Paul Krugman Christmas Column

Pauk Krugman’s Christmas column is all about the ending of child poverty, about how the UK is doing so much better than the US in dealing with this problem. The whole thing is below the fold but this leaps out:

Scenes of a devastated New Orleans reminded us that many of our
fellow citizens remain poor, four decades after L.B.J. declared war on
poverty. But I’m not sure whether people understand how little progress
we’ve made. In 1969, fewer than one in every seven American children
lived below the poverty line. Last year, although the country was far
wealthier, more than one in every six American children were poor.

And there’s no excuse for our lack of progress. Just look at what the British government has accomplished over the last decade.

Well, what has the British Government achieved? Apparently:

3.4 million children live in poverty in the UK today, thats
more than one in four – a shocking figure given the wealth of our
nation.

Hhmm. Child poverty in the UK would appear to be vastly worse than child poverty in the US. So, of course, the US should adopt the UK method of dealing with it. Excellent logic there, don’t you think?

There is another matter that needs to be raised as well. The UK figures are generally calculated post tax, post benefit, adjusted for household size.  The US figures are generally calculated pre tax, post cash benefit, pre non-cash benefits, adjusted for household size. In each country there are more directly comparable numbers calculated, but not on such a regular basis. So we do need to ask a question about which numbers Krugman has been using. Are the the normal US and UK ones? So that the UK ones include housing benefit, tax credits, etc, while the US ones do not include housing vouchers, food stamps or the EITC?

Anyone actually registered with the NYT? Krugman has been known to upload the references to his pieces.

It’s the season for charitable giving. And far too many Americans, particularly children, need that charity.

Scenes of a devastated New Orleans reminded us that many of our
fellow citizens remain poor, four decades after L.B.J. declared war on
poverty. But I’m not sure whether people understand how little progress
we’ve made. In 1969, fewer than one in every seven American children
lived below the poverty line. Last year, although the country was far
wealthier, more than one in every six American children were poor.

And there’s no excuse for our lack of progress. Just look at what the British government has accomplished over the last decade.

Although Tony Blair has been President Bush’s obedient manservant
when it comes to Iraq, Mr. Blair’s domestic policies are nothing like
Mr. Bush’s. Where Mr. Bush has sought to privatize the social safety
net, Mr. Blair’s Labor government has defended and strengthened it.
Where Mr. Bush and his allies accuse anyone who mentions income
distribution of "class warfare," the Blair government has made a major
effort to reverse the surge in inequality and poverty that took place
during the Thatcher years.

And Britain’s poverty rate, if measured American-style — that is, in
terms of a fixed poverty line, not a moving target that rises as the
nation grows richer — has been cut in half since Labor came to power in
1997.

Britain’s war on poverty has been led by Gordon Brown, the
chancellor of the exchequer and Mr. Blair’s heir apparent. There’s
nothing exotic about his policies, many of which are inspired by
American models. But in Britain, these policies are carried out with
much more determination.

For example, Britain didn’t have a minimum wage until 1999 — but at
current exchange rates Britain’s minimum wage rate is now about twice
as high as ours. Britain’s child benefit is more generous than
America’s child tax credit, and it’s available to everyone, even those
too poor to pay income taxes. Britain’s tax credit for low-wage workers
is similar to the U.S. earned-income tax credit, but substantially
larger.

And don’t forget that Britain’s universal health care system ensures
that no one has to fear going without medical care or being bankrupted
by doctors’ bills.

The Blair government hasn’t achieved all its domestic goals. Income
inequality has been stabilized but not substantially reduced: as in
America, the richest 1 percent have pulled away from everyone else,
though not to the same extent. The decline in child poverty, though
impressive, has fallen short of the government’s ambitious goals. And
the government’s policies don’t seem to have helped a persistent
underclass of the very poor.

But there’s no denying that the Blair government has done a lot for
Britain’s have-nots. Modern Britain isn’t paradise on earth, but the
Blair government has ensured that substantially fewer people are living
in economic hell. Providing a strong social safety net requires a
higher overall rate of taxation than Americans are accustomed to, but
Britain’s tax burden hasn’t undermined the economy’s growth.

What are the lessons to be learned from across the pond?

First, government truly can be a force for good. Decades of
propaganda have conditioned many Americans to assume that government is
always incompetent — and the current administration has done its best
to turn that into a self-fulfilling prophecy. But the Blair years have
shown that a government that seriously tries to reduce poverty can
achieve a lot.

Second, it really helps to have politicians who are serious about
governing, rather than devoting themselves entirely to amassing power
and rewarding cronies.

While researching this article, I was startled by the sheer
rationality of British policy discussion, as compared with the cynical
posturing that passes for policy discourse in George Bush’s America.
Instead of making grandiose promises that are quickly forgotten — like
Mr. Bush’s promise of "bold action" to confront poverty after Hurricane
Katrina — British Labor politicians propose specific policies with
well-defined goals. And when actual results fall short of those goals,
they face the facts rather than trying to suppress them and sliming the
critics.

The moral of my Christmas story is that fighting poverty isn’t easy,
but it can be done. Giving in to cynicism and accepting the persistence
of widespread poverty even as the rich get ever richer is a choice that
our politicians have made. And we should be ashamed of that choice.

One response

  1. Wednesday Links

    We wonder if we’ve oversold the science. Warming scientists take a step back. SDARecord numbers defy the UK hunting ban. As Glenn notes:If that many British Muslims turned out to protest interference with their customs, the Blair government wo

Leave a Reply

Discover more from Tim Worstall

Subscribe now to keep reading and get access to the full archive.

Continue reading