How To Lie with Poverty Statistics

There are two clocks ticking down the remaining days of the Obama administration and his Democratic hegemony.  One is the ever-growing unemployment rate, now standing at about 10% "officially" and nearly twice that when you include the underemployed and people who have given up looking for work.  The other factor is the time left to Election Day in November, when American voters will have their first opportunity to vent their fury on the party which originated the saying "It's the economy, stupid!" but now seems to have utterly forgotten it.

In politics, when the going gets tough, the tough start lying.  There's not a whole lot Mr. Obama can do about the unemployment statistics; he's tried blowing smoke at Americans about the economy getting better for several months now and it simply isn't working.  It also doesn't help that he's partnered with buffoons like Harry Reid who last week enthused on the Senate floor:

Today is a big day in America. Only 36,000 people lost their jobs today, which is really good.

If that's really good, we'd hate to see what would be really bad.  With friends like these, who needs enemies?

No, there's not much to be done for employment, but at least Mr. Obama can claim to be fighting against poverty.

How, pray tell, can he claim to be reducing poverty considering that each and every day, another 36,000 people (at least) are sacked from paying jobs and thrown into the penury of the welfare system?  Simple: Change the definition of poverty.  The National Review reports:

The current poverty measure counts absolute purchasing power - how much steak and potatoes you can buy. The new measure will count comparative purchasing power - how much steak and potatoes you can buy relative to other people. As the nation becomes wealthier, the poverty standards will increase in proportion. In other words, Obama will employ a statistical trick to ensure that "the poor will always be with you," no matter how much better off they get in absolute terms.  [emphasis added]

We've previously written that, in America, the war on poverty is long since over and we won.  There is no such thing as poverty in the United States as it's understood throughout history and in much of the rest of the world - we do not have naked people starving in the gutters, literally unable to obtain food for themselves.  America's "poor" are wealthy by any reasonable standard: 97% own color TVs, three-quarters own a car, almost half actually own their own homes.

The only reason we talk about poverty in America when there isn't any is because it is politically expedient for Democrats to do so.  The more supposed poverty they can find, the greater the excuse to take money away from you in taxes and redistribute it to their supporters in return for votes.

But back to the lie of the statistics.  America's poverty statistics have long been indexed to inflation and economic growth in various ways to make sure that the poverty rate doesn't go down much even though the objective material wealth and comfort of the poor, like everybody else, is constantly increasing.  No news here.

Karl Marx, Call Your Office

Mr. Obama's changes go one step further: His administration plans to effectively index the poverty rate as a percentage of GDP per capita.  The implications of this are far from obvious, so let's look at some examples.

First, America's GDP is the amount of money the whole nation makes.  It's a whopping big number - in 2009, even with the recession, our GDP was around $14.25 trillion.  There are a bit over 300 million Americans; a little division gives you the average GDP per capita of $46,400.  Anybody making less than that is below average; anyone making more is above average.

Let's arbitrarily define poverty as someone making one-quarter of the average, or $11,600.  This is not a lot of money, it's true; but compared to the millions who live on less than a dollar a day, it's a king's ransom.  You cannot live a cushy life in America on $11,600, but you certainly will not starve or freeze to death.

So far, so good.  Now let's consider what would happen in a successful Reagan economy where the rising tide lifts all boats, but the yachts get lifted more.  In other words, everyone gets richer, but the rich get richer by more.

The GDP of the whole nation would increase - naturally, since everyone is getting richer.  The GDP per capita would also go up, so our arbitrary poverty line would go up too.  The poor are getting better off, but the bar has been raised, so despite a strong economy, it looks like we've made no progress.

But wait!  Remember, in this scenario the rich got richer by a greater percentage than the poor.  So while the poor's income went up - they objectively got richer - the poverty line raised by even more, since the distance between poor and rich has increased.

The result?  Under Mr. Obama's self-serving calculations, in a good economy such as we saw under Reagan, Clinton, and for a few years under Bush, the official statistics would say poverty is getting worse - even as the actual poor people were getting more money, able to buy more stuff, and living more comfortably in every objective way!

OK, so it's a long-term plot to make Republican governance look bad, is that it?  No: this statistical fraud has a far more immediate goal of flattering Mr. Obama's wealth-destroying policies.

For instead of a good economy, consider the opposite scenario of Mr. Obama's economy, where everybody is losing money, but the rich most of all.  The financial crisis has certainly harmed ordinary Americas, but in both absolute numbers and percentages, it's been a bloodbath for the very wealthy.

What happens when the very rich lose their shirts?  They stop buying Learjets and investing in new companies which means that ordinary people lose their jobs.  However, on average, in this recession the wealthy have lost more than normal folks have.  In other words, everyone has gotten poorer, but the rich have gotten poorer by more.

Don't feel too bad for them, they've still got way more than you or I, but the effect on Obama's newly rigged poverty statistics is startling.

When the rich lose their shirts, GDP falls enormously.  So does the GDP per capita, and so does the poverty line.  Now we have poor people getting poorer, but the poverty line drops beneath them because of what the rich have lost.  Sure you may be making even less money than you were last year, but you're not poor anymore!  The statistics say so!

What sort of a system is it where making the nation richer raises the poverty rate, and making it poorer lowers the number of people who count as poor?  There's a very simple phrase that explains both this sort of system and Mr. Obama's core beliefs:

From each according to his ability; to each according to his need.

It is now crystal clear: Mr. Obama does not want America to be a land where each individual can rise by his own efforts to whatever heights his abilities enable him to reach with the unavoidable result that some will be rich and successful and others will be poor and failures.

Instead, he wants an America where we all are pretty much the same, no matter our talents or hard work, and there is a much smaller gap between rich and poor.  For Mr. Obama, poverty isn't being hungry or cold; it's knowing that there are other people out there with more than you.

And when, as in the Soviet Union, there is equality in poverty - we are all equally poor, cold, and miserable, by force of government policy - then the statistics will show poverty has been eliminated, and the great dream of liberalism will finally have been achieved.

There's a better way: Recognize that absolute poverty has already been eliminated in the United States, and that our current command-and-control welfare system simply perpetuates the relative poverty of laziness and failure.  But that would mean there'd be no need for liberals, leftists, Democrats, or any of their liberty-destroying government programs.