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Thursday, July 21, 2011

The World is Flattened
by David Atkins ("thereisnospoon")

Much has been made of the Heritage Foundation's recently released report on poverty in America from a couple of days ago. The report declares that America's poor aren't really poor, because many of them have the audacity to possess such luxuries as air conditioning, a stove and a refrigerator--which in Tea Party parlance means both that they clearly lack the incentive to work harder to escape their pretend squalor, and that America's billionaires are still clearly paying too much in taxes to support the lucky duckies. Here's a real, honest-to-goodness sentence from the report:

The actual living conditions of America’s poor are far different from these images. In 2005, the typical household defined as poor by the government had a car and air conditioning.

As outrageous as this piece of propaganda may be, in blog time it's already yawn-inducing ancient news as we train our eyes on the next twist in the ongoing default crisis drama.

But one salient point has gone somewhat unnoticed nonetheless. Most of the critiques of the report center around the idea that diachronic comparisons of poverty are unrealistic: e.g., the fact only the very wealthy had indoor plumbing in the 1830s doesn't mean that a flush toilet should be considered a luxury today. Few white collar and even a significantly decreasing number of blue collar jobs in America are available to those without access to Internet, a cell phone, and some form of transportation. These sorts of things are not luxuries, but in today's world necessary prerequisites for the sort of pull-yourself-up-by-your-bootstraps Horatio Alger mythology prized by the modern Right.

This is not the first such report Heritage has produced, however. In 2007 Heritage minimized the challenges faced by America's poor by comparing them to unfortunate souls around the world in countries less wealthy than the United States. Global poverty comparisons are hinted at in the latest report as well.

And that's important, because the double-whammy involved in Wall Street types accusing struggling Americans of being spoiled whiners because they can afford a microwave, three square meals a day and a used car while the poor in Brazil have none of those, is a particularly insidious and revolting bit of sophistry.

There are three key reasons that the lack of significant increase in middle-class wages vis-a-vis productivity and inflation since the 1970s has not led to the sort of riots and revolution we are seeing in the Middle East. The first is massive subsidies of agribusiness and processed foods in the U.S., which keep prices for unhealthy foods low, leading to America's poor rarely experiencing starvation, but often experiencing massive diet-related health problems. The second is cheap prices due to globalization and lack of tariffs: even as jobs manufacturing microwave ovens in America have disappeared, leading to lower wages and higher unemployment, the price of a Chinese-manufactured microwave oven has become more affordable. Wage deflation due to labor arbitrage has also led to price deflation--particularly in the prices of the sorts of electronic goods like refrigerators and videogame consoles on which the Heritage Foundation places such a keen focus. The third reason is the widespread availability of credit, which has served to mask the inability of middle-class and poorer American households to balance incomes and expenses. Shred the credit cards of every single American, and you would have riots the very next day. And in fact, that very explosion of credit in the United States that both keeps the pitchforks away from investment bankers' mansions in the Hamptons and makes those mansions possible, is part of what has driven the world economy into recession.

It's a nifty trick Heritage has pulled: promote agribusiness subsidy, free trade and credit expansion policies that kill domestic jobs while putting households in debt, but make DVD players and cheeseburgers cheap to obtain. Then criticize America's poor for being overweight, in debt, and owning a DVD player, in order to con the beleaguered American middle class into cutting taxes on billionaires.

Of course, good luck trying to explain that to the average American. They're a little busy these days trying desperately to make ends meet during their 10-hour workday, and compensating for it by at least relaxing in front of a movie on their cheap flatscreen TV at night. Altogether a quite convenient set of circumstances for Thomas Friedman's Flatworld utopians and the Heritage Foundation's wealthy donors, if somewhat inconvenient for those struggling to get by in today's America.