In this comment on another site, I get challenged because I refused to respond to the claim that poverty in the US is in decline, that situation of the poor here in the US is improving, and that the best way to consider our economic situation is within the context of the most free, most open personal space imaginable.
There are multiple layers here. So, to be fair to John, I'm going to deal, first, with the more concrete claim - that poverty in the US is in decline. John, apparently, doesn't know there is this thing called Google that provides access to all sorts of information. In order to use it, one types in the words one wishes to find in context. In my case, I typed "US poverty rate by year", and I received access to 3,870,000 links in under a second. The first couple links, because they have the words I typed in Google most closely associated with them, are from, in turn, Bread for the World, and the United Nations. Then, we come to a report from The Washington Times, from September just passed, that the poverty rate is on the rise. Indeed, right there in the title, it reads that the poverty rate has hit a 15-year high!
So, after glancing through that article, I continue on down the Google results page - having used that "Page Back" key - and I come to a US Bureau Of The Census report on poverty. There are many links on that main page to various Census surveys and summaries (.pdf) and one, a summary of the 2008-2009 Household survey, includes in its sidebar under the "Highlights", in the very first one, the little fact that in 2008-2009, the number of people living in poverty in the United States increased to 42.9 million. Increased. Which, in vernacular English, means went up.
I could go on in this way, but just these two little links provide a pretty clear counter to the claim that poverty in the US is on the decline.
OK. So. Libertarianism.
In the same linked comment, John seems to believe that I have made a claim regarding the Bush Administration that is contrary to fact. In many ways, he is correct. The beginnings of our current socio-economic tragedy began during the Clinton years. They were given a jet-engine during the Bush years, the declaration that home-ownership was now the goal of federal housing policy. Coupled with completely deregulated financial markets, this was a recipe for disaster, as people at the time predicted would happen.
Libertarianism begins with the premise that, with minimal interference from the public sector, individuals pursuing their interests create the conditions for optimum economic efficiency and growth. Many of the arguments made by the Republican Congresses of the Clinton and Bush years, and their supporters in Think Tanks and academia, were adamant on this point - the regulatory regime was stifling economic growth, financial innovation, and our general commonweal. The last tattered vestiges of Depression-era regulatory and legal restrictions ending toward the end of the Clinton years, the path was opened toward a golden age of entrepreneurship, of individual and social betterment with no brakes in the form of artificial legal barriers to economic activity.
What actually happened was, in many ways, akin to Somalia. Individuals, in a state of lawlessness, have no power. They may have rights, in some abstract sense. Absent power, however, in particular the police power of the state to protect those rights in the face of more powerful, organized actors - in this case the large investment banks, insurance companies, and brokers of various financial products - the only real players that mattered were these large institutions. With quite literally no barriers to what constituted a legitimate investment opportunity, the limited mortgage-backed security became a potential goldmine. Except, it relied upon a certain magical thinking whereby a debt actually became an asset. Because of the lack of oversight of the financial markets, and because of the federal policy goal of home ownership, the field seemed wide open. Mortgage default was in a steady state, relatively low and shrinking as the housing market expanded.
The end result, of course, is what we are currently living with. It was predicted at the time, of course, but all those who said that when the bubble burst the wreckage would be enormous were shouted down. They were nay-sayers, maybe even anti-American. The promise of the unfettered market, while benefiting the large corporations at the heart of the bubble, seemed to be helping individuals fulfill that part of the American dream that is most dear - owning their own home. Except, of course, what was really happening was a mixture of massive fraud, the aforementioned magical thinking, and the hubris that comes from unchecked power. Those who are paying the price for this libertarian dream-come-true aren't the criminal banks and investment houses; they got bailed out and continue to enjoy record profits by playing the bond market with the bailout money. Meanwhile, the millions who have lost their homes, the millions more who will lose their homes, the stagnant economy (stagnant in part because, as a recent NPR story reported, businesses don't like hiring the long-term unemployed) are all laid at the feet not of those who created the mess, but its victims.
Every time I hear a libertarian talk, I look around at the wreckage wrought by libertarian practice, and I want to scream. The human damage, the social damage, are incalculable. That it was preventable makes it even more tragic. That there are those who insist the just-rehashed facts of our recent past make no difference is a kind of intellectual cowardice that is breathtaking to behold. Because Bush expanded the federal bureaucracy over here (the growth of the national security state) means that freeing up some sector from any legal framework over there (the financial markets) doesn't count. Except, of course, that was not and has never been the concern of libertarians in practice, no matter how much they claim to the contrary. Rather, their sole concern is the unfettered marketplace. So, libertarianism as a practical matter results in . . . economic collapse. Most observers who are sensitive enough to the sufferings of our recent years understand this.
So, John, there you have it. There are your answers.
Virtual Tin Cup
