Katrina Brought Poverty in America to the Front Page
Unfortunately, journalists haven’t accurately reported the data involved.

By Noel Sheppard
Free Market Project
October 14, 2005

     Catastrophic events in America’s cities have a tendency to generate discussions about race, class, and poverty. The Watts riots in 1965, as well as the Rodney King riots in 1992 are fine examples. Hurricane Katrina has sparked another such debate. Unfortunately, America’s media are relying on consistently questionable or out-of-date statistics to not only exaggerate the problem, but to blame President Bush.

     An October 12 Associated Press story detailed a new report on poverty by the liberal Brookings Institution. More than 100 newspapers and news Web sites ran it or published a story related to the original report. AP’s Juliana Barbassa described the findings: “Fresno has the nation's highest concentration of residents in extremely poor neighborhoods, according to a study released Wednesday by the Brookings Institution, the Washington, D.C.-based think tank.”

     But it didn’t take her long to hit big problems. “New Orleans, second on the list, had its deep racial and economic rifts exposed by Hurricane Katrina,” she explained.

     Only a few of the more than 100 articles on this subject recognized that the bulk of the Brookings study was based on data released five years ago. The U.S. Census Bureau published a report on poverty based upon 2004 numbers in August. Not one of the articles studied reported that poverty in New Orleans has actually declined since President Bush entered the White House.

     As illustrated in the Census Bureau’s American Community Survey Ranking table, New Orleans in the year 2000 had the fifth highest poverty rate in the nation at 26.3 percent. Yet, in the ACS’s 2004 rankings, New Orleans dropped into a tie for twelfth highest at 23.2 percent, or a 12 percent improvement since Bush took office.

     Yet, many of these articles stated that poverty has gotten worse since 2000 in urban areas across the country. Bush administration budget cuts were cited as the culprit. For instance, Giovanna Dell'Orto wrote in the Atlanta Journal Constitution: "Centennial Place is a poster child for the U.S. Department of Housing and Urban Development's HOPE VI program, created under President George Bush, supported by President Bill Clinton and bled to near death by the current White House's budget cuts."

     And, the previously mentioned AP article stated: “But the successful program, created under the first Bush administration and supported by President Clinton, has been hurt by the current president's budget cuts, [primary author of the report Alan] Berube said."

     At issue here is a program enacted by President George H. W. Bush in 1992 called “HOPE VI.” Under the direction of the Department of Housing and Urban Development, it sought to tear down distressed public housing in cities across the country, and replace it with redesigned, mixed-income units. Residents of the original buildings were given housing vouchers to be able to afford rents in other areas.

     The success of this program has been hotly debated. For instance, William W. Beach of The Heritage Foundation wrote of this program in June:

“Periodically, a new form of project-based program is adopted as a ‘reform,’ but it too tends to fall out of favor after several years of disappointing results. The most recently created form of project-based assistance is called HOPE VI, but high costs relative to benefits have led the Administration to terminate the program in 2006.”

     It doesn’t appear that recent cuts to HOPE VI funding have had a negative impact on New Orleans. In fact, of the top 20 highest poverty-ridden cities by percentage in the Census survey of 2000, eight of them have seen declines in poverty in the past four years even as funding for this program has declined. Joining New Orleans on this list are Miami, Buffalo, Cleveland, Fresno, Cincinnati, Los Angeles, and Santa Ana.

     Finally, something that all of these articles neglected is that overall funding for HUD has dramatically increased since Bush took office. For instance, in President Clinton’s first term, HUD funding only increased by 9 percent. In his second term, it increased by 23%. Yet, in Bush’s first term, HUD funding increased by 26 percent.

     Regardless of the debate concerning how these funds should be spent, the media have misrepresented a cut in one aspect of an agency’s budget to suggest a reduction in funding for the entire department as well as for the cure of one of society’s ills.

     As previously addressed by the Free Market Project, the misrepresentations began just before Katrina made landfall when the Census Bureau released poverty statistics for 2004, and continued with some of America’s top weeklies once the devastation in New Orleans occurred. Now, more than six weeks later, the finger pointing continues.

Noel Sheppard is an economist, business owner, and contributing writer for the Free Market Project. He is also contributing editor of the Media Research Center’s NewsBusters.org. Noel welcomes feedback at slep@danvillebc.com.