The Federal Government Didn’t Lose the War on Poverty. It Retreated.

U.S. Poverty Rate, 1959 to 2009

In 1904, half the population of New York City lived below the poverty line.

Half. Can you imagine? The poor were so numerous that they nearly outnumbered everyone else.

Today, less than 20 percent of New Yorkers live in poverty. That’s still a serious problem, but it’s a far cry from 50 percent.

Clearly, we did something right.

But in today’s political arena, we don’t talk about what we did right. We talk about what we’re doing wrong. We spend so much time talking about our problems and failures that we seem to have forgotten our nation’s great victories.

This historical amnesia is a dangerous mistake. It poisons our hearts with pessimism. It blinds us to the lessons and solutions we need. Most New Yorkers have no idea how prevalent poverty used to be — or how their predecessors made it go away.

And they’re not the only ones. “We have spent $15 trillion from the federal government fighting poverty,” said Rep. Paul Ryan on Fox News last month, “and look at where we are, the highest poverty rates in a generation, 15 percent of Americans live in poverty.”

Ryan is speaking on behalf of millions of Americans who believe that the War on Poverty was a failure, when in fact it’s one of the greatest success stories in our nation’s history.

If Ryan thinks 15 percent is high, he should go back a hundred years when the poverty rate was three times that. Back then, the government didn’t officially measure poverty, but historians have reconstructed close approximations based on the cost of living and the distribution of household income in those days. Thanks to their calculations, we now know that 44 to 45 percent of Americans lived in poverty in the early 1910s.

A generation later, after the Great Depression and World War II, the poverty rate had fallen to 22 percent.

Can you imagine? They cut the poverty rate in half — from 44 percent to 22 percent — in only a couple decades.

As far as wars go, that’s an astonishing victory. It should be celebrated alongside Gettysburg and Normandy. It should be commemorated and committed to our children’s memories. It should be studied by our civilian leaders in the same way that battlefield strategy is studied by our military leaders.

On this particular battlefield, the strategy that paid off was the New Deal, President Franklin D. Roosevelt’s ambitious series of programs that created jobs for the unemployed, Social Security for the elderly, regulation for the bankers, a minimum wage for the workers, and legal protections for the labor unions.

But the war was not over. One in five Americans still lived below the poverty line. And so, on January 8, 1964, President Lyndon B. Johnson stood before Congress and made it official: “This administration today, here and now, declares unconditional war on poverty.”

Congress proceeded to embark on the Great Society, patching the holes left in Roosevelt’s New Deal. They expanded health insurance with Medicare for the elderly and Medicaid for the poor. They increased Social Security benefits and education funding for poor school districts. They established civil rights and a permanent food stamp program. They invested in urban redevelopment, rural development, and public transportation.

A decade later, the poverty rate bottomed out at 11 percent.

For the second time in half a century, the United States had cut the poverty rate in half — from 22 percent to 11 percent. And just as before, this extraordinary victory faded from our memories, and the policies that spawned it faded from our favor. We allowed labor laws to go unenforced, public investment to decline, and the minimum wage to stagnate even as the cost of living soared. We deregulated banking, and we stopped trying to get enough jobs for the unemployed or enough education funding for poor school districts.

So it’s no surprise that the poverty rate rose to 15 percent during the Great Recession. A century of progress has been forgotten.

Eliminating that final 15 percent is one of the great tasks before us in the 21st century. As we craft new solutions, let us not forget to preserve the old ones — and to honor the memory of those who worked so hard to give us so much.

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This op-ed was published in Friday’s South Florida Sun-Sentinel.

Do You Think That I’m a Crook?

by Norman Horowitz

About forty years ago, I returned to Screen Gems International Television (Columbia Pictures) following a three year hiatus at CBS and a nascent Viacom.

Since I had worked at Screen Gems before, I was well prepared to go to London and make a deal for a group of features because the company needed a few paltry millions in order to “make its quarter.”

I ended up making a five or six million dollar deal with the commercial broadcasters in the UK. In order to do this, I negotiated a price for each and every movie in the “package.”

I returned home and submitted the deal to the accounting department, as was the case with all deals that included the negotiated price for each title.

A few days later, one of the senior accounting executives arrived in my office and handed me a sheet of paper indicating the value of each picture in the UK deal and told me to resubmit his per-picture price. He told me that his prices would reduce our obligations to our producers by about $450,000.

I refused to do what he asked. He threatened to go to our president, who would order me to do what he asked.   Continue reading “Do You Think That I’m a Crook?”

Don’t Blame the Fed for Holding Back the Recovery

Rick Perry must not spend much time in banks.

How else can you interpret his accusation that Ben Bernanke, the Chairman of the Federal Reserve, “is almost treasonous” for “printing money”?

He must think that banks spend every dollar they get from the Fed. He must think that banks depend solely on the Fed for funding. Because that’s the only way that “printing money” — if that’s even what you could call what the Fed does — could result in any damage for the United States.

Rick Perry lives in the Bizarro World of Banking.

Here on Planet Earth, U.S. banks are holding $1.6 trillion in excess reserves. That’s $1.6 trillion that they’re not spending or loaning or investing. It’s just sitting there. Not doing anything for the economy.

Just to give you a little context, before this recession, excess reserves had never been higher than $20 billion.

In other words, most of the money that Perry is so angry about is just minding its own business. Nobody is spending it. Nobody is borrowing it. It’s not contributing to inflation or the depreciation of the dollar. It’s not eroding your purchasing power.   Continue reading “Don’t Blame the Fed for Holding Back the Recovery”