Opinion

The Great Debate

Tackling inequality: Where a president meets a pope

There has been much speculation about President Barack Obama’s meeting with Pope Francis on Thursday. One Catholic church authority asserted, “it is not the task of the pope to offer a detailed and complete analysis of contemporary reality.” The pope got that message — he wrote it himself in his first official “Papal Exhortation” last year.

Yet Francis has also asserted that his papacy has a “grave responsibility” to  “exhort all the communities to an ever watchful scrutiny of the signs of the times” — particularly to know the face of the poor and outcast.

For the pope, this scrutiny must take in the fierce public debate about government cuts that now overshadows U.S. politics. The left and the right are battling over sharp reductions in foods stamps and unemployment benefits, denial of healthcare to those least able to afford it and cuts in many programs designed to help the poor and needy.

Francis has dedicated his papacy to helping those marginalized by harsh economic policies and personal setbacks. He advocates for a “poor church,” one that can give a voice to the voiceless. So poverty of all kinds will likely be an urgent topic when the pope and the president sit down.

Francis, of course, directly addresses only the 1.2 billion humans who are in the Catholic orbit, and Obama was elected to serve only one nation. Both, however, have “gone global” — their words and actions affect “present realities” around the world.

How ambitious the world?

For more than a decade, the very idea of multilateralism often seemed to be on life support — damaged by the Iraq invasion and its messy aftermath, buffeted by the global economic crisis and bruised by the difficulty of coming to agreement on critical trade and climate issues in Doha and Rio, respectively. Now, the world’s attention is riveted on whether the United States and Russia’s agreement to avert the immediate crisis triggered by the use of chemical weapons in Syria can be effectively overseen by the United Nations Security Council.

But a more consequential test for multilateral cooperation is looming, one that will shape the world for decades to come. That is whether, by 2015, the international community — from the halls of U.N. headquarters to the poorest corners of the globe — can identify our shared challenges and collectively act to solve them.

2015 marks the deadline for important negotiations on development, climate change, finance and trade. And the jury is still out on whether the world’s nations can reach agreement in any of these areas — much less all of them. Given the enormous stakes involved, all the U.N. member states must seize this opportunity to revive global partnership.

We need to support anti-poverty measures that work

The U.S. Census Bureau’s release of 2012 poverty data tells us once again that millions of Americans in our wealthy nation continue to struggle at the economic margins, with no signs of progress. The nation’s just-released official poverty rate in 2012 was 15.0 percent, which represents 46.5 million people living at or below the poverty line. This marks the second consecutive year that neither the official poverty rate, wages, nor the number of people in poverty was statistically different from the previous year’s estimates.

Have we become so used to these annual reports that we no longer pay much attention? I hope not.

Research by the University of Michigan’s H. Luke Shaefer and Harvard’s Kathryn Edin shows a sharp rise in the number of people living on less than two dollars per person per day — a World Bank standard used to document global poverty. But in this case, these people live in the U.S. For some of our fellow citizens, two dollars is expected to buy, well, everything.

First chapter for ending extreme poverty

Children queue for free porridge at a local government feeding program in Tondo, Manila, Oct. 29, 2011. REUTERS/Erik De Castro

President Barack Obama believes it. President Ellen Johnson Sirleaf of Liberia believes it. I believe it, too: By 2030, we can eradicate extreme poverty.

This is not a hollow platitude. The generations living today are the first in human history that could eliminate extreme deprivation and hunger. It is critical that all nations strive to meet this goal. Not only for our own security, though we know that a more prosperous world is more stable, but because ending extreme poverty is the right thing to do.

We must focus on the working poor

In many respects the economy is healing, as both the unemployment rate and hiring statistics slowly improve. But there are growing numbers of Americans being left out.

These are not just the unemployed. Rather they are families that, despite having a working adult in the home, earn less than twice the federal poverty income threshold – a widely recognized measure of family self-sufficiency. They are working, but making too little to build economically secure lives. And their number has grown steadily over the past five years.

They are cashiers and clerks, nursing assistants and lab technicians, truck drivers and waiters. Either they are unable to find good, full-time jobs, or their incomes are inadequate and their prospects for advancement are poor.

Government can reduce inequality, but chooses not to

This essay is a response to the Reuters special report The Unequal State of America.

Income inequality is a difficult story to get your arms around, and I think Reuters has done a splendid job. I was particularly intrigued to read about the hollowing out of middle-class jobs within the federal government in D.C. I wasn’t aware that the government had so thoroughly followed the private sector’s lead in this regard.

It is important to acknowledge that while government has played an enormous role in creating the trend toward growing income inequality in the U.S., surprisingly little of that role has involved the most obvious ways government affects income distribution, i.e., taxes and benefits. Overall, the federal government redistributes about one-quarter less today than it did in 1979. But the inequality trend is more pronounced when you look at changes in income before taxes and benefits are taken into account. For example, the share of the nation’s income going to the top 1 percent of households more than doubled from 1979 to 2008. For years economists concluded that such findings meant that income inequality was market-driven. But they failed to ask whether government policies might be shaping the course of the market.

Where is Obama’s promised minimum-wage hike?

During the 2008 campaign, presidential candidate Barack Obama made a pledge to raise the minimum wage to $9.50 per hour by 2011. Promises like this one inspired a generation of young voters, excited long-neglected progressive voters and gave hope to millions of his supporters across the country.

President Obama ran a campaign of soaring rhetoric and uplifting ideas. Amidst two unpopular wars, a rapidly deteriorating financial crisis and the wildly unpopular presidency of George W. Bush, Americans were desperate for a change. He was viewed as a “transformational” candidate, a president who would turn the page on the stagnant politics of Washington.

It is now four years later, and there has been no increase to the minimum wage. There has been no congressional vote, much less a whisper from the White House on the minimum wage.

Good riddance to the tax refund loan

Tax season is full of familiar rituals – mounds of receipts on the kitchen table, midnight news reports from the post office and, of course, all those wacky come-ons from tax preparers promising easy money.

There are the Liberty Tax guys dancing at strip malls in Statue of Liberty costumes. The “FA$T CA$H” banners plastered on storefronts. And in a cult classic of advertising, all over the South there were those ridiculous Mo’ Money Taxes commercials in which buffoonish Southerners bumble through financial crises. Each one ends with advice on how to avoid a similar mess: “Just come on down to Mo’ Money!”

All of these campy promos are actually selling costly loans against your own money, but they have in fact generated lots of easy cash – for the lender, if not the borrower.

Refund anticipation loans, as they are called, have been risk-free business for most of the past decade. Lenders offer roughly 10-day advances of tax refunds, for which they charge exorbitant subprime fees. More than 12 million taxpayers got anticipation loans in their peak year, in 2004, according to the National Consumer Law Center. IRS data shows that over 90 percent of people who applied in 2010 were low-income.

Don’t be fooled, though, refund anticipation loans are no fringe market. Throughout the so-called boom years, the same banks that sit at the center of our high-end economy spread this fraud-ridden industry throughout its bottom tier. Take for instance Mo’ Money, which has faced several fraud probes. Until 2010, its storefronts were actually agents of JPMorgan Chase. The bank backed roughly 13,000 independent preparers in this business.

A better way to measure poverty

USA/

By Stephen Crawford and Shawn Fremstad
The opinions expressed are their own.

The newly released poverty statistics paint a grim picture. Last year 43.6 million Americans — more than 14 percent — had income below the federal poverty line. But those numbers only give a partial picture of the problem.

That’s because real poverty is not just about income, but also consists of assets and liabilities. The official poverty numbers look only at income and use an unrealistically low estimate for what it takes to make ends meet.

It’s time to take assets into account when measuring poverty.

As Nobel laureates Joseph Stiglitz and Amartya Sen, along with economist Jean-Paul Fitoussi, write in their new book Mis-measuring Our Lives, “Income and consumption are crucial for assessing living standards, but in the end they can only be gauged in conjunction with information on wealth.” This point is just as relevant to poverty measurement as it is to other measures of living standards.

from Africa News blog:

Time to stop aid for Africa? An argument against

Earlier this month, Zambian economist Dambisa Moyo argued that Africa needs Western countries to cut long term aid that has brought dependency, distorted economies and fuelled bureaucracy and corruption. The comments on the blog posting suggested that many readers agreed. In a response, Savio Carvalho, Uganda country director for aid agency Oxfam GB, says that aid can help the continent escape poverty - if done in the right way:

In early January, I travelled to war-ravaged northern Uganda to a dusty village in Pobura and Kal parish in Kitgum District. We were there to see the completion of a 16km dirt road constructed by the community with support from Oxfam under an EU-funded programme.

The road is bringing benefits in the form of access to markets, education and health care. Some parents say their daughters feel safer walking to school on the road instead of through the bushes. Many families have used the wages earned from construction work to pay for school fees and medical treatment. This is the impact of aid.

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