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Making a mountain out of a molehill (and vice versa)

Post on October 31, 2007 by 15 Comments »

 Yesterday's report about the growing number of poor kids in the public schools (see the blog post below) and the coverage it received in the Raleigh News & Observer has raised the hackles of that vigilant voice for definitional purity, John Hood of the Locke Foundation. According to Hood, the story was "great big, front page blooper" and "ludicrous" because the reporter had the temerity to be insufficiently precise to please him in her use of the terms "poor," "low income," and "poverty line."

This is a classic case of Hood making a mountain out of a molehill – or, as he is wont to do in the case of the poverty numbers, a molehill out of a mountain.

What the report said is that the number of poor kids in schools is growing dramatically. We know this because the number of kids whose families' incomes are low enough to qualify for the federal free and reduced price school meals program has grown. While it is true, as Hood claims, that there is a difference between the incomes at which someone qualifies for school meals assistance and the point at which one falls below the official federal poverty level (the meals threshold is higher), there is no doubt that the kids in the meals program are "poor" or "low income" or whatever you want to call them.

It is well-documented that the official federal poverty levels have been obsolete for decades — if they ever were relevant. That's why program after program (like the meals program) uses a multiplier when calculating eligibility (150%, 185%, 200%, etc…). According to this report, it takes 231% of the federal poverty level to have a "living income" in North Carolina.

If you have any doubts about whether or not the kids receiving free and reduced price meals are "poor" or "low income," check out the official eligibility numbers from the Wake County Public Schools. John Hood may think that families of four living on less than $38,203 a year are doing just swimmingly, but in the real world, such folks are clearly struggling and, regardless of the official federal poverty level, living below "a" poverty line, if not "the" poverty line. 

That the number of such families is growing and making up a larger and larger percentage of our public schools is, of course, a scandal and, in large measure, the direct result of market fundamentalist policies championed by people like Milton Friedman, Ronald Reagan, and George W. Bush, whose "virtues"  Hood and his staff so regularly extol.    

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Comments (Closed):15

  1. Brian
    October 31, 2007 at 11:45 am

    “That the number of such families is growing and making up a larger and larger percentage of our public schools is, of course, a scandal and, in large measure, the direct result of market fundamentalist policies…”

    Please explain for your readers how greater economic liberty results in higher rates of poverty.

    I will repeat part of my comment from your last post that I would be interested to see any research showing a correlelation of nations with higher levels of government wealth redistribution experiencing higher wealth creation and lower poverty.

  2. Eric
    October 31, 2007 at 12:09 pm

    the meaning of “economic liberty” is not at all transparent. Does it mean the freedom as an employer to pay the lowest wage you can get someone to work for?

    in this case it seems to mean putting education under the invisible hand of the profit motive. our society already submits re-education (the prison system) to administration by for-profit companies. why not the schools? We also do the armed forces that way now, and it’s certainly turned out well. it seems pretty obvious that not everything ought to be done by whoever thinks they can make the most money doing it.

    what do you mean by ‘government wealth redistribution’ ? progressive taxes? contract monopolies? our government (all governments do) distributes wealth in various directions all the time.

  3. Brian
    October 31, 2007 at 1:27 pm

    For a pretty decent example of “economic liberty,” this should help:
    http://www.heritage.org/index/

    Government wealth redistribution simply means when government takes money from some people and gives it to other people – as opposed to tax revenues being spent on the core functions of government such as preserving our liberties.

    It is true that governments distribute wealth in various directions all the time, however those countries in which this activity is the least prevelent are the most prosperous and enjoy the highest standard of living.

  4. Jerimee
    October 31, 2007 at 5:12 pm

    You’re linking to the Heritage Foundation? Wouldn’t that be the union bashing Heritage Foundation? The Heritage Foundation that promotes children under the age of seven being working in sweatshops “in certain situations?” Or the Heritage Foundation that is in favor of outsourcing and opposes even the lowest minimum wage?

    I don’t think the fat cats at the Heritage Foundation are lacking much in the “economic liberty” department.

    Oh, but I’ve forgotten: “the core functions of government is preserving our liberties.”

    The excessive liberties of Enron and Wal-Mart directly impose upon those of working people.

  5. Hugh Beaumont
    October 31, 2007 at 6:12 pm

    … however those countries in which this activity is the least prevelent are the most prosperous and enjoy the highest standard of living. …

    Says who?

    Check out:a FOR-PROFIT not a governmental list, where the the first US City comes in at a robust #27:
    http://www.mercer.com/referencecontent.jhtml?idContent=1128060

    or
    http://business.baylor.edu/Steve_Gardner/LECOUT02A.html
    - again, the presumed US advantage is not so clear

    AND, for a complete interview where no less a capitalist than Warren Buffet points out how bad the tax system is:
    http://www.cnbc.com/id/21553857

  6. Brian
    November 1, 2007 at 9:25 am

    Ward – I think you’re being a bit hard on the Beav.

    I love the link to the goofy “quality of living” survey as some sort of proof – as if that will trump hundreds of years of evidence and proven economic theory.

    Jerimee – already resorting to the “if you can’t attack the message, attack the messanger” card? Pretty weak.
    By the way, Wal-Mart “imposed” a bunch of groceries at very affordable prices for my family last week – how will we survive?

  7. gregflynn
    November 1, 2007 at 10:01 am

    I think the European Union trumps your theories.

    As for Wal-Mart, you pay the balance in taxes for employees’ health needs.

  8. Eric
    November 1, 2007 at 12:49 pm

    i might agree that ‘quality of living’ is a fuzzy measure, but “hundreds of years of evidence and proven economic theory” is…well…an ideological fantasy.

    Economics is a developing social science. If you’re going to pretend that it ended with Adam Smith, then you can hardly complain when other people pretend that it ended with Karl Marx.

  9. Brian
    November 1, 2007 at 2:49 pm

    Eric – No one is pretending economics “ended with Adam Smith.” Quite the contrary, we can simply observe the economic growth of nations over the last few centuries and the picture is quite clear: nations with freer markets and less government interference have seen long-term growth trends far superior to those with the opposite. It’s just reality – no “fantasy.”

    greggflynn – do you really think the EU trumps free-market economic theory with their double-digit unemployment, per capita incomes well below the U.S. and relatively stagnant growth rates? Furthermore, get over the Wal-Mart fixation – their health benefits are equal or superior to the retail industry average, and many of their employees are already enrolled on a family member’s insurance anyway. (findings from this book:)
    http://www.aei.org/books/filter.all,bookID.867/book_detail.asp

    I will attempt again to ask the question from my original comment: “Please explain for your readers how greater economic liberty results in higher rates of poverty.”

  10. gregflynn
    November 1, 2007 at 3:55 pm

    Of 27 EU member states only 2 have double digit unemployment, Poland and Slovenia. The current average unemployment rate is 7%. The EU continues to absorb and improve lower performing countries. The EU tends to have larger and longer lasting safety nets.

    US growth is fueled with heavy borrowing, particularly from China which gets the cash from trading with the US including retailers like Wal-Mart. The more you spend at Wal-Mart, the more they can lend back to us. Eventually the bubble will burst.

    Here’s an alternate view of Wal-Mart employee health benefits

  11. Brian
    November 2, 2007 at 10:32 am

    7% unemployment? In the U.S. we call that a recession.

    The fear over the “heavy borrowing” from China is the result of an economic fallacy addressed here:

    http://cafehayek.typepad.com/hayek/2004/12/the_writer_who_.html

  12. gregflynn
    November 2, 2007 at 9:51 pm

    The seasonally adjusted unemployment rate in the European Union in June 2007 was 6.9%. The rate varies widely by member state. In comparison the United States had an unemployment rate of 4.5% and Japan a rate of 3.8% measured by Eurostat.

    3.3% Netherlands
    3.5% Denmark
    4.0% Ireland
    4.3% Austria

  13. gregflynn
    November 3, 2007 at 5:46 am

    Brian, you presume a conflation of debt with deficit, an assertion I have not made.

  14. Brian
    November 6, 2007 at 10:17 am

    Although the current unemployment rates are but a snapshot and don’t demonstrate any trends, let’s have a quick look at the Heritage rankings on economic freedom:

    http://www.heritage.org/research/features/index/countries.cfm

    Compare to your data:
    “Of 27 EU member states only 2 have double digit unemployment, Poland and Slovenia.” These countries rank 87 and 58, respectively.

    “Japan a rate of 3.8% measured by Eurostat.

    3.3% Netherlands
    3.5% Denmark
    4.0% Ireland
    4.3% Austria”

    Each of these nations rank in the top 25.

    Now, yet again..
    I will attempt again to ask the question from my original comment: “Please explain for your readers how greater economic liberty results in higher rates of poverty.”

  15. gregflynn
    November 8, 2007 at 6:38 am

    Regarding borrowing from China

    Dollar’s fall trips up stocks
    Chinese threaten to ditch weakening US currency