Poverty is the new slavery
cbsnews.com
cbsnews.com
Pieces like this just leave a bad taste in the mouth - it'll obviously help shift copies of Mr. Smiley's book - but I'm not sure its going to do anything for actual poor people. And if there's anything worse than massive social inequality, its trying to make money off the back of it while masquerading as some kind of social crusader.
In fact, what is unprecedented is how little wealth the extremely wealthy currently control. As a share of the GDP and total wealth, historical titans such as Andrew Carnegie and John Rockefeller were vastly wealthier than anyone alive now when adjusted for current dollars. In fact, the only American in modern times that even approached the wealth of numerous historical figures is Bill Gates.
I think there is a systemic problem creating an impoverished underclass but the obvious ignorance around the claims of unprecedented concentrations of wealth just grates.
The fact that one percent of the nation's richest individuals control 42 percent of the nation's wealth is, to me, a stunning revelation in the wake of a recession.
When you say things like this, you presuppose a world where we could take all the money, put it in a pile, then share it equally. But such worlds do not exist among systems of intelligent actors working in their best interests.
Poverty is a symptom, not a problem. The author doesn't go into what it's a symptom for, perhaps because such detailed analysis of how we got here is beyond his ability, or perhaps he just wants to have a good lament and rant. Don't know. But in either case, I got nothing from this aside from "bad things suck"
Also, I'm not sure what observations could be offered in support of this rather bold contention you're making here. Yet you seem to be stating it as if it were something intuitively obvious, practically standing on its own merit.
This is an obvious non-sequitur, of course.
This argument could be made regardless of the numbers.
0.1% of the nations richest individuals control 42 percent of the nations wealth?
One person controls 42 percent of the nations wealth?
Surely at some point enough is enough?
150 million poor and near-poor people, really? Nowhere in the article is the definition of "poor" mentioned.
According to the U.S. Census Bureau data released Tuesday September 13, 2011, the nation's poverty rate rose to 15.1% (46.2 million) in 2010,[2]
Which mean the "near poor" people are lumped in with the poor population so that it become somehow, 150 million people, which is about half of the population of the US.
That's one reason I'd rather have a state-funded university option provided, instead of funding it retroactively via debt. Basically, the current generation should fund the next generation's education, rather than loading it onto them at the beginning of their careers as debt. Or, if student debt is necessary, its repayment should be tied to income, so payment doesn't amount to more than, say, 25% of someone's income per year.
Though in a way, that's still much better than being on the really low end, because many college-degree holders do get okay jobs. If you've never driven through some of the poorest parts of the American south, it's a quite surprising experience, especially going off the highways into smaller towns. In parts, doesn't feel very first-world at all, with whole stretches of people living in what seem to be barely-standing-upright shacks.
There should be policies that protect students from making bad debt decisions to pay for education that won't pay for the debt. Other than that, I don't see student loans as a significant contributor to poverty.
Either college should be purely a luxury, not needed for most jobs, or it should be covered. I don't like the idea of people "starting out" with a big pile of debt before they can even get to the workforce; that doesn't produce any sort of level playing field. If anything, I'd support Thomas Paine's idea that people should start out with a modest positive net worth, granted upon reaching adulthood, in recognition of the fact that everyone has equal right of inheritance to at least a small portion of the existing wealth produced by the country's previous generations.
To me, it's the responsibility of the current workforce to fund the next generation's ability to reach it. I don't see anything wrong with funding education from general taxes, in any case. It's one of the classic, almost universally agreed upon things that a state should do, which even classical liberal writers (e.g. Jefferson) were strongly in favor of publicly funding.
If it were possible for such a large amount of debt to be granted to a person with no track record and structure it in a way that it could be reasonably paid off, I'd be for individuals paying for their own education beyond what's necessary to be an informed voter. I doubt that's possible, so everyone paying it off over a lifetime via taxation isn't such a bad compromise.
After a certain point, however, the ability of a person to pay off their own debt can be reasonably estimated, and we should let individuals pay for their self-improvement rather than forcing everyone else to pay. In general, we should strive to assign costs to those that benefit from them. Most of the benefits for an education accrue to the student. Some accrue to society. Why not pay for education using a similar breakdown?
"I don't like the idea of people "starting out" with a big pile of debt before they can even get to the workforce; that doesn't produce any sort of level playing field."
Using taxes to pay for education guarantees that you'll be paying for education until the day you die.
"To me, it's the responsibility of the current workforce to fund the next generation's ability to reach it."
I agree, but I'd say it a little differently. Successful people have a responsibility to ensure that every person has a chance to be successful as well. That said, I don't think such responsibilities should be mandated by law. Putting someone in prison because they don't help other people become successful sounds wrong.
It could almost be equivalent to my proposal if you limited the amount of debt repayment to a percentage of income; then it'd be more like a tax you opt into (if you go to the university, you opt into an extra 10% tax). Sweden does something like that for a small portion of university fees. The main difference between that and a normal tax is that the tax would have a cap, which basically benefits the people who hit IPO jackpots and such. Again, I don't see a benefit to that.
Mostly I don't see any benefit to all this accounting, unless it's a roundabout way of making sure that people who hit outlier incomes don't have to pay past a cap. Or is there some idea of libertarian "efficiency" that this is all going to produce? I'm more of a social democrat, and think all this extra accounting is what produces the inefficiency; just tax people and provide public services, the way Denmark (where I currently live) does.
There's efficiency to be had in aligning costs with benefits. As a society we probably pay for more Classics degrees than we should. Beyond that, minimizing the amount of money that is forcibly taken from people is inherently good.
I agree with the ends that most social democrats seek. I just think they should be funded voluntarily, perhaps with some help from the government to inform people where additional funds would lead to the greatest benefit. I don't know if such a system would be practical, but it seems like the ideal we should strive for instead of using force as a first resort.
You'll have to elaborate on this a little better, because it seems misinformed. For example, it would suggest that saving Warren Buffet a billion dollars while taking fifty grand from a hundred poor families is preferred. And that's horseshit.
Though I do share some of your concerns about "force". I think criminal sanctions are resorted to too quickly for a lot of things, both taxes and other infractions (any time you lie to the government, or otherwise do something it doesn't like). I'd rather emphasize civil remedies to collect.
What percent of the wealth should the richest 1% control? Until someone can posit some kind of somewhat reasonable answer to that, I don't see how we can by stunned by whatever the actual figure is.
Unless everyone has an equal share of the wealth, so that there is no such thing as rich people and poor people, it is MATHEMATICALLY REQUIRED that the richest X% have >X% of the wealth, and if within each wealth range there are some more wealth than others, then it is necessary that the ratio w(x)/x, where w(x) is the percent of the wealth owned by the top x% be an increasing function.
People with $1.2M in net worth are usually pretty middle class, especially in the more expensive parts of the country. The bulk of the top 1% are hardcore savers and small business owners. Not nearly as many fat guys with top hats and cigars in the top 1% as is often implied.
Admittedly, that's not Americans in poverty.
Edit: Additionally, I think "wealth" and "money" are not the same thing and as such any argument that the wealth of the poor is being unfairly taken cannot be denied purely on the grounds that they don't pay much in tax. Their wealth is being taken before they even see a monetary representation of it.
The middle class and non-connected sort-of-wealthy are the ones getting screwed by the bailouts.
Unless you assume that the poor have a right to what others earn (as opposed to simply the right to not get screwed and exploited by the wealthy, as the parent is talking about), then the poor have nothing to complain about as far as bailouts go.
They're still better off with the bailouts than they'd be without them. They'd be even better off if policies that prevented the necessity of bailouts were in place back then. I hope the policy changes since then have been enough.
(Basically, the single overwhelming issue is "too big to fail". To the limited extent that this has been addressed at all by regulatory changes such as Dodd-Frank, it has been to make the problem worse.)
(We don't have individual rights today, and we haven't had a consistent adherence to the ideal in well over a century. For example, if you own a home, it can be taken under eminent domain. If you have built a giant enterprise on your own, it can be smashed by antitrust. If you have an innovative idea in nearly any field, you'll find that regulatory restriction make it difficult or impossible to execute, with a small number of exceptions like the computer industry.)
Consider food. You need a job in order to eat. You have to work a lot of hours (maybe with a long commute on top) in order to keep your job, or worse, to make enough money to afford your food and housing. You could save a lot of money and improve your health by cooking your own meals, but that's time consuming. Every minute you spend shopping for groceries or cooking your own food is one less minute you could spend at work. So you live on fast food and a big chunk of your paycheck goes to a fast food restaurant.
Now consider the corporation itself. Its foremost incentive is to provide wealth to its owners. Any incentive to provide value to employees or customers is incidental to that goal, and there are of course ways to avoid doing that. Ideally it's just funneling as much money as possible from the customer to the shareholder.
The poor can't afford to be shareholders. So where is the money going?
Do poor people resent fast food restaurants for providing them with cheaper food than they can make at home (including the cost of their time)? I presume they don't. Fast food restaurants provide a valuable product that poor people want to have. I wouldn't call that fleecing.
Also note that making shit food tasty while still being cheap is indeed fleecing, and the oldest trick in the book: sweet, fat, salty. Consider how cheap it is to make soft drinks, which are easily preferred by most folks, and yet how terrible they are for your health.
Humans are hardwired to seek out certain flavors and characteristics, and large fast food joints do nothing but exploit this.
Now, consider how the markets and government reward farmers for growing things that may be in excess of what people need (lol corn subsidies) and how they drive upwards prices of food perceived as a status symbol (compare "organic" produce or milk with the mass-produced varities).
It's a pretty rigged system.
I'm all for eliminating subsidies, educating people better about nutrition, and mandating that restaurants provide nutritional information about food that consumers are likely to see at the time of purchase.
If you know how to cook, it is pretty easy to make very inexpensive and tasty food that is also healthy and quick to prepare. It is definitely cheaper and faster than eating fast food too. In many parts of the US, the very poor do cook all of their meals because it is a skill you learn when growing up and a great way to save money. A lot of the guys I knew who weren't raised that way always ate fast food because they'd never made a meal in their life. Not knowing how to cook was a significant gap.
I always knew how to cook, so it was easy to eat reasonably well on $10-15 per week for one person. Some of those recipes were fantastic so I still make them even though I'm not trying to pinch pennies.
I'm a big fan of helping people help themselves. Many people live in poverty because of poor financial decisions or because they don't have skills to succeed in the workforce, not because their taxes are too high. In fact our current tax structure incentivizes people to stay in lower tax brackets because as you start to earn more money, you have to pay a higher percentage of your income to the government. I think the following changes would go a long way to solving the poverty problem.
- Focus on providing the basic needs (housing, food and medical attention) by providing those goods and services to those in need instead of just giving people money.
- Stop giving loans (especially high-interest loans) to people who do not have good credit. In my opinion the government should not allow loans to consumers to have an more than 10% annual interest.
- Stop using the IRS and tax policies as a welfare assistance program. They are probably one of the worst entities able to determine if someone is really in need.
As others have pointed out, American poverty doesn't really even compare to situations of people in third-world countries. Poor in this article refers to a statistic released by the census bureau, which best I could tell is calculated using thresholds based on one's income and how many people live in a household. Instead it should be based on whether someone is getting enough to eat, has somewhere to live and can get medical treatment.
I'm currently working on a crowdfunding (both equity and project) for universities, because I believe that democratization of the venture capital markets will be a good thing for America.
Like most things, the more data points (i.e., crowd investors), the more rational and likely to succeed is the endeavor.
OK, but IMO disparities in income is a more relevant in a discussion of poverty, and disparities in income in the US are not as high as disparities in assets.