Structural barriers to poverty

An interesting column on Poverty by economist Bradley Schiller contends that for the vast majority of impoverished Americans their condition is short term. Schiller pointed to a study by the University of Michigan which found that only 5% of poor Americans stayed poor for ten years out of the 13 years they were studied. That means that 19 out of 20 poor people were able to escape extreme poverty most of the time.

Democrats would be well advised to pay attention to this because it helps explain why America continues to be a place where optimism sells. In many ways the Democrats are too steeped in the Era and ethos of the Depression.

Schiller suggests that the best thing to do is to work on eliminating the structural barriers which make it difficult for people to escape poverty. One of those is a very Republican barrier. Usurious interest rates of short term loan business like title loans have become widespread as they left the Republicans Deep South in search of new customers in Republican leaning states. They are very much like the company stores of the coal fields or tenant farming which replaced the plantations after the Civil War.

In Republican eyes if a good ole boy can get rich by earning a 100 or 150% return on a loan to some poor desperate person so be it. Not exactly a family value – usury. Apparently it doesn’t make any difference how you make a buck so long as the law allows it and keeping it legal is what the Republicans want.

Yet a ruinous loan is a structural barrier. It should also be noted that Republicans have also  become the primary champions for gambling which provides a sin tax for government. Gaming in America reminds me of the failing Soviet Russian’s dependence in the late 1980’s on revenues from vodka sales which helped to keep the population in a compliant stupor.

Schiller also mentions the 5 million low achieving students who drop out of school every year. This is another critical barrier because poorly funded school systems drive kids out before they can get the tools to help them achieve success. This too is an outcome of Republican politics because Republicans champion “local control” of schools which all too often means localalized financing of schools.

I’ve thought for years that Congress should withold federal education revenue from states which refuse to implement some financial equity between their rich and poor school districts. I suggested this to Paul Wellstone a few months before he died. The Senator didn’t disagree with me but told me that too many Congressmen would fight such a plan.