Losing the War on Poverty

We have been fighting a war on poverty since the 1960s, spending trillions of dollars.  Recent data shows that the poverty level in the US is now as high as it was in 1965.  What happened to all that tax money spent on government programs to defeat poverty?  Some have joked that if they had simply given the money away, it would have completely wiped out poverty.  What’s gone wrong?

I propose that the problem results from using a wrong definition.  Lack of money is not the cause of poverty any more than a cough causes a cold.  Lack of money is a symptom.  The cause may be catastrophic illness or other misfortune beyond their control, but often it's the result of poor choices.  When viewed as a behavioral issue, people are not poor; people behave in a way that makes them poor.  Solutions must recognize the behavioral aspects of the problem.

Some people have no money or are working for minimum wage, but you know they will be all right in the future.  They will rise above it, work their way into a better job, progress and begin to prosper.  Others have no money today and will have no money tomorrow.  Hundreds of examples tell us this is true.  People like Donald Trump file for bankruptcy.  He owes more than he owns.  Do we worry that “the Donald” is poor?  Author and motivational speaker Robert Kiyosaki of "Rich Dad, Poor Dad" fame recently filed for corporate bankruptcy, but if he had filed for personal bankruptcy, it would be a smart bet that he would quickly recover.  On the other side of the coin Rodney King was awarded $3.8 million after his beating by police, and 20 years later his family was asking for donations to pay for his memorial service.  Even disregarding potential investment gains, this represents spending at a pace of $190,000 per year!  This is not an isolated incident (or a racially-motivated observation).  There are many stories of lottery winners who find themselves back where they started only a few years after winning sizable jackpots.  Other lottery winners become instantly rich and continue to live comfortably.  A few years ago, the Oprah Show experimented by giving a homeless man a job and $100,000.  In a follow up shortly afterward they found him once again broke and homeless.  We occasionally hear about star professional athletes, who made millions during their careers, hocking their championship rings and living on the streets.  Others retire comfortably or start a second career.  Don't rely only on my examples, think of some of your own.  In many cases poverty is the consequence of behavior which is not solved by on-going infusions of cash.

The best explanation for these differences in outcomes is behavior.  In my reading I found in an opinion column by Richard Cohen of the Washington Post criticizing Ann Romney’s convention speech references to poverty.  In part, he said:  “The poor often don’t have a man in the house or, to be perfectly frank, sometimes the discipline and work habits to lift themselves out of poverty" [emphasis added].  This was particularly surprising, since I am familiar with his writing and political agenda and would expect him to be the first to defend and endorse enhancing our current failed programs.  Yet even he acknowledges a large behavioral component to the problem.

Perhaps it’s not a case of not doing enough, but of not doing the right things.  Found money and earned money are often treated differently.  Things like dropping out of school, taking inadequate birth-control precautions or abandoning a family are behaviors, often with long-lasting and oppressive consequences.

To conclude, here is a quote from a popular national advice column:  “Many parents find it difficult to cut the financial apron strings, and divorced parents often are particularly indulgent in an attempt to compensate.  This hurts the kids in the long run, creating dependence and prolonged adolescence.”  Few would disagree when the subject is parenting, but substitute government for parents and the poor for kids, and rational, well-meaning people will accuse you of being heartless, racist and cruel.  But as this video shows, expecting better behavior in return for help usually yields better results and is really the more caring solution.  Some problems will never be solved unless they are approached from a behavioral standpoint.  That's why we continue to lose the war.