Poverty


John Edwards is the most unabashedly populist candidate (so far…) in the race to November 2008, frequently utilizing class-infused rhetoric in his diagnoses of “two Americas.”

One of Edwards’ loftiest priorities is to eradicate poverty, and ostensibly to that end he founded the now-defunct Center for Promise and Opportunity in 2005.  The group’s rather vague mission statement read:

The Center for Promise and Opportunity (CPO) is dedicated to exploring new ways to expand opportunity and realize the promise of our country for all Americans. CPO’s mission encompasses much more than just proposing ideas — it will lead efforts to build public support for change, and will serve as an incubator for solutions, conducting real-world trials.

CPO has three overarching goals. First, CPO is committed to exploring new ideas to help Americans build a better life. Second, CPO will be an advocate for change, leading efforts to build support for policies and movements that will make America stronger. Third, CPO will work to prove the strength of its ideas, through pilot projects and partnerships.

As The New York Times reports, however, the organization’s day-to-day mission seems to have been sustaining John Edwards’ presidential ambitions.  This inconvenient truth seems to represent a flip-flop from CPO’s supposed purpose, which says nothing about promoting John Edwards.

The organization became a big part of a shadow political apparatus for Mr. Edwards after his defeat as the Democratic vice presidential nominee in 2004 and before the start of his presidential bid this time around. Its officers were members of his political staff, and it helped pay for his nearly constant travel, including to early primary states.

While Mr. Edwards said the organization’s purpose was “making the eradication of poverty the cause of this generation,” its federal filings say it financed “retreats and seminars” with foreign policy experts on Iraq and national security issues. Unlike the scholarship charity, donations to it were not tax deductible, and, significantly, it did not have to disclose its donors — as political action committees and other political fund-raising vehicles do — and there were no limits on the size of individual donations. […]

Additionally, Edwards has gone a fair bit beyond the usual extent to which politicians funnel cash to their own interests — though it all appears to have been ambiguously legal.

[…] [I]t was his use of a tax-exempt organization to finance his travel and employ people connected to his past and current campaigns that went beyond what most other prospective candidates have done before pursuing national office. And according to experts on nonprofit foundations, Mr. Edwards pushed at the boundaries of how far such organizations can venture into the political realm. Such entities, which are regulated under Section 501C-4 of the tax code, can engage in advocacy but cannot make partisan political activities their primary purpose without risking loss of their tax-exempt status.

Because the organization is not required to disclose its donors — and the campaign declined to do so — it is not clear whether those who gave money to it did so understanding that they were supporting Mr. Edwards’s political viability as much or more than they were giving money to combat poverty.

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Does John Edwards’ work for a hedge fund contradict his populist fight for the Middle Class? I’m not sure, but John Edwards’ wealth has made a lot of people skeptical. Whether it’s the $400 haircut or the $1.25 million income this past year, most of which came from a hedge fund, many pundits would argue that John Edwards’ lavish lifestyle makes him a hypocrite when advocating for the poor. One particular comment from the MSNBC Political Blog said:

 Oh, I see what’s going on, Edwards is buying “capitalism offsets” he makes lots of money being a trial lawyer and now an undisclosed amount at a hedge fund, but, since he also helped to raise minimum wage and organize unions, etc. he’s not really a “dirty” capitalist. This way he doesn’t have to change his lavish lifestyle, that was afforded to him largely due to our capitalism based economy, in order to rail against the horrors of capitalism. He just has to buy “capitalism offset credits”. This is genius. I should start a company offering capitialism credits. I could make a fortune! Oh, wait, then I guess I would have to buy capitalism credits from myself. Oh, well its been done before.

I think its unhelpful to criticize the rich for helping the poor, but I understand the impulse. MSNBC’s First Read quoted Edwards’ talking about his financial dealings:

On Friday, in what seemed to be his most extensive comments on camera on the subject, Edwards dodged questions about his involvement with the hedge fund. When asked to reiterate his position, Edwards responded, “Sure. Well, basically, what I have been doing since the last election is a group of things. One of them is, I did consulting work for Fortress, which is a hedge fund in New York.” After a pause, Edwards listed his other activities during this time — running the poverty center at the University of North Carolina; helping to raise the minimum wage in six states and organize workers into unions; starting a college program for poor students in North Carolina; and doing humanitarian work in Africa. Edwards stated these experiences outweighed his work at Fortress. “So it is one of a group of things I have been involved in and I think that certainly if you look at all those things in totality, it is pretty clear where my commitment is.”

I’m not sure if this is Edwards dodging the question or not, it’s clear he was nervous or at least uncomfortable with his work at Fortress. This could be fear borne out of being caught in a hypocrisy, or a legitimate discomfort with his own privileged position within the anti-poverty fight. His conversation with MSNBC sought to answer the allegations a bit:

Asked if his work at the hedge fund conflicts with the idea Edwards is the candidate for the middle class, he reiterated the benefits from his consulting work. “I do think it’s important for the president of the United States to have a good understanding of our financial markets, how they operate, where the incentives are, where the incentives aren’t.”

Our purpose isn’t to fact check political statements, merely to check candidates’ statements in relation to what they have said in the past, whether they have been consistent or horribly inconsistent, but a friend who reads the blog asked me about where John Edwards’ 37 million people living in poverty figure comes from, so, I thought it might be valuable to discuss this a little further.

The best I can imagine, Edwards got the figure from the U.S. Census which puts the poverty rate at 12.6% in 2005 or 37 million people. This is based on a family of four that earns less than $19,307 or a family of two that earns less than $12,334. This is about 7.7 million families. And a poverty rate for children of 17.6% or about 12.9 million children under the age of 18 living in poverty. New Hampshire has the lowest poverty rate (7.5%) while Mississippi has the highest (21.3%).

There are a number of problems with using U.S. census figures to decide the poverty rate and while Edwards is using it rhetorically more than literally, those problems should be pointed out. Some people think the rate is inflated. It fails to take into account frivolous purchases such as a pair of expensive sneakers or a trip to the Dairy Queen and focuses on income, though a percentage of income may be made in extralegal or illegal dealings, in loans and gifts from family and friends, charity from churches or other organizations and welfare itself. Foodstamps and public housing is not considered in U.S. Census poverty figures.

Conversely, some would say the figure is deflated. The U.S. Census, first of all, does not count everyone and those that are least likely to be counted, and least likely to open their door to a census taker, own a telephone or answer the telephone for a census taker are often of the lowest class. Illegal immigrants and the homeless are often uncounted in poverty statistics. The number also fails to take into account housing costs in different regions.

A true estimate of the poverty rate in the United States is difficult or impossible, estimates range from 35 million to 41 million people. Edwards’ 37 million people figure seems reasonable, and at any rate, is based on the U.S. Census, which remains our best tool to calculate poverty. All of his policies and rhetoric stems from this figure and we want to make sure that it is put in context. You can decide if it is inflated or deflated. If he is elected president, this will be the figure that he will be battling to lower and will be an interesting marker to see how consistent his policies are with his goals.

We have spent a lot of time here at Reality Check finding flip-flops and inconsistencies in candidates’ statements, but an accurate track of consistency would also reward conviction of beliefs. No candidate has been as consistent on the issue of poverty as John Edwards. He has been talking about the problem of poverty for as long as he’s been in the public eye and continues to talk about it today in virtually every speech he gives. In 2004 when he was the Democratic nominee for vice president he stressed the importance of the “two Americas”

We still live in a country where there are two different Americas… one, for all of those people who have lived the American dream and don’t have to worry, and another for most Americans, everybody else who struggle to make ends meet every single day. It doesn’t have to be that way.

After losing the election he founded a think tank at the University of North Carolina at Chapel Hill to research poverty and his One America Campaign, the idealized solution to the idea of “two Americas” was devoted to speaking out on poverty issues.

Before Hurricane Katrina hit, John Edwards was one of the lone political voices speaking out against poverty. After Katrina, at a time when he could have easily said “I told you so” he refrained commenting instead on the Bush policy of mobile homes for Katrina victims as temporary housing saying; ”If we know anything from a half-century of urban development, it is that concentrating poor people close to each other and away from jobs is a lousy idea.” In the wake of Katrina he argued that “Poverty is the great moral issue of our century.” Edwards continued to speak out against American poverty, In June of 2006 he spoke at the National Press Club saying;

On the America we want to achieve in the next twenty years, I don’t think the picture is hard to draw. It is an America where we are well on our way to ending poverty. It is an America where every American has health care coverage — not access to health insurance or other wiggle-word ways we try to describe something less than health coverage for every American. It is time. It is an America where businesses and working people thrive in a competitive and fair international marketplace. It is an America where everyone can join the middle class and everyone can build a better future than their parents had.

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