The Poverty Trap

“They [Researchers for the Oxford Review of Economic Policy] find that monopolistic pricing takes a bite out of every income group’s share of national income, with the notable exception of the top 20 percent, whose incomes rise. In effect, companies are using their market power to extract wealth from poor and middle-class households and deposit it in the pockets of the wealthy, to the tune of about 3 percent of national household income in 2016.” The Washington Post, 2018

Jane Fonda’s Workout book, a 1981 classic that assumed Biblical status with me, didn’t just talk about exercise, but the benefits of sound nutrition, too. I no longer have the book, so I’m paraphrasing from memory, but I’m pretty sure she pointed out that our typical, sugary breakfast was brought to us by a few of the big corporations like General Mills, for example, which had a near monopoly on the breakfast market at the time. And those companies bought their way to our kitchen tables through constant, clever advertising even though what they were selling was chock full of nothing but sugar, and wasn’t good for anyone, let alone growing children. Remember “Tony the Tiger” and his Sugar Frosted Flakes? “They’re Great!”, he roared into our living rooms (strategically targeting the cartoon crowd) …and millions of us were hooked.

“The Biden administration is prioritizing the investigation and prosecution of corporate crime and is giving DOJ prosecutors broader power to do so.” The National Law Review, November, 2021

Unless it’s a major Ponzi scheme, we don’t hear too much about what has been dubbed “white collar crime”. And that’s a shame, because it costs its victims and the American taxpayers between $300 and $800 billion a year according to FBI estimates. On the other hand, “street crime”, anything from petty theft to crimes that involve violence and/or loss of life we hear about daily, especially with today’s ever-present, random gun violence. However, it is estimated that the annual cost of street crime (not counting the tragic loss of life) is about a paltry $16 billion by comparison.

“Critical thinking” is a term thrown around so much it has become almost meaningless. It is embedded deep into the Common Core State Standards for public schools across the nation, which set standards for English and math. And it is discussed in countless articles by educators and for educators that attempt to evaluate and then decide how our students learn. Despite this talk, however, it also is estimated that only 1 in 10 instructors actually teach critical thinking skills.

This 30 minute documentary prepared by the “Economic Disparity and Fairness in Growth” House Select Committee of the 117th Congress seems to suggest there are ways to close the income and wealth gap and help our economy bend toward fairness. Warning: Some of the proposals include government-sponsored programs!

While the committee did prepare a robust report of it’s accomplishments, it also produced this documentary as a way to touch more people, in ways that statistically produced data illustrated on nifty charts and graphs simply cannot: by focusing on individual stories (in this case three Americans), who suffered various types of adversity, financial and otherwise, and seem to have persevered with hard work and some government help. Watching this documentary, a first of its kind for Congress, is an uplifting way to spend 30 minutes.

“…our founding concept of universal equality, in a country where one-fifth of the population was enslaved, led to an increase in racial prejudice by creating a cognitive dissonance — one that could be resolved only by the white citizenry’s assumption of Black inferiority and inhumanity. It’s an unsettling idea, that the most revered ideal of the Declaration of Independence might be considered our original divisive concept.” The New York Times, 2021

I’m resisting the typical end-of-the-year round-up: posts I’ve written, topics we’ve discussed in the last year. Instead, I’ll focus on one word, one idea that might propel our way to substantive change in the coming new year. And that word is “divisive”.

At first blush, it appears counter-intuitive — divisiveness is supposedly a negative concept, especially considering today’s politics as one pertinent example. Rather, we should strive to come together to solve problems, work “across the aisle” and stop the inflammatory talk that, well, leads to divisiveness.

I’m all for uniting and working together, but it can’t always accomplish the substantive change that moves us forward as a country — to jump start the change perhaps a different tactic is needed, and the consensus and working across the aisle parts come at the end.

“Research and development is only about 17 percent of total spending in most large drug companies,” he [Gerard Anderson, professor of health policy and management at John Hopkins University], says. “Once a drug has been approved by the FDA, there are minimal additional research and development costs so drug companies cannot justify price increases by claiming research and development costs.” Qtd. in a 2019 CNBC article.

I’d like to continue the conversation from a recent post that focused on why millions of us carry medical debt in the United States. It makes sense, then, to drill down on the cost of prescription drugs, because that cost can be the largest part of any medical bill, particularly hospital stays, and thus lead to medical debt charged on high interest credit cards or never ending predatory loans.

We know prescription drug prices in the United States are the highest in the world among comparable, wealthy nations. In fact, money spent on prescription drugs by both insurance companies and out-of-pocket by consumers is close to double that of other, similar countries. But why?

Crime and Punishment: Why the Poor Stay Poor In America is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

It’s easy to think that if you have health insurance, you will not have medical bills to pay out of pocket — that’s why you’re paying those hefty premiums, right? Unfortunately, medical bills, regardless of insurance coverage, often turn into medical debt.

“…what looks like sprawl is healthier for the middle class and conforms to what most families want anyway.”

Joel Kotkin, CEOof a Houston-based think tank called “Urban Reform Institute”. The New York Times, Sept. 4, 2017, one week after Hurricane Harvey struck Houston

Houston isn’t the only city in the U.S. with urban sprawl, but it is known in some circles as a “model” city for rapid, supposedly inexpensive housing growth unencumbered by zoning laws or environmental concerns. Like Mr. Kotkin stated above, many believe it is the housing of the future: thousands of individual, inexpensively constructed suburban homes, each with a two car garage and a cramped but private backyard, surrounding a major city or other urban area accessible only by car. Although popular at least since the 1950’s, the city of Houston takes this model to an extreme.

I believe I can speak for Bella (she’s napping at the moment), when I say this :

We have never understood why citizens of the United States choose not to vote. We are fortunate to live in a participatory democracy, at least for the time being, and that good fortune comes with some responsibilities. Perhaps the most important of those responsibilities is to research the issues and the candidates running during each election cycle and then VOTE. That’s why every campaign has a rigorous “Get Out To Vote” (GOTV) effort, so if you’ve been getting lots of emails, texts and phone calls in the last few weeks and are bombarded today, it only means that each campaign wants each eligible person to vote. Why? Because they know that your vote and every vote counts.

If per chance you have not yet registered to vote and believe all is lost, remember that twenty-two states and Washington D.C. have same day registration and voting. You still have plenty of time!

And here’s a more sobering statistic: In the presidential election of 2020, at least 80 million U.S. citizens who were otherwise eligible to vote, did not. NPR produced a detailed, statistic-driven piece shortly after the 2020 election that should infuriate you. Let me provide the reasons why, according to their surveys, those 80 million otherwise eligible voters chose not to vote:

“Nonvoters' reasons for not voting include:

* not being registered to vote (29%)

* not being interested in politics (23%)

* not liking the candidates (20%)

* a feeling their vote wouldn't have made a difference (16%)

* being undecided on whom to vote for (10%)

They are disengaged, disaffected and don't believe politics can make a difference in their lives. They are also more likely to be Latino, younger, make less money and have lower levels of education than voters.”

Recognize anyone you know and love? Voting is one major way we can affect change in our country, and with any luck and enough power, reverse the cruel cycle of inequality and poverty in the United States, the richest country on earth.

Let me make one last plea for you to exercise the most sacred right we have in this country…

GET OUT AND VOTE!

Bella and I would love to hear your thoughts in the Comment Section below! Have you voted or not, and why?

And speaking of communities, you can also become a participating member of the Crime and Punishment community by signing up right now for a free or paid subscription. Thanks in advance for your support!

Crime and Punishment: Why the Poor Stay Poor In America is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

“Between soaring prices and rising rates, the typical home buyer in October paid 77 percent more on their loan, per month, than they would have last year, according to Realtor.com. With a national median asking price of $425,000 and a 10 percent down payment, that works out to an additional $1,117 every month.” The New York Times, November 4, 2022