Last night, Acton Institute President Rev. Robert A. Sirico joined host Lawrence Kudlow and author Naomi Schaefer Riley on The Kudlow Report to discuss the selection of Pope Francis as Time Magazine’s Person of the Year, the effect he is having on the Catholic Church worldwide, and his views on economics and free markets. We’ve embedded the video of the interview from CNBC below.
Cairo is an amazing place. I lived and went to school in this city of over 9 million in the early 1990s. On top of the recent governmental conflict and unrest, it’s a city that has for a long time been devastated by pollution and environmental problems. The smog alone is a constant irritant to the senses.
During my time in Cairo, one of the most dramatic and life-changing events was visiting “Garbage City.” This neighborhood is where many of the Zabaleen people live and they have been sorting the trash in Cairo and using their entrepreneurial skills for decades. To see so many people living in that kind of poverty put my own life and blessings into perspective. When I heard that they were a Christian community, at that point their plight and just the blessing of being an American became very clear. I’ve talked about the Zabaleen people before on the PowerBlog. Because of their Christian faith, they have also been maligned and marginalized in Egypt. They were even forced to destroy their vast drove of pigs (300,000) because of a swine flu outbreak, even though the pigs had no role in the outbreak. The pigs were instrumental in the garbage recycling process for Cairo. Their absence has been detrimental to the excessive amounts of rotting food in the streets.
A few weeks ago, The Guardian ran an excellent story on what the Zabaleen people mean for Cairo and how the new government is aiming to finally give them official status for Cairo’s cleanup. It explains why they are so essential to the success of Cairo. Below is an excerpt from the piece:
“It’s an aberration. Over the years the Zabaleen have created an efficient ecosystem that is both viable and profitable, with a recycling capacity of almost 100 percent. It provides work for women and young people who are the first to suffer from Egypt’s unemployment. We need to use this local organisation,” said Leila Iskandar, who became minister of the environment after the fall of Morsi in July. She has worked for years with organisations in the working-class neighbourhood of Manchiet Nasser, where about 65,000 Zabaleen live. (more…)
Yesterday I began a series of posts which attempts to explain why the working poor tend to make terrible financial decisions and how they think about money differently than other economic classes. In my initial post I wrote,
Imagine that instead of having to deal with consumption smoothing decisions, at most, several times a year, you had to deal with them several times a month, or even several times a week. Now also imagine there is no workable solution that will actually smooth the short-term consumption problem and the best that you can hoped for is a temporary fix that delays having to deal with the issue.
That is what it’s like to be the working poor.
Several people have asked me to explain more what I meant, so before moving on I wanted to provide a more in depth example.
Let’s again begin by looking at the decision-making process of the middle-class. Imagine that you want to buy a home. Your household income is $51,404 a year (the median household income in the U.S.) and the house you’re interested in is on the market for $152,000 (the avg. home price in the U.S.). At what point do you buy the house?
There are several ways the average American may answer, but the one response you will almost never hear is, “You should buy the house only after you’ve saved the $152,000 needed to pay for it.”
While most people would agree that it would be prudent to apply a down payment, the idea that you’d pay the entire amount at once – even if you had $152,000 in cash – would strike most people as peculiar if not absurd. Instead, we borrow money for a mortgage that will allow us to pay a set amount each month for 15 to 30 years. Because we are willing to spread our payments out into the future we will pay a lot more than the $152,000 (at 5% for 30 years, the total would be $293,748.79). But we consider that a reasonable accommodation for getting what we want right now.
That is an example of how most of us take the concept of consumption smoothing for granted.
After reading a comment thread in which her online friends were complaining about poor people’s self-defeating behavior, Linda Walther Tirado wrote an articled titled “Why I Make Terrible Decisions, or, Poverty Thoughts,” which chronicled her struggles with near abject poverty.
I think that we look at the academic problems of poverty and have no idea of the why. We know the what and the how, and we can see systemic problems, but it’s rare to have a poor person actually explain it on their own behalf. So this is me doing that, sort of.
Tirado’s article went viral. A literary agent contacted her, and after a few readers emailed offers to contribute to a book project, Tirado started a GoFundMe page. Her initial goal was $10,500; she raised more than $60,000.
But there was a problem with her story: it wasn’t true.
As Angelica Leicht of the Houston Press discovered, Tirado doesn’t fit the mold of the working poor: She went to a fancy boarding school, speaks both German and Dutch, works as a political consultant, and is married to a Marine. Tirado eventually clarified that her piece was “taken out of context, that I never meant to say that all of these things were happening to me right now, or that I was still quite so abject. I am not.”
While the article seemed to confirm what many people already believed, for those who are actually poor – or at least once were — the article likely didn’t resonate. It doesn’t even live up to the title’s claim of an explanation for why those in poverty “make terrible decisions.”
The fact is that the working poor do tend to make terrible financial decisions — and not just because they lack resources. The working poor think about money differently than other economic classes. I’d like to take a crack at explaining why that’s the case.
Last night on CNBC’s The Kudlow Report, PovertyCure director and Acton Research Fellow Michael Matheson Miller joined host Lawrence Kudlow and Rusty Reno, Editor of First Things magazine, to discuss the position of the Roman Catholic Church on global capitalism in light of Pope Francis’ Apostolic Exhortation ‘Evangelii Gaudium.’ The video is embedded below.
…is published to encourage the faithful to live in a particular manner or to do something, e.g., post synodal documents offered to the church in summary of a previous synod and hoping the faithful will do something helpful for the life of the church…
A recent piece in The Washington Post by Lori Montgomery reports that conservative U.S. Congressman Paul Ryan has been working on solutions to poverty with Robert Woodson, solutions rooted in face-to-face compassion, spiritual transformation and neighborhood enterprise. The Post seems to want to praise Ryan (R. Wis.) for his interest in the poor, but to do so it first has to frame that interest as something foreign to conservatism:
Paul Ryan is ready to move beyond last year’s failed presidential campaign and the budget committee chairmanship that has defined him to embark on an ambitious new project: Steering Republicans away from the angry, nativist inclinations of the tea party movement and toward the more inclusive vision of his mentor, the late Jack Kemp.
The Post’s tendentious description of the tea party movement is contradicted by data laid out in Arthur Brooks’ Gross National Happiness, which shows that conservatives, on average, give a significantly higher percentage of their income to charitable causes than liberals do.
In its defense, the article does have a poster child for its misleading stereotype of conservatism — Paul Ryan’s 2012 presidential election running mate Mitt Romney, the multimillionaire caught on film writing off the bottom 47% of American earners as unreachable freeloaders who don’t pay any taxes. But what Romney has to do with your rank and file tea party conservative is never made clear in the article.
Does promoting limited government require abandoning a commitment to the poor? Ryan Messmore, whose answer is a firm “no”, argues that non-government institutions can provide personalized assistance to help individuals fix relational problems, overcome poverty and lead healthy lives:
Calls for limited government are often mistakenly equated with a disregard for people in need. This flawed line of reasoning assumes that poverty is primarily a material problem and that government bears the primary responsibility for solving it by increasing welfare and entitlement spending.
Yet at its root, poverty is usually more complex than a simple lack of material resources. In America, poverty is often the result of a relational problem, such as fatherlessness or community breakdown. Such relational breakdowns are addressed most effectively through various civil society institutions.
People have many needs that extend beyond simple material possessions—needs that cannot be met by any single institution. Families, churches, businesses, and other forms of association play crucial roles in sustaining liberty and meeting people’s needs. Public policy in general and welfare policy in particular should respect and protect these institutions of civil society.
Thus, limited government is an important piece of a framework that benefits people in need. When government is limited to the tasks it is best-equipped and authorized to perform, it allows more effective poverty-fighting institutions to thrive. Far from being incompatible with a concern for poverty, an appropriately limited government is crucial to maintaining a social order that enables people to escape poverty.
Have you heard the good news about global poverty? The number of people living in abject poverty — defined as living on less than $1.25 per day — has been halved since 1990. Steve Davies of LearnLiberty explains how that happened and how in the near future we may be able to eradicate extreme poverty.
During the late 1970s and early 1980s I spent two extended periods living below the poverty line. The first experience came as I entered the first grade. My father was a chronically unhappy man who was skillful and ambitious, yet prone to wanderlust. Every few months we would move to a new city so that he could try his hand at a new occupation—a truck driver in Arkansas, a cop in West Texas, a bouncer at a honky-tonk near Louisiana. We were always on the move, always a few weeks away from the next paycheck. At the lowest point we had nothing to eat but a half-loaf of Wonder Bread, a five-gallon bucket of unshelled peanuts, and tap water. That lasted for a two-week period in August that stretched across my seventh birthday.
Eventually my father settled down, found steady work, and we inched our way slowly toward the lower rungs of the working class. This period of financial tranquility lasted until I was eleven, when my father walked out on my mother, my younger brother, and me. Brokenhearted and dead broke, we packed the car and moved again, my mother having acquired the nomadic tendency to run away from adversity. (By the time I graduated high school, I had changed schools thirteen times.) Single parenthood tipped the scales and we slipped, once again, beneath the poverty threshold. We survived with the aid of food stamps and government housing until my sophomore year, when my mother remarried and our lives returned to a level of economic normalcy.
I’m always hesitant to share this story because we in America tend to have a knee-jerk sympathy for the “down-and-out.” There are, however, many times, as in my family’s case, when pity is completely unwarranted. A lifetime of foolish decisions by my parents, rather than a dismal economy or lack of opportunity, led to our being poor. We reaped what they had sown.