Poverty All Over This Place
Let's start with a cartoon from Joe Hedler for next week's holiday:
If you're poor and cannot afford a lawyer the state appoints you one but then 43 states make poor people pay for legal counsel anyway, reports Chandra Bozelko in the Guardian:
[T]he creeping trend toward requiring indigent defendants in the US legal system to pay for public defenders proves that recidivism starts before any defendants even hit a correctional facility – and that it springs directly from the process that was designed to defend them. They receive substandard representation that essentially guarantees convictions and incarceration. They are saddled with the bills for this representation and incarceration and then it becomes a crime not to pay them...
While the phrase “absolutely free” doesn’t appear in any of the supreme court decisions on the right to counsel, neither do the phrases “at cost” or “on layaway”. Public defenders are supposed to be appointed at no cost to the defendant – not because of a legal requirement, but out of fairness and common sense, to give everyone equal access to the justice system.
Is the credit scoring system perpetuating racial injustice? Again in the Guardian, Sarah Ludwig had this to say:
For decades, banks have systematically redlined black and Latino neighborhoods, refusing to make conventional loans or locate branches in non-white and lower-income areas, notwithstanding laws that obligate banks to meet the credit needs of all communities they serve, consistent with safe and sound banking operations. Thanks to financial services deregulation and the advent of asset-backed securitization, a multi-billion dollar “fringe” financial system has filled the void, characterized by high-cost, destabilizing products and services, from payday loans to check-cashers – which banks typically also own or finance.
People and communities of color have been disproportionately targeted for high-cost, predatory loans, intrinsically risky financial products that predictably lead to higher delinquency and default rates than non-predatory loans. As a consequence, black people and Latinos are more likely than their white counterparts to have damaged credit.
In the Atlantic, Alana Semuels discusses how Syracuse put a highway in the middle of town causing "white flight" and increases in poverty:
The neighborhood with the most concentrated poverty in America has Victorian-style homes with big porches, immaculate public parks, and tree-lined streets where children play. But some of the homes are crumbling or abandoned, and the parks are empty because a recent spate of shootings in this city has made parents fear for their children’s safety.
The poverty is more evident a few blocks away, where families are crowded into public housing near the overpass of I-81, an elevated highway that cuts through the heart of the city. There are no supermarkets here, just small convenience stores that advertise that they sell cigarettes and accept food stamps...
It wasn’t always this way. Search for Syracuse in the rankings of cities with the highest poverty rates in America, and the city has moved up every 10 years like an underdog racehorse gaining on the winner (or in this case, the loser). In 1969, the city’s poverty rank was 72nd in the nation of cities with a population of 100,000 or more, with 14 percent of its residents living in poverty. By 1979, it had snuck up to 44th, with a poverty rate of 18 percent. By 1989, it was tied for 26th with a poverty rate of 23 percent.
The story of how poverty became one of the defining characteristics of Syracuse is specific to the city and the region, but in some ways it is illustrative of the many policy decisions that have made all American cities more segregated by race and income over the last 15 years.
And lest we should forget that poverty is not just about the inner city, check out this article in the Guardian on Beattyville, KY, America's "poorest white town":
Frontier communities steeped in the myth of self-reliance are now blighted by addiction to opioids – “hillbilly heroin” to those who use them. It’s a dependency bound up with economic despair and financed in part by the same welfare system that is staving off economic collapse across much of eastern Kentucky. It’s a crisis that crosses generations. One of those communities is Beattyville, recorded by a US census survey as the poorest white town – 98% of its 1,700 residents are white – in the country. It was also by one measure – the Census Bureau’s American Community Survey 2008-2012 of communities of more than 1,000 people, the latest statistics available at the time of reporting – among the four lowest income towns in the country....
People in eastern Kentucky still call it “coal country”, even though the decline continued largely unabated and the number of jobs in the industry fell with the passing of each presidency. There were 31,000 under Bill Clinton but fewer than 14,000 by the time George W Bush left power.
The number of people employed in mining in eastern Kentucky has fallen by half since Barack Obama came to power, although the long history of decline has been conveniently set aside in the clamour to blame the current president. The more cautious critics say Obama is anti-coal because of his environment policies. But a no less popular view in the region is that it is part of president Obama’s war on white people.
The fossil-fuel divestment movement is picking up steam reports the Economist, which compares it to South Africa and Israel divestment eras:
Clearly, if a critical mass of investors refused to own the shares or bonds of a company (or of firms from a particular country), the reduced demand would show up in a higher cost of capital. However, it is very hard to isolate the impact of divestment campaigns from other factors...However, Danielle Paffard, who co-ordinates 350.org’s divestment campaign in Britain, says raising the cost of capital isn’t really the point. The real aim is to deny energy companies the political, social and cultural backing to influence decisions on climate change. The parallel is with the tobacco industry, where the lobbying power of cigarette-makers was eroded over time, paving the way for curbs on smoking in the name of public health. The motivation is also moral: “Climate change will have a particularly severe impact on the poorest and most vulnerable who have contributed least to the problem,” Ms Paffard says.
The Guardian also reports the Gates Foundation might have been $1.9 billion better off if funds they are invested in had been divested:
The Canadian research company Corporate Knights examined the stock holdings of 14 funds, worth a combined $1tn, and calculated how they would have performed if they had dumped shares in oil, coal and gas companies three years ago.
Overall, the funds would have been $23bn better off with fossil fuel divestment.
In the Christian Science Monitor, Henry Gaas looks at how America is or isn't adapting to the coal downturn:
A number of factors have conspired to send the US coal industry into perhaps the worst downturn in its history—and unlike in the past, this one may have some permanence. Cheap natural gas and an increasingly affordable renewable energy market have chipped away at coal’s once monolithic market share, and a raft of new state and federal regulations cracking down on greenhouse gas emissions has made coal increasingly expensive to mine and burn. Four major US coal companies have declared bankruptcy in the past two years...
The first challenge for many of these communities is building the kind of basic infrastructure needed to attract new forms of business—everything from new roads to broadband Internet connections.
Rio Blanco County in Colorado is working to address that exact problem. The vast, sparsely populated county derives tens of millions of dollars from the coal industry, but with coal production at a 20-year low statewide, the county is finding that it is poorly equipped to attract new business. It is now in the process of installing fiber optic cables across the county.
The Wall Street Journal is calling foul for a plan backed by presidential hopeful Hilary Clinton to bail out coal workers:
Mrs. Clinton wants to purchase miner support, so her $30 billion plan would bail out the UMW’s pension and health plans as well as those of power plant and transportation workers hurt by coal bankruptcies. She also wants to offset reduced public school property tax revenues in communities with stranded coal plants.
To make up for the job losses, there’s money for high-speed broadband, roads, bridges, water systems, airports, public health centers and renewable energy. Her plan also includes tax credits for investors, funding for arts and culture programs, as well as local food and agriculture businesses...
So here we have the progressive policy arc made clear: First destroy coal jobs to please affluent liberals over climate change, then tax all Americans more to buy the support of the workers who had those jobs.
In the Wall Street Journal, we have a look at a new for-profit soup spot in Philadelphia that will help feed the needy with every order in a collaboration between the owners of Federal Donut and Broad Street Ministry -- a soup kitchen with dignity:
When Golderer opened his own dining operation, in 2008, he set out to provide the neediest Philadelphians with an experience that goes beyond what institutional soup kitchens typically offer. At Broad Street, there are no cafeteria-style lines, plastic trays or monochromatic stews spooned from chafing dishes. Instead, visitors are seated at tables set with tablecloths. Volunteers serve composed plates cooked by Steven Seibel, a 28-year-old chef previously responsible for feeding Comcast employees in their nearby corporate dining room. Golderer doesn’t refer to the people who depend on Broad Street for meals as homeless. “I call them guests,” he says.
Broad Street’s dining room is in a high-ceilinged sanctuary on the church’s second floor, a space flanked by towering, Gothic Revival arches of bright stained glass—these amplify the sense of “dignity and delight,” as Golderer sees it, bestowed by the food. He calls the whole concept “radical hospitality,” and providing it costs around $3 million a year. Proceeds from Rooster Soup could significantly reduce Broad Street’s annual fundraising goals.
Reuters looks at corporate buy-backs and the potential long-term toll:
Share repurchases have helped the stock market climb to records from the depths of the financial crisis. As a result, shareholders and corporate executives whose pay is linked to share prices are feeling a lot wealthier.
That wealth, some economists argue, has come at the expense of workers by cutting into the capital spending that supports long-term growth – and jobs. Further, because most U.S. stock is held by the wealthiest Americans, workers haven’t benefited equally from rising share prices.
Thus, said Lazonick, the economics professor, maximizing shareholder value has “concentrated income at the top and has led to the disappearance of middle-class jobs. The U.S. economy is now twice as rich in real terms as it was 40 years ago, but most people feel poorer.”
The Wall Street Journals' Rachel Emma Silverman reports that executives of companies like Lyft and Etsy along with policy advocates have sent a letter to Congress to demand more social benefits for the growing class of on-demand workers but when it comes to paying for it...:
With as many as 53 million Americans now self-employed, the letter states that benefits “have not kept pace with the rapid changes in the economy.”
Benefits and protections for workers, such as workers' compensation, unemployment insurance and paid time off, are traditionally tied to full-time employment. But the advocates for portable benefits are calling for new protections that kick in even if a worker is a contractor doing lots of small, short-term jobs, such as cleaning homes for Handy, while picking up shifts as a Lyft driver or an Instacart shopper. Such benefits, the group argues, should be portable, so workers can carry them from job to job. They should also be prorated by money earned, jobs done or time worked across different on-demand platforms, the signers say.
Yet the letter doesn’t suggest who might pay for such a safety net. “There isn’t a single policy idea that the group is pushing for other than the fact that right now, independent workers have a much harder time assembling the pieces of benefits that everyone, left, right and center, agrees that they should have access to,” says Greg Nelson, a former special assistant to President Obama who is helping to organize the coalition’s efforts.
We are sadly a nation of people allergeric to new taxes, which is why no one wants to pay for the social benefits a diminishing number of workers still enjoy. But hey, Congress may pull the passports for those people who don't pay the taxes already on the books. Meanwhile, here is a list of companies not even Fortune Magazine editors could excuse for alleged tax dodging--mostly because they rely on government to make their business work. Let's look at Perrigo as an example:
U.S. headquarters: Allegan, Mich.
Tax residence: Ireland
The world’s largest seller of over-the-counter store-brand drugs is headquartered in Michigan but incorporated in low-tax Ireland. CEO Joseph Papa counts on the (tax-supported) FDA to clear prescription drugs to be sold OTC. Perrigo is suing the FDA (for which the company doesn’t pay its fair share) for allegedly not moving quickly enough to allow its testosterone gel to be sold without a prescription.
Speaking of Ireland, some people are annoyed the country is looking more like a tax haven, reports the New York Times.