"You can see this levelling at work in markets for transport and appliances. You no longer need be a Vanderbilt to own a refrigerator or a car. Refrigerators are now all but universal in America, even though refrigerator inequality continues to grow. The Sub-Zero PRO 48, which the manufacturer calls “a monument to food preservation”, costs about $11,000, compared with a paltry $350 for the IKEA Energisk B18 W. The lived difference, however, is rather smaller than that between having fresh meat and milk and having none. Similarly, more than 70% of Americans under the official poverty line own at least one car. And the distance between driving a used Hyundai Elantra and a new Jaguar XJ is well nigh undetectable compared with the difference between motoring and hiking through the muck. The vast spread of prices often distracts from a narrowing range of experience."
Combine this with the fact that the new income inequality is driven by differentials in skills, as set out brilliantly by Becker, and it should become clear that very different policies are in order. The Economist's arguments suggest that we can take a long-term approach to relieving poverty - there is not a driving need for relief right now. Becker's suggest that improving human capital can bring the poor out of poverty - there is not some other problem keeping the poor from improving their condition.
All that suggests that creating the social and institutional conditions for the poor to improve their human capital is the right way forward. Those who see benefit spending as the way to end poverty should think again.