Because poor people are not stupid. They're often actually pretty damn rational within their constraints. Smarts alone does not equip one to handle a windfall.
This is a very crucial point. The so called "stupid" financial behavior of people in (first world) poverty is anything but, it's a series of carefully calculated and measured responses to extreme inflexibility. Almost all means of establishing long term financial stability involve either a) put away some money now, wait for some time, then receive more money or b) risk losing some money for the chance to gain more money in a way that averages to a net positive over time. Neither of these are possible when you do not have flexibility, you can't afford to put away money when doing so means not eating for a week, and you can't afford to risk money for more money when coming out on the losing end of that deal means becoming homeless. You have to have a completely different approach to managing money when in poverty, and it sticks with you mentally even after escaping to a more stable situation.
- If earning a lot was just a matter of intelligence, you'd have as many people earning $100k coming from ghettos, as from rich neighbourhoods. Because intelligence isn't correlated to the social status of your parents.
- Intelligence isn't knowledge. If you're walking on a path riddled with deadly hidden traps, your intelligence will not help you much. And if you're in a race (and career is a race against other people, and against time), even if you're bright, you'll be left in the dust by people who might not be as smart, but were better prepared by their parents and community.
Those are not the "outlying cases" as you call them. The outlying cases are when someone manages to use his/her intelligence to get over all those challenges and switch into a different social class. A cool book called "Outliers" comes to my mind now. It's one of the classics and I highly recommend it: http://www.amazon.com/Outliers-Story-Success-Malcolm-Gladwel...
The thing that I still understand in the comic is why the hell poor people find it ethically acceptable to produce children when the children will later have such problems in life.
If I were a poor child, I'd be really furious on my parents that they didn't use condoms (or another method of contraception) to prevent the suffer that I'd be in from the start.
The human mind and human decision making do not work in the way that you're suggesting, especially when it comes to reproduction.
If you were a poor child, you might not even have been taught or have ever learned the self-awareness necessary to be angry at your parents for such a decision. Plus, I find it hard to believe that you'd have the exact same take on poverty and birth rates were you actually poor, and not simply hypothesizing about what it's like to be poor.
Because being smart has little necessarily to do with finding a way out of poverty. Your question is approximately as bizarre as asking "if they're smart, why haven't they found a way to bench press 600 pounds." Yes, some people can bench press 600 pounds, and yes, intelligence will likely help developing and sticking to a training and diet regimine. But there are a lot of people who could never bench press 600 pounds, regardless of how smart, well-trained, etc. they are, due to things completely beyond their control. And I hope that no one would see one of these people and conclude that they must not be very smart if they're unable to bench press 600 pounds.
> If they're smart, why haven't they found a way out of poverty yet?
It's tempting to think you're just trolling, but this view seems to be widespread enough that it's worth a serious answer.
It's because of the time value of money. Money now is worth more than money later - and it's extremely non-linear, not only with time but it also varies with the amount you have. So any money you don't have now corresponds to (literally) exponentially more money you won't have in the future, all things being equal. Even a smart person will find this hurdle very difficult, maybe even impossible, to overcome without a large dose of luck.
For example, what do you do if your car breaks down? Obviously you get it fixed and then move on with your life.
Now, what do you do if you're poor and your car breaks down? Assuming we take starving to death off the table, your choices likely boil down to losing your job because you can't travel to it or getting a payday loan at an usurious interest rate. Ironically, if you make the conscientious choice then people on internet message boards will call you lazy, whereas if you make the rational choice then people on internet message boards will call you stupid.
Whatever you choose will suffice to keep you poor for long enough for your car to break down again - which it will, because at no point would you have had enough money to invest in one that won't. Now apply this scenario to absolutely everything, large or small, that you ever have to buy and there is the answer to your question of why the poor haven't found a way out of poverty yet: because being poor is much more expensive than not being poor.
