The Poverty Trap

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“Industrial policy” in its broadest sense refers to the deployment of policy tools with the intent of influencing how we create value—what goods (and services) we produce and how we produce them…The common thread in different understandings of industrial policy is a recognition of the role of government as a key actor in shaping the world of production in line with a public purpose. From a Roosevelt Institute report published May, 2023.

What is the “role of government” in helping shape production of goods and services for a public purpose? If you believe, as I do, that our government exists to do the most good for the most people, then you likely would agree that crafting a strong industrial policy plays a key role in the ways each Administration and Congress steers our economy. For example our industrial policy today, what President Biden calls a “modern American industrial strategy” is being used to temper our extreme inequality, change the trajectory of the climate crisis and generally improve the standard of living and quality of life for everyone, not just the few.

The Roosevelt Institute, for example, describes an industrial policy that implements a broad transformation and includes a focus on “well-being” as primary factors:

…As Todd Tucker and Steph Sterling (2021) suggest, "Perhaps the most important question for policymakers when developing industrial policy is whether it is promoting the industries we need most to allow all members of our society and country to flourish."

The history of industrial policy in the United States is fascinating–it navigates the twists and turns of various administrations and political parties, but has not always come down on the side of the public good and/or the “well-being” of most of our population. The Council on Foreign Relations provided a more traditional definition of industrial policy in an article published in September 2023, that does not explicitly include a reference to “the public good” or to making the economy more fair for all of us :

Industrial policy generally refers to efforts to promote specific industries that the government has identified as critical for national security or economic competitiveness. In a Council Special Report, [Council on Foreign Relations] CFR experts Jennifer Hillman and Inu Manak define industrial policy as “government action that encourages or directly subsidizes the expansion of certain economic sectors over others.”

Examples of the tools government typically uses to implement industrial policy are: subsidies and tax incentives given to specific industries and production sectors, laws, financial investments in research and development and tariffs—to support particular industries that are strategically important. The goal is to… “incentivize the production of more of some goods and services and less of others.”

A recent example of the use of an industrial policy tool is the call by Ohio Senator Sherrod Brown, a Democrat, to permanently ban the importation of electric vehicles from China. While others recommend a high tariff on the import of these vehicles, Senator Brown has suggested a full ban to President Biden because: “Chinese electric vehicles are an existential threat to the American auto industry."

My knowledge of industrial policy is limited to what I’ve read, so I’ll rely on the experts to help us make sense of the major policy changes and laws the Biden Administration has implemented in the last three-plus years . This new policy direction has lifted our country out of the Covid and economic crises, increased manufacturing for the first time in decades and reduced greenhouse gases and ignited the green energy industry.

In addition to independent research institutes and think-tanks, like the Roosevelt Institute, Brookings Institution, Economic Policy Institute, and the Council on Foreign Relations and the Congressional Budget Office, another expert is Robert Reich who has been writing about industrial policy for decades. Professor Reich wrote a post last year on his Substack newsletter touting President Biden’s success with his “new” industrial policy, saying:

The Biden administration is bringing back American manufacturing. It’s one of the most significant (and least publicized) economic stories in recent decades (see chart).

I’m “borrowing” this chart so you can see the trajectory of investment that businesses have made in factories in the last few years. And it is not a coincidence that the U.S. also has had 39 straight months of job growth, with the March 2024 jobs report showing the addition of 303,000 new jobs and the unemployment rate falling to 3.8% (although manufacturing jobs showed no change during March).

Right now, our country is facing at least two major crises: raging economic inequality and climate change. Whether embracing a particular “industrial policy” or “modern American industrial strategy”, our government has always stepped up in times of economic upheaval to guide (and yes, “bail out”) our country’s industries to prevent financial collapse and the ruin of livelihoods and lives. We also have made choices that some industries and particular locations in our country need more of a boost than others — not “choosing winners and losers” as some critics of industrial policy have said.

The Biden Administration and its allies in Congress passed four major pieces of legislation in the last (117th) Congress that invest in a better future:

* The American Rescue Plan Act (ARP) passed in the spring of 2021

* The Infrastructure Investment and Jobs Act (IIJA) passed in the fall of 2021

* The Chips and Science Act passed in August of 2022

* The Inflation Reduction Act (IRA) passed in August of 2022

The administration’s overall industrial policy driven by this legislation is also “place-based”, meaning it targets specific areas of the country in need of rejuvenation:

That is, they propose to achieve broader national goals through deliberate and direct investments into specific U.S. places and regions. In this vein, the Brookings Metro counts 19 explicitly place-based industrial policy programs—adding up to some $80 billion of authorized spending—distributed across three of the four previously mentioned pieces of legislation (ARP, IIJA, and CHIPS and Science).

By the way, government funds to clean up from natural disasters like hurricanes, tornadoes, floods, droughts, wild fires and more, which are increasing in severity and frequency because of changes to our climate, currently total between $100-$150 billion a year, give or take a few billion. Any money our government earmarks to lesson the impact of the climate crises (like incentives and tax credits for clean energy development rather than continued funding of fossil fuels, which are included in the above legislation ) should be considered an investment in the health and well-being of our country and the future of a livable planet.

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I’d love to hear what you think about these types of government investments. The four major pieces of legislation passes in 2021 and 2022–are they already having a positive impact on our economy, and more importantly, our lives? Or are we just spending too much? Your…

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“US President Joe Biden is proposing a huge increase in fuel taxes for private jets. It is being pitched as a fairness issue compared with airline passengers, who pay special taxes on every ticket.” EuroNews.Green, 3/12/24

The above photo from the Sundance Resort is about it for the positive environmental news…. Wait, there is at least one initiative brewing that might put a dent in our climate crisis, plus a few other items of interest. Read on.

— First up is President Biden’s proposal to gradually increase the tax on private jet fuel as part of his Fiscal Year 2025 budget proposal released a few weeks ago. The president believes it will help even the playing field between the wealthy and average Americans. Currently, commercial airline passengers pay the largest share of upkeep of airports and national airspace:

Airline passengers pay a 7.5% excise tax on tickets and a separate levy of up to $4.50 per flight to help pay for airport projects.

On the other hand:

The [Biden] administration says that private jets account for 7% of all flights handled by the FAA but less than 1% of taxes that fund the federal trust fund for aviation and airports. The Transportation Department said the proposal would raise $1.1 billion over five years.

Under this new proposal, the tax on private jet fuel would gradually increase from the current 22 cents/gal. to $1.06/gal over five years. Of course, the largest aviation industry trade group came out against this modest tax increase, “saying private jets help companies succeed and create jobs.” Really now? That statement might well be true, but it has nothing to do with a choice by the government to ease the burden on the average American and finally require the wealthy to pay their fair share. I can’t help but believe these lobbyists keep making the same, tired arguments because it’s all they’ve got…and it is still an embarrassment.

— According to a CNN Business article published on March 15, approximately 1000 “dollar stores” plan to close around the country in the next few years. Some say good riddance and others worry the closings will further diminish the shopping choices in underserved communities. (I’m in the “good riddance” camp —they sell cheap brands made overseas, and almost entirely ultra-processed “food-like substances” , —a phrase popularized by the writer, Michael Pollan— and pay their workers poorly).

A year ago, I wrote about the proliferation of dollar store brands and some communities’ attempts to ban them. And whether the bans have worked or the brands have concluded that expansion in numbers did not bring expansion in profits, the companies—Family Dollar, Dollar Tree and Dollar General—are closing fairly rapidly.

She [Tulsa City , Oklahoma Councilor Vanessa Hall-Harper], hopes that the recent Family Dollar closures will make it easier for local grocers to open. The expansion of dollar stores has led to a decline in the number of grocery stores and a reduction in fresh produce consumption for some lower-income households, a study last year by researchers at the University of Toronto and UCLA found. Markets lose one grocery store for every three new dollar stores that open, the study found.

— A New York Times article published earlier this month details the extraordinary lengths state Medicaid offices will go to “clawback” payments made to now deceased Medicaid benefit recipients. This article discusses Medicaid’s insistence on repayment from the deceased’s estate, when the deceased received long-term care benefits during his or her lifetime. A home where the Medicaid recipient is living or owns while receiving Medicaid benefits is typically exempt from being counted as an asset, but post-mortem, the house is fair game to collect Medicaid’s alleged “debt”.

In Ohio and all other states, the surviving spouse and/or a disabled child can to continue to live in the deceased’s home until their death, but then it can be seized as an asset owed to the state.

Medicaid “is the only public benefit program from the United States of America that requires states to seek to get money back,” said Representative Jan Schakowsky, Democrat of Illinois. This month she reintroduced a bill, the Stop Unfair Medicaid Recoveries Act, to end the practice. Her staff has calculated that 17,000 families in Illinois alone have lost homes to Medicaid recovery since 2021.

Representative Schakowsky describes this federal law implemented by each state’s Medicaid agency as “a really harmful and cruel program…” that may cost more to implement than any amount recovered:

…for the most part, the states pursue claims against low-income families, many of them Black and Hispanic. Critics argue that the policy perpetuates poverty. The average wealth of deceased Medicaid recipients over age 65 is less than $45,000, the MACPAC report noted, and the average home equity is $27,364 … It imposes recovery against the families and communities least able to pay it.

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I’d love to hear your thoughts on these articles. A higher tax on fuel for private jets? Will a few less dollar stores bother you? And what do you think about Medicaid raiding the paltry estates of poor people? Let me know in the Comment Section below.

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This post goes out to both free and paid subscribers, but if you are not already a paid subscriber and value this effort and our growing community, please consider upgrading to a paid membership. Thanks in advance for your financial support of my work —it’s what allows me to keep researching and writing. And thanks to all the new paid yearly subscribers who signed up during our winter sale! You are appreciated!

“Many first-time home buyers don’t realize that the lender that approves their mortgage could turn around and sell the servicing rights to a company they’ve never heard of. Now the homeowner might have to deal with a mortgage servicer that has bad customer service, charges late fees when it shouldn’t, or makes needless demands on borrowers.” The New York Times, March 2, 2024

And…your original mortgage lender can turn around and sell your mortgage to another lender and the servicing rights to another company, leaving you dazed and confused. All of this selling and transferring is legal because it allows the banking/mortgage lender industry to make more money by streamlining the care of their sometimes vast portfolios.

The problems for the borrower arise when the mortgage lenders or servicers don’t comply with the current regulations governing the financial industry, and when they don’t, the burden is mostly on the borrower to to get the errors corrected.

Unfortunately, I’m intimately familiar with the CFPB regulations governing mortgage servicers because I fought off foreclosure of my home for over a decade before I managed to sell at the last minute. The servicers of my mortgage knew I was an attorney, and I quoted the law to them verbatim, but they still refused to comply—they simply ignored me until after I sold my house and the attorney I hired filed a complaint in federal court. My servicer settled for just about ten times the amount they legally owed me before the sale of my home. (More in a later post, on financial institutions violating the law as part of doing business because it’s cheaper and easier).

I don’t want this post to be a rumination on my past failings, but rather to focus on what I’ve learned dealing with mortgage lenders and servicers and to put together a brief primer to help you keep tabs on your mortgage. There is no need to think your lender or servicer is out to get you with every paper you’re asked to sign, but the Russian proverb translated as “trust but verify” and popularized in the U.S. by President Reagan, is good to keep in mind. And when dealing with the banking industry, I would modify it to “trust-ish but verify”.

This advice should not be limited to first time home buyers, because it seems that most consumers have a general understanding that the banking industry is regulated, so they '‘trust” all of the papers they are signing are “legal”. But when you make what is likely the largest purchase of your life and you need a loan to make that purchase (and who doesn’t?), it’s important to understand your rights as a consumer of a financial product.

* The Consumer Financial Protection Bureau (CFPB), created in the wake of the Great Recession through the Dodd-Frank Act and the perseverance of Senator Elizabeth Warren (D Mass.), regulates financial products like mortgage loans, entities like mortgage lenders and servicers and other financial products like credit cards. I wrote a post discussing exactly how the CFPB directly helps consumers, and as a follow-up, Audrey Hood who writes The Civic Librarian published a fantastic guest post explaining how to access the CFPB consumer complaint data base. This data base, by the way, is a great way to investigate your bank or servicer and view the number and type of complaints filed against them.

* In case you don’t already know, this is the difference between a mortgage lender and a mortgage servicer, provided by the CFPB:

— A mortgage lender is “the financial institution that loaned you the money. Your mortgage servicer is the company that sends you your mortgage statements. Your servicer also handles the day-to-day tasks for managing your loan.” And as I mentioned, they are not required to be the same company and both the lender and servicer can change at any time. (They do have to notify you in writing of these transfers). And the servicer’s “day -to-day tasks” are substantial — they take and apply your principle and interest payments and manage your escrow account if you choose to have one, and can initiate a foreclosure on your home.

* Speaking of escrow accounts, my advice is to not establish an escrow account if you don’t have to — the only time it is required is if you put less than 20% down or have less than 20% equity in your home. I paid my taxes and insurance separately for a couple of decades and never had to worry about the servicer mis-applying the escrow ,or reviewing my statement each month, trying to understand if the proper amount had been paid or why there was a escrow shortfall at the end of the year. If there is an issue with the correct application of escrow money, it is more time consuming to correct then to pay taxes and insurance yourself.

* Know which entity owns your loan. According to the National Association of Realtors (NAR) about 70% of all mortgages are owned and/or backed by Fannie Mae and Freddie Mac. Both are now classified as quasi-government agencies known as government sponsored enterprises (gse’s). According to the CFPB:

“Historically, they [Fannie Mae and Freddie Mac] were private companies operating with government permission and under government regulation. In late 2008, following the financial crisis, the U.S. government took over operations at both companies.”

And here are the direct links to look up the owner of your mortgage from the CFPB:

Look it up online

There are some online tools you can use to look up who owns your mortgage.

* Many mortgages are owned by Fannie Mae and Freddie Mac. Both offer a mortgage look up tool on their website.

* FannieMae’s look up tool

* Freddie Mac’s look up tool

You can look up your mortgage servicer by searching the Mortgage Electronic Registration Systems (MERS) website.

And know which entity regulates your bank, in addition to the CFPB. It is probably the Office of the Comptroller of the Currency, and its website provides a way to check: https://www.helpwithmybank.gov/who-regulates-my-bank/index-who-regulates-bank.html

* How do you dispute a suspected error by your lender or servicer? Again, the CFPB provides both helpful information about the financial industry, the statutes and regulations that govern it and the process to file a dispute against a particular lender or servicer, including sample dispute letters, which you can access here: https://www.consumerfinance.gov/ask-cfpb/how-do-i-dispute-an-error-request-information-about-my-mortgage-en-1855/. You can also file a dispute by phone by calling the CFPB at: (855) 411-CFPB (2372) or online here: https://www.consumerfinance.gov/complaint/

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I hope this short bit of information has helped you better understand your rights when dealing with a mortgage lender or servicer. I would love to hear your thoughts in the Comment Section below. Have you had any problems with your mortgage? Have you contacted the CFPB to ask a question or file a dispute?

And if you have a specific question about a problem with your mortgage, ask it in the comment section, and I’ll be happy to answer or point you in the right direction.

And please take this opportunity to subscribe to The Civic Librarian as well as signing up for a free or paid subscription to The Poverty Trap

The Poverty Trap: Why The Poor Stay Poor In America is a reader…

“When asked what drives the economy, many Americans have a simple, single answer that comes to mind immediately: “greed.” They believe the rich and powerful have designed the economy to benefit themselves and have left others with too little or with nothing at all.” The New York Times, February 21, 2024

I was checking out at a grocery the other day during a time when almost no other customers were in the store. While the cashier was scanning my eight cans of a rare brand of cod pate (for my elderly cat), she was chatting with two other employees, one of whom was using a wheelchair. This woman was incredibly frustrated at her boss who kept scheduling her for too many work hours, even though she had told her many times that she was receiving disability payments and could not earn over a certain amount of money before her disability payments were cut.

I understand that being able to work full time, and still receive full disability payments each month doesn’t make sense...

“The truth is, you can’t change a corrupt system by taking its money.” Senator Bernie Sanders campaign commercial, 2016.

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Trailer for “Razing Liberty Square”, a documentary directed by Academy-Award nominated filmmaker, Katja Esson, a resident of Miami, Florida. It premiered on PBS on January 29, 2024. You can read more about the film and the film makers here.

A government report, The Indians of Southern California in 1852, explained that many Californians believed "destiny had awarded California to the Americans to develop" and that if the Indians "interfered with progress they should be pushed aside." The Library of Congress

Pushed aside. People, land, animals, waters, trees — all have been bulldozed, re-routed, displaced and yes, pushed aside for “development” of the land — what some believe is “progress”. Progress, though, tends to favor already wealthy developers at the expense of low income people and their communities. Displacing America’s indigenous peoples was one of our country’s founding principles justified by the colonists’ and later our government’s belief in “manifest destiny”. President Andrew Jackson signed The Indian Removal Act in 1830, “…which empowered the federal government to take Native-held land east of Mississippi and forcibly relocate Native people from their homes in Georgia, Alabama, North Carolina, Florida, and Tennessee to “Indian territory” in what is now Oklahoma.” This forced removal is known as “The Trail of Tears, where tens of thousands of Native Americans either died or were killed.

And from the government’s perspective, it worked — those without power were removed from their land, and the many and varied cultures of the indigenous tribes were erased along with their people.

This pattern of displacement continues to be repeated with the “gentrification” of neighborhoods throughout the country. Clearly, there is not a direct comparison of a forcible removal of people from their land to reservations on the other side of the country where tens of thousands and then millions died, to gentrification of individual neighborhoods, but the common result is forced displacement of marginalized people, including the poor and people of color.

In the last decade, though, climate change has become an additional catalyst for gentrification of predominately minority and poor communities. Here is a general definition of climate gentrification from an interview with the director of “Razing Liberty Square” in Orion Magazine. The interview/article is aptly titled “Stealing Higher Ground: A Portrait of Rising Climate Gentrification”. You can read the full interview here.

Climate Gentrification: the process by which the impacts of climate change, such as rising sea levels and increased temperatures, contribute to the displacement of low-income communities and the transformation of neighborhoods, often driven by increased investment and redevelopment in less climate vulnerable areas.

The film focuses on a four square mile area about six miles north and west of downtown Miami, Florida, called Liberty Square, which was one of the first public housing projects built in the United States (1937) for Black people. It sits on some of the highest ground in Miami-Dade county, approximately 15-16 feet above sea level. At the time it was constructed, Miami’s beach front was whites only, and Liberty Square was a safely segregated distance from the wealthy whites on the shore.

In 2019, then Secretary of Housing and Urban Development (HUD), Ben Carson, attended a ribbon cutting ceremony for the opening of the first phase of the redevelopment of Liberty Square, touting a federal, state and local partnership of funding and planning to make this redevelopment happen. The local news video and article paint a rosier picture of the demolition and first phase of the rebuilding than does the documentary, “Razing Liberty Square”. The impacts of climate change are not lost on real estate developers, and they began to calculate the high cost of living ocean front, including soaring home insurance premiums. And the developers knew they had a built-in market — the home owners living on drained swamp land and borrowed time. The developers, along with government funds and wealthy homeowners set their sights on poor communities like Liberty Square, just a few miles away, and relatively speaking, on higher ground.

According to the Orion Magazine interview with the documentary’s director, Katja Esson, the redevelopment of Liberty Square did not benefit its long-time residents:

The promise was to do a block-by-block approach. All the people from the first block would be moved into empty units that existed on site. Then demolish and build the first block and move the people into the new units. And so on. That was the promise, not to displace anybody. But then the film witnessed how promises were broken. 

In fact, statistics released by HUD last year show that only five families of the 640 living in Liberty Square when the redevelopment began have returned to claim the new housing. The “why” is not answered in the film, but Esson believes that the story is not over.

We are trying to change the outcome of the story we are telling through the film, because only 3 of the 9 blocks of the new Liberty Square are complete, which means with enough visibility, how these next blocks are built, could (and should) be different. We also hope the film will support residents’ ongoing fight for the things they were promised: like a new building for the MEYGA learning center, and quality apartments, respectful management, and so on.

We want to share this story as an intervention in the affordable housing sector and look to (or create) housing that is truly affordable to longtime residents and is not intended to displace anyone.

The Liberty Square “demolish and redevelop” project is likely a continuation of HUD’s longtime promotion of mixed income communities. In 1992, HOPE VI was signed into law which allocated $5 billion to demolish blighted public housing (where only poor people lived), and to rebuild communities that included people with different levels of income to “decentralize poverty and revitalize urban neighborhoods”. And to some degree, this program accomplished its goal. According to a Congressional report published in 2012, the first year after all funding expired for HOPE VI:

Over the history of the program, 268 HOPE VI revitalization grants (including Main Street grants) have been made to [ local Public Housing Authorities] PHAs in 41 states, districts, and territories. As of June 2009, the program had been responsible for the demolition of 93,295 units of public housing and the construction or substantial rehabilitation of 78,692 replacement units.

But these numbers have underlying costs —costs to people and their communities —that are perhaps better told through stories highlighting real people, like Esson’s film, “Razing Liberty Square”. One person the film focuses on throughout is Aaron McKinney, Development Coordinator for the private company, Related Urban Development Group which was awarded the contract to redevelop Liberty Square, where McKinney was born and raised. When talking with a group of Liberty Square residents, he says: “ I believe concentrated poverty doesn’t work.” And that was one of the main prongs of the HOPE VI projects — break up poverty clusters so poor people can see a way out. McKinney eventually resigned his position with Related Urban and continues to do community work in Liberty Square.

Here’s another…

Here’s to A Happy and Healthy New Year to you and yours! Thanks so much for your support, and I hope you continue to enjoy The Poverty Trap in 2024.

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“It’s the economy, stupid.” James Carville, presidential candidate Bill Clinton’s campaign adviser, sometime in 1992 at the candidate’s Arkansas campaign office.

Good news: the economy is recovering much more quickly than predicted even a year ago, inflation is down, unemployment is down and productivity and wages are up. And steady but perhaps slower economic growth, with declining interest rates, inflation and unemployment numbers are predicted for 2024.

The following two charts from the Bureau of Labor Statistics show how the U.S. economy has improved considerably in the last several years.

What is equally important as our rapidly improving economy is the overlap between these economic indicators and the positive environmental news that I wrote about in my last post. It’s almost suspicious, isn’t it, how purposeful government and private sector investments in clean energy, blocking incentives for fossil fuel extraction and use, and reigning in pollution directly lead to improvements in both our economy and environment?

Rather than rely on suspicion or my intuition, I’ve curated a few articles described below that explain our improving economic indicators, and how our growing economy overlaps with the positive environmental news of the past year. I realize that it doesn’t take a Nobel prize-winning economist to see the link between dollar investments in new energy sectors and the creation of new jobs, for example, but with a presidential election looming and rampant “disinformation” crowding our brain space, it’s helpful to see both the facts about the economy and the investments in products and people that helped create these facts.

— First up is an article from U.S. News and World Report stating that consumer sentiment soared at the end of 2023, resulting in increased holiday spending and a boost for retailers and the overall economy.

The final reading of the University of Michigan consumer sentiment survey for 2023 amounts to a Christmas card for the U.S. economy…The university’s consumer sentiment index soared 14% in December – even better than the earlier estimate a couple weeks ago – as consumers reacted to the latest data on inflation that shows it making substantial progress toward the Federal Reserve’s 2% annual target.

Here’s a brief explanation from Britannica Money about what consumer confidence means and how it impacts the economy:

During an economic expansion, consumer confidence is usually high. Consumers accordingly tend to spend more than they do at other times, especially for bigger-ticket items and durable goods (e.g., automobiles and household appliances). The increase in consumer spending in turn helps the economy sustain its expansion.

— This Washington Post article touts the surge in consumer spending in the third and fourth quarters of 2023, which is both a testament to and a bolster of a strong overall economy:

U.S. retail sales between Nov. 1 and Dec. 24 were up 3.1 percent compared with the same period a year before, according to Mastercard SpendingPulse, which measures sales in-store and online across various forms of payment. Online shopping accounted for a large share of the increase, rising 6.3 percent, compared with a 2.2 percent jump for in-person shopping. Apparel sales rose 2.4 percent. Plus, strong demand for in-person dining powered a 7.8 percent jump in restaurant spending.

But the overall expanding economy doesn’t usually “trickle down” to those living paycheck-to-paycheck, and at least some of the spenders that are jump-starting the economy have accumulated massive credit card debt.

— This piece from NPR provides good news for lower wage workers—the minimum wage went up in 22 states starting January 1, 2024. It’s certainly about time that states, cities and local governments have taken the initiative since the federal minimum wage has remained the same since 2009 at $7.25/hour, and the cost of living has skyrocketed in the last 14 plus years.

[These] increases will affect an estimated 9.9 million workers, according to the Economic Policy Institute (EPI), which estimates that those bumped wages will add up to an additional $6.95 billion in pay.See the full list of increases.

In addition to those 22 states, 38 cities and counties will also increase their minimum wages above state minimums on Jan. 1. According to the Department of Labor, 20 states will maintain the federal minimum wage of $7.25 an hour.

Here is a map from the Economic Policy Institute (frequently cited in the NPR piece, above) which highlights the 22 states. You can read the full article with explanation and hover-over map, here.

Again, it is not the work of a brilliant mind to see the overlap between the investments that create an overall robust economy, and those same investments helping to curb climate change and protect our environment from further destruction…but it doesn’t hurt to remind those who vote about the direct connection.

— One of the most important investments is the Inflation Reduction Act, signed into law by President Biden on August 16, 2022. This law allocated $391 billion to environmental improvements, specifically “to support clean energy and address climate change, including $8.8 billion in rebates for home energy efficiency and electrification projects.” You can read the details here, in a handbook published by the White House and updated in September 2023.

It includes billions of dollars in grants to both federal agencies and local governments and organizations to help stem climate change through investments in renewable energy (which creates new jobs and transitions workers who lost jobs in the manufacturing sector), and other incentives to transition from fossil fuels.

The Department of Energy released a comprehensive report in August 2023 that detailed the “significant impacts of both the Inflation Reduction Act and the Bipartisan Infrastructure Law on the U.S. Energy Economy and Emissions Reductions”. You can read the full report here.

[Inflation Reduction Act] IRA and [Bipartisan Infrastructure Law] BIL are poised to save American families $27 billion - $38 billion on their electricity bills from 2022-2030, relative to a No BIL/IRA scenario.

American businesses are also projected to save on their electricity bills, with a 13%-15% reduction in commercial electricity spending between 2022 and 2030. Electricity rates across sectors decline 8%-9% during this period…These factors combine to increase disposable income for Americans families and businesses.

I understand that the current economy is not doing well for everyone — the millions of people estimated to be living paycheck to paycheck can take little comfort in investments in electric cars and renewable energy and the recent holiday spending spree, when the price of food and consumer goods continue to go up, albeit more slowly. But these government and private sector investments will continue to improve our lives in both the short and long term if we understand the effort being made and have patience to see them through.

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I’d love to hear your thoughts on this second round of positive news as we start the new year. Do you feel the improvements in the economy yet? What is your take on the investments in infrastructure, renewable en…

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You may be wondering how long it took me to find some good news, particularly about issues like the precarious state of our environment and its attendant climate crisis, and the U.S. economy. It actually was easy to find positives in these two broad arenas because this year in particular, there is frequent overlap of the two. So yes, Virginia, there is good news for both our environment and economy in plain sight, and I’ve curated quite a few articles to focus our collective thoughts on the positive.

This post will review the positive environmental news, and Part II that I’ll publish in a few days, will discuss the positive economic news and where the two overlap.

The Environment:

Both the MIT Technology Review and the BBC highlighted a number of positive news stories from 2023 focusing on the environment, climate change and nature that were surprising if you’re not paying close attention to these issues.

— First up is a December round-up from the MIT Technology Review focused on a few, somewhat unexpected turnarounds relating to climate change: the rise in demand and production for the fully electric or plug-in hybrid, and the capping of methane emissions:

We put the “inevitable EV” on our list of 10 Breakthrough Technologies in January, noting that strong policy support and expanding supply chains were combining to vault the technology to new relevance. Those trends have largely continued through 2023, and that means good news for climate change, since the transportation sector accounts for nearly 20% of global emissions. EVs are on track to make up 15.5% of automotive sales this year, according to [Bloomberg New Energy Finance] BNEF. Between battery electric vehicles and plug-in hybrids, this new growth means there are almost 41 million passenger EVs on the road.

Additionally, a recent CNN article reports that American consumers snapped up one million electric vehicles in 2023. And according to NPR, getting a tax credit (of up to $7,500) for buying these vehicles will be easier starting in 2024,

The U. S. Environmental Protection Agency recently announced the it will require oil and gas companies to monitor their methane emissions to “sharply reduce their flaring, venting and leaking”.

Carbon dioxide has long overshadowed methane, since we emit so much more of it. But methane traps about 80 times as much heat over a 20-year period and accounts for at least a quarter of overall warming above our preindustrial past….it’s a step forward that promises to eliminate the warming equivalent of about 1.5 billion metric tons of carbon dioxide by 2038.

And according to Environmental Defense Fund data, methane pollution can affect our health rather drastically:

…when methane, the main component of natural gas, leaks from oil and gas infrastructure, it’s not alone. Other pollutants are released along with it, including volatile organic compounds, nitrogen oxides, sulfur dioxide and more. These co-pollutants contribute to ground-level ozone, which is linked to serious health issues like respiratory and cardiovascular disease, cancer and stroke. 

— Here’s more positive, climate change news from CNN— the production of renewable energy has been increasing for a number of years, but had a big surge in 2023, and the Brazilian rainforest has stopped its rapid slide to zero, thanks to government conservation efforts. According to an International Energy Agency 2023 report:

Solar PV capacity, including both large utility-scale and small distributed systems, accounts for two-thirds of this year’s projected increase in global renewable capacity. This unprecedented growth is being driven by expanding policy support, growing energy security concerns and improving competitiveness against fossil fuel alternatives…

Following two consecutive years of decline, onshore wind capacity additions are on course to rebound by 70% in 2023 to 107 GW, an all-time record amount. This is mainly due to the commissioning of delayed projects in China following last year’s Covid-19 restrictions. Faster expansion is also expected in Europe and the United States as a result of supply chain challenges pushing project commissioning from 2022 into 2023.

If you want to see some proof that government intervention via conservation laws and policies helps stem the impacts of climate change, look no further than Brazil’s rainforest turnaround.

Deforestation in Brazil fell by 22.3% in the 12 months through July, [2023] according to data from the national government, as President Luiz Ignácio Lula da Silva started to make progress on his pledge to rein in the rampant forest destruction that occurred under his predecessor, Jair Bolsonaro.

It is reported that Bolsonaro drastically cut funds to the agency in charge of protecting Brazil’s environment and allowed mining on indigenous lands, while his successor, President Luiz Ignácio Lula da Silva, has pledged to stop deforestation completely by 2030 and marshaled government resources and the help of neighboring countries to accomplish this goal.

In 2023, Brazil’s actions to reverse the destruction of the 60% of the Amazon rainforest that is located within its borders included, among other strategies:

…monitoring the forest for criminal activity such as illegal logging… and encouraging Amazonian countries to collaborate regionally, highlighting efforts to jointly track, map and stop deforestation through projects such as the MapBiomas project, which gathers and presents data on land use change.

Note that the figures in the chart below had not been independently verified at the time this article was published.

— Another December compilation from the BBC focuses more on positive news for the natural world, rather than preventing the pollution that is causing climate change. It includes a few extraordinary accomplishments , but I’ll highlight just one here:

Four dams located along the Klamath River that runs between Oregon and northwestern California will be removed in 2023 and 2024. The removals will be followed by extensive restoration projects of the reservoir beds, Klamath tributaries and riparian habitat.

Dams along Oregon and California's Klamath River have greatly reduced salmon populations. After decades of campaigning [mostly by tribes indigenous to the area], the first dam was demolished in November 2023 – one of four that will be removed over the years in the largest dam removal project in American history. 

The Yuroks and Karuks and other tribes native to the area have been leading the campaigns for dam removal and have been fighting for a free-flowing river to restore and heal the ecosystem, and strengthen their ancestral connections to the river, which they see as a lifeline. "The removal of the Klamath dams is the single biggest step we can take to restore the river ecosystem and increase salmon numbers," says Barry McCovey, Yurok Fisheries department director. The project will also make fish runs more resilient to climate change.”

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Share your thoughts on this good news for the environment in the Comment Section below.

The Poverty Trap: Why The Poor Stay Poor …

CNBC video on medical debt posted on January 23, 2023. It is well worth your 10 minutes and 39 seconds to watch…

“Neither medical bills nor medical debt should exist in the United States in the twenty-first century. We do not need health insurance of any kind or cost, what we need is quality health care. If you are not wealthy enough to pay the exorbitant costs to for-profit companies to keep you alive and relatively healthy, you are punished with debt, bankruptcy and even your life or those of your loved ones.” The Poverty Trap: Why The Poor Stay Poor In America, December 2. 2022

There have been several new developments with medical debt in America since I wrote about its shocking prevalence one year ago. In that post, I focused on the cost of health insurance — even with Affordable Care Act (AFC) subsidies if one qualified — the cost was too much for average working adults, particularly coupled with higher deductibles and the rising cost of prescription drugs. The unfortunate result is that even with health insurance, whether purchased on the AFC exchange or through an employer, every income group (except the very poor who qualify for and receive Medicaid) has to pay thousands of dollars each year before deductible limits are reached, plus co-pays, prescription drugs that may or may not be covered by a specific plan, and procedures that are increasingly and routinely denied by insurance companies.

A summary of data compiled in 2022 by the Kaiser Family Foundation (KFF) in cooperation with NPR shows that 41% of Americans have some kind of debt related to medical and dental bills, and this debt is carried in a variety of ways: through payment plans with hospitals or individual doctors; added to credit card balances; transferred to loans, including those taken with payday lenders; borrowing from family and friends; and simply letting the bills go unpaid, even when harassed by debt collectors.

The chart below from the KFF, 2022 survey breaks down the above narrative into percentages by type of debt.

And don’t think that dying will erase your debt, because any cash or other assets of your estate will be used to pay the debt you leave behind, depending on the laws of each state.

In 2022 and 2023, the Biden administration and the Consumer Financial Protection Bureau (CFPB) have worked together to lesson the burden of medical debt for millions of Americans, including forgiving substantial amounts of debt for the poor and veterans, and directing the use of American Rescue Plan funds to individual communities for this purpose. But the underlying issue is how to prevent this specific kind of debt in the first place. Medical debt, unlike other types of debt, is not accumulated through a wild spending spree on luxury goods or Botox injections (well, maybe for a member of Congress or two), it is accumulated through the misfortune of an injury or illness.

Short of calling for “Medicare for all” or a single-payer health care system, the current administration is working around the edges to prevent the accumulation of medical debt. For example, CFPB held a hearing in July 2023 on medical billing and collections and its relationship to medical debt. According to CFPB Director, Rohit Chopra, medical debt isn’t just pervasive and a burden to nearly one third of the U.S. population, it has a massive and detrimental impact on the economy:

“…medical debt impacts approximately 100 million Americans, and national health expenditures account for more than 18 percent of our country’s gross domestic product, with consumers’ out of pocket expenses accounting for a staggering $433.2 billion”.

It turns out that we accumulate medical debt, not only from injuries or illnesses, but from incorrect billing or outright denial of coverage for procedures that should otherwise be paid for by insurance. The CFPB is working with the Departments of Treasury and Health and Human Services to investigate these practices, in addition to investigating consumer complaints filed against special medical card providers for illegal or shady practices. I have a Care Credit card from Synchrony Bank, which is one example of a special use credit card that I use exclusively for veterinary bills.

There are also strict laws on how and when debt collectors can contact debtors and what they can and cannot say to them. But who among us knows these rules and can recall the specifics during a stressful call? It’s hard to stand up for yourself or even know whether you have the legal right to appeal a bill, inaccurate charge or denial of coverage. As noted in my most recent post, less than 0.2% of people with health insurance purchased from the ACA exchange in 2021, whose claim for medical coverage was denied, appealed the denials. Forcing insurance companies to correct their billing practices and pay for covered services and drugs, as the CFPB is currently doing, are specific ways to prevent medical debt.

Statistics show that people who have health insurance can certainly have medical debt, but it is less likely, and the amount of debt is usually substantially lower if a person has insurance of some kind. According to early 2023 statistics from the Department of Health and Human Services, the ACA expanded insurance coverage to over 40 million more Americans than had health insurance before the law was enacted, including to the poorest in our country through an expansion of Medicaid eligibility.

The ACA envisioned a national Medicaid expansion and paid each state no less than 90% of the cost associated with insuring more poor people (The federal government paid a full 100% of the expansion cost for the first several years and then paid a 90/10 split thereafter). But in 2012, the U.S. Supreme Court ruled that each state could make its own decision about Medicaid expansion and not every state chose to accept the federal dollars.

Today, there are 10 states that are holdouts and still refuse to expand Medicaid to insure its poor, and seven of those 10 states are in the South, which also has the highest concentration of the poorest people and those with the most medical debt in our country. See an up-to-date, interactive map from The Commonwealth Fund that provides specifics on each state and their acceptance or non-acceptance of Medicaid expansion here.

To emphasize the southern state concentration with medical debt, the Urban Institute, a non-partisan think tank in D.C, states in a 2023 article in The Washington Post:

Of the 100 counties with the highest share of adults struggling to pay their medical debt, 92 are in the South, and the other eight are in neighboring Oklahoma and Missouri, according to credit data from the Urban Institute. (On the other side, 82 of the 100 counties with the least pervasive medical-debt problems are in the Midwest, with 45 in Minnesota alone.)

This article also helps explain the reason for the medical debt concentration by focusing on where the country’s lowest credit scores are concentrated — in the southern states — and they have the lowest credit scores because they have more medical debt…and one of the reasons the southern states have more medical debt is the refusal of those states to accept Medicaid expansion.

Although the holdout states are still controlled by Republicans, I want to call attention to an outlier: the great state of Ohio. In 2013, then Republican governor of Ohio, John Kasich, bucked his party and approved the expansion of Medicaid in Ohio. And he did so with great fervor, doing an “end around” the state legislature and manipulating the state’s 7 member Controlling Board to approve the expansion. In 2016, the Washington Post wrote a profile of Kasich when he was in his second term as Ohio governor and running for president. Here’s what he said on Fox News about accepting the expansion of Medicaid in Ohio:

“You guys are practically spooning, you and President Obama,” Laura Ingraham said in a Fox News interview with Kasich in…

This post goes out to both free and paid subscribers, but if you are not already a paid subscriber and value this effort and our growing community, please consider upgrading to a paid membership.

By the way, a few days ago, I cross-posted to my subscribers an invigorating discussion I had with Carrie Lou Hamilton, author of the really cool Substack newsletter, Pen In Fist, but I understand that this cross-post did not reach all of my subscribers. There is both a podcast and transcription, so you can enjoy it both ways! Have a listen and/or a read here: “I Saw That Stories Could Have An Impact”. A huge thank you to Carrie for our fun and enlightening discussion!

PBS News, May 28, 2023

“ProPublica’s investigation [of health insurance company, Cigna], published in March [2023], found that an automated system, called PXDX, allowed Cigna medical reviewers to sign off on 50 charts in 10 seconds, presumably without examining the patients’ records. Decades ago, insurers’ reviews were reserved for a tiny fraction of expensive treatments to make sure providers were not ordering with an eye on profit instead of patient needs. These reviews — and the denials — have now trickled down to the most mundane medical interventions and needs, including things such as asthma inhalers or the heart medicine that a patient has been on for months or years.” PBS News

Earlier this year, I wrote about an infuriating number of health care denials specifically issued to those covered by Medicaid, as if the insurance companies were choosing to deny claims to those who were unlikely to have the time or resources to mount successful appeals. And this trend has continued to make the news, with a broader investigation by ProPublica and statistics gathered by the Kaiser Family Foundation (KFF) in 2023. ProPublica has published a series of articles on the topic of health care claim denials just in November, in addition to the PBS piece shown above, and others. And I think they’re worth reviewing here because everyone who has health insurance can be denied payment for treatment, which can cause additional medical issues, medical debt and even death.

Private, for-profit health insurance companies are getting away with a record number of claim denials — many issued with no clear reason or evidence provided for the denial — which the insured needs to file a proper appeal. This increase is in part, attributable to lax government oversight and an incredibly low number of appeals from customers, according to the ProPublic report. For example, less than 0.2% of people with health insurance purchased from the ACA Exchange in 2021, whose claim for medical coverage was denied, appealed the denials. And of that minuscule number of appeals, the insurers upheld 59% of the original denials.

When a claimant files an appeal of any kind through a private company or government process, it is arduous and time-consuming, and often involves gathering evidence, transferring that evidence to upload-able formats and completing complicated forms…and then the waiting for a decision begins. But with medical claims, it is likely that the patient simply cannot pay for the procedure and either doesn’t receive what could be life-saving treatment, charges the cost on high interest credit-cards and/or borrows from family and friends and accumulates medical debt in one form or another as millions of Americans do everyday.

The recent increase in health insurance claim denials, particularly the “robo-signing” of en-masse denials as discussed in the PBS video above, is really part of a larger pattern of how big business, that have oodles of money and power with regulators, shape their business practices. Not only do industries as diverse as health insurers, banks and environmental polluters (the chemical industry or product manufacturers, for example), cut corners in their processes and coverage to increase their profits, but many times — and I have first-hand experience with mortgage and manufacturing industries—build in noncompliance as a cost of doing business. They choose to ignore certain laws, and if caught, pay a penalty (which their lawyers negotiate to as little as possible), and then go back to, well, ignoring laws that are cheaper to violate than comply with. Think the illegal robo-signing of house foreclosures nearly all of the major banks used during the financial crisis, for which they were later convicted and fined.

One article in the recent ProPublica series is aptly titled: “When Health Insurers Break State Laws”. It details a pattern of certain medical insurers who had routinely disregarded state law, and in one case used as a particularly vivid example, Aetna denied health insurance coverage for certain procedures necessary during childbirth and required to be covered by Maine state law. Oddly, these denials were issued to the same woman two times, separated by several years, for the birth of her two children…and she filed complaints to the state insurance agency for both. Here’s what happened after the second complaint was filed.

Regulators discovered that the insurer [Aetna] had miscalculated claims related to more than 1,000 births over a four-year period. Aetna issued refunds totaling $1.6 million and agreed to pay a $150,000 fine if it failed to follow conditions listed in a consent agreement. It was a rare victory. The potential fine, though, constituted less than .002% of the $6.63 billion in profit recorded by Aetna’s parent company, CVS Health, that year.

There are numerous egregious cases highlighted through this investigation, but when a person denied medical treatment dies while still fighting for coverage, it is particularly cruel. And when insurance executives purposefully collaborate to deny treatment by circumventing state law with semantics, denials of coverage reach a new low. According to one of the executives no longer working for the insurer in question, Priority Health: “We crossed the line”.

What executives at Priority Health did was try to avoid a costly payment that was otherwise required by Michigan state law, that mandated coverage of all clinically approved “cancer treatment drugs”. What the doctor ordered for Forrest VanPatten, stricken with an aggressive form of lymphoma, was an FDA approved gene therapy called CAR T-Cell treatment, that Medicare had already approved and had successfully used to treat its patients. The executives decided to specifically exclude “gene therapy” from coverage in their policies because it was not technically a “drug”.

Knowing it could take weeks to grow the cells used in the treatment, his [Vanpatten’s] doctors prepared to extract his white blood cells. “These are diseases where we don’t have a lot of time to waste,” Williams [VanPatten’s doctor] said. …Then Williams’ office found out that Priority Health had denied the request. Forrest’s doctors appealed but were turned down again… The VanPattens didn’t have the money to pay out of pocket, and Forrest didn’t want to saddle his family with medical debt. His medical team filed a third and final appeal, this one to an independent reviewer.

Forrest VanPatten died waiting for a decision on his third appeal.

Medical insurers are equal opportunity deniers, though, and in another case investigated by ProPublica, an attorney nationally known for his litigation skills, Robert Salim, was denied life-saving treatment (targeted Proton therapy) for “Stage 4 throat cancer that had spread to his lymph nodes.” The insurer was Blue-Cross and Blue Shield of Louisiana and they denied his initial claim and appeals, saying the doctor had to try other procedures first and that the recommended Proton therapy “was not medically necessary”.

After hearing the grotesque possible side effects of the alternative treatments, Salim paid the $…

“The car, her biggest investment, became her home — the roof turned into a dining table, the trunk a closet. And a weathered stretch of blacktop provided by a Methodist church became her yard, her neighborhood and her safe place.” Note: “Her” is Chrystal Audet, a social worker with a full-time job living in her car in Kirkland, Washington, and shadowed by a New York Times reporter for this story. The New York Times, October 17, 2023

It’s called “vehicle residency”, and it’s increasing across the country. In fact, 2022 Housing and Urban Development (HUD) data show that nearly 600,000 people in the United States are homeless, and additional data confirm that nearly 40% of that number are living in a place “not suitable for human habitation [such as] city sidewalks, a vehicle, abandoned building or park” (emphasis added). According to the National Alliance to End Homelessness, a vehicle is not suitable shelter for a human.

Yet soaring rents and a constricted home buying market in most areas of the country, combined with loss of government pandemic aid and overall food and other cost of living increases have contributed to a greater number of homeless Americans, in the last few years in particular. As expected, cities and states with the highest housing costs have a greater number of homeless, and those with significantly lower housing costs, have a correspondingly lower number of homeless. For example, cities with incredibly high housing costs like “L.A., San Francisco, New York City, Boston, Seattle and Portland have a high per capita homelessness rate, and states with low housing costs, like Mississippi and West Virginia, have exceeding low rates of homelessness despite higher levels of overall poverty than other states.

And millions of other Americans are living precariously close to losing the roof over their heads: In addition to poverty as a risk factor for homelessness, an increasing number of Americans, an estimated 7.1 million (using 2021 statistics) live with “severe housing cost burden”, defined as households spending more than 50% of their income on housing. The standard percentage to maintain financial stability is to spend no more than 30% of income on housing costs.

Although there are numerous, science-driven programs in place across the country to help reduce homelessness, the focus seems to be more of a band-aid approach, rather than an approach that prevents homelessness, like ensuring there is enough affordable housing, especially in areas with exorbitant housing costs, and helping to move people on the verge of homelessness to affordable housing before foreclosure or eviction occurs. These proactive measures can only be accomplished with programs designed to prevent homelessness before the process starts—curbing rent increases, strengthening eviction laws and providing temporary monetary assistance for renters who have lost their jobs or are working under reduced hours. There doesn’t have to be a worldwide pandemic to enact programs that keep people off the streets (and parking lots) of America.

For instance, one reaction, and it is clearly reactive, to the increasing number of homeless living in cars is to provide relatively safe, 24 hour parking lots for the homeless with vehicles to live temporarily, including some lots with security guards, portable bathrooms with running water and help to navigate a transition to permanent housing. Colorado’s Denver metro area seems to be leading the way with its “Colorado Safe Parking Initiative” that has expanded the number of its safe parking lots to 13.

In other cities, places of worship provide safe parking lots for the areas’ homeless.

On a national level, the Biden administration has recently announced a project led by the Department of Transportation to convert unused downtown office space to affordable housing. Not only does this project create more livable spaces, it does so without using the massive amount of land and other resources for new housing and locates it near existing public transportation hubs. At the same time, the commercial establishments that would follow the influx of new residents will create bustling “downtown” areas again, rather than commercial suburban sprawl that separates people’s housing from their activities.

“…the Department of Housing and Urban Development will release an updated notice detailing how its Community Development Block Grant fund can be used for projects aimed at boosting housing supply, the fact sheet stated, “including the acquisition, rehabilitation, and conversion of commercial properties to residential uses and mixed-use development.” CNN.com, October 27, 2023

The discussion we’re having in this post about our increasing homeless population, and cars doubling as shelter in the United States of America, can be misleading. It presents after-the-fact statistics documenting some of the reasons why homelessness has increased in the last few years, and what a few states and the Biden administration are doing to keep the problem of homelessness from getting worse. But what I’ve tried to show in this newsletter over the last two years is what leads people into poverty and homelessness and keeps them there.

The New York Times article quoted at the beginning of this post and written just about ten days ago, follows one particular woman, her daughter and their dog as they navigate homelessness together, including what events, turns of bad luck and maybe a few poor decisions led an educated social worker with a full-time job to not be able to afford an apartment. Granted, she lives in one of the highest priced housing markets in the country and her landlord recently raised her rent, but she also had medical debt from an illness, a low credit score and as a result, a near usury interest rate on her used car loan, the car she is now using for shelter. I’ve written about each of these issues and the politics and policy choices behind them, and how individually or combined, our current laws and policies can lead to poverty for any of us.

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I’d love to hear what you think of our country’s increasing homeless population, the creative use of their vehicles for shelter, and other issues you find important. Please leave your thoughts in the Comment Section below.

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