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The New Poverty

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I met a man the other day, pretty regular guy all in all except he was homeless. Just one more, one more of the millions of Americans to whom healthcare is dream, food is a hope and even shelter is questionable. It is an American story; it is a microcosm of modern American society. And a most amazing facet of this problem is not the new poverty of millions but the invisibility of the problem.

How many of the fourteen million now unemployed will replace unemployment checks with part time work? The new poverty is subsidized with food stamps to the multitude which end up in the pockets of merchants. It creates a baseline economy, a brutal Dickensian society with a whiff of paternalism which says, "Feed them but don't actually attempt to improve their lot," merely subsidizing their poverty.

"Benefits should always be conferred gradually; and in that way they will taste better." -- Niccolo Machiavelli

A government which goes out of its way to declare an economic all clear when it is obviously not so, conjoined at the hip with a media filled with happy talk. A media overburdened with happy talk, sensationalism and infotainment, the Super bowl, the Grammy's and poor Whitney, a media of distraction, by distraction and for distraction. A new Hollywood war picture has been released with real Navy Seals to further blur the line between reality and warfotatinment. "Is that you John Wayne?"

Yet the plight of the average American is only barely discussed and even then only in the abstract. This is the nucleus of the movement, a lost generation of college educated and formally middle class new poor. I knew a biological engineer with a doctorate who unemployed for almost two years. When he landed a job I asked, "better money?" He answered; with a shoulder shrug meaning "no" but there was a look of relief in his face as if he had escaped. An easily recognized reflex of relief, escape from his brush with poverty, a scientist unemployed this indeed, isn't your run of the mill recession. 

This is a depression where anemic job and wage growth limit purchasing power which in turn fuels layoffs and low tax revenues for tax coffers. The state of California reported tax revenues a half a billion dollars short of estimates for the month of January. The shortage was primarily caused by income tax revenue falling 13 percent in the fourth quarter. Those with low paying, part time jobs pay little income tax and the unemployed pay no income tax. 

"Old truths have been relearned; untruths have been unlearned. We have always known that heedless self-interest was bad morals; we know now that it is bad economics. Out of the collapse of a prosperity whose builders boasted their practicality has come the conviction that in the long run economic morality pays." - Franklin Delano Roosevelt 

Despite the knowledge gained from past depressions and even the early lessons of the current depression Federal, state and local governments continue to shed employees at record levels. In 2010, California Governor Arnold Schwarzenegger began furloughing state employees in response to a budget crisis. The cuts amounted to a 15 percent cut in pay and within just a few months the city of Sacramento went from one of the bright spots of economic activity to one of the worst. Restaurants, furniture stores, car lots and office equipment stores began to close their doors.

The Obama administration has followed the Schwarzenegger path,

Federal employee job cuts - January 2011 to January 2012 -- 17,100
Post Office employee job cuts - January 2011 to January 2012 -- 37,000

State government job cuts - January 2011 to January 2012 -- 71,000
State government education job cuts - January 2011 to January 2012 -- 6,100

Local government job cuts - January 2011 to January 2012 -- 161,000
Local government education job cuts - January 2011 to January 2012 -- 105,400

Nearly 400,000 less pay checks each week to bolster the economy and on the other end are the same small business's which the politicians love to praise as job creators. They are left to deal with lower levels of government services. Local businesses have fewer customers and the nation's children have a poorer education. This year's cuts come in the wake of over half a million government job cuts in 2010.

A government cannibalizing itself to save on groceries, 

"Every time you stop a school, you will have to build a jail. What you gain at one end you lose at the other. It's like feeding a dog on his own tail. It won't fatten the dog." -- Mark Twain

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I who am I? Born at the pinnacle of American prosperity to parents raised during the last great depression. I was the youngest child of the youngest children born almost between the generations and that in fact clouds and obscures who it is that (more...)

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