The Economist: In 20 years, the global poverty rate has fallen by half

Over the weekend, President Obama focused his weekly address on — you guessed it — the economy, and the many rehashed policy prescriptions the Obama administration has for “continuing” to foster economic growth and create good middle-class jobs (neither of which the president has proved at all adept at so far, and I must say, I find the moments in which Democrats conveniently discover a renewed and vigorous interest in the economy rather fascinating). Just the usual trite fare: First, all of the supposed “good news” and the ongoing “recovery” we’re experiencing, but we (i.e., those darn obstructionist Republicans blocking my brilliant agenda!) still “need to do more”:

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Except that nothing much the president mentions is really part of the recipe for a robust and long-lasting economic growth rate. As much as progressives will claim more bureaucracy, more spending, more entitlement programs, more regulations, more taxes, more market interferences, and more big government are the only direct ways to help people lift themselves out of poverty and into a solid middle-class life, we’ve long since bypassed the point at which all of those things have become so metastasized as to be antithetical to economic growth — and economic growth is the truest, most efficient, most pervasive way to really lift people out of poverty in the long run.

As The Economist pointed out in a helpful blurb today, the cumulative impact of the many worldwide, bureaucratic variations of declaring a “war on poverty” over the decades has been marginal at best. The declining poverty rate averaged around the world is overwhelmingly due to the creation of new wealth, which is precisely why it needs to be our ceaseless Priority Numero Uno — not a useful smokescreen to which we “pivot” when our administration is suddenly plagued by scandals, hem hem:

POVERTY is easy to spot but hard to define. America sets its poverty line at $11,490 of income per year for a one-person household, or just over $30 a day. Any income below that amount is judged inadequate for the provision of fundamental wants. Other rich countries set their poverty lines in relative terms, so an increase in the incomes of top earners results in more poverty if everything else is held constant. The threshold for dire poverty in developing countries is set much lower, at $1.25 a day of consumption (rather than income). This figure is arrived at by averaging the poverty lines in the 15 poorest countries, not because $1.26 spells comfort. This is the yardstick by which poverty reduction in poor countries is measured. Remarkably, this poverty rate has halved worldwide, from 43% in 1990 to 21% in 2010. …

Almost all of the fall in the poverty rate should be attributed to economic growth. Fast-growing economies in the developing world have done most of the work.

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David Strom 3:20 PM | November 15, 2024
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David Strom 10:30 AM | November 15, 2024
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