Government’s Not the Solution to the Poverty Problem

Government can’t solve it, but it can make the poverty problem worse.

poverty etc

Here is an article I think is quite interesting: “Why Poor People Stay Poor.”

An excerpt:

It’s amazing what things that are absolute crises for me are simple annoyances for people with money. Anything can make you lose your apartment, because any unexpected problem that pops up, like they do, can set off that Rube Goldberg device.

One time I lost an apartment because my roommate got a horrible flu that we suspected was maybe something worse because it stayed forever–she missed work, and I couldn’t cover her rent. Once it was because my car broke down and I missed work. Once it was because I got a week’s unpaid leave when the company wanted to cut payroll for the rest of the month. Once my fridge broke and I couldn’t get the landlord to fix it, so I just left. Same goes for the time that the gas bill wasn’t paid in a utilities-included apartment for a week, resulting in frigid showers and no stove. That’s why we move so much. Stuff like that happens.

Because our lives seem so unstable, poor people are often seen as being basically incompetent at managing their lives. That is, it’s assumed that we’re not unstable because we’re poor, we’re poor because we’re unstable.

Since Slate is an unrepentant liberal web magazine, this article is undoubtedly intended to persuade people to support more aggressive income redistribution policies.

I think that is insane.

But that is not because I believe the problems are imaginary. It is because the regulatory-welfare state merely adds problems and increases poverty. So the bad news is real but trying to “help” the way most Slate writers and readers envision would make the situation worse.

I completely understand people claiming that poverty can be hopeless; I just find it inexcusable that they then claim that the government shows promise.

The author’s first anecdote comes from how her car ended up impounded. She lost it because the daily charge for “storing” the car was more than the money she made. Losing the vehicle meant a six-mile walk to work for her and her husband. That, in turn, meant getting fired for showing up to work wet or sweaty, and then the loss of the apartment.

A few years ago I was smashed off the road in a hit-and-run accident. The police were extremely efficient in making sure my car was towed away. I was not in the proper state of mind. I felt relieved to be alive and non-hospitalized. I felt rescued and safe. I was delusional. The tow truck gave me a ride to a fast food restaurant on the highway from which I could call my wife to pick me up.

I had to immediately figure out how I was going to borrow a replacement vehicle to get to my job. I had to get my insurance company to look at the wreck. I only realized later that I had been distracted and stupid.

The impound lot where my car had been towed was charging an exorbitant amount for my wreckage to sit on their empty lot. All of the things I needed that I had failed to remove from the wrecked vehicle were off limits to me until I arranged to have the wreckage towed elsewhere and paid the lot the hundreds of dollars they demanded.

If I had been hospitalized from the accident, and had been delayed in contacting the yard, I could have owed thousands. As it was, they recommended a local junkyard. I called up the junkyard and got them to make me an offer. But I was starting to wise up. I called another junkyard that had no sweetheart relationship with the people who were shaking me down and got and immediately was offered another hundred dollars more, even though their costs in towing the vehicle to their property were probably double.

So I managed to get the car out of hock because it had been totaled so that I didn’t need to try to get it towed and fixed somewhere. I was able to cover my losses.

When I went to pay off the people who were holding my car, the first thing I noticed was that their wall of the lobby was covered with plaques of appreciation from the local police and fire organizations, their sports leagues, etc. Buying a territory from the municipality was obviously written into their business model. The tow truck that took my vehicle and paid me for it was very used—nothing like the glistening and equipped truck that had originally “helped” me with my car and put me into this money-draining situation.

I understand that, when availing oneself of emergency services, one has to pay enough money to motivate entrepreneurs to provide those resources. But in this case, no one had made any agreement with me or provided any advanced warning. For all I knew at the time the tow was part of the police services. The business model was predicated on my getting entangled before I knew what was happening.

Live and learn. When you think you are being helped in an emergency you had better remember to put your hand on your wallet, ask questions, and make demands, even from a stretcher if you have to.

If you are on the conservative/libertarian end in your political philosophy you need to realize the poverty described in the Slate article remains a very public issue even for us believers in private enterprise. Courts and municipalities are every bit as biased toward shaking down the poor and accommodating the upper to middle classes as any other group or institution. Read this Slate piece and then reread what is going on in Ferguson and other municipalities. Remember, the courts are reinventing debtors prison for the fines you can’t afford to pay in a timely fashion . This is, by the way, sometimes fatal.

The bottom line is that, along with the worldwide economic crest that we have passed, we are living in a nation of local municipalities that still want to pretend that the standard-of-living bubble has not sprung a leak. I’d love to recover the upward trend line, but in the meantime we need to concentrate on not becoming any more of an abusive banana republic than we already are.