Monday, May 18, 2015

Why California's anti-poverty agenda will fail

In January 1992, campaigning in recession-hammered New Hampshire, President George H.W. Bush glanced at his note cards and told an audience, “Message: I care.”
Three years after the Census Bureau began including cost of living in one of its measures of poverty, California’s politicians are finally responding to the bureau’s finding that the Golden State has by far the nation’s most impoverished population. Unfortunately, it’s with their own version of “Message: I care.”
Assembly Speaker Toni Atkins, D-San Diego, wants to add funds to affordable housing programs that amount to a lottery in which a tiny fraction of poor families win the right to subsidized apartments and homes. Despite decades of evidence in California that this is not a serious approach to reducing the cost of housing – the prime driver of poverty in the Golden State – Atkins depicts her initiative as grand evidence of her commitment to helping the poor.
Now Gov. Jerry Brown is joining in the “Message: I care” push with his proposal for a California version of the federal earned-income tax credit, an idea economists like because it helps people make ends meet without providing disincentives for them to work. Brown’s plan would provide $380 million to the state’s poorest workers. But as with Atkins’ housing initiative, this will have a tiny, trivial effect on poverty.
If California’s most powerful politicians actually wanted to reduce the number of households that struggle to make ends meet, they would start with the basics.
To bring the cost of housing down, they would push to allow far more new construction. This is what New York Mayor Bill de Blasio, perhaps the nation’s leading progressive, is doing.

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