Oregon writer, Rain Trueax, and Oregon painter, Diane Widler Wenzel co-author Rainy Day Thought. Diane generally posts on Wednesdays and Rain on Saturdays. There may be extra days or changes as situations warrant. Comments are always welcome and appreciated as it turns an article into a discussion.

Saturday, October 29, 2016


Economics is a tough one to write about. Economic inequality is discussed a lot but usually without solutions to issues that involve fair taxation, good jobs, and fair trade policies. Poverty is a cause of many other problems. If you look at it from a world perspective, it's impossible to get your head around how so many must live.  In terms of income inequality, while poverty has not lessened or even grown, CEOs have had astronomical increases in their pay even when they fail. Fairness is a word used a lot in such discussions...

In the United States, numbers don't really reflect how someone impoverished lives, as that varies with parts of the country. So a couple who earn $15,871 a year might live fairly well if they already own their own home in rural areas where they heat with wood they cut, hunt, fish, and grow a garden-- that is if property taxes aren't too high and they have no medical disasters. City dwellers don't have so many options to supplement their dollars with foraging. 

To help the poor, there are programs like SNAP, heating assistance, and Medicaid. All the helps have problems attached in getting them. I had a friend who lived in government housing, which meant every year she was inspected to be sure she was maintaining her home properly. That's demeaning. If she got a tiny increase in Social Security, the other agencies reduced whatever aid she was getting. There is no way up with that kind of system in place.

While all racial groups are impacted by poverty, some suffer more.
When I began voting was in 1964, and it was Goldwater vs. Johnson. Johnson began a war on poverty. Think about that. Over 50 years ago and a war on poverty. What has it accomplished?  22 trillion dollars has been put toward the problem but to what result? [the war on poverty after 50 years]

Would raising the minimum wage help as some claim? It might not as some of the companies using low wage workers are already switching to robots for some jobs. Besides ending wages, that saves them insurance and sick time. Evidently, a trucking company is trying out a computer driven truck with a trucker riding with it-- for now.

The argument is made that income inequality can be evened out by taking more from the richer and handing it to the poorer. Some countries have gone to a minimum income whether someone works or not and it's given out by a reverse income tax. The argument against that goes along the lines of if people don't have to work, some will choose not to. Is this kind of a system enabling lack of responsibility?

Paying better wages that involve the government paying part of the salary is another possible solution that is suggested. This has the advantage of having those capable of working out there, feeling good at what they can do, but still having a living wage.

In all the solutions, if the money used is not paid for by higher taxes on the income earners and is instead borrowed, the solutions are temporary. It is not possible for a country to borrow forever. This is especially true since the borrowing has to come from countries who may be suffering their own economic readjustments. An even worse temporary fix is for the country to start printing money with nothing behind it. That makes a dollar worth less and less until it's a bad joke. that becomes a cruel tax on the poorest.

Trump says he knows how to bring jobs back that are in manufacturing where the wages had been better for those not having a college degree. He would do this by making it less profitable for companies to go overseas, where they pay extremely low wages with no environmental controls or rules regarding working conditions, and then ship the products back here. Now raising the cost of the products, like clothing, will again hurt the poor as often while it cost them jobs, it lets them buy things much cheaper. Whether he could even do what he's suggesting with renegotiating or ending trade agreements is being debated

Clinton was for the Trans Pacific trade deal before she was against it when she ran against Sanders. Her Veep candidate said that all might change once they win. Sanders and Trump say that's a terrible deal for the US as was NAFTA and other pacts that helped oligarchs but not our workers. Her economic suggestions involve higher taxes on the rich (not sure where rich would start), a higher death tax, and government jobs as a way to deal with unemployment. When she implied those who hadn't contributed to the government weren't contributing to the society, it's clear that her solution is government oriented.  

If we had a tax on stock trades, even a small one, it'd bring in a lot of money and reduce some of the hedge fund gambling that has made some people fortunes and cost others their retirement income. Currently, it makes the stock market go up and down on whims. So, if we did that, how would we spend that money that had a chance of actually improving the lives of the poor?

Black Lives Matter wants reparations for years of slavery and Jim Crow. Would they want that money handed out to each black person or would they take it and use it to set up programs... involving higher salaries maybe for the administrators. If the money was handed out in a lump sum, how much difference would it make in the long run? I grew up when we saw that happen with a payout to Native Americans for land taken. It temporarily was a boost to the local economy, but the end result of changing lives wasn't so hot. The casinos have done a better job of providing jobs for those tribes able to have them. That is obviously not a solution for every poor. 

I wish I had solutions. Jesus said the poor you would always have, and we certainly always had. In our country poverty is nothing like it is around the world-- which doesn't make those who have so little feel good about it. While most poor still have television, computers, food to eat, and a roof over their heads, that's not a lot of consolation when they see others who have so much more, when they have to worry from day to day whether the money will stretch far enough. 

Personally, I have never known poverty but did grow up with a father who was out of work sometimes for strikes or other problems and where I considered secondhand clothes a good deal, where I never ate at a nice restaurant until I was long grown and even then it worried me for fitting in, where a treat was a Dairy Queen sundae, and doctor visits were paid by the visit without insurance-- but those visits were affordable back then.

Growing up in a lower economic level home, I came to believe you had to work for what you wanted. Also that you cannot take so much from the rich that you end up taking away their incentive. I worry that when you hand out money, you have to be sure the person really cannot work. That life is lived better with some responsibility for yourself and others. I also know after over 50 years of trying to defeat poverty, we haven't gotten it done. Frankly I don't see either of the candidates running for President with a viable plan that would now.    


Tabor said...

Not sure that subsidies (new ones) that go directly to the poor are going to work. That money should go to their housing, their schools and better forms of transportation. CEO's make obscene salaries, but I am not sure how a Capitalistic system deals with that. We have to move more to socialism and I would not worry about CEO's losing their motivation as I am not sure that they contribute anything commensurate with millions of dollars a year. This was the argument with those crooks on Wall Street being able to hang on to their jobs when research shows they were not all that skilled...just greedy.

Rain Trueax said...

The big thing is to get their schools better so less drop out. Although Oregon is in the bottom of the states for dropouts and it's mostly white and more or less lower and middle class with the poverty zones being in the country and inner cities.

My big concern for just increasing taxes as without knowing where it goes, it tends to be swallowed up and accomplish nothing. I am against the death tax as it just blocks middle class families from passing on wealth to their children. It does nothing for stopping the rich as they have foundations etc. to avoid the tax anyway.

It's funny how the right always blames the poor and the left blames the rich. I am suspicious that someone else looks at this and laughs. Who really runs things and keeps us from effective programs?