The Poverty Trap: Why the Poor Stay Poor In America

“For applicants with the same SAT or ACT score, children from families in the top 1 percent were 34 percent more likely to be admitted than the average applicant, and those from the top 0.1 percent were more than twice as likely to get in.” The New York Times, July 24, 2023. Maybe it’s because I still carry a chip on my shoulder that the recent report from researchers at Opportunity Insights, struck a disillusioning chord with me. I managed to attended a perfectly good public university, but as a teenager, I had grander plans for myself and my education. My father died suddenly at the beginning of my senior year of high school, just as we were talking about where I might attend college. In fact, it was the last conversation we had before he died of a heart attack the next day. As a reminder, in the 1970’s , living in a steel town and from a lower middle-class family, you weren’t prepped for college while still in diapers. The only college application I made was to the massive public university a few hours away from my home because friends from my high school were going there, and I knew I could hitch rides home for the holidays. I also could get tuition and room and board paid in full through a work-study program, because after my father’s death, our family had no income except Social Security. At the time I applied in early 1976, this university accepted everyone who graduated from an Ohio high school and was still breathing when they arrived on campus. If I knew enough at the time to apply elsewhere, could I have been accepted to an “elite”, private college, and if I had, would I have succeeded? I’ll never know the answers to those questions, but what is important today is that students from low income backgrounds simply don’t have the same chance as the wealthy (generally defined as a family making $611,000 or more a year, and the ultra-rich or 1%, who earn millions or even billions each year) to attend a college with nationally and internationally known professors, smaller classes, more help to graduate, and obtain an advanced degree, and eventually higher paying, more influential career opportunities. Although there is a small percentage of students from poor or middle class families admitted to Ivy League colleges, for example, this recent study shows it is a disproportionate share of the wealthy and ultra-wealthy students (with similar test cores as their lower income peers) who attend these colleges. It all comes back to money and wealth. Both government and the private sector, by their laws, policies and ways of thinking perpetuate both the cycle of poverty and the “amplification” of wealth and privilege —two sides of the same coin. This report and analyses lead me directly to student loan forgiveness, and to those who begrudge freeing a small portion of student loan debt in certain circumstances. Do you see how release of at least some student loan debt is an attempt to level the playing field and how much that forgiveness matters to students without the legacy of wealth? _____________________________________ I’d love to hear your ideas on all of this, all sides. Please leave your thoughts in the Comment Section below to get the conversation started—thanks! And as always… The Poverty Trap: 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. Get full access to The Poverty Trap: Why The Poor Stay Poor In America at povertytrap.substack.com/subscribe

The Works Progress Administration (WPA) is one of the many programs President Franklin Roosevelt funded to put people back to work and pull the U.S. out of the Great Depression. The WPA was funded by the Emergency Relief Appropriations Act signed in 1935, two years after Roosevelt was sworn in as president. It put to work over 8.5 million people on 1.4 million public projects like “creating parks, and building roads, bridges, schools and other public structures”. Nearly a century after the Great Depression and despite pushback from close to half of our elected officials, our government continues its investment in our collective futures. Since President Biden took office in January 2021, he has signed four major pieces of legislation, all in the last (117th) Congress: * 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 Poverty Trap: 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. Get full access to The Poverty Trap: Why The Poor Stay Poor In America at povertytrap.substack.com/subscribe

”The U.S. Interior Department on Friday [April 19, 2024] essentially rejected the Alaska Industrial Development and Export Authority’s proposal to build the Ambler Road, a 211-mile industrial road that would have cut through Gates of the Arctic National Park and Preserve to access copper and zinc deposits in Northwest Alaska…the Biden administration said the road, also known as the Ambler Access Project, would cause irreparable damage to wildlife including caribou, which many local people rely on for food. The administration also announced stronger protections for 13 million acres inside the National Petroleum Reserve-Alaska, a vast swath of oil-rich — but environmentally sensitive — federal land in the Arctic.” Alaska Public Media/PBS, NPR April 19, 2024 Why has our country decided to “preserve” certain lands and bodies of water, to set aside and protect great swaths of our country, limit human access and use, and allow nature to dominate? It was, unsurprisingly, painters and poets who first discussed the idea of preserving large areas of land in the west for national parks. According to the National Park Service (NPS) page titled: “The Philosophical Underpinnings of the National Park Idea”, the portraiture artist, George Catlin, was the first to talk about the idea of large western national parks in 1832: ____________________________________________ I’d love to hear your thoughts on these environmental issues. Are we doing enough to confront climate change? What about land and water protection? Should we continue to protect our pristine land and water from development? Feel free to leave your ideas in the Comment Section below. The Poverty Trap: 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. Get full access to The Poverty Trap: Why The Poor Stay Poor In America at povertytrap.substack.com/subscribe

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! “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...

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! “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...

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 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...

“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. Get full access to The Poverty Trap: Why The Poor Stay Poor In America at povertytrap.substack.com/subscribe

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. But wait, there’s a sale going on at The Poverty Trap! For all NEW yearly Suscribers and NEW founding members, you will get 20% off if you sign up today through February 29, 2024. Thanks in advance for your financial support of my work —it’s what allows me to keep researching and writing. 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,...

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. 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, our annual sale continues through January 14, 2024—see details at the end of this post! “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...

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. Holiday Sale! From today through Sunday, January 14, 2024, I’m offering a 20% discount for all new, yearly subscribers (including founding member subscribers!). That means for $40 (or $80 for a founding member), you can support The Poverty Trap for a full year and receive compelling analysis of the politics and policy choices affecting poverty issues in the United States. You’ll receive a full post with audio (and sometimes video) each week, plus an extra post or two each month with a round-up of positive news and recommended readings. 2024 will be a big year, so start it right and sign up now! 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...

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...

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...

“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...

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. “During the past decade, the study of English and history at the collegiate level has fallen by a full third. Humanities enrollment in the United States has declined over all by seventeen per cent, Townsend [Robert Townsend, the co-director of the American Academy of Arts and Sciences’ Humanities Indicators project] found…And American scholars…have begun to wonder what it might mean to graduate a college generation with less education in the human past than any that has come before.” The New York Times, 2/27/2023 American academics are posing a profound question: What will it mean to our country “to graduate a college generation with less education about the human past than any that has come before”. I think it will mean a lot—more than our political system can withstand, given the lack of a basic understanding of how our government should work by more than a few of our current elected officials and well over a majority of the U.S. population — almost 50% of America adults cannot name the three branches of government and just over half of our population understands that “a 5-4 ruling by the Supreme Court becomes the law of the land.” My somewhat educated guess is a robust education in both government and the humanities will help our country avoid what can happen with curriculums that produce a “college generation with less education about the human past than any that has come before”. ___________________________________________________________________________________________________ I’d love to hear what you think about our declining civics curriculum in K-12, and colleges dropping many liberal arts majors to “better position them (the colleges) for the future. Or anything else you take from this post—your comments are welcome and appreciated! Please consider supporting The Poverty Trap with a free or paid subscription. Your financial support will allow me to continue writing this newsletter and expanding it with primary source statistics and podcast interviews. Thank you in advance for your financial support of my writing! The Poverty Trap: 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. Get full access to The Poverty Trap: Why The Poor Stay Poor In America at povertytrap.substack.com/subscribe

Friendly Reminder: This is the first post under this newsletter’s new name, The Poverty Trap: Why The Poor Stay Poor In America, and the new url is povertytrap.substack.com (Previously, Crime and Punishment: Why The Poor Stay Poor In America) Your transition to the new url will be automatic! See my last post explaining the name and url change here. And…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. Thank you! “The income needed to purchase a starter home has been steadily increasing for over a decade and jumped 13% in the last year alone. As a result, many young people turn to family for help when getting onto the first rung of the housing ladder.” Forbes, August 21, 2023 Many Americans are finding it difficult to buy a home in this market, with prices rising, supply dwindling and mortgage interest rates hitting nearly 7%. Younger adults, in particular, find it difficult to purchase their first home—the average price of what today is considered a “starter” home is $243,000, up 13% from last year, and 45% higher than pre-pandemic numbers, according to a June 2023 report by Redfin. Putting 20% down to avoid mortgage insurance and keep monthly payments affordable, means having an extra $48,600 lying around…or more likely getting help from living family members or an inheritance. ————————————————————— What are your thoughts on the home ownership crisis we’re having in America? Do you favor additional housing developments to drive down prices? Let me know in the Comment Section below! Please consider supporting Crime and Punishment with a free or paid subscription. Your financial support will allow me to continue writing, and expanding this newsletter with primary source statistics and podcast interviews. Thank you in advance for your financial support of my writing! The Poverty Trap: 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. Get full access to The Poverty Trap: Why The Poor Stay Poor In America at povertytrap.substack.com/subscribe

I used the above photo in my first post for this newsletter on September 15, 2021, and a few other times in various posts in the last two years. I’m celebrating my second anniversary of writing Crime and Punishment: Why The Poor Stay Poor In America along with the Autumn Equinox with today’s post, and I thought it might add a bit of nostalgia to include this photo again. Besides, I love the silvery, shimmering look of olive tree leaves—it’s visible from any angle and looks especially striking on a sunny day. On a more practical note, I also want to announce a change to both the title and url of this newsletter—this is the last post you will receive under the name Crime and Punishment. The next publication will be changed to The Poverty Trap: Why The Poor Stay Poor In America, and the new url will be: povertytrap.substack.com. A writer friend of mine suggested the change, and I knew immediately it would be a good fit. It’s obviously more descriptive of the topic than “crime and punishment” and leads nicely into the subtitle that follows. In fact, my research for this newsletter over the last two years has confirmed that poverty is indeed a “trap” for millions of Americans, and that trap seems to have a tighter grip than ever. Get full access to The Poverty Trap: Why The Poor Stay Poor In America at povertytrap.substack.com/subscribe

Note: See the brief explanation at the end of this post about the coming changes to Crime and Punishment: Why The Poor Stay Poor In America! It’s exciting! 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. “For many Americans, the middle class is a matter of identity, aspiration and lifestyle as much as it is about wealth.” NPR, July 7, 2016. I don’t have foolproof answers to the questions posed in this post’s subtitle: “where has our middle-class gone and can we get it back”, but I will provide a bit of history and statistics to show you where the wealth that once belonged to the middle class, in homes, savings and good paying jobs, has been transferred. Unfortunately, it now mostly resides with the rich and super-rich. And most recently, millions of once middle-class folks have been thrown into poverty in 2022 and this year by the rising cost of living and the choice to end the child tax credit and other pandemic aid, so it’s gone in the other direction, too, leaving the once booming middle-class hollowed out, indeed. But it isn’t just about enough money to pay the bills and the accumulation of some wealth, it’s about that thing called hope. I mentioned the idea of a better life for ourselves and our families in my last post—it is why union membership is so important for workers, and by extension, their families and broader communities. It gives them both the hope and the means for a better life. ___ Do you consider yourself part of the middle class? Should our country fight to expand it rather than let it disappear? If so, how? Leave your thoughts in the Comment Section below. As to the forthcoming updates to this newsletter… in a few days, I’ll change the name of Crime and Punishment: Why The Poor Stay Poor In America to The Poverty Trap: Why The Poor Stay Poor In America at the brilliant suggestion of my writer friend and with the enthusiastic go-ahead of a few long-time and brand new subscribers. This will require a change to my url from: crimeandpunishment.substack.com to thepovertytrap.substack.com. If you have any feedback on whether “the” should be part of the url, please let me know in the next few days—appreciated! According to Substack technical support, this change should proceed rather seamlessly with no links broken. And I’ll send a separate post to all subscribers explaining my thinking a bit more, right after I’ve made the change. You’ll also see a few more substantive changes to the newsletter, like a sharper focus on politics and how our collective action can help break “the poverty trap” for good. Thanks for your continued support of my writing! 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. Get full access to The Poverty Trap: Why The Poor Stay Poor In America at povertytrap.substack.com/subscribe

Crime and Punishment: Why the Poor Stay Poor in America explores how our laws and culture create a cycle of economic, racial and environmental inequality...and what together, we can do to change it. 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. Bread and Roses Strike, 1912 . Photo Credit: New England Historical Society “A movement to weaken American child labor protections at the state level began in 2022. By June 2023, Arkansas, Iowa, New Jersey and New Hampshire had enacted this kind of legislation, and lawmakers in at least another eight states had introduced similar measures. The laws generally make it easier for kids from 14 to 17 years old to work longer and later – and in occupations that were previously off-limits for minors.” U.S. News & World Report, June 26, 2023 The employer-employee relationship is exploitive to some degree and at any age, but with 14 year old children, perhaps working in industries or assigned job duties that are physically dangerous, it’s practically a given. Exploiting the energy, naiveté and eagerness of kids who can’t legally drive, vote or sign a contract is what recent, state legislation is really about. ___________________________________________________________________________ I’d love to hear what you think about the current state of unions and their power to affect change in the United States. Please share your thoughts in the Comment Section below. Get full access to The Poverty Trap: Why The Poor Stay Poor In America at povertytrap.substack.com/subscribe

Get full access to The Poverty Trap: Why The Poor Stay Poor In America at povertytrap.substack.com/subscribe

If you can afford it and are in the mood, why not… “Pain is always a form of motivation,” the training manual reads. “Once you find the Seller’s pain, you have a much better chance of buying the house.” ProPublica article, May 11, 2023, documenting its investigation into “We Buy Ugly Houses” and its corporate owner, HomeVesters of America I’ve written about predatory business practices several times before on Crime and Punishment, but usually focused on the companies that lend money, like Pay Day lenders as one example. Their business model targets the poor who are more likely to be in vulnerable social and financial situations and because of low credit scores and lack of higher paying jobs, cannot borrow from a more closely regulated institution. This population is desperate for cash or credit, lenders know it and prey on them and their communities. Predatory practices are baked into an unscrupulous company’s culture and literally taught to its employees, and in the case of HomeVesters, the target of the ProPublica article above, its franchisees. Of course, these practices are never discussed or admitted to publicly, because the companies are savvy enough to put a legitimate face on their business operations, and for good reason: these practices, either individually or taken together, can amount to fraud. And thankfully, fraud is still illegal. Have you had experience similar to mine and/or the schemes uncovered in the ProPublica articles? What should be done to prevent these unethical and potentially illegal business tactics? I’d love to hear your take on this. Feel free to leave your thoughts in the Comment Section below. If you are not already a subscriber, why not take this opportunity to join our community with a free or paid subscription? A new paid subscription or an upgrade from a free to paid subscription will allow me to expand this newsletter with additional, primary source information, like interviews and public information requests, and expanded podcast offerings to include real, live guests. Although I won’t be going on strike any time soon, the current TV writer’s strike demonstrates that writer’s deserve to be paid, and paid well for their work, just like any other profession. Thank you in advance for your financial support of my writing! 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. Get full access to The Poverty Trap: Why The Poor Stay Poor In America at povertytrap.substack.com/subscribe