This is only the beginning. With the world's economists recently declaring the dollar in danger of a serious fall, we could see poverty numbers that make the Great Depression of the Twentieth Century look like a trip to summer camp.

Currencies at risk

"At some point, the US dollar has to come down. Indeed, it already has, having come down by almost 20 per cent against a basket of the world's chief currencies since its peak in early 2002. Economists believe it has to fall further if the country's chronic current account deficit - now in excess of 5 per cent of its gross domestic product - is to be reversed. But it is in the interest of both the US and its trading partners that this adjustment occurs slowly and deliberately, not suddenly and precipitously."

This is why job losses are slow and steady, so that the economy doesn't suffer a serious jolt and cause a stampede to the investor exits. Either way, however, we're going down, and we can thank the Bush (mis)Administration for this.

What? Can't hear you. It's Friday afternoon.

For some historical perspective, the poor in 2002 have real incomes that approximately match the top 5% in 1900. Damn those high-income people for keeping the low-income people in the gutter.

34 million people did suffer under such conditions in 2002. But most of these low income-earners do not remain with such low incomes year-after-year.

There are two types of poor people: those who don't and won't move across income brackets, and those who regularly do. If the 34 million could be broken down into these components, and the stagnant component was growing, I think we'd have a basis for Bush not wanting you to see these numbers.

However I agree that "housing a family of three on a little more than $14,000 per year is nearly impossible in most cities," as long as we believe the poorest deserve the much higher square-foot per person. The wretched urban poor in Soviet Russia would sleep 3 to a room; we expect much more for our poor.

For a perspective on wealth disparity in the US look at
http://tiger.berkeley.edu/sohrab/politics/wealthdist.html
and
http://www.ufenet.org/press/archive/Pre_1999/forbes_400_study.html
and
http://faireconomy.org/

Kevin- Balderdash.

I rent a single room in a shared apartment in New York City for $1050 per month, or over $12,000 per year. So a family of three sleeping three to this room would still find it almost impossible to survive even if they crowded in.

In many cases, housing is far less affordable than in 1900. Yes, the poor 100 years ago were in some cases more desperately poor, but the idea that the poor today are better off the wealthy then is ridiculous.

In fact, many of the better off New Yorkers live in the houses that the poor inhabited back then-- just look around the gentrified Lower East Side.

The poor themselves are being pushed farther and farther away from their jobs in the city-- paying a greater and greater part of their income for housing.

I'm sure that Kevin would love to try living that way just to show that it can be done. To be fair to Kevin, it's true that Russians live in higher densities than Americans do, and once we were more adaptable than we seem to be today. Abe Lincoln's childhood cabin is smaller than most apartments anywhere.

But this doesn't excuse the disregard of the real issue, which is that MORE Americans are reaching this economic bottom, at a noticably increasing rate. This is the real issue, Kevin - care to address it?

and many of the poor live in the former dwellings of the rich. look around midway plaissance in chicago. those subdivided tenements used to be the mansions of the mccormacks, swifts and armours. such is progress!

yes, history is such a pitiable spectacle. the rich of 1900 were so deprived. they could not even afford a t.v., whereas nowadays the poor can afford a pawn shop model. they could not afford an automobile, whereas nowadays even some poor folk can afford a 12 year-old beater, one that will pass inspection if their lucky. and back then there was no szechuan take-out; their palates were terribly starved. and think of the educational deprivation of rich folk back then, what little knowledge of science or history they could afford. they had never even heard of einstein or the ozone layer; they new nothing of the great depression or martin luther king,jr. life was just so much more time-consuming and laborious back then. why, they couldn't even afford microwave ovens! they had to hire servants to cook there meals! fortunately for them wages were much lower back then. perhaps if modern poor people weren't so uppity, we could improve the standard of living.

I'm sure that Kevin would love to try living that way just to show that it can be done

Why don't you tell that to my wife, who grew up in Soviet Russia, and lived with her Mother, Father, and Grandparents in a single room in Leningrad. She came to this country (with its wretched poor) to escape that hellish existence. I agree, 5 to a room is not how people want to live.

Our standards are so much higher than they were in the past. We wouldn't want the poor to live in the "affordable housing" of 1900.

the idea that the poor today are better off the wealthy then is ridiculous.

I disagree--firmly. Of course the wealthy then had servants and the like, but it is not ridiculous at all.

In terms of life expectancy, quality of life, amount and diversity of diet, the quantity and quality of clothing, quality of healthcare (even the emergency-room dependent are immeasurably better off than the rich man of 1900), etc.

The economic bottom is rising in innumerable ways that the term "better off" fails to capture.

The poor themselves are being pushed farther and farther away from their jobs in the city-- paying a greater and greater part of their income for housing.

I don't have the long-term data to demonstrate or refute this. I tend to think this is true over recent short-term periods, but false over the past century.

It's funny-- I was just watching old episodes of Upstairs, Downstairs, the classic BBC series about the class divide between the rich and working class of that period in the past.

And the idea that the wealthy then were worse off than the poor of today is ridiculous-- yes, technology may in some ways make everyone a bit better off, but for day-to-day life, the rich then and today did not and do not face the racking economic insecurity and base indignities that the poor have faced across time.

Don't even try to tell me that a mother unable to afford decent food or child care or health care for her child is better off than the pampered wealthy of the Victorian Era.

I liked these comments--not in full text--commenting on Shrub and globalization...

Crisis of the Globalist Project
and the New Economics of George W Bush

by Walden Bello
July 15, 2003
(Prepared for the McPlanet Conference, Berlin, June 27, 2002. The original version of this piece will appear in the Fall issue of New Labor Forum.)THE NEW ECONOMICS OF THE GEORGE W. BUSH

The interlocking crises of globalization, neoliberalism, capitalist legitimacy, and overproduction provide the context for understanding the economic policies of the Bush administration, notably its unilateralist thrust. The globalist corporate project expressed the common interest of the global capitalist elites in expanding the world economy and their fundamental dependence on one another.

However, globalization did not eliminate competition among the national elites. In fact, the ruling elites of the US and Europe had factions that were more nationalist in character as well as more tied for their survival and prosperity to the state, such as the military-industrial complex in the US. Indeed, since the eighties there has been a sharp struggle between the more globalist fraction of ruling elite stressing common interest of global capitalist class in a growing world economy and the more nationalist, hegemonist faction that wanted to ensure the supremacy of US corporate interests.

As Robert Brenner has pointed out, the policies of Bill Clinton and his Treasury Secretary Robert Rubin put prime emphasis on the expansion of the world economy as the basis of the prosperity of the global capitalist class. For instance, in the mid-1990s, they pushed a strong dollar policy meant to stimulate the recovery of the Japanese and German economies, so they could serve as markets for US goods and services. The earlier, more nationalist Reagan administration, on the other hand, had employed a weak dollar policy to regain competitiveness for the US economy at the expense of the Japanese and German economies. With the George W. Bush administration, we are back to economic policies, including a weak dollar policy, that are meant to revive the US economy at the expense of the other center economies and push primarily the interests of the US corporate elite instead of that of global capitalist class under conditions of a global
downturn.

Several features of this approach are worth stressing:

- Bush’s political economy is very wary of a process of globalization that is not managed by a US state that ensures that the process does not diffuse the economic power of the US. Allowing the market solely to drive globalization could result in key US corporations becoming the victims of globalization and thus compromising US economic interests. Thus, despite the free market rhetoric, we have a group that is very protectionist when it comes to trade, investment, and the management of government contracts. It seems that the motto of the Bushites is protectionism for the US and free trade for the rest of us.

- The Bush approach includes a strong skepticism about multilateralism as a way of global economic governance since while multilateralism may promote the interests of the global capitalist class in general, it may, in many instances, contradict particular US corporate interests. The Bush coterie’s growing ambivalence towards the WTO stems from the fact that the US has lost a number of rulings there, rulings that may hurt US capital but serve the interests of global capitalism as a whole.

- For the Bush people, strategic power is the ultimate modality of power. Economic power is a means to achieve strategic power. This is related to the fact that under Bush, the dominant faction of the ruling elite is the
military-industrial establishment that won the Cold War. The conflict between globalists and unilateralists or nationalists along this axis is shown in the approach toward China. The globalist approach put the emphasis on engagement with China, seeing its importance primarily as an investment area and market for US capital. The nationalists, on the other hand, see China mainly as a strategic enemy, and they would rather contain it rather than assist its growth.

- Needless to say, the Bush paradigm has no room for environmental management, seeing this to be a problem that others have to worry about, not the United States. There is, in fact, a strong corporate lobby that believes that environmental concerns such as that surrounding GMOs is a European conspiracy to deprive the US of its high tech edge in global competition.

If these are seen as the premises for action, then the following prominent elements of recent US economic policy make sense:

- Achieving control over Middle East oil. While it did not exhaust the war aims of the administration in invading Iraq, it was certainly high on the list. With competition with Europe becoming the prime aspect of the trans-Atlantic relationship, this was clearly aimed partly at Europe. But perhaps the more strategic goal was to preempt the region’s resources in order to control access
to them by energy poor China, which is seen as the US’ strategic enemy.

- Aggressive protectionism in trade and investment matters. The US has piled up one protectionist act after another, one of the most brazen being to stall any movement at the WTO negotiations by defying the Doha Declaration’s upholding of public health issues over intellectual property claims by limiting the loosening of patent rights to just three diseases in response to its powerful pharmaceutical lobby. While it seems perfectly willing to see the WTO negotiations unravel, Washington has put most of its efforts in signing up countries into bilateral or multilateral trade deals such as the Free Trade of the Americas (FTAA) before the EU gets them into similar deals. Indeed the term “free trade agreements” is a misnomer since these are actually preferential trade deals.

- Incorporating strategic considerations into trade agreements. In a recent speech, US Trade Representative Robert Zoellick stated explicitly that “countries that seek free-trade agreements with the United States must pass muster on more than trade and economic criteria in order to be eligible. At a minimum, these countries must cooperate with the United States on its foreign policy and national security goals, as part of 13 criteria that will guide the US selection of potential FTA partners.” New Zealand, perhaps one of the most doctrinally governments to free trade, has nevertheless not been offered a free trade deal because it has a policy that prevents nuclear ship visits, which the US feels is directed at it.

- Manipulation of the dollar’s value to stick the costs of economic crisis on rivals among the center economies and regain competitiveness for the US economy. A slow depreciation of the dollar vis-à-vis the euro can be interpreted as market-based adjustments, but the 25 per cent fall in value cannot but be seen as, at the least, a policy of benign neglect. While the Bush administration has issued denials that this is a beggar-thy-neighbor policy, the US business press has seen it for what it is: an effort to revive the US economy at the expense of the European Union and other center economies.

- Aggressive manipulation of multilateral agencies to push the interests of US capital. While this might not be too easy to achieve in the WTO owing to the weight of the European Union, it can be more readily done at the World Bank and the IMF, where US dominance is more effectively institutionalized. For instance, despite support for the proposal from many European governments, the US Treasury recently torpedoed the IMF management’s proposal for a Sovereign Debt Restructuring Mechanism (SDRM) to enable developing countries to restructure their debt while giving them a measure of protection from creditors. Already a very weak mechanism, the SDRM was vetoed by US Treasury in the interest of US banks.

- Finally, and especially relevant to our coming discussions, making the other center economies as well as developing countries bear the burden of adjusting to the environmental crisis. While some of the Bush people do not believe there is an environmental crisis, others know that the current rate of global greenhouse emissions is unsustainable. However, they want others to bear the brunt of adjustment since that would mean not only exempting environmentally inefficient US industry from the costs of adjustment, but hobbling other economies with even greater costs than if the US participated in an equitable
adjustment process, thus giving the US economy a strong edge in global competition. Raw economic realpolitik, not fundamentalist blindness, lies at the root of the Washington's decision not to sign the Kyoto Protocol on Climate Change.

I'm going to have to side with Kevin on this one.

I tend to think of it not in cross-wise comparison (the rich of then worse off than the poor today) but in direct comparison and quality. The rich of 1900 had means to access top health care, housing, jobs and more that the poor absolutely did not. They could afford lavish trips, staying in the finest hotels, etc. Homes could be built in multiple places. The poor of 1900 in America were all pretty "desperately" poor as you say. By comparison, the rich are still partaking in the cream of the goods and services crop, while the poor no longer suffer (as a group, though anecdotally and statistically there are always those on the tails) entirely without medical treatment, living in condemned homes fending off rats and insects, no ability to clothe the family, etc. While yes, there are still cases like this, it does not define the demographic of "poor" the way it once did. Nor do our poor look anything like the poor in other countries -- though they did in 1900. I find it hard to say that the truly rich live vastly better lives today than in 1900 (since a number of things like medical improvements have had impact across all areas; and life expectancy differences have closed between the rich and the poor), though a great proportion of the poor in the US actually do.

Since the rich already had access to better living, the improvements in technology have had a larger impact on the poor and can't be sloughed off as making things "a bit better off". Changes in water management, sewer systems, and minimal housing standards make large differences in quality of life. And they're things that the poor benefit from far more than the rich (sewer system clean up and refinement alone meant fewer people living in constant contact with human waste).

I think Kevin has a point too. The financial gap between the rich and the poor may be greater, but the lifestyle gap isn't. The poor have cars, cellphones, televisions, etc., the rich just have much much nicer ones. I read somewhere (though I don't have the reference) that in 1900, if you could afford to eat meat more than once a week you were considered wealthy. But I would point out that any differences are pretty much meaningless. Studies show that from a happiness perspective, people don't care what they have, only what they have relative to everyone else. So while a capitalist society may make everyone's life better overall, most people would be happier if society as a whole were not as great but more egalitarian. We may all be equally miserable then, but at least there wouldn't be jealousy.

There is little question that fewer people as a percentage of the population are in dire poverty compared to 1900, but it's less clear that the very poor are better off. Yes, the poor (sometimes) have cars, but they also live in a built environment that requires them to spend the money to have one, rather than on food for their families. Housing costs have remained a large and crushing cost for the poor-- the reason so many are on the edge of homelessness or in shelters (hardly a sign of easy living).

The poor of 1900 probably were less crowded in and spent less of their income for housing. See this from a somewhat conservative source:

"Even in the poorest neighborhoods, housing, if modest, was rarely abject. A 1907 report by the U.S. Immigration Commission, for instance, found that in the eastern cities, crowding in such neighborhoods was by no means overwhelming, with 134 persons for every 100 rooms. “Eighty-four in every 100 of the homes studied are in good or fair condition,” wrote the commission. True, many lived without hot water or their own bathrooms. But rents were cheap. A 1909 study by the President’s Homes Commission of Washington, D.C., found that a majority of the 1,200 families surveyed paid but 17.5 percent of their income for housing costs."

(Actually the article supports some of my other hobbyhorse that zoning laws are a chief villian in preventing more affordable housing, but the lack of decent housing in core areas where people work remains today.)

Aside from health care- which benefits everyone today-- it's unclear that the very poor aren't more under pressure today to feed and house their families than in 1900.

At another website in a discussion of income distribution figures, I said comparing income distribution in 1900 to that of 2000 was like comparing Aztec to Mexican society. In fact, since 1900, a vast degree of technical progess has been achieved and a large increase in consumption goods have been produced, together with real improvements in conceptions and practices of equity -(just think of race)-, such that all population groups, if not all individuals, are better off. But leaving aside the fact that growth in consumption demand is a functional requirement of capital reproduction, the appropriate standard of comparison is with the real potentials of a given era. To cite a static statistical picture of a past era without considering how life was actually lived in that era to justify current practices and justifications is to take refuge in abstraction for factitious and fallacious purposes: viz. to deny the real difficulties and privations of contemporary poor and disadvantaged populations and communities, (i.e. those for whom something could perhaps be done about it), while ignoring the real predations and privileges of the currently rich and powerful by casting a pall of indifferent tolerance over remediable and reproducible inequities, which appeals to the resentment underlying middle class self-complacency. At any rate, to get down to brass tacks, in 1900 the large majority of the population in the U.S.A was still agrarian, which means that much of the means of subsistence of the poor was not market transacted, while the urban labor force typically worked for up to 80 hours per week. Yes, there has been progress, but the question is can there still be progress or is the status quo simply the summit of human attainment?

"The poor will always be with you". This was not meant as an economic prediction, but as a spiritual injunction.

Nathan,

Thanks for your comments.

Don't even try to tell me that a mother unable to afford decent food or child care or health care for her child is better off than the pampered wealthy of the Victorian Era.

Clearly you're correct with this example--unless both the child and Victorian had to live through a summer in DC, the former with air conditioning--the latter without, or both were to get sick with something like the flu. If a victorian era child were to get an ear infection, what was the probability of his losing hearing compared to the poor child of today?

You get my point, and I get yours. I don't want to cherry-pick comparisons. The rich will always have the benefits of being rich. But my point is that the poor today have tremendously more than the poor _and the rich_ of 1900. Clearly today's poor are not better off than victorian rich in all ways. At a minimum, the poor today to not have all the costs of being poor in 1900.

Another question: For the poor, has economic insecurity increased or decreased since 1900? What data do we have to answer this question?

It is funny how a retired couple with Millions could be counted as living in poverty. If they had a bad year in the stock market, maybe they had losses and it even went against their Social Security earnings. Therefore they made $8000, they are counted as in "poverty", even though they have net worth of 2 million.

This is the nation of the haves and the haves lots more.

The "poor" in America are DARN well off. 27% have TWO cars. Not one but TWO! 75% have VCRs! WHAT? Hey if you are in poverty, what the heck do you have a VCR for? 41% owner their own homes!!!!

http://www.ncpa.org/pd/economy/pdeco/sept98u.html