War On Poverty, Or War On the Poor?

Johnson_and_King.jpg
Wikipedia

By Frank Stricker

The 1960s War on Poverty (WP) involved three approaches. The most publicized and least effective at lifting people out of poverty included Head Start, legal aid and other services. It emphasized training and psychological uplift through the Job Corps and Community Action Agencies. Evaluations showed that Job Corps graduates did no better than others. Community Action Agencies got mixed reviews. They involved poor people in community organizations and they supervised Head Start and other programs. Although some had naively pushed them as a way for poor people to take control of their communities and challenge local political machines, that did not happen, nor did poor people control business decisions to create jobs in their communities.

A second, often soft-peddled, approach worked better. The American safety net began with Social Security, welfare and unemployment insurance in 1935. In the '60s, old programs were improved and new ones (food stamps, Medicaid and Medicare) added. In the '70s, the Earned Income Tax Credit was created for the working poor. These programs counteracted market forces that created more poverty. Today, cash (such as Social Security) and near-cash benefits (food stamps) lift 40 million people out of poverty. In the pit of the recession in 2009, unemployment benefits kept 5 million people from slipping into poverty. 

Americans should celebrate these welfare state successes, but they should also support improvements. Fifty million people are still poor. The poorest fifth of black households have only $9,800 in cash per year. Social Darwinists, led by the Koch brothers, Republican Paul Ryan and Tea Partiers talk economic nonsense and want to eliminate social programs. Liberals sometimes make it easy for them. In the '60s, safety net programs were kept in the background and WP training and uplift programs were sold as a hand up, not a hand out. American attitudes trail collectivist reality. We live in a web of interdependencies but are still drawn to archaic forms of economic individualism.

Nor are most Americans comfortable with the third WP approach: deficit spending. In 1964 President Johnson won support for Keynesian tax cuts by promising to balance the budget for one year. Soon, due in part to the murderous war in Vietnam, spending and deficits soared. The economic impact at home was huge. Unemployment averaged 3.7% over four years, and the poverty rate fell from 22% to 12%.

In 1971-1972 President Richard Nixon used deficits to boom the economy and assure his re-election. That added to inflationary pressures coming from higher oil and grain prices around the world. Inflation soon seemed out of control. There weren’t enough socialist economists to defend the working class. Mainstream economists urged high unemployment to cut inflation. In the early '80s, the brutal Volcker-Reagan recession cut prices and beat up on workers. The Reaganites cut income supports, attacked unions and re-enthroned the royalty of money. The WP was becoming the war on the poor. Imprisoning young people of color was the tool. Democrats moved to the right, and President Bill Clinton approved big welfare cuts.

Over time, conservatives made Republican social policies even more hostile to poor people. In our time, Republican governors deny Medicaid to millions of people. North Carolina’s Thom Tillis wants people to look down on those “who choose to get into a condition” that requires government aid.

Yet despite the spread of poisonous ideas, in many places it is easier to talk about economic poverty. The anti-poverty paradigm has shifted. In the 1960s, the poor were imagined as outside the working class, a distinct underclass with bad values. They were often viewed ethnically or culturally: poor blacks and poor Appalachians were the poster people for the WP. But that kind of liberalism could slide into blaming the poor. Daniel Moynihan’s 1965 Labor Department report, The Negro Family, emphasized unemployment but also the idea that black family structures were deranged. By the '80s, right-wing writers had pushed the poverty debate from attacking poverty to attacking poor black people as criminals and welfare cheats.

But now the working poor are at the center of the conversation, thanks to Occupy Wall Street; militant workers at McDonald=s, Amazon and Wal-Mart; and unions like SEIU and UFCW. And, thanks to terrible economic conditions:

  • the average real wage is still lower than in the early 1970s;
  • the income inequality gap is huge;
  • there's always sleaze and criminality in capitalist operations, but now there's not much trickle-down.

Bush tax cuts favored the rich but did little for job creation, even before the recession. Businesses routinely steal wages from employees. Apple stashes $100 billion abroad to avoid taxation. Wal-Mart donates to school privatization but advises underpaid employees to use Medicaid and the Earned Income Tax Credit.

These factors had a bigger impact because of the Great Recession of 2008-2014. The crash pushed millions into poverty and weakened confidence in the rule of the Robber Barons. But the power and vast wealth of capital, the conservatism of many Democrats, the resentments of white people and the absence of a vibrant Left promoting socialist values helps explain why our second worst depression did not generate a second New Deal.

What would a second New Deal on jobs and poverty look like? We need to improve the safety net, but we must also fix job markets by raising the minimum wage and by direct federal job creation. How do we pay for new jobs? Tax the rich more; tax financial transactions. And borrow. Almost every job boom since the Great Depression has been fueled by federal deficits (often for war). Also, full employment with more good jobs means more tax revenues and fewer people needing food stamps and other benefits. That means the deficit can fall. And millions of people will be less insecure and, we hope, happier.

Frank Stricker, Emeritus Professor of History at California State University, Dominguez Hills and member of the National Jobs for All Coalition, wrote Why America Lost the War on Poverty (2007) and is completing a book: American Unemployment: Why We Have It and What To Do About It. 


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