Down goes the Dow

seattle prattle wrote:

Igy, this is the exchange that i find offensive, in which you indicate that food bank recipients are assumed to be substance abusers, frivolous, and making poor financial decisions and pretty ,ch are unworthy of being helped. And please note that your second post indicated it was in response to George Corwin.

George Corwin wrote:

WTF?!

Ghost of Igloi wrote:

Average expenditure for cable, internet, and cell phone is $300/month. Over 50% of Americans do not have savings to cover a $500 emergency expense. Wasting money on tattoos, lottery tickets, booze, drugs of various types, including unnecessary medications like opioids, are even greater financial moral hazards. More effort should be directed to elementary financial education rather than recycling programs that have really not advanced much in the last two decades.

Seattle,

I guess I would answer it this way, if the average American spends $300/month on non-essentials, yet does not have $500 in savings for an emergency, I would tend to believe these percentages are higher among those that access food banks. That said, I have volunteered at our local food bank, and believe in them.

I do believe more effort needs to be channeled toward financial education. Also, minimum wage needs to go up. Amazon and WalMart need to pay their workers more, since many of their workers are regular recipients of such aid, off corporate balance sheets.

Certainly wasting money on tattoos, lottery tickets, and various proclivities are not confined to the poor, but exists at some level. At any level of lower income though this would represents poor decision making in my view.

I would consider any of the expenditures highlighted not an obligation of society, while eliminating hunger or providing adequate health care would be. I see it in the same way as requiring helmets for motorcycle riders. A person’s right to riding helmet-less, has to be balanced against the rise in healthcare costs for foolish behavior.

Igy

Ghost of Igloi wrote:

The only thing I assume is a significant portion of the population choosing consumption over savings.

For some people that is literally the difference between life and death.

For the record. I agree with Igy that many, many Americans are in bad financial shape mostly because of their bad financial decisions. Cars, tech and eating out are the main problems. Lack of investing for the future is another.

I'm not going to put a number on what proportion of Americans is responsible for their own financial problems, but it's a big number.

We are starting to see how much money Americans have been able to save during the pandemic because they can't travel or go out to dinner...enormous amounts. Which tells us that excessive discretionary spending is a major, major problem.

One of the things we need to move toward is corporate incentives to sponsor pension like plans. They need to be structured in such a way that the liabilities don’t rest on the corporate balance sheet, but a benefit is guaranteed and transferable between institution.

63% of Americans are living paycheck to paycheck.

25% of Americans have no emergency fund.

Could either of you kindly back up your assertion that food bank recipients are making bad financial decisions? And i don't expect any first hand testimonials because we are all a bit more fortunate than that, aren't we? And statistics about the average American seem to miss the point that these people are falling below that threshold.

In reading up on the topic i find that rather food bank recipients are having to make really difficult decisions between paying the rent, paying their bills, paying to keep heat and elec. on, or feeding their families. And just a few years before the pandemic, as many as 54% of the families served by Feeding America's foodbanks were working poor- they had at least one member of the family working. And reading further, once the pandemic hit, the numbers have risen by about 40% from pre-pandemic levels.

Consider the following: "Feeding America estimates those facing hunger will swell to 1 in 6 people, from 35 million in 2019 to more than 50 million by this year’s end. The consequences are even more dire for children — 1 in 4, according to the group."

Again, it sounds to me like some people, willing to work and provide for themselves and their families before their jobs were lost or cut-back, are having to face some really tough choices and are worthy of help, not judgement.

The hypothesis advanced in this thread by some is, more or less, that poor people tend to be, on average, either dumber or lazier than those of us with better financial fortunes, motivated by the easy path to security via a search for handouts. This strikes me as a lazy - potentially delusional and sociopathic, depending on the degree to which it's internalized - rationalization that serves only to make one feel validated in their own superiority, that their better position was clearly earned and deserved, and not in any way a partial result of luck and privilege.

My own experiences and observations over the years suggests that some of the more important pre-conditioning factors inclining people to lower financial status include, in no particular order: caste and other systemic structures in the socio-cultural fabric; war, including civil strife, tribal conflict and in particularly genocide; mental illness (among homeless people in particular); local availability of resources and meaningful work.

Don't get me wrong; some poor people are dumb, lazy or both. But my own view is that the proportion of dumb and lazy among the poor is little different than that among those better off.

The preconceived notion that poor = lazy or dumb is, IMO, false and enormously harmful, as it perpetuates lies and preserves stereotypes and systemic barriers that keep us on top and holds others down.

This discussion reminds me why I took on this alphabet soup version of my handle last summer, when some in this thread were sharing their deluded view that the US (among other places) is an idyllic place free of systemic racism, which blatantly ignores nearly all its history.

Places where I've encountered high proportions of poor people in my travels:

- homeless people on the streets of cities around the world, including in many major north American cities

- migrant / refugees in many major European cities, including in particular in Izmir, Turkey

- poor rural areas in many Canadian provinces and US states

- poor neighbourhoods or slums in many cities around the world, for example Santiago, Chile; Phnom Penh; Bangkok; Ho Chi Minh City; Lima, Peru; Hong Kong

- rural villages in the uplands of Peru and Chile (visited both countries on holiday, and travelled extensively in Chile for work)

- First Nations (you might say Indian) reserves in Canada and the US

- Inuit communities in northern Canada, and Eskimo communities in Alaska (that word is not acceptable in Canada but seems to be in Alaska) where I've travelled extensively for work

- Rohingya refugee camps in Bangladesh (visited there for work in 2019), as well as Bangladesh communities (Cox's Bazar, Dhaka)

- the entirely of Saint Lucia (visited there following Hurricane Tomas for work)

- off-resort urban and rural areas in several other Caribbean islands visited mainly on holiday (Jamaica, Barbados, Aruba)

- very small slums in urban areas in otherwise wealthy small nations (e.g., Bermuda, where I spent ~ 6 months working in the early 90s)

- slums in Guatemala City, and poor rural villages elsewhere in Guatemala (there for work in ~ 2015)

- all around Morocco (visited there on holiday several years ago, drove around the whole country, stayed in many cities)

- urban and rural areas in many (formerly Soviet Bloc / Warsaw Pact) eastern European countries; visited some on holiday, some for work, some for my spouse's work, and some while on military deployment in the 90s)

My own impressions from encounters with poor folks is that they are exactly like wealthier folks, except poor, thus generally motivated to strive harder than us, not the opposite.

Dr. Racket wrote:

the media is corrupt wrote:

What’s unbelievable is that you still believe, after decades of failure, that the current welfare system is a way to combat poverty.

And to pretend that life choices have no impact on outcomes is disingenuous at best.

I would believe that dropping out of school in the 6th grade is choice that you made

Oh boy, you really got me with that zinger.

SP, was this you?

https://www.foxnews.com/us/seattle-man-charged-with-assaulting-a-federal-officer-during-capitol-riots

Bitcoin getting hammered

seattle prattle wrote:

Could either of you kindly back up your assertion that food bank recipients are making bad financial decisions? And i don't expect any first hand testimonials because we are all a bit more fortunate than that, aren't we? And statistics about the average American seem to miss the point that these people are falling below that threshold.

This is paywalled but it changed my view on this, toward the 'poverty can be unlearned' school.

It's about how the Mormon Church has had much success getting people out of poverty by teaching old-fashioned middle class ideas. Via foodbanks. The result is an increased social mobility an enormous amount.

The point is that by altering their behavior, poor people did a whole lot better than their old selves.

Obviously, the success of charters schools in cities suggests poverty can also be unlearned in a non-white setting.

To think that people cannot raise themselves up, because the 'system' holding themselves down is so powerful...is a very, very un-American idea.

It's paywalled, unfortunately.

And this (October 2020) shows that when Americans spend less, they have lots of money left over. Not just rich people. Poor working people too. Note that payday loans are down, pawnshop business has fallen. Because people are spending less money. Which means that even among the working poor, spending above their means is a huge problem and cause of being 'stuck in poverty.'

For months, Americans have barely dined at restaurants or traveled for vacation. There have been no ballgames or concerts to attend. Gym and other memberships mostly remain frozen.

Forced into lockdown mode by the coronavirus, people put big purchases on hold and scaled back their spending. Around the same time, mortgage lenders, student loan collectors and other creditors offered struggling borrowers a break on payments. And stimulus checks from the government arrived.

These trends have come together to form an unlikely silver lining to the economic recession, which set in eight months ago: Despite the pandemic’s economic devastation, which has tipped millions of people into unemployment, many American households are in relatively good shape. Since April, consumer savings have increased, credit scores have surged to a record high and household debt has dropped. The billions of dollars that banks set aside at the start of the crisis to cover anticipated losses on loans to customers have been largely untouched. And lending at pawnshops and payday lenders, where business tends to boom during downturns, has been unexpectedly slow.

agip wrote:

For the record. I agree with Igy that many, many Americans are in bad financial shape mostly because of their bad financial decisions. Cars, tech and eating out are the main problems. Lack of investing for the future is another.

I'm not going to put a number on what proportion of Americans is responsible for their own financial problems, but it's a big number.

We are starting to see how much money Americans have been able to save during the pandemic because they can't travel or go out to dinner...enormous amounts. Which tells us that excessive discretionary spending is a major, major problem.

How many financial decisions do you think people in poverty are making month to month? I suspect you're conflating actual poverty with lower or blue collar middle class.

People in poverty don't waste discretionary income on iPhones because they have no discretionary income.

Great example of how some people are born into systems of support. The Mormon Church is one of the wealthiest institutions in the world with a close-nit group of worshipers who tend to lookout for their own. It's like being born into a country club.

But yeah, tEaChInG MiDdLe cLaSs iDeAs

that's fair - I should define my terms better.

although by legal definition, a family of 5 making $31,000 is living in 'poverty.'

With $2-$3,000 coming in per month plus government aid...that's enough cash flow for an adult in a low cost of living place to buy some fancy stuff.

But sure the bigger problem is lower middle class people trying to live like actual middle class people by boosting their discretionary spending. Cars, tech, eating out, vacations.

This is probably the most privileged boomer thing I've ever read and is consistent with your other dumb sh!t like "I can't be racist because I have black friends."

Imagine having not only a totally monolithic socioeconomic belief, but carrying that without any thought of progress or change for 50+ years. Only boomers

read the story if you can get it somehow.

It changed the way I look at these things.

It's actually thrilling and heartwarming - much good is being done in Utah.

And don't get the idea that they are only helping Mormons. That's not how it works.

agip wrote:

Dr. Racket wrote:

How many financial decisions do you think people in poverty are making month to month? I suspect you're conflating actual poverty with lower or blue collar middle class.

People in poverty don't waste discretionary income on iPhones because they have no discretionary income.

that's fair - I should define my terms better.

although by legal definition, a family of 5 making $31,000 is living in 'poverty.'

With $2-$3,000 coming in per month plus government aid...that's enough cash flow for an adult in a low cost of living place to buy some fancy stuff.

But sure the bigger problem is lower middle class people trying to live like actual middle class people by boosting their discretionary spending. Cars, tech, eating out, vacations.

Consumerism is bad cycle but let's also not pretend that scraping together $500 a month into a .000001% interest savings account is going to be any kind of salvation. Medical debt is the #1 reason for bankruptcy. College tuition - one of the most tried and true ways towards social mobility - rises to astronomical heights YoY.

These are just some of the middle class issues, but the point is that their are systemic barriers in social mobility in every class.