Obamanomics Hammers the Poor
By Randall Holcombe • Thursday September 15, 2011 2:27 PM PST •
Data recently released by the Census Bureau shows the poverty rate in the United States at the highest rate it has been in more than a quarter of a century. (You can find the historical statistics by downloading Table 5 on this page.) Poverty is sometimes blamed on laissez faire policies that favor the rich over the poor. Few would accuse the Obama administration of pushing policies that hurt the poor by favoring the rich, but the data make it apparent that the poor are faring worse under President Obama’s leadership than they did under President Bush. The poverty rate was never higher than 13.2% during Bush’s eight years in office, and it is 15.1% now.
I hold President Obama indirectly responsible for the record high poverty rate. If you look at the statistics, the poverty rate rises when the economy is weak, and falls when the economy is strong. A good economy benefits both rich and poor; a weak economy hurts both rich and poor.
The highest poverty rate in the last three decades was 15.2% in 1983, during which the economy was in a severe recession. It rose to 15.1% in 1993, also a recession year, equaling the rate today. During better economic times, the poverty rate fell to 12.8% in 1989, and 11.3% in 2000.
I wouldn’t argue President Obama’s policies have been especially hard on the poor, but rather that his economic policies have resulted in a stagnant economy, and that is what has pushed up the poverty rate. Obamanomics has done this is by imposing costs on business, most notably regulatory and health care costs, but more so by creating the uncertainty about future economic policy that my fellow blogger Robert Higgs has emphasized.
President Obama has criticized Republicans for policies that look out for the rich but punish the poor. So, it is worth a remark that the poverty rate has increased substantially, to its highest level in more than a quarter of a century, under President Obama’s watch.