4 ms·

Poor people stay poor because there are so many systems in place that squeeze them, from usurious payday/title loan shops to rent-to-own places; and the stuff p

by Frondo 12y ago

Poor people stay poor because there are so many systems in place that squeeze them, from usurious payday/title loan shops to rent-to-own places; and the stuff poor people buy is never built to last. There's something to the Vimes theory of socioeconomic unfairness. The people who run these systems have free reign to squeeze the poor because the poor have virtually no political power. (When was the last time you saw a politician throw a 50c/plate dinner?) Assigning any part of poverty to poor people's inability to assess gold seems bafflingly detached from reality.

patio11 12y ago
Jewelry/gold, when used as financial instruments, form one more "system in place to squeeze." (We may have to agree to disagree regarding to what extent that system is created by poor people.) A $500 ring that is repeatedly used to secure pawn loans to cover short-term cashflow deficits is a lot like a savings account which seizes 80% of value on deposit and charges a $15~25 convenience fee on withdraws. bafflingly detached from reality You'll find alternative financial services, including voluminous material on jewelry as a store of value and collateral for pawn loans, well-represented in the academic literature. Would you like citations?
- idlewords 12y ago
  Citations on what? No one is arguing that gold rings are an excellent investment strategy. Rather, you're being called out on the claim that 'this is one of the reasons the poor stay poor'. The implication there is that the poor deserve their poverty, or at the least are kept mired in it by their own inadequacy.
  - swatow 12y ago
    I think it follows pretty directly that if poor people are using jewelry as a store of value, then it's going to being making their financial situation even worse, and therefore can be considered one of the reasons the poor stay poor. You also are committing a fallacy of "if X is true, then I must hold an immoral position Y, so X cannot be true". But logically either Y does not follow from X, or Y is not really immoral. (X = "poor people make bad decisions", Y = "the poor deserve their poverty") This logical fallacy has got you rationalizing everything that poor people do.
    - yummyfajitas 12y ago
      A third possibility (remaining within the realm of logic rather than probability) is "holding true beliefs is immoral". A fourth possibility is that patio11 and idlewords have priors which are not absolutely continuous w.r.t. each other. I.e., idlewords' prior for patio11's hypothesis is 0, and no amount of evidence will change his mind even if he is a completely rational. (It is by this mechanism that a rational Bayesian can also be religious. )
  - aaronem 12y ago
    You what? No one introduced the word "deserve" here but you.
  - patio11 12y ago
    I think we agree more than we disagree with regards to "deserving" poverty.
euroclydon 12y ago
Poor people stay poor because there are so many systems in place that squeeze them, from usurious payday/title loan shops to rent-to-own places; There are also utility deposits, auto insurance, etc. But, there are a tremendous amount of free resources available to poor people, from food stamps and food kitchens to clothing. It could be easier for someone with nothing to scrape together a few thousand bucks than someone in the middle class. If your food is subsidized, your income tax rate is low, and your lifestyle costs are low, e.g. not having to insure a home or expensive car, then you should be able to save quickly. So, I'd assert that: Impulsive people, those severely uneducated in their economic alternatives, or those with little marketable skills stay poor because they continue to make bad decisions.
- lil_cain 12y ago
  You're assuming that poverty doesn't cause impulsiveness, and that poor people don't face any costs that the middle classes don't. Both of these assumptions are likely untrue. Poverty makes the cost of many things higher. Banking is non-trivially more expensive. Public transport often ends up more than the cost of a car, and that's assuming you can afford a season ticket. Those in poverty often cannot. Rental is over a lifetime normally more expensive than buying - and if you're in poverty, you can often expect rental to include large deposits which you often won't get back. For the impulsive thing, see http://yalepress.yale.edu/yupbooks/book.asp?isbn=9780300120905 http://yalepress.yale.edu/yupbooks/book.asp?isbn=97803001209.... Essentially if you're poor, there's a good chance that your marginal utility curve is upward, rather than downward sloping. Which rewards impulsive behavior in a way that is not the case for those who meet the normal standard of living in their society.
- girvo 12y ago
  You've never been poor, have you? I have. I'm not, now, because of skills that I was lucky to have cultivated prior, but when you're about to end up homeless because of <insert any dozen emergencies here that can wipe out your savings instantly>, getting free food doesn't really cover it.

by Frondo 12y ago

patio11 12y ago

Jewelry/gold, when used as financial instruments, form one more "system in place to squeeze." (We may have to agree to disagree regarding to what extent that system is created by poor people.) A $500 ring that is repeatedly used to secure pawn loans to cover short-term cashflow deficits is a lot like a savings account which seizes 80% of value on deposit and charges a $15~25 convenience fee on withdraws. bafflingly detached from reality You'll find alternative financial services, including voluminous material on jewelry as a store of value and collateral for pawn loans, well-represented in the academic literature. Would you like citations?

idlewords 12y ago
Citations on what? No one is arguing that gold rings are an excellent investment strategy. Rather, you're being called out on the claim that 'this is one of the reasons the poor stay poor'. The implication there is that the poor deserve their poverty, or at the least are kept mired in it by their own inadequacy.
- swatow 12y ago
  I think it follows pretty directly that if poor people are using jewelry as a store of value, then it's going to being making their financial situation even worse, and therefore can be considered one of the reasons the poor stay poor. You also are committing a fallacy of "if X is true, then I must hold an immoral position Y, so X cannot be true". But logically either Y does not follow from X, or Y is not really immoral. (X = "poor people make bad decisions", Y = "the poor deserve their poverty") This logical fallacy has got you rationalizing everything that poor people do.
  - yummyfajitas 12y ago
    A third possibility (remaining within the realm of logic rather than probability) is "holding true beliefs is immoral". A fourth possibility is that patio11 and idlewords have priors which are not absolutely continuous w.r.t. each other. I.e., idlewords' prior for patio11's hypothesis is 0, and no amount of evidence will change his mind even if he is a completely rational. (It is by this mechanism that a rational Bayesian can also be religious. )
- aaronem 12y ago
  You what? No one introduced the word "deserve" here but you.
- patio11 12y ago
  I think we agree more than we disagree with regards to "deserving" poverty.

euroclydon 12y ago

Poor people stay poor because there are so many systems in place that squeeze them, from usurious payday/title loan shops to rent-to-own places; There are also utility deposits, auto insurance, etc. But, there are a tremendous amount of free resources available to poor people, from food stamps and food kitchens to clothing. It could be easier for someone with nothing to scrape together a few thousand bucks than someone in the middle class. If your food is subsidized, your income tax rate is low, and your lifestyle costs are low, e.g. not having to insure a home or expensive car, then you should be able to save quickly. So, I'd assert that: Impulsive people, those severely uneducated in their economic alternatives, or those with little marketable skills stay poor because they continue to make bad decisions.

lil_cain 12y ago
You're assuming that poverty doesn't cause impulsiveness, and that poor people don't face any costs that the middle classes don't. Both of these assumptions are likely untrue. Poverty makes the cost of many things higher. Banking is non-trivially more expensive. Public transport often ends up more than the cost of a car, and that's assuming you can afford a season ticket. Those in poverty often cannot. Rental is over a lifetime normally more expensive than buying - and if you're in poverty, you can often expect rental to include large deposits which you often won't get back. For the impulsive thing, see http://yalepress.yale.edu/yupbooks/book.asp?isbn=9780300120905 http://yalepress.yale.edu/yupbooks/book.asp?isbn=97803001209.... Essentially if you're poor, there's a good chance that your marginal utility curve is upward, rather than downward sloping. Which rewards impulsive behavior in a way that is not the case for those who meet the normal standard of living in their society.
girvo 12y ago
You've never been poor, have you? I have. I'm not, now, because of skills that I was lucky to have cultivated prior, but when you're about to end up homeless because of <insert any dozen emergencies here that can wipe out your savings instantly>, getting free food doesn't really cover it.