Monday, May 21, 2012

Ehrenreich on political and economic markets that harm the poor

Individually, the poor are not all that tempting to thieves. Mug a banker and you might score a wallet containing a month’s rent. Mug a janitor and you’ll be lucky to get bus fare to flee the crime scene. But the poor in aggregate provide a juicy target for anyone depraved enough to make a business of stealing from them.

Great point. Markets will arise to engage in trade with groups of people. In relatively rare cases, consumers will be relatively vulnerable to significant fraud or coercion within markets. In debatable cases, consumers may be "irrational" and could potentially be protected from their own bad decisions.

The trick, however, is to rob them in ways that are systematic, impersonal and almost impossible to trace to individual perpetrators.
Again, this could happen in markets. It certainly happens in govt policy all the time-- as govt works to help special interest groups and imposes subtle costs on the general public, often disproportionately on the poor. 

Ehrenreich criticizes lenders in the high-risk / high rate-of-return niche of credit markets. The market seems quite competitive, but perhaps the consumers are morons. I'd like to extend a lot more dignity to poor people than Ehrenreich, but maybe she's right. 

She critiques employers who "enrich taking money from their employees...requiring employees to work hours for which they’re not paid, failing to pay minimum wage and refusing to honor overtime pay differentials." This is an interesting critique, since it hits all workers-- and again, she's implicitly assuming few options for the working poor and/or their irrationality. Maybe the poor are hit harder by this, but why do they stand for it?

Ehrenreich points to local govts and the imposition of fines and fees on defendants-- for drivers license problems, polluting with cigarette butts, modest amounts of pot, putting your feet on a subway seat, etc. 

She wraps up with this: "Before we can 'do something' for the poor, there are some things we need to stop doing to them." I've written a book and a half on this-- as well as numerous articles and blog posts. I couldn't agree with her more. Unfortunately, she advocates many policies that hammer the poor. 


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