Curious how poverty works?

In a report published this month by the Brookings institute, we're offered a look at American poverty for adults aged 25 to 61.

Let's consider how certain disadvantages might combine to make life more difficult. How do those play out across racial categories? Not surprisingly, such impediments tend to afflict blacks and hispanics more than whites. Here's the list:

1.                 Low household income 

(Less than 1.5 x the poverty line)

2.               Limited education 

(Less than a high school)

3.               Lack of health insurance

4.               Low income area 

(Area poverty rate 20+ percent)

5.                Household unemployment

About half of us in America encountered at least one of these disadvantages in the inquiry year, 2014. But, if you are black or hispanic, you were about twice as likely to face that disadvantage as your white acquaintance.

Moving on to those occasions of dealing with two or more such obstacles to upward progress, the racial gap widens.  Most white adults don't face any of the five difficulties, most black and hispanic adults do.

Black residents are more likely to live in a poor area and perhaps in a jobless family.   Hispanics are more likely to lack a high school education and perhaps health insurance as well.  Why is that?  Are they welcomed differently or treated differently?

If we're going to understand and deal with inequality and with poverty, understanding the difficulties a family might face will help us know how to help with government and organizational assistance efforts.  And individual efforts as well will benefit from understanding.  Change makers and help bringers must be knowledgeable and skilled.

America measures poverty with an income-only yardstick.  Are they missing some important details?  Of course.  

"A more multifaceted approach to measuring poverty, like the one offered here, reveals some of the insights that can be gained in the U.S. by framing the issue more broadly—from revealing the deep racial and ethnic disparities that exist to shedding light on the differing dimensions of disadvantage experienced from one group to the next." ~Brookings, Richard V. Reeves, Edward Rodrigue and Elizabeth Kneebone | April 14, 2016

Helping without hurting isn't simply a money handout, is it.  The most extraordinarily counterproductive attempt to help might be just giving money without plan or goal.  The only less informed position would be to just tell them to get a job.

Poor

'Poor' is not a character flaw.  

It's a container.

No one chooses to live without enough to feed their family.  No one chooses to live where it isn't safe and there are dangerous people influencing their children. No one chooses to prevent their children from having a better life.

Poverty is done to you by others, most often by neglect. Opportunity is denied to you by others; fair treatment, fair education, fair wages, acceptance, support, encouragement, a hand up and a way out ... those things are denied by culture, prejudice, policy, and practices of governments who favor the wealthy at the expense of most others.  It trickles up, not down, and the injustice persists from generation to generation.

We can make a difference, we can perhaps help break the container if we can climb above common thinking, common acceptance of such practices.  Uncommon might be better.  So what specifically might we do?




Change makers and help bringers have more fun.

The century's deadliest idea

In 1970, Nobel laureate economist Milton Friedman declared that the purpose of business was profit, exclusively and without apology.  Wages have stagnated since then as employers have taken his advice and prioritized profit and shareholder value over everything else in their business model.

Milton Friedman at the establishment of the International Monetary Market (IMM), the world’s first
 in foreign currencies.

"No popular idea ever has a single origin. But the idea that the sole purpose of a firm is to make money for its shareholders got going in a major way with an article by Milton Friedman in the New York Times...."  ~Forbes, Denning
Among the most destructive turns in national history, our subsequent and almost exclusive focus on corporate profit changed not just our business environment but our culture.  It has spread through the developed world and into the developing world.

The visible effect, the widening GAP between the wealthy and all the rest.  The unintended consequence, a death toll that goes far beyond that of all the century's wars combined.*

Among our children today, 21,000 die daily.  More than 100 million have died since the turn of the century, and perhaps twice that many more since Friedman's pronouncement.

The killers are poverty, hunger, easily preventable health issues, and malnutrition. Despite the scale of this daily/ongoing catastrophe, it rarely manages to achieve, much less sustain, prime-time, headline coverage.

It wouldn't be fair to blame Friedman, of course.  He was just reducing the factors of finance to the functionally relevant ones.  Friedman never intended or expected the transformation we've seen, and I doubt he would approve.  Economics since the 1980's is math and money and winning.

From UNICEF, the world’s premier children’s organization, part of the United Nations, we find that:

• 2.5 billion people lack access to improved sanitation
• 1 billion children are deprived of one or more services essential to survival and development
• 148 million under age 5 in developing regions are underweight for their age
• 101 million children are not attending primary school, with more girls than boys missing out
• 22 million infants are not protected from diseases by routine immunization
• 7.6 million children worldwide died before their 5th birthday in 2010
• 4 million newborns worldwide are dying in the first month of life
• 2 million children under 15 are living with HIV
• >500,000 women die each year from causes related to pregnancy and childbirth
• All the above are after years of improvement.  Some countries have made significant advances in health and nutrition.  Others have lost ground.   

 *Death by war in the 20th century is estimated at 200+ million.  The death toll from preventable causes among children under age five and just since 1970 exceeds 300 million, and that is just the children.  Each one was a great loss to their family. Across populations, death and suffering from poverty, economic inequality, and disenfranchisement (all unnecessary and addressable) are beyond measure.  Or excuse.

While there are many difficult problems associated with poverty, it's worth remembering that poverty from generation to generation is not chosen by the victims, it is chosen by policy makers and imposed by rules of trade and finance.  

______________________________________________

20 APR 2016 -- This morning with my doctor, he was lamenting the changes in medical practice that he'd seen in his 30 years.  The science is magnificent, but the business has changed, he explained.  It used to be about the patients, it was a service, not a business.  Doctors entered the field because they wanted to help, to make a difference, to save and improve lives.  Today, healthcare is a business about the money and not about the patient's needs.  It's a business like every other.

Note: Despite the Nobel Prize, Friedman's premise turns out to have been problematic. It changed big business, and it took almost half a century to see that it wasn't going to work well.

Following Friedman's philosophy and theory, Jack Welch made GE the largest corporation in the world, and in 1999 was named CEO of the century. "It turned out that the fabulous returns of GE during the Welch era were obtained in part by the risky financial leverage of GE Capital, which would have collapsed in 2008 if it had not been for a government bailout."

"In due course, Jack Welch himself came to be one of the strongest critics of shareholder value. On March 12, 2009, he gave an interview with Francesco Guerrera of the Financial Times and said, “On the face of it, shareholder value is the dumbest idea in the world." ~Forbes, Denning

Much in popular economic theory has fallen flat. Supply-side and trickle-down are perhaps the most familiar failures. Meanwhile, the GAP widens.

Things are changing, and it is going to be different. Whether it will be better or not remains to be seen. Our great concern remains, how will we treat the poor and deal with persistent and imposed poverty?

John Doe, "My life is in danger"

He leaked 11.5 million documents to the press, the Panama Papers.  He unveiled tax evasion, illegal shell corporations, fraud, and avoidance of international sanctions.  More, there are records of hidden wealth from monied players around the world.  (This is all from just one 'corporate service company' in Panama.  There are thousands more in various countries.)

This is all from just one 'corporate service company' in Panama.

"John Doe", the whistleblower who leaked the documents to the German newspaper Süddeutsche Zeitung, remains anonymous, even to journalists on the investigation. "My life is in danger", he explained.  He cited income inequality as the reason for his action, and said he leaked the documents "simply because I understood enough about their contents to realise the scale of the injustices they described". 

Extreme inequality is spreading across the

world via the international marketplace.

Documented: heads of state, former heads of state, former prime ministers, dozens of family members, and of course hundreds of lower level government officials. Corporate players appear as well. The client list includes numerous donors to former US President Bill Clinton and former Secretary of State Hillary Clinton, as well as to the Clinton Foundation and its associated charities. There are mentions of Donald Trump, although none appear to refer to the person but rather to businesses using the name.  According to the documents, 28 German financial institutions emerge in the Panama Papers along with 500 banks from around the world.

The reasons for such offshore holdings are (1) to shelter funds obtained under questionable circumstances, and (2) to insulate transactions from regulatory oversight. Why would someone, an elected official perhaps, need to move wealth offshore?  Or corporate players?  How might someone come up with enough money to need an offshore shelter?

Around US$2 trillion has passed through this one firm's hands, some legally, some not. Thirty clients were at one time or another blacklisted by the US Treasury Department, including businesses linked to senior figures in Russia, Syria and North Korea. Documents revealed £10 million in cash from the sale of gold stolen in the 1983 Brink's-Mat robbery and how it was laundered. Four Americans with offshore shell companies are named in the documents; all had previously been either indicted for or convicted of financial crimes such as fraud or tax evasion.  Most American offshore activity is conducted through the Cayman Islands, not Panama.

On extreme inequality:  Global wealth is increasingly being concentrated in the hands of a small wealthy elite, and the scale is difficult to understand.  (Today, 62 of the world's wealthiest people own more than the poorer half of the world.)  These wealthy individuals have generated and sustained their vast riches through their interests and activities in a few important international economic sectors (finance, pharmaceuticals, etc.). Companies from these sectors spend millions of dollars every year on lobbying to create a policy environment that protects and enhances their interests further. The most prolific lobbying activities in the US and EU are on national budget and tax issues; public resources that should be directed to benefit the whole population, rather than reflect the interests of powerful lobbyists.

COMPANIES FROM THE FINANCE AND PHARMACEUTICAL SECTORS SPEND MEGA-MILLIONS ON LOBBYING

The biggest and most successful companies from both the finance and insurance sectors and the pharmaceutical and healthcare sectors achieve extremely high profits and therefore command substantial resources which they use to compensate their owners and investors, helping to accumulate their personal wealth. But these resources are also used for economic and political influence. Companies use their resources for influence through lobbying governments on issues and policies which affect their business interests. During 2013, the finance sector spent more than $400 million, and the pharmaceutical and healthcare sectors spent more than $487 million on lobbying in the USA alone. In addition, during the election cycle of 2012, $571 million was spent by companies from these sectors on campaign contributions. The financial sector is the largest source of campaign contributions to federal candidates and parties.  Why might that be?

Industries and individuals hide their wealth offshore for various reasons.  At least 2,400 US-based clients were found in the Panama Papers, and while many of their transactions were 'legal', the service company offered advice to its clients on how to evade US tax and financial disclosure laws.

A starting salary in the finance industry is perhaps $400/day for a newbie.

It moves quickly to five or ten times that amount for the successful players.

Monied interests shape the developed economies by purchasing regulatory favor.  Wealth flows to the elite, and the bottom 90%+ see little or no benefit from their own increased productivity and contribution. Wages for them have been stagnant for more than forty years.  Poverty persists as the GAP widens between the elite and the rest.  In the developing world, resources and money flow into the coffers of the wealthy elite and to the developed economies.

The laws governing the finance industry are poorly written and the international marketplace is no more civilized than the drug trafficking industry.  The good of the citizenry isn't part of the business model of multi-national corporations.  Not anywhere, as best I've been able to determine, and the GAP widens explosively like never before in history.  What might that suggest?

At the other end of the kleptocratic spectrum -- poverty is created. Poverty is neither inherent in nor a product of nature since by its nature, poverty is an unnatural state imposed upon the powerless. Humans have created engines for extracting vast amounts of wealth from nature, using the economic power of that largesse to exploit, subjugate and marginalize the majority of the world’s population in effect keeping them in a chronic state of poverty.  


True?  Why might John Doe risk his life?  Or Snowden?  

Billionaires on a bus

Just 62 people own as much as half of the world's population now.  That's the GAP -- the accelerating inequality that is creating a different world than the one where you were born.  

See the Oxfam report, one of many on the subject.

It wouldn't be so bad, rich people getting richer, if it wasn't at the expense of everyone else.  Do the research yourself.  The resources of countries are extracted for the benefit of the wealthy, not the country's citizens, and it is particularly visible in countries that were former colonies.  The business model that pervades the global financial system is profitability and wealth extraction while minimizing costs for wages and employee benefits.  Your value to your employer is your work after which you're just refuse.

This is the developing world, one of the nicer neighborhoods.
We didn't understand.  Until we worked with these
 folks and spent time in their world, it just
didn't register in our view of things.
This is real life and the norm
for more than half of
the world.

Those are harsh words, and there are many exceptions.  Many employers treat their workers rather well, comparatively speaking.  Benefits may be provided for things like parental leave, matching retirement contributions, educational assistance, and more.   The trend, however isn't good.  The marketplace competition extends now to owners vs. workers.

Those 62 folks are significantly richer than they were a few years ago.  In 2010, it took the top 388 to match half the world's wealth, but as they get richer (which they do at an incredible rate) the rest of the world is the source of their wealth. The last fifty years have seen the GAP widen continuously with zero progress for most, and decline for many.  Just the wealthy are rising.






Today, the top 1% hold half of the world's wealth as the trend of the last half century continues.


The GAP is not the only issue we face, but it is perhaps the most visible clue for what the future holds.  The trend is both national and global.

Is there anything wrong with being
spectacularly  wealthy?  
Interesting question.  

For this most recent decade, the poor folks I met were nicer
than pretty much all the rich folks I encountered.  Generous
and unfailingly hospitable, kind hearted, all of them.  
The rich, not so much.

Does our understanding of wealth include where it comes from? Conscience perhaps requires an answer to that question.

Is there a right path for us as individuals?

Governments face a dilemma, do they not.  Shall they acquiesce to monied interests or defend the common good? How's their record so far?




(The facts and numbers here are concurred by various objective and non-collaborative sources.)

Refugees (NC17 Content)

Intervention by outsiders in this conflict
 hasn't helped much, nor has it been
well received.

The Syrian conflict has precipitated the largest humanitarian crisis in the history of the world.

This was done to them.  The eleven million+ displaced persons didn't invite the air strikes and chemical weapons to their neighborhood.


Consider for a moment if this was you in the picture (left). If you had to collect your family and whatever you could carry and leave for the nearest national border just to survive.  How would you manage, walking day after day?  And if you made it across the border, consider your next months and years in a makeshift camp where there are no jobs, no stores, no schools for your kids.  It has been like that for five years.

Syria's uprising began in March 2011, when protesters marched in the capital of Damascus, demanding democratic reforms and the release of political prisoners. The security forces responded by opening fire on the protesters, killing five.  (The protest itself was triggered by the February arrest of a boy and his friends by the government for writing a graffiti called "The people want the fall of the regime", in the city of Daraa.)

Five years later, refugees try to keep warm by burning trash (mostly plastic) in a tent settlement
in West Bekaa, Lebanon, near the Syrian border. (© 2016, Jon Warren | World Vision)

At latest count, the U.N. has identified 13.5 million Syrians in need of humanitarian assistance (food, shelter, medical help).  Included are more than six million inside and five million outside the country who have been driven from their homes.  Half of them are children.  Millions have had to quit school.  They've left their jobs, their possessions, their communities, and fled for their lives.

"Syrian children have been used as human shields, shot at by snipers, jailed by the regime and in some instances summarily executed by the opposition. 

But as Save the Children notes in their report, “It is not just the bullets and the shells that are killing and maiming children. They are also dying from the lack of basic medical care.” 

Across Syria, an estimated 60 percent of hospitals and 38 percent of primary health facilities have been damaged or destroyed, according to Save the Children. Drug production is down by roughly 70 percent, and nearly half of all doctors have fled the country. In the besieged city of Aleppo there should be 2,500 doctors, but according to the study, just 36 remain." ~PBS JASON M. BRESLOW 2014

Should the world intervene to bring an end to the violence.  Perhaps, if it can be done collaboratively and with appropriate force and constraint.  Not an easy task.

Should the world step in to assist those in need.  Of course.

Anything less would be the same as just walking by on the other side of the street.

Aleppo before the war ...

And thus we come face to face with today's real world.  We had hoped to end such slaughter a century ago.  We began with the League of Nations, hoping to come together as adults to oversee the world and end the violence and hatred.

There are things we as individuals might do including, as Pope Francis has said, we can pray fervently for an end.  As a nation, there is so much more that we might do, of course, if we can get over our unreasoning cowardice fear.

REPORT ON SYRIA CONFLICT FINDS 11.5% OF the POPULATION KILLED OR INJURED

Aleppo today.

Syria’s national wealth, infrastructure, and institutions have been “almost obliterated” by the “catastrophic impact” of nearly five years of conflict. Fatalities caused by war, directly and indirectly, amount to 470,000, a far higher total than the figure of 250,000 used by the United Nations until it stopped collecting statistics 18 months ago. 

In all, 11.5% of the country’s population have been killed or injured since the crisis erupted in March 2011, and half the population has been driven out of their homes.   ~The Guardian 2/2016