Skip to comments.America Won't Get Rich by Relying on the Permanent Poor
Posted on 04/18/2012 5:09:06 AM PDT by Kaslin
America is a land of class mobility. That's what makes America a magnet destination for people all over the world: Come to America and make something of yourself. If you want great welfare benefits, try to bust into Europe; if you want to work for a living and get rich, come to the United States.
But for some Americans, there is no class mobility. There is a permanent economic underclass, and those who inhabit it have no ability to rise above their fiscal fate.
There is a reason for that: They make bad decisions.
Take, for example, prom night. A recent study from Visa shows that the average family spends a whopping $1,078 on their teenager's prom night. But what's more interesting is that there is an income breakdown. If you make more than $75,000 per year, you will spend somewhere between $700 and $1,000. If you are one of the unfortunates who earn between $20,000 and $29,999 per year, you will spend ... $2,600. In other words, if you earn three times less, you'll spend three times more.
This is not a recipe for financial success.
And yet President Obama believes it is. In fact, he thinks that if we distribute income to the lowest economic rung, we'll somehow build our nation's wealth. Thus spoke Obama last week: "In this country, prosperity has never trickled down from the wealthy few. Prosperity has always come from the bottom up, from a strong and growing middle class."
Nothing could be further from the truth. Prosperity has never trickled from the bottom up. It has always come from the top down, in terms of investment. That's because people at the top have money. Even in Obama's vision of the universe -- the vision where wealthy people subsidize poor people -- the wealth is flowing top down. It's just being forced to flow by the government.
True wealth comes from generating goods and services people want to buy at a price they want to pay. The only way such goods and services are generated is if somebody is willing to front the cash to do it. Henry Ford needed investors to get his Model-T up and running. It didn't magically appear. And when enough rich people are competing to create the next great product, you get capitalism's greatest achievement: thriving markets with choices for consumers.
And yet, the left does not want to see this. They proclaim that poor people spending money produce goods. This is insipid. It leaves the left in the unenviable position of having to argue that unemployment benefits help the economy because after all, people who are poor are spending more money.
If poverty generated wealth, Sudan would be a paradise.
Wealth generates wealth. It takes money to make money. Nobody has ever been hired long term by a member of the permanent poor. Nobody has ever developed a product while being funded by a member of the permanent poor.
The left insists that such talk is racist. It isn't. Charles Murray's new book, "Coming Apart: The State of White America" deals solely with American whites and makes the same point. The permanent underclass is a permanent underclass because it is filled with folks who make rotten decisions. That doesn't mean we can't help them. It doesn't mean we can't lend them a hand. It does mean that building our economic strategy on their ability to stimulate growth is a fool's errand.
If you work hard and do the right thing in America, you will benefit financially. If you don't, you won't. If we redistribute cash from the hard workers and good decision makers to their less responsible counterparts, we penalize hard work and good decisions in favor of frivolity. We don't want the parents who spend 10 percent of their earning power on prom night defining our economy. We've already done that once. It led to subprime mortgage meltdowns and stock market collapses. Why not try responsibility?
In 1989, I spent about $100 for a tux, liquor, gas, and condoms.
Let's do some math (and err on the expensive side): Prom ticket: $100 Tux Rental: $250 Dress Purchase: $500 Limo rental: $750 Corsage: $50 Hair: $200
That's nearly $2k, but includes BOTH a dress and a tux, and assumes each kid gets a limo (rather than one limo transporting 4, 6, 8, or 10 kids. I'm not buying (literally and figuratively).
I’m not sure if it’s naivete, ignorance or what,
but why does “our side” continually take at face value that the left’s end goals are the same as ours -
ie, a prosperous country of strong moral values?
They don’t. They seek power and control.
This goal, ultimately, is building Satan’s kingdom under one supreme leader, though even THEY might not understand that.
Poor people are more likely to employ outward “wealth signals” to others, because of their self conscious awareness of lack of relative success.
Conspicuous consumption among “the poor”:
Prom dress, flowers, limo, condoms, pictures ?
It's a sickness. We are wired to give people the benefit of the doubt.
I think in psychological terms it's called "battered woman syndrome".
If you transferred all of the money from the rich to the poor overnight, the rich would have it all back within a year.
My grandparents came over from Ireland with nothing. 2 of my grandparents were orphans. They started out as poor as one could be. They knew what starvation felt like, and knew discrimination and destitution. America gave them a future and hope when Ireland had none.
It is not the poor who are the problem as the poor built and made this country into a super power. It is the social programs that are robbing peoples future.
It might take 5 years, but the end would be the same.
The rich get richer by continuing to do the things that made them rich in the first place.
Ditto for the poor.
The left side of life's bell curve, which is almost half the population, does not want a strong economy. They blame the strong success of the right side of the bell curve for their unhappiness. They are certain they can only be happy if everyone in the world is forced to live a Cuban existence.
What if the left side of the bell curve lived in their own economy? Half of them would become the right side of the new bell curve, and would be against government wealth destruction. Half of them would be upstanding citizens, highly respected in their communities. We can reduce our leftists from 50% of the population down to 25% by creating insulated sub-economies for them. This function used to be provided by national borders.
“If you transferred all of the money from the rich to the poor overnight, the rich would have it all back within a year.”
Your theory only works with people who “earned” their money. If you took away any of the Kennedy’s money today they would never get back on their feet again.
Poverty is more of a state of mind, than a state of the wallet.
I was going to say that the extra cost was for prenatal and delivery but the taxpayer is picking up that tab.
The Ruby Payne book Frameworks of Poverty nailed it. The poor spend a greater % on entertainment as a form of escapism from an unfulfilling lifestyle and tend not to be able to think about the long term consequences.
It's only unfulfilling because they constantly compare themselves to their neighbors. They actually have a better, more fulfilling lifestyle than any king did 100 years ago. Their unhappiness is caused by envy. Both happiness and envy are personal choices, not something imposed from the outside by others.
I'm pretty poor. Send me all your money and we'll test your theory out.
> That has me puzzled, too. My first thought is that it's a poor family's best opportunity to get their daughter married off...??
More like they have no hope that their daughter will ever get married, so this is the next best thing. Where I grew up, getting knocked up on prom night was practically a rite of passage for the lower classes.
By the time my daughters grew up, high schools had daycare centers, and provided free baby-sitting on prom night.
I guess you can buy rims on a FBT card.
We need to remove welfare and make the lower earning people get off their collective asses.