Tuesday, October 20, 2015

Rich and Poor

Our federal government classified me as poor when I moved to Maine in August, 1977. My family of four was “under the poverty line” according to their way of measuring things. I had just taken a job as Director of Special Education for Maine School Administrative District #72 in Fryeburg at an annual salary of $9200. With four individuals to feed, clothe, and house, our federal government said I was poor and eligible for lots of programs which we didn’t use. That our daughter, Annie, was still in utero portended deeper “poverty” when she was to be born in December. Then our son, Ryan, came along five years later when my salary was still about the same. As a family of six, we must have gone from poor to very poor in the eyes of government.
Rather than take assistance from taxpayers, I chose to take on additional work. For most of my teaching career, I carried two or three part-time jobs as a caretaker, a writer, and a ski instructor — working all four simultaneously during several of those years. After all the kids were in school, my wife took on various part time jobs as well. She waitressed, cleaned houses, and drove a school bus before going back to school herself to become a therapist. She’s been doing that for almost twenty years, the last five or so part time. Each of us now works the equivalent of a half time job — roughly twenty hours a week. Now our federal government considers me rich because our combined household income is in the top quintile according the census statistics. I don’t worry about bills because my wife and I made it a priority to pay them off some time ago.
Ours is a common story. The “poor” don’t remain poor unless they stay on government programs. If they work, they often become “rich.”
Angus Deaton

Why tell you all this? Because it was announced last week that Princeton University’s Angus Deaton was awarded the Nobel Prize for Economics, in part because of his work measuring poverty. I didn’t expect to agree with Deaton on much considering the Nobel committee awarded a previous economics prize to Paul Krugman, but I looked him up anyway and found his observations quite reasonable. The first thing I came to was a 2003 essay he wrote called “Measuring Poverty.” In it, Deaton writes:
“Everyone has some idea what poverty is, and most people have little difficulty answering the question, ‘Do you consider yourself poor?’ although some people need a moment or two to think about it. Nor do people find it hard to answer the same question about their neighbors or other people that they know. Yet these simple ideas turn out to be hard to extend to countries, and harder still to the world as a whole.”
International agencies like the United Nations and the World Bank work mainly to mitigate poverty rather than spur economic development. Doing so, they allow local people to self-identify according to Deaton and that’s a problem, he says: 
“…It is not possible to push this local poverty identification too far. If the sums to be distributed are large enough, they become worth misappropriating, and there is an incentive for people to identify their friends and relatives (or themselves) as poor. Similarly, some NGOs have discovered that, if they use the poverty identification to enroll people into employment or training schemes, then after a few visits everyone is reported to be poor.”
I would point out here that in local school districts there is a similar phenomenon — applications for free and reduced lunches sent to each family each September are not vetted. I’ve asked people in at least three Maine districts and none vet the applications. They don’t check to see if families fudge their income/assets because the district qualifies for lots of additional federal and state aid based on percentage “qualifying” for free or reduced lunch.
When I was teaching economics, we found it necessary to define poverty. Students and I agreed that one is poor if he lacks sufficient funds to purchase food, clothing, shelter, and medical care to sustain life. We also agreed that someone is rich if he has enough for those basic needs — and some left over. He’s a little rich if he has a little left, and very rich if he has a lot left.
There’s another definition on which my wife and I agree: We’re rich, not just because we have everything we need and some left over, but also because we have everything we want — everything that money can buy, at least. Some may say our wants are modest and maybe they are, but they’re ours. They were established during lean times when our family was young and they haven’t changed much. We learned to live on less and haven’t forgotten how. We learned to be happy with what we have, and that became the habit of a lifetime.


Texas Transplant said...


Anonymous said...

1. How can you possibly NOT "want" a personal, nicely appointed, private jet to take you back and fourth around the globe to "attend discussions" on world poverty, global warming, and next Springs hottest fashion trends?
2. How come the Nobel Prize for "economics" medal is just a little bit bigger than all the OTHER award medals?
3. I am now what many would consider "comfortable" in my assets. We STILL do canning (from the garden) every fall, have "older" cars,(that CAN be self repaired), repurpose all KINDS of "trash", and have a taste for things many modern folks consider suitable only for "pet food".Tripe? Liver? Chitterlings? Fiddleheads? LAMB TOUNGUES? (Meh, can't even BUY those anymore)
Oh sure, I indulge in philanthropy that tempers my excesses. And I sure as hell know what "discarded" Hobo Stew is from a #10 can and used Sterno pots.
Pro tip: A 50 lb.(or 20 Kg.) bag of rice, and assorted dried beans, store well and go a LONG way with occasional "extras" thrown on top.

Brian said...

I agree that it does not take a lot of material objects to feel happy and "well off". I too have supplemented my teaching job in order to make ends meet. But I certainly am not blind to the fact that, despite my circumstances of having risen from "poverty", many Americans live in extreme poverty with very little chances and options to get out of their desperate situations. Sure, you can always find examples of a few, with hard work and luck, have done so, but for far too many the outlook is extremely bleak. We cannot ignore these fellow citizens.

Theodore Sirois said...

Your article should have included Ben Franklin's most famous saying concerning poverty:“I am for doing good to the poor, but...I think the best way of doing good to the poor, is not making them easy in poverty, but leading or driving them out of it. I observed...that the more public provisions were made for the poor, the less they provided for themselves, and of course became poorer. And, on the contrary, the less was done for them, the more they did for themselves, and became richer.”


Anonymous said...

Unfortunately you avoid the reason why we are all poor. The federal reserve act of 1913. When you let a group of private international bankers "loan" us, the USA, our own money at interest and charge the proles, that's you and me, said interest, in the form of an illegal "income tax" than you get what we have. Which is not what was envisioned for this great country. Our taxes go to this group of international private bankers--- not roads, or education etc.

Why does everyone pretend that this isn't happening? It's a documented fact. The federal reserve is unconstitutional----period.

People in their country really do detest freedom and love their servitude. Pathetic.

Alabaster said...

"I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs.
~ Thomas Jefferson

G%^HU()^ said...

A child born and “raised” in the slums, perhaps by an abusive drug addicted parent,with no role positive modesl, no one instilling the importance of an education and strong moral values, whose entire world consists of a few city blocks full of drug dealers and prostitutes. Is it their fault that they live in poverty? Just how are the people living is such conditions supposed to “pull themselves up by their bootstraps”?

Nine months before his inauguration as America’s first president, George Washington wrote:

[America] “will not be less advantageous to the happiness of the lowest class of people, because of the equal distribution of property.”

Thomas Jefferson wrote:

I am conscious that an equal division of property is impracticable. But the consequences of this enormous inequality producing so much misery to the bulk of mankind, legislators cannot invent too many devices for subdividing property…Another means of silently lessening the inequality of property is to exempt all from taxation below a certain point, and to tax the higher portions of property in geometrical progression as they rise.

Adams wrote that – unless constrained – “the rich and the proud” would deploy economic and political power that “will destroy all the equality and liberty, with the consent and acclamations of the people themselves.”

Likewise, the “father of free market capitalism” – Adam Smith – railed against monopolies, supported regulation of banks and the financial sector … and said that inequality should not be a taboo subject.

The well-known Greek historian Plutarch said 1,900 years ago:
An imbalance between rich and poor is the oldest and most fatal ailment of all republics.

Brian said...

Thank goodness that we have a Pope who is stressing the righteousness of not ignoring and blaming, but helping the poor.

He has made it a priority to point out the evils of those who take too much (such as CEO's) at the expense of people living in impoverished conditions. Pope Francis said that the poor are being sacrificed at the “altar of money,” as the rich worship a “golden calf.” This sacrifice costs lives and drives more people into slums.

“A way has to be found to enable everyone to benefit from the fruits of the earth, and not simply to close the gap between the affluent and those who must be satisfied with the crumbs falling from the table, but above all to satisfy the demands of justice, fairness and respect for every human being.” (Pope Francis, 6/20/13)

Brian said...

The widening gap between rich and poor and the disappearance of a middle class is widely accepted as one of the prime explanations for the fall of the Roman Empire.

A study by two historians finds that inequality in America is worse than in ancient Rome:

The Roman Empire, a society built on conquest and slave labor, had a more equitable "income distribution [than America today"


Do some people really not see what the result will be if we continue to have fewer and fewer accumulate larger and larger portions of the wealth? Already we have 85 people controlling half of the world's wealth! We have less than 200 giving the majority of money to choose our leaders!

How soon until we have 20 people controlling 95% of the wealth?
5 people?

It is insane that people have no problem with this. I guess some people LIKE the idea of being controlled and dominated by a few elite.

Anonymous said...

Brian said...

The widening gap between rich and poor and the disappearance of a middle class is widely accepted as one of the prime explanations for the fall of the Roman Empire.

Better tell Tom that. I'm pretty sure he thinks the reason was sodomy. Set the "history teacher" straight.

Greezy said...

The moment I saw the illustration of a jolly old poor man (Democritus) and the "By desiring little, a poor man makes himself rich" quote, I got the hunch that Tom was once again cherry picking information that fit his agenda while ignoring the big picture. A little research made me wonder why Tom didn't include any Democritus quotes like the following:

"Equality is everywhere noble," and that those in power should "take it upon themselves to lend to the poor and to aid them and to favor them, then is there pity and no isolation but companionship and mutual defense and concord among the citizens and other good things too many to catalogue."

He also said that excessive hoarding of money for one's children is "avarice" ...(hello "death" tax)

Look at the big picture, Tom, look at reality, and stop just trying to justify your beliefs no matter the facts.