Counterparties: Poor America

December 20, 2012

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You can call 2012 the year of bank fraud, the year of the 47%, the year of the housing recovery — or you can call it just another year of persistent, widespread American poverty.

Reuters has an interesting look at how we’re (not) responding. The economy is “grinding through a prolonged stretch of rising poverty and income inequality“, but America has decided that “the able-bodied poor don’t deserve much help”:

[There are] 12.2 million adults of working age, with no children at home, who were living below the poverty level in 2011. That’s up nearly double from two decades ago. And of those, 5.6 million received no assistance from any of the major five federal programs, a Reuters analysis of Current Population Survey data found. That’s the highest number since 1992, the first year for which comparable records are available.

There were 46 million Americans living below the official poverty line in 2011, up from 31 million in 2000; the number remains scary no matter which measure of poverty you use. And even as the rural population falls, the rural poverty rate has continued growing, as it has since the 1960s.

Today’s poor look like America: young people, for instance, are the “new face of a national homeless population”. And of course unemployment factors in: poverty rates skyrocket as the unemployed approach 27 weeks without a job. Congress, for its part, replaced extended Federal unemployment benefits this August “with drug testing, stricter work-search requirements, and leeway for states to run innovative training programs”. This, despite our increasingly troubling long-term-unemployment problem.

The Economist indicts Obama for not discussing poverty on the campaign trail, but adds that America’s poor are “beyond the aid of any single administration”. — Ryan McCarthy

On to today’s links:

Growth Industries
Meet the entrepreneur behind “the Crovel”, the only tool you’ll need after the Zombie apocalypse – Chadwick Matlin

Big Ideas
Gregor MacGregor, the con man who invented a country — The Economist
An untrained, amateur linguist invents his own language — Joshua Foer

Bill Ackman unimpressed by business model of selling diet shakes to your friends — Matt Levine
John Paulson is losing support rapidly — Reuters

How thieves pulled off an $18 million heist from Canada’s strategic maple syrup reserve — NYT

NYSE in talks to be acquired by ICE –Reuters
Why the NYSE doesn’t matter —Felix

Crisis Retro
GM to buy stake from Treasury; government could lose billions —Reuters

Popular Myths
The myth of the bond vigilantes — Matt Yglesias

Easing Ain’t Easy
A look at the BOJ’s latest stimulus program —Global Macro Monitor

Primary Sources
US GDP revised up to 3.1% in 3Q — BEA

Good News
Mexico’s economy is a “growth dynamo” —Hale Stewart


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