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Why it's expensive to be poor (washingtonpost.com)
183 points by tialys on May 20, 2009 | hide | past | web | favorite | 194 comments

Data point: I once worked on software for very large retail chains which allows those retailers to group stores by "zones" for pricing purposes. One of the commonly defined pricing zones is "inner-city", which consistently get their prices bumped by, say, 5 or 10% for many items. The reasoning behind this was exactly as laid out in the article: inner-city residents lack transportation options, and so retailers can command higher prices.

I forgot what article I read it in, but there was something a while back about this. It justified the higher costs by describing the extra costs of the stores in these areas. Apparently, many of these stores have higher theft rates and need for security, which drives up prices.

Here is a great blog post describing the crime problems of an inner city grocery market: http://www.detroitblog.org/?p=604 From the post:

A day in the life of Tom Boy Super Market consists partly of stopping people from robbing the place blind. "There’s so many days when I don’t do nothing," Jitu says. "My main job is to run the office and I don’t have to be here, but I have to come anyway. You don't want to have, like, one person here, and then half the store is gone. We have to have so many people. They don’t have to do nothing, but they have to be here."

"Most grocery stores have a razor thin profit margin on the merchandise they sell therefore it is imperative for shrinkage to be kept to a minimum. For example with a profit margin of 5% a store must sell 500 dollars in merchandise just to cover the cost of a 25.00 dollar item. In one year a store with merely twenty five dollars of losses a day must increase sales by 175,000 dollars to break even. Keep in mind that for many supermarkets 5% profit margin is high"


Right, the article should have been about it being expensive to be the urban poor. Suburban poor have it much better. They largely have cars, because people in a city pay more to park a car for three months than people in the suburbs pay to buy a car. They shop at and work Wal-Mart rather than 7-11, and Wal-Mart costs less and pays more. Etc.

The moral is, if you're poor, get the hell out of the city.

I don't know about suburban as in "within commuting distance to the city", but rural poor largely have cars because they need them. You absolutely cannot get by in a rural area without a car, and that is a huge barrier to entry to the job market. Contrast this to living in the city (or close enough so that you can commute there), where you can commute whenever/wherever you want with a MetroPass for $70 a month .

The cost of living is much lower in rural areas, but the pay for an equivalent job is much lower as well.

If you're a poor person with an unskilled job, if you are in the city you can get another job the next day. In a rural area, this is close to impossible - jobs are very few and far between, so if you lose yours you might have to move to an entirely different location. (for an unskilled job, there are obviously more choices, but if you lose a skilled, professional job in a rural area and you don't have enough saved up to move somewhere else, you're pretty much fucked.)

So I dunno about the city vs. the suburbs, but if you are poor, you do not want to be anywhere near rural areas - they are absolute traps that leave you either on government assistance or at best in a situation with a single point of failure.

The urban poor usually have much better bus access and walking access to jobs. That saves a lot of money. The cost of housing is also super cheap. And many inner cities do have inexpensive super markets, cheap ethnic grocers, and dollar discount stores for household goods. I'd need to see some actual stats on the price of milk or eggs by neighborhood. I'm not sure inner cities are really that much more expensive.

The poor city I'm adjacent to, Trenton, has no supermarket. People simply have to shop at the convenience stores, which are more expensive anywhere. I'm not aware of anything you mentioned inside the city--just in the suburbs surrounding it. Housing is not super cheap: 800-1200 a month rent is typical for a far-from-glamorous home, maybe 700 if you're willing to live in the high-crime areas. Most people with kids would do anything to stay out of those parts. That doesn't leave a lot for food, utilities, child care, transportation, and misc. costs.

I'm not really sure what city you're considering. It's far from the reality I've seen.

What do you mean Trenton has no super markets? A quick google maps search shows over a dozen super markets and grocery stores. The rent you cite is less expensive than the suburbs. The cities I know best are Philly, DC, and New Haven. In each of these cities, the poor, inner city areas have lower housing prices than the surrounding suburbs, and they have available super markets.

Those small grocery stores aren't the same as a supermarket, and the supermarkets listed aren't really in Trenton. For some reason some of them are listed as such, but if you look at the map they're a bit off elsewhere. We don't consider that part of Trenton--one of those is in Hamilton, for example. Trenton's last supermarket closed back awhile ago and it's an obstruction to food access often-mentioned by non-profits in the area.

I'm not sure about rent. In states south from NJ those rents are high for suburban areas, for housing in much worse shape (chipping lead paint, etc). You're right in terms of staying within New Jersey--those are low in a state with very expensive housing (and everything else), but considering both health and the pay people get in the poor areas receive I'm not sure if it's a fair comparison. In my own experience, the suburban poor do seem to be better off than the urban poor (and I think it all trumps rural poverty)--and I love cities, so I really wish that weren't the case.

I call BS on some of the "facts" in this story.

...an economics professor at the University of Massachusetts at Boston [says]. "You have to work a lot of hours and still not make a lot of money...."

Just not true. The typical poor family works less than half as much as the typical non-poor family (1000 hours/year vs 2100 hours/year).


You ask him why he didn't just go to a bank...He says he lost his driver's license and now his regular bank "won't recognize me as a human.

A check cashing place requires the same, usually more stringent ID than a bank.

...Jacob Carter finds himself standing in a checkout line at the Giant on Alabama Avenue SE...The clerk suggests that he use his "bonus card" for savings...Carter tells the clerk he has no such card.

Bonus cards are so hard to get. You need to walk over to the courtesy counter, ask for one, then fill out phony information on the card to get it.

I agree with you here. Some of the things that the article dismisses as impossible are quite possible, like getting a bank account. You have to waste an hour waiting in line to get an ID, and then you can save $15 every time you get paid. That sounds like a good deal to me. These people should do that, and stop letting the check cashing places take advantage of them. They can also go to the public library and pay their bills online, saving the the cost of either postage or the fee on the money order. None of this costs money or much time, but it will save money.

Also, why are people with a 10 minute drive not riding a bicycle? If you can't afford a car, and the bus route isn't convenient enough, it's time to get a bicycle.

I also don't buy the article's premise that having a car is mandatory. I live in a big city (Chicago), and I have never owned a car. I ride my bike to the grocery store (even in the winter), take the CTA to other stores I need to visit, or just order what I need online. All of these things save me money, and don't cost me much time. (It would take as long to drive to the grocery store ad it takes to ride my bike.)

Don't get me wrong, I know the poor have a hard life. But some of their problems are easily fixed, if they are willing to invest time now to save time later.

That is kind of the point of the article. Part of being poor is not knowing ways of saving money. That is why they are stuck in this vicious circle.

That's a valid point, but I don't see anywhere in the article that seems to be trying to make it.

Then the article should be about how expensive it is to be dumb, but it's not.

Not taking this out on you. But, start a business then that teaches them this and find a way to make money doing, or get donors and do it as a none profit. I am not saying that you are saying have the government do it for them, but that is the vibe, I get with the vast majority of people in this thread.

The government is not the only people that can help the poor, and likely not the best to help the poor. Why is this? Because the government does things on tax payers dime, they don't have a 100% control of the money.

I am sorry, but even if this is the case in real life that the poor have it harder, which I do not doubt, it does not make the solution government intervention.

"I am sorry, but even if this is the case in real life that the poor have it harder, which I do not doubt, it does not make the solution government intervention."

Why is that any less a solution than starting a business?

I realize this place is full of people who want to start businesses, but at least attempt to make an argument why that is the case instead of just stating it as if you're saying "the Sun rises in the East"...

In the case of poverty it's in the taxpayers interest to get rid of poverty, because society is footing a lot of the bill. The interests seem much better aligned than those of someone running a business trying to extract money from the people who have none.

Try living in rural North Florida without a car.

You're lucky. I live in Appalachia without a car. If I don't want to pay $11 for cab fare, I have to walk 5 and a half miles over a MOUNTAIN to get to work.

Bikes are good for non-poor people too. Walking is not the only option if you are car-less.

I'm not allowed to say this, because I'm not poor, but I'm going to break that taboo.

Many people have to walk that far to get clean water. Many people in history had to walk further than that to get to school or work before cars were invented.

I'm not saying you should do it, or should be happy to do it, or even that you can do it. I'm trying to point out that your somewhat defensive retort can be interpreted in the context of a world where it's standard for people to drive many miles to work, or one where people walk many miles to survive. Maybe neither is the best context to consider it.

(I don't mean to be preachy, but to comment as a means of thinking about your reply. I want reply and discussion, not to be pushing a stupid opinion).

> Many people in history had to walk further than that to get to school or work before cars were invented

When nearly everyone has a car, being able to get to distant places on a strict time-table becomes expected.

<i>...Jacob Carter finds himself standing in a checkout line at the Giant on Alabama Avenue SE...The clerk suggests that he use his "bonus card" for savings...Carter tells the clerk he has no such card.</i>

The way I understand the paragraph is that Carter doesn't even ask because he thinks it is something beyond his possibilities. Just one of the many things he cannot get because he is poor.

In fairness to the other side, that sounds like a problem with Jacob Carter and his assumptions than with "the system." We can't really blame them for that, can we? I'm sure they WANT him to use they card, just as for any other class of people (so the retailer can use that information for advertising, move the goods they desire to, etc).

I'm sure they WANT him to use they card

I'm not.

You almost never have to walk to the courtesy counter; you can fill it out while standing at the checkout. But people typically don't know this, in my experience, and the cashier is unlikely to enlighten them, since then he'll have to wait for them to fill it out while there are people in line, etc.

Things like this are important to know, and if you don't already just know, you have to ask about them constantly. If you don't know that, though, and you're poor, it feels as though you're asking for handouts or special help whenever you aggressively inquire about this sort of thing.

They can take a phone number too; I give them nnn-555-1212. It's always registered and you get the discount. I use this on vacation - "What's the area code here?" "808..?" "My number is 808-555-1212". Bingo.

But yeah, it's a hack.

At most stores I've been in, the cashier will enter the store "bonus card" number if you ask them to. In fact, they often enter the number before I can even get my card out.

I'm surprised they don't do this in DC. It must be a Chicago thing.

Safeways here in Silicon Valley will ask for your phone number (the card is linked to this) if you forget your card. Pretty handy.

Curiously, my parents never signed up for a bonus card because they use it to track your purchases and my dad was not comfortable with this. Once I moved out, this habit lasted for exactly one visit to the supermarket before I realized I could save 10+% and got one. Money > privacy.

Oh, they do that around here at some stores, too (not the more upscale ones, interestingly). Around the Columbus, GA area, though, where I used to live (in east AL), I don't remember that happening. Of course, I shopped mostly at the super Walmart, then, and they don't have a card.

I had high hopes for this article (based on the title), but was utterly disappointed by it. It seems to serve no purpose other than to provide dinner-party fodder for the middle classes hoping to project a sense of I'm in touch with the poor empathy.

It deals with a generality that is stunningly obvious: it's expensive to be poor. In the space of five pages, it struggles to get beyond that generality. There are a handful of anecdotes and equal number of catch-phrase expert opinions that barely scratch the surface.

Where is the data: how many people are actually affected by these factors (not merely 'poor'), to what extent, and at what ultimate cost (in dollars).

Where is the root-cause analysis: is being poor linked to class / expectations of life / upbringing?

Where is the counter story: examples of people who got them selves our of the trap - how did they do that? What made them different.

Where is call to action: if this is truly an oh-so-terrible-problem then where is the call to action? What are readers to do?

I apologize now if this comes across as a rant. In my opinion this is a real and growing problem for the developed world, and as such a article that merely skims the surface like this one comes across as disingenuous, so I suspect the motives.

I'm reminded of the 1984 hit "Feed the world". The final lines of the verse (sung by Bono) always sends a chill through me:

  There's a world outside your window,
  and it's a world of dread and fear
  Where the only water flowing
  is the bitter sting of tears
  And the Christmas bells that ring there
  are the clanging chimes of doom
  Well tonight thank God it's them instead of you  (Bono)
This feels like classic 'tonight thank God it's them instead of you' journalism.


I apologize now if this comes across as a rant.

Actually, I think yours is the best comment of the entire page.

What is it they say, "money rolls uphill"?

It's very true that when you don't have funds to make financial investments that pay off over time you end up even deeper.

I guess this is why I think progressive taxation is "fair", people with higher incomes can leverage it so it makes more difference than the apparent income difference would indicate.

This is exactly the arguement I make when people tell me that progressive taxation is some sort of evil and "fair" is when everyone just pays a fixed percent. I usually say "money has its own economies of scale" and a progressive tax is just a way to address these. "Money rolls uphill" is a nice way of saying that. I hadn't heard that before. I think maybe I'll borrow that. Thanks.

Rich people pay more taxes if you have a flat tax rate too.

How do you know how much progressiveness you need to counteract the vague phenomenon you describe? How can you be sure a mere proportionate increase wouldn't be enough to do it? Or even less?

The unfortunate answer is trial and error. If we agree that money does have an economy of scale but that its very difficult to measure, ignoring it because we can't measure it isn't much of a solution. The idea is that money has a decreasing marginal utility as well as a "money makes money" economy of scale. A subtle and well tuned progressive tax would keep the tax (although small) from overwhelming the poor who are right on the edge and also ask more from those who can afford it the most while still not overly dampening their incentives to achieve. Like Terry Pratchet so succinctly said "its the difference between using a feather and using a chicken".

Tax rates are determined by something like trial and error now, but the test is not whether they produce equality, but simply how much you can extract from each group without causing social disasters. You can take away about half the money rich people make before you start to break your economy, but if you took half the money poor people made, they wouldn't have enough left to live. Hence you get progressive taxation.

Look at the wealth accumulation with time of people with different incomes. I bet you that someone who makes $80k/yr will accumulate a whole lot more wealth with time than someone who makes $40k/yr (~ median income in US), and compare to those that make $14k/yr (what you make in a year of full-time work at minimum wage). That should tell you what the ROI of money made at various income levels is.

Cost-of-living varies greatly, and in some areas 80K/year may really not be different than 40k/year elsewhere.

Unfortunately, what I have come to realize is that it is getting harder and harder to be under a certain threshold, and in a large part that is driven by the outrageous health care/insurance costs in the U.S..

It tells you that if that's your hypothesis. If you think rich people are smarter, it tells you that not only do they make more money, but they're more responsible about saving it, too. So even though Mr. $80K has to buy a nice car and a couple suits, and Mr. $40K doesn't, Mr. $80K still spends less on liquor and lotto tickets.

It tells me what if what's my hypothesis?

I really dislike when people use the word "smart" or "intelligent" in these situations, because it makes it sound like "intelligence" is innate, like a genetic trait. Even people's IQ scores are not genetically determined, and an even more amorphous trait like "ability to amass monetary wealth" probably has a lot more to do with skills you acquire during your upbringing than with genetics.

So if you want to say that rich people are better at gathering wealth, sure. That does not imply that the poor people, if they had been swapped at birth, could have acquired the same skills from the same situation.

Don't get distracted with the intelligence thing. His point is simply that you can't tell how much of the growth in people's fortunes is due to money rolling uphill, because it's probably not the only factor.

I've always really hated vehicle emissions testing. It's evil. The government colludes with the auto industry to force perfectly fine but slightly older vehicles off the road. And 90% of the time it's not even related to emissions--- some damn sensor is just faulty. For the middle class it's a costly expense. But if you own a car that costs $1500 but to pass emissions you have to spend $1000 to get it fixed, you're hosed. So you don't have any option but to drive an unregistered vehicle, and so the cycle continues...

Putting $1000 into a $1500 car still makes it much cheaper than any new car you can buy in the US.

As air pollution expert Glen Class used to say (while acknowledging its disproportionate effect one the poor), the most effective thing you can do improve auto emissions is to remove the oldest 10% of cars from the road as they contribute emissions equal to the newer 90%.

While I don't know who colludes with whom, new cars really are that much better emissions wise than older ones.

Well, that varies by state, I think. Wisconsin had specific exemptions for cars over a certain age, or cars that would cost too much to bring in line. You just had to get an estimate from your auto shop demonstrating that compliance would exceed a certain amount, and you'd be waived.

I feel bad for the people mentioned ... however, just by virtue of being in the US/Canada/Western Europe etc. you have already "won life's lottery".

Is it also expensive to be a flea-bitten, hungry, malnourished baby in Africa and with only a 50% chance (or whatever the number is) of making it to 25 years old?

No matter which country has higher mobility, the reality is, you can in fact improve your lot in life if you are poor and in the USA.

".. however, just by virtue of being in the US/Canada/Western Europe etc. you have already "won life's lottery"."

That is true. But you can also "win life's lottery" if you are born in a middle/upper class in a developing country.

Ok, you save a dollar on a gallon of milk, but how much does it cost to own a car?

That's a very good question, but if you take into account that you can work 2h more per day because you don't have to wait for the bus, it might pay off.

you can work 2h more per day because you don't have to wait for the bus

It pays off if you already have the money up front to buy a car with, or if you have enough income before you buy the car that you qualify for a car loan. You can't get a loan by telling the bank "well, I'm living totally hand to mouth now but if you front me a few thousand bucks for a car then I'll surely find enough extra work to pay back your loan, and pay for gas, and pay the insurance, and pay the insurance deductible if my car gets crashed..."

Cash flow, cash flow, cash flow.

Well, yeah. That's their problem. (I'm not sure whether your comment was in disagreement or agreement...)

The point is that the poor pay more for exactly the same (or even inferior) things as people who are better off, not that they somehow spend more in the aggregate. People who already are going to have less than others because of their lower income actually have that small amount of money go less far than exactly that same amount of money would go for someone who was better off.

You can view that as just the reality of how the economics work out, or you can view that as fundamentally unfair that people essentially get kicked while they're already down.

You can view that as just the reality of how the economics work out, or you can view that as fundamentally unfair that people essentially get kicked while they're already down.

The two are not mutually exclusive positions.

I spent a lot of time and money learning to be poor - it's called 'grad school'. Which is why I spend a $ on a home made meal of rice/beans/vegetables instead of $5 on a McDs.

Shop at supermarkets at 8:00pm (4:00 on sunday) when they are selling off fresh food and never buy anything except own-label staples that isn't on sale.

It seems like this should be a huge opportunity for someone to come in and optimize things.

The "pay day advance" stuff seems particularly wasteful and generally awful. Even my credit card company won't charge me $50 to front me $300 in cash. Hell on a clean card with one of those "0% APR for 6 months" I could probably cut myself a 3k bridge loan and pay almost nothing. (assuming I just pay minimums and then if the 0% APR expires I clear the balance).

> Even my credit card company won't charge me $50 to front me $300 in cash.

Yes, but the credit car company has allready screened you and determined that you aren't a large risk to default.

The people who use payday loan services are statistically much more likely to default on their payments or to try and cash bad cheques.

If you're the kind of person that needs to go to a payday loan place, you're not going to be eligible for a 0% APR card - if you're lucky, you'd be offered a fully-secured credit card (meaning you have to give them money first before you can use it, and you can only use up to the amount you've given them) with a maximum balance of five hundred bucks, which you wouldn't have lying around anyways.

You get those card offers now because you're (presumably) employed to some degree and have a decent credit rating, so the card company thinks you're a pretty good bet to not default. If you need a payday loan, it's unlikely you have anything near a good credit rating, if you have one at all.

As for optimizing things, it depends on who you want to optimize for. If you want to optimize it for the credit card and payday loan companies, that's pretty much been done already - they have a very permissive set of regulations they operate under, and aren't short on profit margin. If you want to do it for the customers, that means you need to set up a financing service aimed at high-risk individuals, but you're going to have to mark-up some to make up for the default rate.

A good deal of people who frequent payday loan companies can't even get it together (for whatever reasons, both in and out of their immediate control) to get a normal checking account - you think that they'll be offered no-interest unsecured credit cards?

@optimizing why not do something like a fresh fruit/vegetable cart that rolls through every morning at say 8am. The cart is actually backed/financed/supported by some bigger "rich folk" store (Shaws/Krugers/whatever) and is only available from 8am to 10am.

This, theoretically reduces the "cost of doing business" since the likely hood that you get mugged for vegetables and fruit in broad daylight is probably pretty low.

Following from the article, low cost of doing business should mean lower costs - even if you factor in gas and such you should still be able to beat the corner market and cut a profit since you are selling "big box" product at a markup...

Those 0% intro rates rarely apply to cash advances.

Yeah, but sometimes they do.

And the middle class people know how to get around that by buying items and returning them for cash or other tricks to let you borrow $10,000 on various interest-free cards. Then put it into a savings account and use the interest to pay for the holiday.

>>But, Blakeney says: "I don't have time to mail it. You come here and get it done. Then you don't get charged with the late fee." <<

Huh? So you pay 10% for someone to do it for you..

To mail it himself would take some long-term planning. He'd have to book off a time when he knows he'll have the bill and the address with him, not put this off until tomorrow, locate and go to a post office/convenience store to buy stamps and an envelope, get the money in his account, and then keep it there for five or six business days until he's sure that it's been cashed.

If you're living paycheque-to-paycheque, this is more difficult than you would think - especially the part about having the fifty bucks sitting in his account for five days without touching it.

"The effective annual percentage rate is 806 percent"

A ridiculous metric for a week long loan.

Unless you take one out (almost) every week.

No, because the 806 number includes compounding.

It certainly does not include compounding; the 806 figure is derived from the stated weekly cost of $100 -- $15.5 -- times 52 weeks, a simple sum.

A calculation of the annual rate based on 15.5% compounded weekly would be much, much worse.

The effective annual rate is somewhat worse than 806%, because if you rolled over your $100 principal loan each week, paying just the $15.5 fees, then paid back the principal at the end of the year, you've paid $806 in interest, yes. And if that full interest payment had been made only at the end of the year, your annual rate would have been 806%. But you paid a lot of that early, so your effective rate was higher.

Yikes, you're right. That's obscene.

I hope non-profits like Kiva are able to help in this area.

Isn't the problem really that there are fixed costs associated with loans that are exaggerated on smaller ones when consider on a percentage basis? Looking at in terms of interest seems wrong, there should just be a fee.

But the loans are cyclical. You take out a $300 and have to pay $345 next week. Next week, since you are troubled financially, cannot make the payment, so you take a $345 loan and have to pay $400 next week.

Continue until they cut you off and sic a collection agency on you.

Related video: Comedian Louis CK on the cost of being broke:


Read the article, didn't like it.

How can I comment that it's stupid to lease a sofa when you have to scrounge food for your family, without getting lynched by the "you don't know what it's like you evil smug lucky middle class brat" crowd?

It's a suboptimal choice. Maybe a stupid choice (BUT POOR PEOPLE AREN'T STUPID).

You could go on the bus to the cheaper shop and buy two lots of food while your friend does two lots of washing at the laundromat (BUT IT'S EASY FOR YOU TO SAY YOU DON'T KNOW WHAT IT'S LIKE)

You could pool your money and get a washing machine between several people and free up a lot of time (BUT THAT'S NOT AN OPTION, DON'T YOU SEE?)

You could not spend 25% of your available money on fried chicken instead of food that lasts longer (and is healthier). (What the hell? Fried chicken? Is that paragraph solely there as bait to trap commenters like me?)

Isn't it silly for several people to have $800 cars they can't afford to repair, when together they could have a $2000 car and some spare cash? Well isn't it?

OK, OK, you can't do any of that. You can't do anything. You're not stupid or lazy you just didn't get a break. Yes I am lucky, yes I don't know what it's like. Yes I see it's probably extremely unpleasant. OK then, there's no way out. At all. So does it help that I now feel guilty about it? Not really.

Do you really believe it's possible to have a society almost like ours, but with no poor people? I don't. Not really. No good reasons why not, but it feels impossible. I mean, we can't all be millionaires, can we? Is that different?

So there's Bob. Bob is poor. It can't be OK. because that's something "you can't say" (see PG essay). So it's not OK. But it's not Bob's fault. If there's anything that can happen short of a lottery win that would help Bob, then that would be good. But that must include being able to publicly acknowledge bad choices without condemning them or the reasons for making them.

So is information the answer? You can't see what available options you have. Well hello the internet - information delivery a specialty. Hello HN - information crunching a specialty.

Whoever brought up AKay's quote that "perspective is worth 80 IQ points" in these comments, that rings true.

But I also want it to be true that anybody has the chance of happiness. This includes billions of people born in poor countries. It includes the billions and billions of people who were born and lived more than 50 years ago. In order for this to be the case, then the answer has to be in perspective, not money or sofas or cheap rent or abundant food or "lack of opression by the system" or handouts or community centres or lucky breaks.

Would it be as bad to be poor if I didn't know anything of any alternatives? There is so much poverty and so little luxury when you consider global population. Global population over all history - is wealth and comfortable living really a possible way forward, or just an aberration? A temporary break from a nasty, brutish and short life, for the lucky few?


This aligns well with the concept of economic mobility: Team of Brookings Institution researchers publish study - http://www.economicmobility.org/assets/pdfs/EMP_American_Dre...

From the PDF: the U.S.A. has fallen behind other western nations, such as Canada, Germany, Norway, Sweden in maintaining the concept of economic or upward mobility...

And this is the main reason, as I recall, why the U.S. was always portrayed as more desirable than European nations (and it was true in the 50s; part of my German family immigrated to the U.S. in the 50s). If you take that concept away - why would you want to live in the U.S. anymore:

- none of U.S. cities rank in the top 100 most livable places (Mercer Cities Ranking)

- high schools and many public schools rank low in comparison to other western nations

- education is much more expensive

- there is no organized trade school education, like in Germany, Britain etc.

- salaries for the lower third are less

- health care (don't get me started)

- hardly any social safety net

- crime, largest per capita prison population in the world

- infrastructure - roads, bridges, buildings etc. (don't get me started; it's almost third world country level)

- average lasting quality of housing (drywall, cheap wood framing, bad carpentry on windows and doors etc.)

- manufacturing quality and capability: look at American made cars or power tools (I always prefer foreign made)

- half of the government budget goes towards the military

- lack of public transportation (Standard Oil bought up the urban train networks in the 1940's and had them decommissioned: street cars, urban transit etc.)

- no functioning Euro-style city cores, urban sprawl, stuffed highways with commuters

- and the most important fact of all: the byzantine law system of the U.S. and the huge costs of lawyers and law suits (this affects many areas); lawyers can cost over $ 500/ hour and if you can't afford one you are out of luck; further, judges are not high-end lawyers trained as judges (like in Germany etc.) but can be any random divorce lawyer that got appointed regionally, as I understand

Final verdict: the U.S. has been badly managed in the last 30 years, and the poor carry the burden.

The final evidence is given in the study of Cliometrics and measuring average body height of nations (an indicator for health/ prosperity): it used to be (up until the 1950s) that U.S. Citizens were taller than Europeans; this trend has been reversed in the last 30 years - now the Euros are taller (especially the Dutch)

"- none of U.S. cities rank in the top 100 most livable places (Mercer Cities Ranking)"

This is rather false: http://www.citymayors.com/features/quality_survey.html

This calls into question the other assertions. What is your source?

I actually agree that the U.S. has been pretty badly mismanaged lately, but despite this I've encountered many hardworking immigrants who manage to do well for themselves. I believe the main reason the poor continue to be poor is lack of drive and lower intelligence/education. Both of these derive mostly from environmental factors, especially family life, poor values, poor education and generally inhospitable surroundings.

You would need to make some pretty radical changes to turn it around.

My mistake - quoted from memory (comment system on HN locks edits after 1 hour), tried to edit later.

"half of the government budget goes towards the military"

This is some serious misinformation that I see repeated over and over again, propaganda style. It's really under 21%.


"During FY 2008, the U.S. government spent nearly $800 billion on defense and homeland security, approximately 30% of tax collections." (and this does not include interest on debt owed on past military expenses - http://www.warresisters.org/pages/piechart.htm; therefore, it can be argued that almost half of the U.S. budget goes towards defense) - (GAO-2008 Report Page 35): http://www.gao.gov/financial/fy2008/08stmt.pdf


The big picture argument here is: the U.S. spends almost as much as the rest of the world's defense spending combined - http://www.globalissues.org/article/75/world-military-spendi...

Homeland security isn't the military.

That Ware Sisters site is pure propaganda, a complete factual distortion zone. All of the interest being paid on debt is not "military".

It sounds as if you aren't a US native, so I won't assume you are. However, a few remarks:

> none of U.S. cities rank in the top 100 most livable places (Mercer Cities Ranking)

Unless I am mistaken, this link shows 8 US cities in the top 50. Are you referring to something else?

http://www.citymayors.com/features/quality_survey.html http://bwnt.businessweek.com/interactive_reports/livable_cit...

> crime, largest per capita prison population in the world

Honest question, is this totally a bad thing? Does punishing criminals under a certain standard imply something poor? Or am I fuzzy on the statement?

> infrastructure - roads, bridges, buildings etc. (don't get me started; it's almost third world country level)

Whoa! Have you ever been to the US? This is a very bold statement to make. (note: I've been all around the world in my days)

> average lasting quality of housing (drywall, cheap wood framing, bad carpentry on windows and doors etc.)

Hmm, I've never seen this in my travels around the States. Quality depends on many factors. I've lived in newly built to 40+ year old homes and I've never had the problems you've mentioned. I've never heard of anyone I've personally known with those problems, either (not that they don't exist, of course).

> no functioning Euro-style city cores, urban sprawl, stuffed highways with commuters

Some areas could use some help, but I've successfully navigated around San Diego, Seattle, Washington DC, NYC, and other metros without a personal vehicle, and have relatives who do so all the time. Does this not fit the description? On a side note, my personal city is 400,000 people over 115 sq miles (county: 900,000 people over 832 sq miles) - it's a different way of life and trying to force a metro-city transportation system into this area is bound for failure (though I will agree that there is room for improvement).

The US isn't perfect. But not that imperfect, either.

"it used to be (up until the 1950s) that U.S. Citizens were taller than Europeans; this trend has been reversed in the last 30 years - now the Euros are taller (especially the Dutch)"

This is related to the fact that recent immigration trends into the United States have favored the shorter peoples of the world.

Studies on this issue have screened out people of Asian and Hispanic descent in order to maintain a more consistent data set:


Other studies actually show slight overall height gains. Compare NHANES III (1988 - 94) HANES (1999 - 2000) and there is a 0.1" gain. I find that data from the New Yorker quite unbelievable, as the average height has been increasing http://www.cdc.gov/mmwr/preview/mmwrhtml/mm5431a5.htm , so how could there be "no subgroup that is getting taller"? I haven't taken math for a while, but that doesn't make sense.

The same article also reports: "Since the nineteen-twenties, the median height of Mexican-American teen-agers has nearly reached the United States’ norm. It’s that norm, and not the immigrants, that has failed to rise." So, you add a lot of people below the mean and wonder why the mean isn't rising?

Everyone should read this link by John Scalzi, as well, as a companion to this article. Being Poor:


That's fantastic. They're all brilliant but, "Being poor is having to live with choices you didn’t know you made when you were 14 years old.", just gives me chills.

Being poor is having to live with choices you didn’t know you made when you were 14 years old.

Let's not mumble-mumble "choices" -- that makes it sound like you could be doomed forever if, in a fit of adolescent stupidity, you went out with friends instead of studying for a geometry test.

Here are the durable wreck-your-life decisions you can make at age 14:

1) Dropping out of high school, at age 14.

2) Getting thrown in jail for crimes you committed, at age 14.

3) Getting pregnant, at age 14.

They don't seem all that hard to avoid now, do they? And they don't look all that hidden now, do they? Its not like rich people get together and say "Psssst, pssst: having a baby at age 14 will wreck your life. Pass it on but don't tell the poor people!"

When I was 14, I thought that sex in a pool was a contraceptive method because "the chlorine would kill the sperm".

14 year olds can be monumentally ignorant about very important things. How many geometry tests do you have to skip before its one too many?

I know a bunch of people that dropped out of high school (usually later, at 16 or 17, since you can't at 14 in MA) and several of them have done quite well for themselves. As in gotten into Smith, MIT, or Wellesley. Many of the better colleges don't care about that high school diploma if you can demonstrate that you can do college-level work.

My list of "things that will really wreck your life" includes:

1) Getting killed.

2) Getting addicted.

3) Getting pregnant.

4) Getting convicted.

In roughly that order of precedence. Also, many of my friends that actually did have babies as teenagers wouldn't actually say it "wrecked their life" - rather, it just meant that their expectations for what their life would hold became dramatically different than what they initially expected.

Not even necessarily #2, our valevictorian in high school went to Harvard - and at age 14 was arrested, convicted, and went to juvie for a few days for shop lifting. You have to commit a violent crime to really screw up your life because everything else gets erased.

I think that's a little extreme, although I understand the points of the articles and acknowledge the problem.

You can recover from your choices at any time in life, although it certainly gets harder the older you get, whether or not you realize it.

The notion however that your future path is set because of your past choices is part of the myth that the poor need to have destroyed through education. Tomorrow is about what you do tomorrow, not about what you did yesterday.

The notion however that your future path is set because of your past choices is part of the myth that the poor need to have destroyed through education. Tomorrow is about what you do tomorrow, not about what you did yesterday.

Only if you don't believe in causality.

Making forward progress in the future has little to do with your current starting point.

The time to achieve a desired end-point may vary, but until you've instilled day-to-day habits, the end goal is not achievable.

"The notion however that your future path is set because of your past choices is part of the myth that the poor need to have destroyed through education. Tomorrow is about what you do tomorrow, not about what you did yesterday."

More blame-the-victim rethoric. Suppose what you did yesterday was give away all your belongings save what you wear, erase all higher education and job experience from your brain, and teleported you and your family to a city where you don't know anyone. You are now in an equivalent situation to many poor people. Now tell me with a straight face that what you do tomorrow would be unaffected.

I'm not blaming the victim, I'm recognizing the only real solution.

I never said it would be easy, as it certainly wasn't for me. It is however the only method of success, period.

I think we should focus more on why people end up in poverty than trying to "make them not poor". Prevention is likely to be more effective than correction. Things like living wages and abandoning local funding of schools would probably help.

It's scary, but despite being written down for ages, and having parents and elders who have some sort of duty in imparting their "wisdom," people still make stupid choices for one reason or another, and commonly excusing themselves with "because they were young." It's not just scary on an individual level; it's scary on an organism level; it's scary how so many humans can be so resistant to self evolution: who is responsible for this?

The other scary thing is, poverty in an unequal society is a downward spiral, despite all the pop meritocratic sentiment that is especially rampant in the USA. Rich people are more educated, healthier, more emotionally stable, and... generally more attractive. This becomes a positive feedback loop down the generations.

The sickness is the widespread misattribution of the sum of all of these traits as the result of effort, rather than what is very largely a product of chance: you have no control over what environment you are born into. Essentially, people are credit hogs.

Actually, the majority of millionaires in the US are self-made, first-generation wealth. We have very high economic mobility here, which seems to invalidate your theory.


A lot of people in the US seem to believe this - it's the essence of the American dream after all.

But if you actually take a look at the Wikipedia article, you'll see this: "France, Germany, Sweden, Canada, Finland, Norway, and Denmark all have more relative mobility than the US, while only the United Kingdom is shown to have less mobility [1]" [1] http://www.economicmobility.org/assets/pdfs/EMP%20American%2...

It's still possible that the majority of millionaires in the US be self-made (although I'd argue that a middle-class born Web entrepreneur cashing out is far from self-made - see other comments about the importance of a middle-class upbringing).

But that doesn't necessarily give the US a very high economic mobility: here, like often, it's easy to only look at a few extreme cases and forget the averages.

The way I see it, the American dream is but a myth perpetuated by the wealthiest: if I believe I'll strike it rich someday, I won't want more high-income taxation or estate taxes... even though there's actually very little chance it'll happen.

It's not an absolute good to maximize economic mobility, at least as it's defined here. Here, mobility is inextricably tied to outcomes. There's no reason to believe economic outcomes should be randomly distributed in each generation.

People should be perfectly free from government interfering with their ability to pursue success, but one would expect the children of successful people to be more successful simply because of inherited traits alone. Moreover, even aside from money, to the extent that a child's environment is his relationship with his parents, you'd expect children of successful parents to be more successful.

There's also something to be said for parents being able to give their children an advantage in life.

A society that maximized economic mobility would not be a fair one. It would mean arbitrary wealth transfers from the richer to the poorer.

Personally, I'm in favor of a 100% inheritance/estate tax, with every citizen's child given an equal share of society's inherited wealth on his 18th birthday. It would be sad to give up parents' rights in this way, but I think it would be well worth it on a public policy level.

A society that maximized economic mobility would not be a fair one. It would mean arbitrary wealth transfers from the richer to the poorer.


Personally, I'm in favor of a 100% inheritance/estate tax, with every citizen's child given an equal share of society's inherited wealth on his 18th birthday.

How ironic.

> I think it would be well worth it on a public policy level.

Loose ideas for counterarguments follow.

This policy is as arbitrary as the voting and drinking age. I think the age restrictions are utterly stupid (it completely ignores the huge variance of physical and mental development speed), and it is likely that the basis of this 18 stems from the same reasoning. Sure, there may be good reasons to pick 18 out of all other ages, but it is still based on scant information and remains mostly the arbitrary opinion of a few people. One who promotes Free Choice (which I suppose you are, because it is more friendly to ideas that are meant to promote social mobility) is not so likely to agree with this sort of mostly baseless policy.

Next, this system is very easily gamed. Suppose it really comes into effect. One way to go around is to start a business and transfer assets with it. Suppose you erect a barrier against that. Easy: immigrate out, immigrate back. Your society will want that immigrant money. Suppose you further erect barriers. Still easy: if the parents know that at age 18, the child will have total loss of control over the assets, all they will do is set up all the pieces before that birthday. Whatever safety net that was supposed to last 18+N years now is compressed into 18 years, with every penny spent the most expensive schools, equipment, teachers, social parties, and connection building. Other parents in the same situation would do the same, and you just constructed, in one generation, the noble class.

Third, some parents or potential parents will completely change their life strategy. For example, it becomes far less in their interest to have children to begin with.


personally, I don't believe a fair system is possible. Blame gene recombination. You can only make it easier for the longs of one group to complement the shorts of other, hopefully balancing overall group happiness and overall group advancement.


I'm beginning to see Raganwald's point about reductio ad absurdum.

>"France, Germany, Sweden, Canada, Finland, Norway, and Denmark all have more relative mobility than the US, while only the United Kingdom is shown to have less mobility [1]"

That report again! All I see is: some professor came up with his own definition of economic mobility (some unitless score, what the hell is it?) and now we are supposed to take these conclusions as a gospel.

UPDATE: Apparently I can't reply to the comment below, so I have to do it here. The comment only confirms what I wrote and does not answer the question: what is that score? How is it computed?

The report uses two metrics of economic mobility: absolute mobility, and relative mobility. Relative mobility is unitless because it's an elasticity: it measures how much parent income influences children income.

This is from note 13 in the report. Also, the authors didn't come up with this themselves. The data comes from here: http://www.iza.org/en/webcontent/publications/papers/viewAbs...

This explains nicely where the use of elasticity comes from.

Do you have other data that contradicts these conclusions?

> "France, Germany, Sweden, Canada, Finland, Norway, and Denmark all have more relative mobility than the US, while only the United Kingdom is shown to have less mobility"

The key is the word relative. It's extraordinarily difficult to move out of the middle class, in both directions (up: tax, down: welfare). The difference between lower and upper middle class is maybe $75-125k income/yr, and completely reasonable to navigate.

"We have very low economic mobility here" There. Fixed that for you.


Regarding your reply, there are two things to address. First is that of economic mobility, which I referenced casually with "meritocratic sentiment." I'm not ready to say anything conclusive, but as other posters have pointed out, there is reason to disbelieve the popular belief.

In the very page you link to: "While there is some economic mobility between generations in the United States, it is still difficult to move up one or more quintiles in regard to one’s income."

But again, I am not one to make conclusions about this topic; I merely express skepticism and disagree with those who hold strong opinions one way or another, because either borders on irrational conviction.

The second point, which you don't address, is the effect of generational wealth on offspring. The effect is subtle and easy to overlook, but is as important as wealth itself. Why do the rich stay rich, and the poor stay poor? It's not as simple as saying the system is or isn't in favor of mobility. You must also consider the possibility that rich offspring have become inherently stronger, smarter, and prettier than the poor -- and they are. There has been research on this topic, but it is intuitively obvious: a desperate person is not attractive, is brash, and is weaker against temptation.

The symptom is one: wealth disparity is increasing; but the disease is manyfold. That's my "theory". The problem here, is that somebody will write an article illuminating one facet of the problem, just like somebody takes a magnifying glass to examine a rash. Then somebody reads it and says, "let's apply Cortisone!" But it's actually an allergic reaction to an ingested substance.

The skin-deep understanding of society helps perpetuate this "credit hog" mentality. And that in my opinion is among the foremost barriers to equity.

Search for Ilkka Kokkarinen's comment.

Gah. People who think that the poor are lazy and shiftless are scum.

Some of the poor maybe be lazy and shiftless, but having middle class / wealthy parents doesn't just give you money and education and health -- it also gives you the very habits and abilities (saving, studying, deferring rewards, working hard, etc) that keep people from being poor or staying poor. Even things like applying to college are different if you have parents who can help guide you through the process -- I read a heartrending account of a (poor) child who got a scholarship to go to a private high school but his parents couldn't afford the transportation and he didn't have the institutional knowledge to know that if they'd told the school that, the school would have helped. So he declined a great education for the lack of $400.

Growing up middle or upper class also gives you all the social markers people look for -- whether it's straight, clean teeth, the ability (and skill) to dress appropriately for a variety of social situations, the proper manners to eat in a range of restaurants from a greasy spoon to a 3 star Michelin, a good suit to go to interviews, acne medication so you don't have acne scars, the ability to make small conversation about art, etc. If you read the literature, most Americans drastically overestimate the social mobility of America and are shocked when they hear how very heritable wealth is.

You sort of contradict yourself there. You decry people who think the poor are "lazy and shiftless", then go on to explain why the poor are shiftless. Explaining why someone is shiftless doesn't make them not shiftless. It may help you figure out a better way to address the problem, but merely explaining the problem doesn't change it.

Note I dropped the "lazy" qualifier. I'm not convinced that doesn't cut across social classes pretty freely, nor did you talk about it at all.

I do broadly agree, though. Many programs to "help the poor" amount to throwing money at them, but that doesn't strike at the root causes at all, which I think you're largely correct about. Pouring water into a leaky bucket doesn't help; you need to fix the leaks.

Shiftless? The story about the kid? The kid is not shiftless. Were his parents shiftless? Possibly, but there's nothing in the story to indicate that they were anything but ignorant (e.g. didn't know there might be help available).

How hard exactly did you search for the exact sentence out of that post that, if I was solely responding to that, would invalidate my point?

You have to do your part when reading other people's arguments and at least try to find out why they might have a point, instead of searching for the exact angle that doesn't make sense. That pessimizes the information content you can get from someone; there's always an angle where it's wrong, no matter how you have to torture the English to get there, but because that's always true, that's information-free.

Incidentally, make sure you know what the term means, I had to look it up myself to make sure I wasn't misusing it: http://www.merriam-webster.com/dictionary/shiftless

It took about 10 seconds, because that was my immediate reaction and I didn't see anything else in your post to contradict it.

And I did look up shiftless beforehand.

Maybe you should consider that your arguments aren't half as clear as you think they are?

It's pretty wild that you could discount personal responsibility to the favor of things like "proper manners" at a 3 star and Acne medication.

I'm tempted to put responsibility at #1 for everyone who wasn't born with some obvious disadvantage (living in a 3rd world slum or having a serious disability.)

I'm tempted to say "fuck you and your ignorance" because, honestly, that's a pretty offensive thing to say. My own escape from poverty had nothing to do with personally responsibility, but had everything to do with winning the genetic IQ lottery and being in the right place at the right time.

It's true what they say about walking a mile in their shoes. You really have no idea what it's like.

Saying "I'm tempted to say x" = saying x.

This is true. And my comment deserves all the down votes it gets. The "poor are irresponsible" comment pushed an anger button in me that I didn't even realize was there. I just had to vent.

I never said the "poor are irresponsible", and there's no reason to get hot over things people don't say. What I said was: Excepting serious disadvantages (like being disabled) responsibility is the #1 factor in whether you're poor or not. If you think that your genius-level IQ made you non-poor, then you're short-selling yourself, which is a psychological folly. Picture your same life, with yourself have twice the IQ but 10x the laziness. Now what's your bank statement look like?

There's also a #2 factor and a #3 factor and a #4 factor, etc, and some of those reflect the hideous face of dame fortune. But attributing guilt to ANYONE, the winner or the loser, on chance, is a stupid mistake. So-and-so was born with a low IQ. Not my fault. In fact, as a eugenics supporter, I did my best to prevent it. (<-- joke)

Even though you guys are close to bickering, I have to say I like it that the comments on this site contain phrases like "reflect the hideous face of dame fortune."

I'm not tempted to say "fuck you" since I don't know you, but I will point out that people in a wide range of IQs are capable of lucrative trades and professions


You're right, but it's also true that having a high IQ gives one an immense advantage.

It's worth pointing out that IQ's advantage is a diminishing return. I imagine that the advantage is in how many people you're smarter than, rather that in how smart you ultimately are.

I think it's a bit of both: absolute IQ is important, because it determines what cognitive tasks you can do, and because if you have destructive or sub-optimal personal habits, high IQ means it's more likely you will notice and diagnose them.

You come from a culture that gives you that viewpoint. You don't understand how different it can be.

Two married friends of mine work in DC schools. The husband works in a charter school and handles their IT department (this is a joke - he essentially tries to scrabble up funds however possible so the kids have something). The wife works in a public school.

While the husband's job is tough - kids come from drug-addicted, violent families; kids come to school with guns, sometimes accidentally, cuz their brothers/sisters borrowed their backpacks, etc.

The wife's job is impossible.

She works in a classroom that has no books. This is not an exaggeration.

It also has no power.

Between her classroom and the next one, there is enough power to run a single box fan. So when it gets hot - and summer in DC is hellacious - they trade off. If one classroom acts up, the box fan goes away to the other classroom.

Now tell me. You are a kid in inner city DC - the richest counties in the US are nearby. You live in the seat of American political power, but the only people you know who have any money and any lifestyle are drug dealers and gun runners. Those people both embody and romanticize "live fast, die young."

You can't do anything but basic math, and you can't read anything more advanced than children's books... not that it matters, since your classroom has no books & no electrical lighting to see by.

And yet there is a skinny white lady (also far from wealthy) up front telling you to believe and stick with it and that you can get somewhere in life... through education.

With everything else that life has taught you, you'd have to be an idiot to believe her.

Yeah. That reality is a major reason for my progressive politics. Plus the fact that my parents both grew up poor, obviously through no fault of their own, and I think a rich nation should do more to help it's poorest.

I think a rich nation should do more to help it's poorest

I'm trying not to sound flip, but I challenge you to a thought experiment -- perhaps with real money, if you like.

Take some of your own money. Go find a poor person. Use your money to make them less poor. It's easy, really. If the nation can do it, surely you or I could do it as well, right?

The goal of this experiment is to take away lofty ideals and ask practical questions: just what are we supposed to do that is going to help? Just what really helps and does not hurt poor people?

So pick a strategy and pay for it. Let's agree to come back in three years and see how they are doing.

You'll find that there are only three cases: 1) the person is poor because they continue to make poor choices, perhaps due to addiction, mental capacity, or emotional issues, 2) the person is temporarily poor due to circumstances outside of their control and is quite able to get ahead in the world if given time and left alone, 3) the person is somehow trapped by circumstances outside of their control which will not go away: medical bills, bad spouse, etc.

#1 and #3 aren't going anywhere -- by definition they have chronic issues which money will not fix. No amount of mental therapy is going to make a drug addict into a banker: recidivism for drug addiction is around 95%. No amount of money is going to take the wife of a crack addict wife-beater and turn her family into Oprah's.

For #2, those guys are going to do well anyway. Sure, if you want to lend a helping hand to make yourself feel better, go for it. But don't kid yourself that you're the one making the difference. The difference comes from inside, not from outside.

I'm not saying don't help people. I'm saying that lofty, praiseworthy feel-good rhetoric does not fix a damn thing. Instead everybody just smiles and nods and agrees to spend money. If you or I have a hell of a time fixing one poor person, with direct one-on-one involvement, it is completely ludicrous to expect an impersonal government to do it for us. It's also a lazy man's morality -- I'd like to help people today, but I'd rather write a check (or even better, make the rich guy down the street write a huge check) and just go take care of it, okay?

That sounds artificial. Prove to me that there are only those 3 cases and outcomes.

You are essentially saying is that only addicted, mentally ill or people with abusive spouses are permanently poor, everyone else is just temporarily poor. I think that indicates a monumental disconnect with reality.

Fact is, someone can work full-time in this country and still not be able to feed their family. How are they going to get ahead when not working because you are looking for a better job (let alone getting more education) would mean not feeding your family in the meanwhile?

I thought it particularly telling that you think case #3, "trapped by circumstances like medical bills" can not be fixed by money. Universal health coverage would take care of that one, for sure.

The problem with your thought experiment is that you don't help poor people by throwing money at them. (See the article referenced below). You help them by creating institutions which help children develop important cognitive skills and avoid making poor choices in the first place. Education, adequate housing, policing, parenting skills, etc....

If you grow up in an environment where getting good grades is actively discouraged by your peer group, your parents have poor/counterproductive parenting skills, you consequently have low cognitive abilities, and you have every incentive to drop out and sell drugs, then it's possibly too late, and no amount of cash in your pocket is going to help you. But if you have good parents, grow up in an environment that values education and that's safe enough and free enough of distractions so that you can learn, then you'll likely be in your category #2 above. Small advantages that begin at infancy accrue and snowball over a lifetime, and that's one reason why middle/upper class kids _generally_ tend to grow up to be middle/upper class adults.

From http://chronicle.uchicago.edu/970417/mayer.shtml --

"Increasing parental income not enough, according to study Increasing parental income alone is not enough to break the cycle of poverty, according to a new study by Susan Mayer, Associate Professor in the Irving B. Harris Graduate School of Public Policy Studies.

Even if their incomes increase, parents who have experienced persistent periods of poverty often have such problems as chronic illness and low cognitive skills that make it difficult for them to help their children escape poverty, Mayer reports in her new book, What Money Can't Buy: Family Income and Children's Life Chances. . . . The study shows that non-monetary factors play a bigger role than previously thought in determining how children are able to overcome disadvantage, Mayer explained. "Parent-child interactions appear to be important for children's success, but the study shows little evidence that a parent's income has a large influence on parenting practices.""

So in answer to your question, what would I do to help the poor, I'd say it'd have nothing to do with spending my money and everything to do with spending my time, say, tutoring and hopefully inspiring a child.

spending my time, say, tutoring and hopefully inspiring a child.

Thanks. You are one of the few who have answered without spinning off somewhere else.

By the way, I do not know the answer to my question -- that's the reason I asked. I'm interested in hearing people's responses. I'm dubious as to your "creating institutions" statement -- it sounds wonkish, the type of thing to come out of a study or institute without being overly practical.

From observing myself and others who have come out of poverty, it is not intelligence, or money, or luck that makes the difference, most of the time. It's having personal one-on-one examples as a child, having a good attitude, and basically trying and not giving up. 90% of life is simply showing up.

I can observe, however, that western societies are creating multi-generational poverty. LBJ sat on a porch in Appalachia 40 years ago and declared a war on poverty. Since that time the U.S. has spent trillions and has the same basic poverty rate it had before. In fact, the same place LBJ stood is still an impoverished area.

I feel like there is a long, long, long way from where the politicians and spin doctors are, and what makes a real difference. I am also dubious that you can take the things that work and scale them. In the end, I think it comes down to religiously-motivated, local groups, personally trying to make a difference one person at a time. I don't think any of that scales very well. Although some people (mainly the ones looking for funding) would like us to believe it would. But that's just my opinion. I would like to do more -- hence my original comment.

I always say: to make a man out of your child spend half the money you're spending on him and spend twice the time with him. (not my line but liked it)

I also think that money for eradicating poverty would be better spent on scouts who can spot people or groups or communities worth being helped instead of helping them all.

My response would have been essentially the same as msluyter's. Strong education systems, I believe, can provide the examples you mention are needed for a child, the examples that inspire the positive attitudes and strong work ethic. I was lucky enough to grow up with incredible parents who knew exactly what to do, so it's no surprise I'm doing much better than they did. For the kids who aren't as fortunate (and I am of course not blaming the parents, how could they know?), your peers and your school life are a dominant influence in life.

Some examples that may inspire some hope: http://www.nytimes.com/2009/05/08/opinion/08brooks.html (or for a more reputable but lengthier description of the same program, http://www.economics.harvard.edu/faculty/fryer/files/hcz%204... )


I'm glad you weren't in charge when I was a #2. I made some bad decisions, like starting a family too early, and had some bad luck when I was young. When I reached the point where I was ready, I asked the Government for help and I received it in the form of assistance and college grants. I also worked and now have a large student loan payment, which I pay with a smile every month.

I earned a B.S.M.E, worked as a professional engineer and then switched to IT, because I wanted to and because I could, partially as a result of having a degree. This improvement in my life also enabled me to develop a startup in my spare time. I know that it would have been 10,000 times more difficult or impossible to do it without that help and opportunity.

The great part for the good 'ol U.S.A. is that they now have an extremely productive, $30k+/yr. tax paying citizen who is giving and will continue to give a great return on their investment. Assuming I don't get hit by a bus. ;)

(flooha)I'm glad you weren't in charge when I was a #2.

(Daniel) I'm not saying don't help people.

I'm asking you what you personally would do.

Stick to the topic, guys. If you don't like the 3 choices I presented, fine. Provide your own. I didn't say people couldn't move between scenarios. Still stick to the topic. What would you personally do to make one person stop being poor?

To say you're glad I wasn't in charge assumes you know me. You do not. I've made my way from homeless to a pretty good life as a consultant. But telling my story is not the point of this question. Neither is any of the other smoke that is getting thrown up.

Fair enough. What you have pointed out is that there are not many micro-actions that can help the poor. But, that doesn't mean there aren't any macro-actions that can.

I am in India. I too can't do anything to help the poor but my government sure as hell can (and the good thing, at least for the moment, is that it is doing so).

(For instance, tax money can be and should be spent on policies, subsidies, etc that make education cheaper for everyone and make usury extremely difficult to practice. These are the real ways in which rich nations can help their poor. Seriously, how much money did you give to AIG and friends and how much money would it take to provide free college education for everyone in the US who could get through the selection process?)

It's anecdotal and just one point on the graph, but it is absolutely on topic and a valid response to your post.

You ask what I would personally do to make one person stop being poor? Well, it worked for me, so I would give that person the opportunity and the means to do so in the form of money for higher education. You can't personally teach the masses one on one.

I do agree with some of your points, but it seems that you are asserting that money isn't the answer. I disagree. If college were free then money wouldn't be the answer.

"If college were free then money wouldn't be the answer."

But college is free. MIT is free for people who make less than $100k/year. Stanford is free for people who make less than $100k/year. Amherst is free for people who make less than $60k/year. Most other private colleges will give full rides for people of the income level that this article is talking about.

Is money still the answer?

you need better K-12 education for poor areas in order for them to qualify for these "free" university programs.

Yeah, that's what I see as the real problem. I'd really like to see more attention paid to preK-12 education in poor areas, because by the time these kids get to be 18, it's generally too late unless they have heroic individual will. But that means targeted spending - it doesn't necessarily take a lot of money, it takes a moderate amount of money that's well-spent on programs that make a serious impact.

free for <s>people</s> Americans who make less than

I'm fairly certain it extends to international students as well - I had friends at Amherst whose families made less than $3000 annually (that's like 1/4 the poverty line in America), and there's no way they would've been able to afford it if they didn't have some serious scholarship money.

This is only true for the best schools with a decent amount of money. As bloomberg noted in a piece last month, a lot of schools on the cusp are in big trouble financially and depend on tuition to make up the difference. For most of these schools, students making under whatever the line is, don't get full aid like they might at Harvard, MIT, etc.

Also, this only extends to international students at, again, the best schools. When I applied for college several years back, I think it was only five schools that were need-blind to international students (they were also very generous with that aid). There might be more schools that do so now but I can't imagine it's substantially more.

Grameen Bank.

> The goal of this experiment is to take away lofty ideals and ask practical questions: just what are we supposed to do that is going to help? Just what really helps and does not hurt poor people? So pick a strategy and pay for it.

I can think of two things the government could do that would help poor people, while not costing anything (this is in the UK, but most probably applies to other countries):

1. Housing. Housing is very expensive in the UK, mostly because of govmt policies (incidently the people making these policies personally profit from them, surprise surprise). Reverse these policies and the cost of a house could easily be reduced to £20,000. -- http://cabalamat.wordpress.com/2009/05/19/housing-policy-and...

2. allow people on low incomes to set up a "microbusiness" that as long as its turnover is less than £2000 a year, doesn't reduce the benefits they get. Any such businesses that currently exist are part of the illegal economy and not paying tax anyway, so the govmt wouldn't lose any revenue. -- http://cabalamat.wordpress.com/2009/05/13/reforming-the-bene...

I'm not saying don't help people. I'm saying that lofty, praiseworthy feel-good rhetoric does not fix a damn thing. Instead everybody just smiles and nods and agrees to spend money. If you or I have a hell of a time fixing one poor person, with direct one-on-one involvement, it is completely ludicrous to expect an impersonal government to do it for us.

This seems like a worryingly general argument.

"If you or I have a hell of a time keeping out a gang of home invaders, with direct one-on-one involvement, it is completely ludicrous to expect an impersonal government to handle policing or national defense for us."

"If you or I have a hell of a time educating someone in a wide array of subjects, with direct one-on-one involvement, it is completely ludicrous to expect an impersonal government to handle schooling for us."

"If you or I have a hell of a time putting out a fire, with direct one-on-one involvement, it is completely ludicrous to expect an impersonal government to handle the fire service for us."

It seems like it could be used to argue for anarchy, effectively.

I don't think it's actually that general, because some of those things are better handled through groups of people rather than on an individual level. That's not to say that government is a good solution, but there are non-State group solutions to things (grocery stores, coops, etc).

I don't think it's actually that general, because some of those things are better handled through groups of people rather than on an individual level.

This is a reasonable point. But bear in mind that DBM's original point is subtly different: he effectively said that because it was hard to deal with poverty on an individual level, it would be silly to let government intervene. Your point looks to be different: that non-state groups can do things as well/better than the state. So the generality of my inference is unaffected.

Whenever tax and "helping the poor" comes up, the argument always seems to degrade to higher taxes <-> bigger welfare checks.

Never underestimate the power of one well placed community center.

I know guys who have had the entire course of their lives altered by one mentor at one afterschool program. A lifetime of welfare checks could not have done so much.

I think you're changing the subject.

As a participant in this thought experiment, you can (and should) use whatever resources you might have available. If volunteering at a community center is the thing, then you would go down there and do that. The question is: given whatever you want, what would you practically do?

I'll touched on the two follow-up questions, but they weren't the point 1) if you've got an answer, why aren't you doing that right now? and 2) do you feel it is moral to take your best guess for fixing poverty and push it on the rest of us? Would you mandate community center service, for instance, or do you think writing a check for somebody working at a community center has the same effect as somebody who has a life purpose for doing it? (and how would you tell the difference? What if there's simply not enough people who really care about working at community centers? What then?)

Those are great follow-ups, and the conversation should continue along those lines, but really, the point was what practically was supposed to make a difference if you personally had to do it. Not some generalities about some program that looked good on 60 minutes. What you would go do right now to make one person not poor. There's Bob. Bob is poor. Go make him not poor.

Not all poor people are poor for the same reason suggesting any one solution would work in all cases is stupid.

I have helped several people become less "poor" by:

1) Teaching money management skills. The payback for a poor person investing 20$ to avoid a late fee can be huge. Poor people are so used the "fees" that it often quietly crushes them.

2) Suggesting a change of vocation. Not all low skill jobs pay crap.

3) Loaning money for an unexpected expense that was going to cost someone their new job. Their pay bump was going to cover the cost but they need the money before they could get to work...

4) Convincing someone to stay on Methadone.

PS: Ok, in a thought experiment I guess you could hand them a million a week which would solve most peoples problems, but that does not really scale.

I met a guy on the streets of Berkeley years ago. I gave him some money and he smiled a warm, effusive smile. He said it was his birthday. We started talking. He had been on the streets for a couple months, the result of discrimination. He was black, but he said it wasn't that -- it was age discrimination. He was in his 50's and as a hospital orderly, he couldn't move as fast as the young competition. He found himself out of work, ran through his savings, and then, once he was on the street, had a big problem giving out an address for a job application, getting cleaned up for the interview, etc.

I ran into him once a week, giving him as much as I could. $20 sometimes. Then I stopped seeing him. About six months later, I ran into him again, but it took me a while to recognize him. He looked great. A guy was reconstructing a house in the Berkeley hills and after meeting him, got him some work on the project. It was all he needed.

The U.S. spends a lot in taxes, and that money goes to such areas as defense, where "throwing money" at a situation is considered the norm, not the exception. Halliburton has gigantic, fat contracts in Iraq, for example.

I would rather we "throw money" at our neighbors when they're down on their luck, and donate money for tanks and B2 bombers. There's Iraq. Iraq is fucked. Go make it not fucked with your own money.

> I met a guy on the streets of Berkeley years ago...

That's a really heartwarming story. Unfortunately, it's a single data point. We certainly can't expand that to cover all poor people, right?

After hearing people speak at RU meetings (and others), many of them had a single purpose in life: get high, gambling, etc (whatever said person's vice was). I've never personally heard of a perfectly fine individuals thrown out onto the streets, though I don't doubt it happens. However, where are the family members and friends? That would be the first place I turned - I'm not proud (not implying he was).

Side note: If someone is poor because they blew all their money on drugs, then lost their job and found themselves on the streets, I don't want to "throw" money at that problem. Sure, I'll buy a meal/gift card (or other necessities) as I've done in the past, but I'm not blindly trusting someone in that position. I wouldn't expect anyone to blindly trust me.

> The U.S. spends a lot in taxes, and that money goes to such areas as defense ...

Ok, we realize that number is about 20% - where is the other 80% going? There's a lot to fix other than just getting out of Iraq.

You want to know how to fix the problem of dealing with the poor? Change people's hearts. A caring, loving people will do more than any government sponsored program will. Unfortunately, the average US citizen is so far removed from the everday reality many others face. Their only insight into those struggles are the latest sob story drama of an American Idol contestant (or a Christian Children's Fund commercial). It's pathetic.

>That's a really heartwarming story. Unfortunately, it's a single data point. We certainly can't expand that to cover all poor people

Sit quietly and really ask yourself if you think that was my point. Dan posted something that put the poor into three categories, all of which said, "You can't really help them." And that's a bullshit rationalization. America has little in the way of economic safety nets compared to most western industrialized countries and it shows. America also spends more on defense than every other nation in the world -- combined -- and it shows.

If you change your priorities, you change your results.

Yes. Thank you. You covered everything I wanted to express, but better, and calmer.

Everyone arguing in these threads on HN - a bastion of privilege - should come live in a place like Vienna for a couple months. I've always been an advocate of the idea that a society is only as strong as its weakest member, but you can't know what you're missing in the US until you really experience it.

See the lack of fear in the cashier's eyes. Experience what a society is like when not a single person in it is worrying that he or she might get fired if they miss days of work due to sickness or a child's sickness.

See the total lack of homeless people.

See how it can be when all the sick are cared for, and the poor have good housing -- very nice community housing, that anyone in the country can live in, with a waiting list (poor and needy have priority), keeping them from being slums.

Everything here is better. Everyone here may live with dignity. That makes an enormous difference.

I'm an American a few hours North in Prague. Drop me an email if you come up this way; it's in my profile.

I thought maybe we could use some of the taxes to build some community centers and hire some staff.

If volunteering at a community center is the thing, then you would go down there and do that. Can do. have done. But most of my volunteering has been fixing stupid "for want of $100" problems. Volunteers like the ones you speak of can line up but if there's no electricity, it doesn't matter.

do you feel it is moral to take your best guess for fixing poverty and push it on the rest of us? No. I feel its moral to use what science we can muster and use a results based approach to choose very wise uses of the limited resources we have.

There's Bob. Bob is poor. Go make him not poor. To help Bob (in this case) would require time travel. But Bob's son is a whole different matter. I can't cure stage 4 melanoma, but I can tell people to wear sunscreen.

Your argument is unconvincing. You rely too much on the idea that all malleable variables in a person's life are under their control and that they have the knowledge or personal ability to change them and furthermore that if they don't then they deserve the outcome.

I mean, seriously, "No, no, don't help this mother because her child has a chronic disability. It's not going to do anything in the long run." "This dude's poor and is manic-depressive, I don't think we should give him any psychiatric assistance because, seriously, he's not going to STOP being manic-depressive." "This guy over here lost his home because his house burnt down and his insurer is refusing to honor his claim. Don't worry about him! He'll just pick himself up by his bootstraps!"

Fuck off.

A second problem with your comment occurs to me.

We can safely assume that earl and other people in this thread arguing in favour of state support of the needy don't believe that private charity is adequate. (If they did, why would they argue for state intervention?) As such, your comment - which essentially just urges people to go out and commit acts of private charity - is hardly going to convince them otherwise.

I was a progressive until I discovered that the progressive movement caused many of the worst problems affecting the poor in America. Intentions are not the same as results.

Like what?

1) Read "Gang Leader for a day" or watch the Wire and then compare it to a first hand account of the slums of the 1900s. We are richer now thanks to technology. But the pathologies and decay of the slums is much, much worse. The progressive movement replaced a highly functional system of private and city government charity with a bureaucratic system that creates dependency, has no interest in actually solving the problems of the people it serves, and leaves housing projects to rot away.

2) Credentialism. From the Pendleton Civil Service Act to laws giving monopoly rights of practicing medicine to the AMA guild, the progressive movement towards credentialism gave government subsidies and monopolies to a class of people who could pass the civil service exam. These artificial barriers to entry result in a direct transfer of funds from the poor and working class to the college educated elite. For one example of many: http://libertariannation.org/a/f12l3.html

3) The Fed/Bretton Woods/Fiat currency. The progressive movement turned our financial system from a bottom up system (loans and banking happened at a community level) to a top down system ( all banking originates out of Fed guarantees and a government printed currency). This has resulted in insane profits for Wall St. At the same time, because the USD is the reserve currency of the world, the U.S. exports dollars, and then gets back real goods at a very cheap price. This is great for the civil service and for Wall St. But it sucks for those in manufacturing jobs, as they cannot compete when the currency is artificially priced so high.

4) Griggs Supreme Court case. The Griggs case basically banned the use of IQ tests by employers. So now bright young kids must spend lots of money on a 4 year long IQ test proxy, rather than getting a job directly.

5) Taxes. Overall tax burden has increased enormously since the early 1900's, even on the working classes. The working class has by no means received a corresponding increase in benefits. For example, poor people must now pay heavy education taxes. This is despite that after seventy years of massively increased taxes and longer hours at school, rates of vocab and numeracy have been flat (http://www.miller-mccune.com/politics/does-education-really-... ). The ROI on this education spending was zero. Yet we all continue to pay. Worse, progressive judges in the 1970 eliminated the ability of teachers to effectively discipline students. Now are schools have become Lord of the Flies hell holes, with the inner city schools being the worst. Taxes on the rich are bad for the poor too, if the government does not use the money any more effectively than the rich do ( as is often the case). The rich often invest in charity ( like Rockefeller, Carnegie, Gates or Buffet), or reinvest in companies and growth ( like Paul Graham or Marc Andressen). Either way, it increases the prosperity of the nation much more than government spending has.

6) Lax crime policies of the late 60's were primarily responsible for the dramatic increase in crime. This crime hit poor people the worst. It also drove the middle class, and the jobs, out of the inner cities.

7) Immigration. Whatever the other merits of immigration may be, it no doubt drives down the price of low skilled labor. Thus it is bad from the point of view of the American poor and working class.

8) Democracy promotion abroad. The U.S. has had the insane idea that simply by forcing elections in countries with 20% literacy rates, no judicial system, no institutions, no heritage of civic participation, and highly combustible tribal relations, that these countries would magically turn into replicas of America. In reality, the result has been civil war, coups, bad government, and corruption. U.S. imposed anti-imperialism and democracy promotion has been an unmitigated disaster for the third world. Read this article for one example, but there are many, many more: http://unqualified-reservations.blogspot.com/2007/08/country...

9) The interstate highway system. Created by progressives, it has increased the cost of living for everyone.

Most of these points are highly debatable. I don't have time for all of them, but taking a couple...

Re: #3 -- I assume you'd prefer the gold standard. Most (non-Austrian) economists believe that the gold standard actually exacerbated the great depression. I simply would recommend readers read the entire wikipedia article including the section on disadvantages. Or read this:


Re: #6 -- your claim that lax crime policies were primarily responsible for the rise in crime. Evidence is actually that it was mostly demographics -- a rise in crime prone young men -- combined with the rise of drugs like cocaine, crack, etc... And there's little evidence that "tougher" and longer sentences do any good.

Re: #8 -- Democracy promotion abroad isn't necessarily a progressive idea. After all, our recent experiment in democracy promotion in Iraq is the brainchild of neoconservatives.

Most (non-Austrian) economists believe that the gold standard actually exacerbated the great depression.

It's possible to run a sound currency regime using fiat dollars. But the U.S. has not done so. And the people pushing our decidedly unsound monetary policy were mostly progressive Keynesians.

As for the depression, the problem was that the government printed far more greenbacks than it could back with actual gold. As a result, people started trying to redeem their notes for gold. Since banks did not have enough gold to redeem, the banks failed. The government refused to devalue for many years, resulting in a catastrophic deflation. The depression could have been avoided by devaluing while still still maintaining the gold standard. If you step in front of a freight train and get run over, do you blame the freight train?

Re: #6 -- your claim that lax crime policies were primarily responsible for the rise in crime. Evidence is actually that it was mostly demographics -- a rise in crime prone young men -- combined with the rise of drugs like cocaine, crack, etc... And there's little evidence that "tougher" and longer sentences do any good.

The homicide rate in Baltimore, DC, and Philadelphia increased ten fold. Were there ten times the number of young men?

Re: #8 -- Democracy promotion abroad isn't necessarily a progressive idea. After all, our recent experiment in democracy promotion in Iraq is the brainchild of neoconservatives.

By any historical standard, neoconservatives are progressives. They did not splinter off until the 1960's when they got upset with the excesses of the left. Before that, they were Trotskyites. They are only considered "conservative" because the country as a whole has moved so far left in the past century. Neoconservatives inherit the tradition of promoting democracy from progressives like TDR, Wilson, FDR, etc. If you read the Weekly Standard or any other neocon rag, you'll find that they hold TDR as their idol. TDR founded a party called, "the Progressive party", and was an original proponent of promoting democracy abroad. The neocons are very much a part of the progressive movement.

"The homicide rate in Baltimore, DC, and Philadelphia increased ten fold. Were there ten times the number of young men?"

I have to address this point. Doesn't have to be a ten fold increase in people to account for a ten fold increase in crime. A much smaller, unemployed group can dramatically increase crime for lack of better stuff to do.

Specifically as it concerns drug turf or gang related violence, there are significant network effects at work.

How do the interstate highways increase the cost of living? They would seem to make it cheaper to transport goods via road and faster to transport people between cities?

> How do the interstate highways increase the cost of living?

1) It killed the railroads. Rail is a fundamentally more efficient form of transportation than the truck, and thus adds less cost to pass on to consumers.

2) It allowed long commutes to become expected.

Maybe they increased the cost of living, but they dramatically increased the quality of life ...

> they dramatically increased the quality of life

Pray tell, how?

It should do more to help its poorest succeed, but I draw the line at "handouts" in the strictest sense. I'm from Canada, so you can guess that my politics are probably a little further down the progression line than most Americans.

It's important though that we teach people to fish along with simply feeding them.

Believe me, the poor in the US don't get "handouts." To get foodstamps or other welfare, the poor usually have to work ridiculous hours. And the money you get from being on welfare just isn't enough.

I'd rather see more legislation to ensure that people get paid enough money to survive a normal life than more handouts that just make them more dependent on the government.

Oh I'm not suggesting they do, far from it. I wanted to temper my comment though because the situation in Canada is much different. I think we do a pretty good job up here of making sure most people don't fall through the cracks. Most of our poor are addicted to something, or native (let's not go there). It's easier to break the cycle in this country, although that isn't saying that it is easy.

Life is a lot rougher in the US if you're poor, and I realize that.

Everyone should read that link to learn how nobody but poor and ex-poor people are allowed to comment on poverty.

The poor tend to be the stupid (plenty of studies to back this up), and hence the poverty. Since they are more stupid, they fall for stupid payday loan schemes, credit card idiocy, etc., at rates greater than the rich do.

Please do not reply if you read "tend to" as "always." I'm not going to bother responding.

While your comment is a little inflammatory, it's a shame to see it down-modded. That threshold has certainly changed as Hacker News has, and we're losing some good discussion because of it.

The thing is, you are in a way correct. Intelligence, ignorance and effort combine into defining a person's success level. We have done a relatively good job at neutralizing all other factors by making them illegal (not that they still don't exist mind you.)

Ignorance lessens with experience, as does effort. Intelligence however is the only uncontrollable trait that we still actively discriminate against, and joyfully so.

I'm not suggesting this shouldn't be, as I'd hate to imagine that world, but it does mean that a disproportionate amount of the "losers" in life tend to be of below average intelligence.

But they don't fall for those schemes because they are stupid. They fall because that is the only way they know. Quoting Alan Key."Perspective is worth 80 IQ points." So don't feel that you are way smarter than poor people. We just had a better context to make smarter decisions. Edit: grammar.

yep, so?

Your implying stupid people aren't equal, they deserve to be poor? That smart people are superior? Perhaps stupid people should have to stay in special stupid areas, go to separate schools, drink at special stupid people only water fountains.

I believe stupid people need more not less of a break, more not less assistance, more not less of everything from society and government precisely cause they are stupid.

I implied nothing. I said what I said.

Your solution, however, leaves much to be desired. Affirmative action for the unintelligent is unlikely to lead to wonderful economic success on any scale.

If your original comment really does imply nothing beyond what it literally said, it is superfluous. All it offers is a correlation - which is insufficient to show whether poverty causes stupidity or the opposite - and a qualitative, unsubstantiated 'explanation' for why stupidity causes poverty and not the other way around.

You're right. I didn't say which caused what. I can if you'd like though: Sibling and SES-normed adoption studies tend to show that intelligence is the cause and not the result.

I wasn't going to waste my time responding to this, but wikipedia made it easy:

The American Psychological Association's report Intelligence: Knowns and Unknowns[8] states that IQ scores account for about one-fourth of the social status variance and one-sixth of the income variance. Statistical controls for parental SES eliminate about a quarter of this predictive power. Psychometric intelligence appears as only one of a great many factors that influence social outcomes.[8]

One reason why some studies claim that IQ only accounts for a sixth of the variation in income is because many studies are based on young adults (many of whom have not yet completed their education). On pg 568 of The g Factor, Arthur Jensen claims that although the correlation between IQ and income averages a moderate 0.4 (one sixth or 16% of the variance), the relationship increases with age, and peaks at middle age when people have reached their maximum career potential. In the book, A Question of Intelligence, Daniel Seligman cites an IQ income correlation of 0.5 (25% of the variance).

A 2002 study[75] further examined the impact of non-IQ factors on income and concluded that an offspring's inherited wealth, race, and schooling are more important as factors in determining income than IQ.


I hadn't come across the APA link you provided before, but I had read the Bowles study. He's absolutely right if you assume that inherited wealth, race, and schooling are all independent of IQ. But there's plenty of evidence to show they aren't. So he's not right. In fact, his analysis is quite representative of a certain kind of study you see every so often: you can always make the IQ effect disappear by relying on IQ-correlates instead. I can give you a half-dozen papers that use the same trick. Nobody is impressed by them.

Now, instead of copying and pasting from Wikipedia, maybe you should actually look into the literature in the future. You'll come up with a much fairer sampling of what's out there.

That piece you linked by Cosma Shalizi ‘g is a statistical myth’ is incorrect.

1. The main thrusts of his argument is that test data do not statistically support a g-factor. Gould tried to discredit g but his argument argument was statistically incompetent (for a statistican’s critique see Measuring intelligence: facts and fallacies by David J. Bartholomew, 2004). Shalizi’s criticism is incredibly sophisticated, but likewise incorrect. In a nutshell, Shalizi is trying to argue around the positive correlations between test batteries. If those correlations didn’t exist, his argument would be meaningful. However, these intercorrelations are one of the best documented patterns in the social sciences.

2. Cosma Shalizi misrepresented Spearman and his two factor model. The author tried to present Spearman as ignorant of group factors (he should have called them out as such or noted that they are from the second stratum). The fact is that Spearman gave up on the two factor model and accepted group factors. The fact beyond that is that the predictive validity of group factors typically appears in the range from (and including) zero to about 4%. In other words, the two factor model is not rigorously correct, but it captures virtually all of the practical validity of any test.

For a discussion of neurological correlates with g see this discussion by Professor of Neurology at UCLA Paul Thompson:


Cosma Shalizi will handle this one for me: http://cscs.umich.edu/~crshalizi/weblog/520.html

Let me sum up.

4. Now that people are finally beginning to model gene-environment interactions, even in very crude ways, they find it matters a lot. Recall that Turkheimer et al. found a heritability which rose monotonically with socioeconomic status, starting around zero at low status and going up to around 0.8 at high status. Even this is probably an over-estimate, since it neglected maternal effects and other shared non-familial environment, correlations between variance components, etc.

7. Randomized experiments, natural experiments and the Flynn Effect all show what competent regressions also suggest, namely that IQ is, indeed, responsive to purely environmental interventions.


I suspect this answer will still not satisfy some people, who really want to know about differences between people who do not have significant developmental disorders. Here, my honest answer would be that I presently have no evidence one way or the other. If you put a gun to my head and asked me to guess, and I couldn't tell what answer you wanted to hear, I'd say that my suspicion is that there are, mostly on the strength of analogy to other areas of biology where we know much more. I would then — cautiously, because you have a gun to my head — suggest that you read, say, Dobzhansky on the distinction between "human equality" and "genetic identity", and ask why it is so important to you that IQ be heritable and unchangeable.

Oh, god, not Shalizi. Back when I was a younger fellow, still willing to devote long chunks of my time in pointless internet debates, I thought of writing up a long critique of Shalizi. He's wrong, and purposefully so. He invokes straw man arguments. He cherry picks whatever evidence he needs to in order to make his points. The fact that he believes something is wonderful evidence that it's probably not true.

A friend of mine once told me that Shalizi's world view was explained by a certain instructor he had as a graduate student, and most of his argument is derived from there, but the name escapes me right now.

Regardless. I happen to believe in evolution. Shalizi believes in a magical equality fairy. One look at an SNP map proves him wrong.

Edit: I just realized that you were trying to follow my suggestion to look into "the literature" and mistook Shalizi's blog entries for actual journal articles. He never published them anywhere as far as I know. Nor could he.

> Affirmative action for the unintelligent is unlikely to lead to wonderful economic success on any scale.

Yeah, so? "Affirmative action" (I call it society's obligation to care for the unfortunate) for blind, crippled, veterans, mentally retarded, etc is also unlikely to lead to an economic success.

Why don't we just round up all the "burdens" on smart, successful, beautiful people and kill them. They're limiting society's economic success! And as we all know money is the most important consideration in any decision.

Yeah, it is expensive for a poor to try to live as middle-class. And it is stupid. Stupidity is always more expensive.

The advantage of being poor is that you're detached from all that useless goods, property, stuff and even people. Then you can move. You can live where life is better - some warmer and cheaper place - maybe some buddhist countries, but not California, of course.

Take a look at the Indian brahmins, Tibetan or buddhist monks - they are very poor, as poor as possible, but they are happy and healthy because they does not trying to catch some advertised illusion or broadcasted style of life.

The rule is very simple - spend less than you got. It means to avoid what you can't afford. If you have only one bag with some absolutely necessary things you can live in almost every place with warm climate and peaceful people.

read it, enjoyed it, but had to flag because it's OT. Sorry.

I'll be honest, I thought it was on topic because I enjoy these types of stories on Hacker News, as well as the discussion. I rarely submit stories unless I think they will generate good discussion. If you want to define a 'topic' for this, I'd say it's understanding another market, and getting insight in to a lifestyle you may not fully recognize or understand. That said, I still understand if you flag it.

And what exactly is the topic?

Hacker News. I flagged it as well, incidentally.

Another article goes to #1, and a couple people flag it. Something is wrong with this system.

I think it's more a difference of opinion, which isn't exactly something that needs correction.

What's with the down modding, if you don't like it respond.

    For unto every one that hath shall be given, and he shall have abundance: but from him that hath not shall be taken away even that which he hath.
    —Matthew 25:29, King James Version.

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