Cross-posted with permission from Because Finance Is Boring.

Yesterday marked the 50th anniversary of Lyndon Johnson’s War on Poverty. Many on the Left are using this opportunity to bring new life to a much-aligned idea: that there is a role for government in fighting poverty.

On the Right, LBJ’s War on Poverty drew criticism from Milton Friedman and his seems to be the prevailing ideology today. The refrain goes: these sorts of programs are going to disincentivize work and be exploited. The belief was that the best way to fight poverty is by growing the economy, which is best done by shrinking government.

It’s not surprising this belief in advancing the economy as a means to ending poverty prevailed: it’s a convenient theory for those in power. 95% of the gains from the 2009-2012 economic recovery went to the 1%. This ideology serves a dual purpose for the wealthy: it lines their pockets and it absolves their consciences. Believing that promoting the very economic growth that enriches the elite will also magically eradicate poverty is a rewarding mythos and a salve to the conscience.

While the Right have been very effective in criticizing this war on poverty, the Left has let them set the agenda, and by doing so, has been on the defensive ever since. President Bill Clinton best symbolizes this capitulation when he enacted welfare reform, the “Personal Responsibility and Work Opportunity Act” which added work requirements and created a lifetime limit of 5 years of benefits. Bill DeBlasio, the new mayor of New York City who ran on a progressive platform, was just sworn-in by former President Clinton. What does this say about the commitment of our so-called progressive candidates to truly move forward?

President Obama continued this assault from the Left with a commitment to cutting Social Security via Chained CPI and his“Choice Neighborhoods” reforms to public housing which often just act as a gentrification machine. And even the programs that have managed to avoid gutting by the right or “reform” (gutting with a smile) from the left, have become less effective. According to The Center on Budget and Policy Priorities, the value of the Temporary Asssitance for Needy Families (TANF) program has dropped significantly since it began:

Because the $16.6 billion annual federal TANF block grant has not been adjusted for inflation, it has lost significant value over time.  States receive 30 percent less in real (inflation-adjusted) dollars than they did in 1997, a year when the unemployment rate averaged just 4.9 percent.  State minimum-required contributions to TANF have declined even more.”


The establishment Left justifies these sorts of unholy alliances with the Right because they “must” advance austerity in order to balance the budget. They are urged on by coalitions of Wall Street billionaires like“Fix the Debt“.

Worse still, the Left has co-opted the language of the Right when talking about poverty. For example, President Clinton talked about how “a rising tide lifts all boats,” and President Obama is careful to speak only about “responsible homeowners” whenever discussing HAMP or other housing assistance programs. Ta-Nehisi Coates pointed out, when talking to the graduating class of the historically-black Moorehouse college, President Obama told them that “there’s no longer any room for excuses.” This borrowing the Right-wing’s framings and phrasings is pandering–pandering to people who view poverty through a racially-coded lense.

Despite this caving of the Left to the Right’s fetishization of work and paternalism, and the way they demand it to confer legitimacy on those who would seek benefits, poverty today is also an issue for working Americans. As recently highlighted by the #FastFoodStrikes and #FastFoodForward campaigns, 52% of front-line fast food workers at the ten largest companies are on some form of government assistance. It is estimated that McDonald’s alone costs taxpayers $1.2 billion due to government aid programs needed by its employees. The Free Market is lionized as the answer to poverty, but full-time, low wage fast food employees don’t make enough to survive without these programs that continue to be targeted for cuts.  

As James Weill and Christine Owens wrote in The Hill, “Shamefully, instead of strengthening anti-poverty programs, too many of our political leaders train their sights on them.” Rejecting cuts to existing programs has become a central message of Democrats going into 2014. In an oped, Representative Barbara Lee also identifies two additional ways to tackle the ongoing problems with poverty: extending unemployment insurance to the 1.3 million long term unemployed, and by raising the minimum wage. As Lee points out, “A simple rise from $7.25 to $10.10 would lift 4.6 million Americans out of poverty”–lifting 1 in 10 of those currently in poverty out of it.

These are important fights–but they are still fights at the margins. Wall Street is the engine that fuels all of this lop-sided growth. And while Rep. Lee is launching a series of 50 speeches in 50 days on the House Floor about poverty by Democratic members, more mainstream Democrats still don’t want to break ties with the industries responsible for that poverty: Hillary Clinton made two speeches in five days to Goldman Sachs, and her speaking fee is “about $200,000.”

It is important to remember the criticisms of the War on Poverty waged from the left at the time, as they remain valid critiques today. Martin Luther King Jr. responded to the War on Poverty in “Why I Am Opposed to the War in Vietnamspeech at Riverside church in 1967, making clear where budget shortfalls really come from:

“…it is estimated that we spend $500,000 to kill each enemy soldier, while we spend only fifty-three dollars for each person classified as poor, and much of that fifty-three dollars goes for salaries to people that are not poor. So I was increasingly compelled to see the war as an enemy of the poor, and attack it as such.”

In the same speech, King describes how the War on Poverty was gutted by America’s focus on war:

“Then came the buildup in Vietnam and I watched the program broken and eviscerated as if it were some idle political plaything of a society gone mad on war, and I knew that America would never invest the necessary funds or energies in rehabilitation of its poor so long as adventures like Vietnam continued to draw men and skills and money like some demonic destructive suction tube.”

Getting serious about fighting poverty is not just about making transactional gains on (or mounting an effective defense of) politically-popular programs like Social Security. That can certainly stem the bleeding, but we need to stop sharpening the knives. One knife is the military-industrial complex, as Dr. King identified. The second knife is Wall Street.

Wall street was the originator of the latest financial crisis, which displaced 10 million people due to foreclosures. This same crisis that wreaked havoc on state and federal budgets. This budget havoc leads to the pushing of austerity, which cuts social programs. The gutting of these programs then forces people to take on increasing amounts of debt just to get by. And that debt enriches…Wall Street!

As Sarah Ludwig of the New Economy Project put it to the NYTimes:

“banks have for decades gotten away with brazen redlining of low income neighborhoods and communities of color. A noxious array of fringe and predatory financial services has filled the vacuum, and now dots the landscape of virtually every low-income neighborhood in the country. After wreaking havoc with predatory subprime mortgage loans and fraudulent foreclosure practices, banks now want in on the lucrative consumer finance business. Bringing check-cashing, payday loans, and prepaid cards within their four walls, banks have effectively morphed into giant consumer finance companies.”

And just one more sharpening stone to the knife that brings poverty, is the ongoing refusal to address climate change. Hurricanes like Katrina and Sandy will continue to turn entire cities into giant poverty dens, while Exxon Mobil enjoys at least $10 billion a year in corporate subsidies.

Truly ending poverty in America, then, will require a wholesale re-imagining of the things that are important to us. It’s not something that can be solved in speeches about inequality, or even in playing defense to what is left of the Great Society. We must, at the very least, the complete rejection of old ideas (like repealing the Faircloth Limit, or rolling back Welfare Reform). But more ideally, we need newideas. Instead of just renewing the War on Poverty, we need a War on Corporate Malfeasance, and a War on the Race to the Bottom. If the Left doesn’t get creative (and follow in the success of groups like Strike Debt), and instead keeps playing defense on the margins, the knife of austerity will continue to be sharpened, and eventually, we won’t be able to stem the hemorrhaging.

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