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What if the problem of poverty is that it’s profitable to other people?

theguardian.com

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Re: What if the problem of poverty is that it’s profitable to other people?

#101

Post by etherael »

nxzero wrote: post #89
jdietrich wrote: post #77

The thesis is transparently false. While the deprivations of poverty may be exacerbated by exploitative business practices, they are self-evidently caused by a lack of income. Software developers in San Francisco or lawyers in NYC may complain about high rents, but they are not impoverished by those rents. Someone living on $733/mo of SSI remains poor even if their rent is free. The author mentions a significant root…

Poverty has ultimately nothing to do with opportunity, but those less unfortunate; literally, those without luck. Buffett would be the first to acknowledge that he's been lucky, and I would claim that while it's completely true that poverty has many sources, I would not agree that luck cannot be removed from the process. As such, poverty will always be with us.

I assume you actually mean that luck cannot be removed from the equation when you say "I would not agree that luck cannot be removed from the process."?

You may be onto something there, certainly resources assist with wealth creation, but there's very little that is a sure bet, and risk and reward in the financial sense are frequently correlated. If it is a given that one wishes to minimise the degree to which they are beholden to luck (reducing risk) they are simultaneously frequently taking the other side of that bargain too (reducing reward). And you end up with poor people working terribly bad reward jobs on wages that left to market forces might not even be enough to cover their cost of living at all, but are pushed up by minimum wage laws, and subsidised by state social welfare programs (put it this way, and it's actually the state that profits from the poverty of other people by trading subsistence living for political capital, a conclusion the guardian would likely be utterly horrified by)

People just trying to scrape by, keep a roof over their heads, clothes on their backs and food in their bodies are not prone to taking smart, calculated risks on their financial situation. In fact the example that springs to mind with the kinds of risks that these people take are actually really bad ones (lotteries, gambling in general, etc). They don't for example build a wealth portfolio, start a business, or even just invest in the skills necessary to get a better job that would yield a higher wage.

It seems that risk management education is a vanishingly rare thing in the group under discussion, and perhaps that's something that would go some way to addressing the role that you highlight when you refer to luck.

Re: What if the problem of poverty is that it’s profitable to other people?

#102

Post by petra »

sokoloff wrote: post #11
darpa_escapee wrote: post #10

Earlier quoted context omitted.

Predatory businesses are still exploitation. > Building such a business (and I assume running a 131 unit mobile home park) is absolutely work, the value of which is evident by the paying tenants. Running a sweatshop is still work, the value of which is evident by its customers. Just because someone needs to work or a place to live doesn't make it right or commendable.

Let's think in terms of solutions. Concretely, what would you propose to change to make it better? Have you started to raise funds to start and run that business?

Few Ideas:

1. Let a non-profit run those kinds of businesses. The non-profit , before starting would establish clear rules that prevent eviction, discrimination and the other nasty stuff. Financing should be gotten from institutional investors, by promising some fixed rate of return.

2. Let the government run that, it works pretty well in many places around the world , in creating a relatively stable living environment.

3. better regulation to prevent nasty behaviors.

Re: What if the problem of poverty is that it’s profitable to other people?

#103

Post by Animats »

US housing has become much more expensive as a fraction of income since WWII. As the article points out, the big problem in the Great Depression was food, not housing. In 1950, most people in apartments in NYC were paying about 10% of their income for rent. Now, 60% in NYC, about 30% nationally.

Why is this?

Some of it is tax policy. Tax policy is very favorable to property owners. Not only can landlords deduct mortgage interest and depreciate over 27.5 years, when someone buys an old building, they can depreciate it all over again.

Antitrust law doesn't seem to be applied to rental property. In some smaller cities, there are only a few big landlords.[1]

Given the current low cost of borrowing, rental housing prices should have dropped. But they haven't.

[1] http://people.oregonstate.edu/~emersonp/rentcontrol/rc2.pdf

Re: What if the problem of poverty is that it’s profitable to other people?

#104

Post by flashman »

Retric wrote: post #68
zw123456 wrote: post #59

There is an old saying that "if you took all the money away from all the rich people, and spread it around evenly to everyone else, within 2 or 3 years, all the formerly rich would be rich again having taken advantage of the poor who don't know how to make and keep money". This adage, although heartless to be sure, has some degree of truth to it in my view. The problem is twofold, 1) a lot of people become rich not b…

Depends, if you distribute resources aka stock land etc then you are going to end up with a different set of rich people. If you just redistribute money then it's like handing out money in monopoly after every property is bought, it might make the game take longer but the end game is not going to change.

I wonder how Monopoly would play if you got assessed for Income Tax when you passed Go, or perhaps every fifth turn, instead of when you landed on a particular square.

Re: What if the problem of poverty is that it’s profitable to other people?

#105

Post by flashman »

jdietrich wrote: post #77

The thesis is transparently false. While the deprivations of poverty may be exacerbated by exploitative business practices, they are self-evidently caused by a lack of income. Software developers in San Francisco or lawyers in NYC may complain about high rents, but they are not impoverished by those rents. Someone living on $733/mo of SSI remains poor even if their rent is free. The author mentions a significant root…

> Improved regulation of the rental market would be a minor improvement at best.

Taking Desmond as an example, even with no rent he would have to live on $20 a day. That would still be grinding poverty.

Re: What if the problem of poverty is that it’s profitable to other people?

#106

Post by brbsix »

c0nducktr wrote: post #92
awt wrote: post #45

What if poverty is profitable to the government? What if, through welfare, the government encouraged single motherhood, and thus poverty, and thus dependance on the government? What if single mothers were held responsible for their choice to have children with bad men?

> What if single mothers were held responsible for their choice to have children with bad men? Then children will suffer.

Children will suffer either way. You can accept a relatively small amount of suffering and address the issue in the here and now (stigmatize the women, pose alternatives like adoption, thus set an example of what not to do) or you can go the other route (make excuses, subsidize their behavior) and end up with a massive self-perpetuating culture of single motherhood, dysfunction, and criminality in the long run. We're currently seeing the latter. If you thought eugenics was terrible, consider what the opposite would look like.

Re: What if the problem of poverty is that it’s profitable to other people?

#107

Post by Spooky23 »

jdietrich wrote: post #77

The thesis is transparently false. While the deprivations of poverty may be exacerbated by exploitative business practices, they are self-evidently caused by a lack of income. Software developers in San Francisco or lawyers in NYC may complain about high rents, but they are not impoverished by those rents. Someone living on $733/mo of SSI remains poor even if their rent is free. The author mentions a significant root…

Poverty is more than lack of money. Lots of people lack funds, but would violently disagree with you assessing them as poor.

Think about Maslow's hierarchy of needs -- people need a base to function properly. When your home can vanish in an instant, it changes your mental stance and influences your behavior negatively.

Government is supposed to represent the people, not slumlords. We've perverted the notion of democracy into some sort of weird embrace where "the economy" (where the economy is whatever special interests weild influence today) is a priority above the public welfare.

If a slumlord, or a corrupt contractor profiting off of others misery (operators of "nonprofit" social services orgs, private prisons, etc) is happy, democracy has failed.

Re: What if the problem of poverty is that it’s profitable to other people?

#108

Post by bufordsharkley »

flashman wrote: post #104
Retric wrote: post #68

Earlier quoted context omitted.

Depends, if you distribute resources aka stock land etc then you are going to end up with a different set of rich people. If you just redistribute money then it's like handing out money in monopoly after every property is bought, it might make the game take longer but the end game is not going to change.

I wonder how Monopoly would play if you got assessed for Income Tax when you passed Go, or perhaps every fifth turn, instead of when you landed on a particular square.

> I wonder how Monopoly would play if you got assessed for Income Tax when you passed Go, or perhaps every fifth turn, instead of when you landed on a particular square.

The alternative game to ur-Monopoly, that is "Prosperity", had all rents split up when a player landed on a square. The property owner got a rent payment that reflected the value of the houses/hotels, whereas the rent on the land itself was paid to a common fund.[1]

[1] http://landlordsgame.info/games/lgp-1932/lgp-1932_rules.html

Re: What if the problem of poverty is that it’s profitable to other people?

#109

Post by [deleted] »

nkurz wrote: post #70
sokoloff wrote: post #23

Earlier quoted context omitted.

I'm not so sure the corner bodega belongs in the same category with the payday loan assholes. Yes, the corner bodega is more expensive than the full grocery store, but they also probably have way lower sales per hour of labor, lower sales per square foot, lower sales per other overhead (rent, insurance, security, utilities, taxes), higher credit card interchange fees, higher shrinkage and spoilage, and pay more for t…

What's different about the payday loan industry such that the "better to have some alternative than no alternative" argument not apply? Running such a business clearly takes lots of work, and clearly there is lots of demand for the services they provide. What differentiates them from other business that provide "value"?

[deleted]

Re: What if the problem of poverty is that it’s profitable to other people?

#110

Post by danharaj »

CydeWeys wrote: post #93
danharaj wrote: post #85

Earlier quoted context omitted.

That's an incredible statement, what's your support for it?

How about you answer one of my questions before you ask me yet another one. What exactly are you proposing if neither people nor government are allowed to own property? I'm not aware of any such scheme in all of modern civilization. The onus is on you to explain.

I think that's a very open ended question, but a very good scholarly source describing alternative systems to governing resources that isn't too radical but is also substantially different from privatization and market systems is "Governing the Commons" by Elinor Ostrom. She's got a Nobel prize in economics if that lends her work any credibility.
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