (6.8%); and France (7.5%).  Egalitarian economic policies are not based on communist ideology but rather on a sense of fairness, decency and compassion.


One of the measures related to poverty is the unemployment rate which is much lower in many OECD countries than in the United States although it is important to bear in mind that the unemployment statistic itself is very flawed, for example treating the working poor as if they earn a sufficient income to support their families.  According to the OECD, in August 2008, the U.S. has an unemployment rate of 5.68% compared to Austria at 3.30%, Denmark at 2.9%, the Netherlands at 2.60%, Korea at 3.2%, Japan at 4.15%, Australia 4.08%, Luxembourg at 4.2%, and the Czech Republic at 4.30%.

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Hidden behind these statistics on unemployment are the 75,873,000 (Bureau of Labor Statistics, 2007) people who are working at or below the minimum wage.  Since the recent increase to $5.85 per hour, the minimum wage had been stuck at $5.15 an hour since 1997 which adds up to $10,712 a year or $6,000 below the poverty line.  In fact, the minimum wage lags far behind cost of living increases given that the current minimum is $3.50 lower in purchasing power since 1960.


One of the critical explanations for the depth of poverty in the United States is the ideological opposition to transfer payments for individuals who are struggling.  This opposition is a consequence of the religious commitment to Neoliberalism which encourages each individual to maximize his wealth to benefit society as a whole.  It must be noted that there is no similar anathema to transfers to defense industries or to corporations in the form of tax breaks, subsidies, deregulation, guaranteed loans, and bailouts.  Adam Smith's invisible hand seems to slap those in need and reward those who are wealthy while applying the dogma adhered to rigidly by the disciples of Milton Freidman.


According to OECD statistics for 2003, the United States ranks 28th out of 31 countries in the percentage of GDP devoted to social spending such as healthcare, education and pensions.  Only Ireland, Korea and Mexico spent a lower percentage of GDP on social spending.  On the other hand, Sweden spent 31.3%, France 28.7%, Germany 27.3% and Belgium 26.5%.   Low social spending explains the high poverty rate in the U.S. as well as the very high infant mortality rate.  Out of 18 European countries, Japan and Canada, the U.S. had the highest number of deaths per 1000 live births (OECD, 2007).  The U.S. had 6.9, Finland 3, France 3.8, Germany 3.9, Norway 3.1, Portugal 3.5 and Sweden 2.4.

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Despite the statistics exposing the severity of poverty in the United States and an understanding of the unconscionable mental, physical and emotional consequences of poverty, not to mention the long-term costs to society, past presidents and the two candidates for the next presidency seem to assign a very low priority to this tragic problem.


Obama's solutions to reduce poverty include raising the minimum wage to $9.50 by 2011.  First of all, $9.50 will mean that a minimum wage worker will still be below the poverty line as well as falling further behind the cost of living for three more years.  It seems that when the financial and banking sector are in a state of crisis, it only takes weeks to agree to a $700 billion package but when the problem is poverty there doesn't seem to be enough money to fund the necessary programs and the poor will just have to wait until 2011 to scrounge around for the few crumbs that Obama can scrape together.


Obama promises to reform the Child and Dependent Care Tax Credit but families that pay almost nothing in taxes because their income is too low will barely benefit.  His promise to give families up to 50% credit for their child care expenses is too vague to offer any hope.  Many European countries and several provinces in Canada pay close to 100% of day care expenses for those who need it.


The real problem is that the government has no real intention to redistribute wealth in any meaningful way.  Redistribution of wealth is well beyond the boundaries of legitimate economic policy in American political culture.  It's radical, extreme and subversive.  It's probably a threat to the security of the United States.


State of Darkness: US Complicity in Genocide since 1945

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I have been a professor of political science at Seneca College in Toronto. I have published five books the last of which "Selling Out: Consuming Ourselves to Death" was released in May/08. As well, I have been featured in CounterPunch, Z (more...)

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