Financial hypocrisy

Am I the only person who finds it interesting that whenever we have a debate about welfare and social programs in this country, certain groups just can’t stop talking about all of the fraud and corruption, but not a single hedge fund manager or big banker who engineered toxic investments and sold subprime mortgages to people who couldn’t afford them went to jail? When people want $250/week to buy food and pay rent, drug test them! The dirty takers! But when a rich person on Wall Street collapses the economy? Give that man a promotion or a bonus! Seems quite bizarre to me.

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8 thoughts on “Financial hypocrisy

  1. This was Jon Stewarts point on the Daily Show a few nights ago. In addition why is the solution to corruption for the poor, to get rid of the benefit entirely, but when, what they say are a few bad apples are corrupted on Wall Street, things must remain unchanged? If a small percentage are taking advantage of welfare their should be no welfare, instead of asking how we can make welfare better. It’s ludicrous to the max how income disparity continues to grow and yet it’s still somehow the poor people’s fault.

    1. This sort of conversation comes up frequently between myself a conservative classmate of mine. He’s a nice guy, we just don’t see eye to eye philosophically. Anyway, he’s quite fond of saying things like, “welfare just keeps people from looking for jobs,” or “I know people who wouldn’t take a job just because it paid less than their old one.” General stuff about welfare queens and people who are too prideful to take paying work that they deem to be beneath them.

      I, however, believe that those are both conservative tropes that generally do not reflect reality. With regard to his first statement, I don’t really see why anyone would chose not to work, considering that they’d make more money than simply staying on welfare. It’s not like people on welfare live extravagant lifestyles. Rationally speaking, I’m not sure why people believe that individuals would chose to remain poor when it’s possible to not be poor. The reality is that the job market isn’t picking up at a rate that can accommodate all of the people who need jobs. I’m sure that given the choice, the overwhelming majority of people would in fact choose to work for financial and personal reasons. Even retired people often get part time jobs or volunteer simply out of boredom, so I don’t quite know where the right gets this idea that people love to stay at home and stare at walls all day, everyday.

      He’s also fond of stating stuff like, “Do you know how many people on food stamps I see with new iPhones?!” To which my general response is, “YOU KNOW THEY GIVE THOSE AWAY FOR FREE WHEN YOU SIGN UP FOR A NEW PLAN, RIGHT?!” Moreover, often mobile plans are far cheaper than land lines. So what, poor people just shouldn’t own phones? Well then how the hell are they supposed to look for and apply for gainful employment?!

      With regard to the idea that people won’t take jobs just because they pay less I say, “So what?” Some people simply can’t afford to take jobs that pay less. If you have a mortgage and car payments, not to mention any debt (like student loans) you have fixed payments for which you are legally obligated to pay. But let’s say you lose your job. Why on earth would someone take a job that doesn’t allow them to pay their bills? The result would ultimately be the same, regardless of whether or not they didn’t work at all or took a job that didn’t provide enough money to pay the bills: repossession, foreclosure, and bankruptcy.

      I guess what frustrates me the most is that while good intentioned, most conservatives seem to live completely detached from reality and from other people.

      1. Agreed Ryan. If you looked at the percentage of poor people “cheating” the system, I would bet dollars to doughnuts that it’s smaller than the percentage of the wealthy “cheating” the system. The only difference is that the very wealthy can often play loopholes, lobby government, and rig the system in their favor so that it appears that they are not cheating.

        Self-determination is a very important human quality, and most people want to be in control of their own destiny. People who are born in poverty often don’t have good schools or good nutrition, and studies have shown that this impacts the decision-making process of children as they grow up in that environment or try to get out of that environment. Living month to month keeps you focused on the immediate for survival and not on long-term goals either.

        I think it’s also false that all welfare recipients are democrat loving voters. Most of the people are two busy working minimum wage jobs, that don’t even give them an opportunity to go vote, and given the extreme amount of poverty in the bible belt and the fact that those are highly red states, there has to be at least some cross over with republican voters who receive welfare.

        Perhaps it’s not completely unrelated to our discussion in regards to vaccination. We do live in a society where we can easily become very detached from the struggles of others once we have money. It allows us to stay in nice neighborhoods, send our kids to good schools, etc. A big part of my understanding of what poverty is, was not only growing up with parents who struggled financially and took advantage of tax laws that worked in favor of families trying to make it work, but weren’t just pulling in a lot of income. I think my mom made most of my clothes until I was 14! But it also made a big impact going to my father’s home country of India and seeing the poverty that was much more prevalent than it is today. Seeing people without hope of ever raising themselves up out of the poverty they were born into. It’s hard to see that and not be moved. As the infrastructure of our country falls apart and unemployment remains high, many people are without hope. Working hard, with no chance to save up enough money to better themselves, get out of a bad neighborhood, with weaker schools.

        Whatever type of president Mitt Romney would have been, his detachment from reality was incredible. His statement that was revealed at that private dinner was so representative of the sentiment of wealthy conservatives towards the poor in this country. “47% of the country want government handouts and are never going to vote Republican”. If that was true, that means that for a Democrat to when, only 5% of the population above the poverty line voted for a Democrat. That doesn’t even make sense. It demeans the poor in so many other ways as well, like they only have the intelligence to get free money, like they might not also care about the environment, women’s rights, health care, or host of other liberal ideals. It’s very sad.

  2. Love the Jon Stewart references here. What surprises me is that I agree with about half of what you said. There is abuse and fraud. Absolutely. It’s hard to actually document the findings but even the government is aware and have their estimates. My point is this: the amount of money that is “abused” is tiny in comparison to a large bank. You’re right. But it is not the amount. It is the mere fact that someone is not being productive and using others people’s money, not working, not doing much. The people who use the money more wisely, who look for work, who don’t buy junk food, or new cars, are the people who are not included in that “fraud or abuse” accusation.
    Also, for the banks. There were several that did some naughty things. What was worse is that our government perpetuated that mess by giving them quotas to fill. The premise was that “everyone” should be allowed to have a house, regardless of their credit score, poor income status or history. Instead, people within the federal government (includes BOTH parties) lowered lending standards of these topics and eventually given quotas. Not real quotas but something similar. Now, you add in the fact that banks invest their money. They always do. Always have. Always will. Just like other people with their money… in this case, they became a part of the mess. If you notice, some banks…a lot actually….wanted nothing to do with being a part of this mess. U.S. Bank, for example, did not want to be a part of the government’s pet project of “here, let’s spread this housing debt around, shall we? Oooh, looky here: tax incentives!” Instead, many banks refused this and carried on as usual. They were ok during the crisis…..

  3. Maybe you should discuss with your conservative friend that not everyone is a “welfare queen” but when people say things like “my mortgage is gonna be paid for” or if you happen to witness it first hand, then people, like your conservative friend (whoever that is), may get the wrong impression. I see countless families at Winco that have grocery carts stacked full to the edge using the Oregon Trail card. All of it being healthy, low-fat food. Every now and then I see something like pop or whatever. No big deal. However, when I see people buy moderately-healthy food (when there’s tons of produce available) with their Oregon Trail card but then buy a lot of junk with a completely different card, I get a little angry. That money spend on the junk could have been spent on the better food. I see people, all the time, buying gas with food stamps at ARCO. Or buying pizza at various pizza places… Anecdotal evidence is largely the best evidence so far. But when I see this (http://www.nyc.gov/html/hra/welfarefraudnyc/html/numbers/numbers.shtml) and the money abused, I realize there is more evidence.

    What this really does, more than anything else, is hurt those that actually need this money for help. Instead, you get a lot of fraud and abuse that end up taking that money away and spending it on crap. These fraud statistics only show people caught abusing money from our treasured “safety net” but not the people who are not caught.

    1. There are also much bigger problems than people “abusing” the money they receive. It’s the mere fact that it’s availability, although seemingly needed for not using credit cards, being in debt, being homeless, is actually more likely to keep people in poverty or not working. This has been studied before. If this wasn’t true, then the several trillions spent on the “war on poverty” would have eliminated it entirely, instead of worsening. 13 Trillion since 1965, actually. (http://www.nytimes.com/roomfordebate/2010/09/16/rising-poverty-and-the-social-safety-net/little-bang-for-the-anti-poverty-program-buck)
      If you have been unemployed longer than six months, you’re less likely to find a job that not. It’s not because potential employers are just turned “off” from this fact, it’s because they view you should have been working “any” job in the first place. I know when I was down and out, I worked more, played less, got a second job, etc. Didn’t care what it was. Didn’t mean I never got help or anything, though. Regardless, people not working get thrown into a mindset that not working is the norm. It’s actually normal human behavior. Even though people want to work and not be on welfare, they are left into a void of not working for so long….it ends up becoming a part of their mindset. Ever since the idea of using the social safety net was put into place, more and more people have been using it.

      Denmark is an example where they reduce the pay and time of unemployment insurance (UI) benefits. They still help you and help you find a job (like here) but when they started to lower the time available of these benefits, unemployment reduced drastically. (http://www.hha.dk/nat/aop/dokumenter/finlandb.pdf) Employment increased because they helped their citizens get off of unemployment and become employed. Big difference from the cheap rhetoric we here in politics about “we should extend these benefits and if you disagree, then you’re an ‘XYZ’!”

      So, not only supporting your citizens helps them when they actually need it but that helping hand should have a limit. Most people benefit from a proper education (which the government has had this role for several decades of paying via state and some federal budgets) but they also benefit from having the amount of time of UI reduced drastically. It gives them an incentive to take decent job. Here, the same thing applies.

      You are encouraged to not take a large pay cut when getting off UI. However, in most cases, when starting a new job, you usually always take some cut in pay. Period.

      If you don’t care to read the data, then I’ll be short: social safety nets were put in place because of poverty. The root causes of poverty were not yet fully understood (family roles, poor parents, children born out of wedlock, poor public education, living in poor areas) as they are today. There are many causes of poverty and it starts from the generation that raised the new one. It’s really nobodies fault, per se…it’s everyone’s. You are influenced by the world around you and simply trying to alleviate poverty by someone else’s tax dollars doesn’t magically levitate people out of poverty. It does help, however. Just not anywhere near that it was hope to do…. in fact, having negligible effects overall.

      It revolves around the fact that people simply do not know how to bring themselves out of their situation that they’re in. There are other factors, of course, but coming up with simple excuses does you no good if the local shop is hiring someone and 50 people apply….. there are several more opportunities.

      What would help is not just on the demand side but the supply side. Seeing how the supply side of the economy is largely taxed and regualated, even more so than it was 30 years ago, it’s no wonder why opportunities favor less and less people each day….

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