Prince Hall

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Copy of speech by Prince Hall, founder of African-American Masonic Order, 1797

 

Meanwhile, at Tiger Beatdown…

I’m discussing class war, and why we’re past due for one.

Recall the Wisconsin 8

For those who’ve been following it, the situation in Wisconsin reached a new stage last night, with the “Ash Wednesday Ambush” from Republicans passing a law suspending collective bargaining rights in dubiously legal circumstances.  From Firedoglake:

the Wisconsin State Senate rushed through and passed a bill that strips collective bargaining rights from most public employees. The vote in the State Senate, entirely composed of Republicans, was 18-1; only moderate Dale Schultz voted no. The budget repair bill was split at the last minute, cleaving the “non-fiscal” anti-union piece from the fiscal components of the bill. The non-fiscal piece did not require a quorum, so the Senate was able to pass it.

I’m sure the protests in Madison will be huge, and there’s things those of us outside the country (or outside in the US entirely) can do to show support.  Governor Walker is not eligible for recall until January next year, but already efforts are underway to recall the 8 Republicans eligible for it. If you’re in Wisconsin obviously you should visit the staging stations set up for the recall effort, but even if you’re not, please donate to support.  This is looking to be a crucial battle for worker’s rights, so spread, disseminate.

The Wisconsin Democrats have, unlike their national counterparts, shown solidarity with their base and deserve the support.  As E.J Dionne points out at the Washington Post, Washington could learn from Wisconsin.

Lastly, at Global Comment Erik makes the compelling case for a general strike.  Labour in the US has very little to lose at this point, with dodgy laws being passed against the clear will of the people.

Solidarity innit.

Spending, Priorities, and Class Divides

(This post originally appeared on this ain’t livin’.)

If there’s one thing I am pretty much guaranteed to see a lot of during a recession, it’s helpful news articles about financial planning, doing more with less, etc etc. Though these articles are ostensibly provided for the benefit of readers, one thing I note about them is the tendency to take a certain set of underlying assumptions unexamined. As a result, they are of questionable utility to the people they are supposedly aimed at. Sometimes they are just laughably wrong and at other times they seem to be more actively harmful.

One thing I note, over and over, is insistence that people need to save money and put a little by. Apparently unemployed folks are excused from this obligation, but no one else is. This ignores the fact that many people cannot, functionally, save money, because every paycheque is spent, down to the last penny. Not on those ‘frivolous’ purchases people are told to cut out of their budgets, like lattes at the corner coffeehouse in the morning, but on basic necessities like food and transportation to get to work (you know, the place where you earn the money you’re supposed to be saving?).

People are taken to task for profligate spending in a lot of these columns with the assumption that everyone spends money like the columnist. Even if people don’t want to admit it, they ‘splurge’ now and then on silly things or things that are not strictly necessary or things they could get more cheaply. These columnists assume that everyone’s budget has room for trimming, because theirs does. They assume that everyone should be clipping more coupons, because they aren’t always good about using coupons. They assume that everyone has some money left over at the end of the month, because they do.

People talk about long term financial planning and projected futures like these concepts are universal to everyone, and like no one ever feels just completely alienated by them. <em>Of course</em> everyone wants to save money to start a college fund, right? Naturally, everyone is planning on buying a house. And everybody is thinking about retirement. The idea of having not just long term finances in question, but short term survival under threat, is just not even considered or discussed in most of these financial advice columns.

Even though, for many people, this is the reality. Even people considered members of the cultural middle class, and marginal members of the economic one, may only be one paycheque between comfort and financial disaster. All it takes is one slipup to slide down the rabbit hole. For them, financial planning is not as simple as setting aside a set percentage of each month’s pay to get ready for the future, because they are too busy struggling to survive in the present. One mistake. That’s all it takes.

And not necessarily your mistake. What happens when the bank messes up processing your mortgage payment and it never goes through? You sent it in, it got cashed, you assume everything is under control, and you’re shocked when you get the doubled bill next month with late fees out the wazoo and your interest rate just got jacked up. The response here is probably ‘well just call the bank and fight them on it until the issue gets resolved’ but what if you do not have time to do that? What if you need to do a gazillion other things, so you just sigh and pay the big bill and the late fees, knowing that paying the mortgage will be increasingly hard because your safety cushion just disappeared and the monthly payments, carefully factored into your budget, are going up because of the higher interest, and pretty soon you’re between a rock and a hard place. Not by your own doing, but as a result of a bureaucratic error.

Financial planning seems like a quaint luxury to a lot of people because, functionally, it is. It should not be, but it is, and refusing to talk about this fact means that conversations about money, concentration of wealth, fighting your way to get ahead in this culture, end up fundamentally skirting over a pretty critical issue. If you start a financial planning discussion with the ground assumption that everyone has money to spare and can trim the budget to make more, you’re pretty much telling a big chunk of your readership to just not even bother.

And, of course, these discussions also usually revolve around spending a lot of time on financial matters. Not everyone is able to spend time on the phone asking for lower interest rates, not everyone has the ability to renegotiate rents, to ask for a change to the terms of a loan to make it easier to manage. Time is a commodity just like money and it is not accessible to all people, although it is often framed as such. When I read something directing me to invest time in something, my thoughts turn to <em>how</em> I am going to restructure my schedule to do that, when my time is very precisely measured out and efficiently used, and I know that the same holds true for many other people.

Not having enough money is treated like a personal failing, having the wrong priorities, not being organised enough, when in fact it’s about a lot more than that. It’s about social structures intended to maintain class divides and keep people poor, for example, it is about eating up time so that people cannot hope to get ahead. It’s about reminding poor folks from the start many goals and hopes and dreams like retiring, attending college, having money for emergencies, are just not attainable and they shouldn’t even bother.

The Econopack Problem

(Originally posted on this ain’t livin’)

One of the assumptions that gets made a lot about poor folks in this country is that they are stupid, and not capable of making good purchasing decisions in places like the grocery store. It’s always charming to be reminded that people assume both that poverty is the result of a personal failing/stupidity, and that poor folks aren’t capable of managing their own affairs because, you know, they’re poor, so that obviously renders them incapable.

Newsflash, for those of you not previously aware of this: Poor folks are not stupid. But they are often forced into shitty purchasing decisions for a whole lot of factors. We’ve talked about some of them before here; issues like lack of access to options, limited transportation, having to juggle lots of tasks with shopping, and so forth. There’s something I want to zero in on right now because I’ve been noticing it coming up a lot. I call it the econopack problem.

Generally, when you buy something in bulk or you buy a lot of stuff packaged together, the per unit cost is cheaper. It’s cheaper for me to grab rice out of the bulk bins at Harvest than it is to buy a bag. I can buy the same amount of rice for less, even. It’s cheaper to buy 24 rolls of toilet paper, per roll, than it is to buy four. A lot of manufacturers offer economy packaging and it’s a lot less costly to buy things that way.

There are a lot of reasons for doing this. It definitely encourages people to cut down on packaging, which is good for the environment. It’s less expensive for manufacturers to package stuff in big containers than it is for them to make a bunch of small ones. And so forth. It’s just generally cheaper to buy larger sizes of things.

Per unit.

It is not cheaper in terms of the overall sticker price. If you are living on a food budget of $20/week, say, you cannot AFFORD to buy an economy-sized bag of beans that costs $5, so you’re forced to buy the little pack with the higher per-unit price for $.99. Because that’s what you can afford on your budget. If you’re buying toilet paper, you would probably prefer to buy 24 rolls for a low per-unit price, but you have to buy the four pack, because it is what you can afford.

Packaging is shrinking and prices are going up; my five pound bag of sugar is now a four pound bag of sugar. Poor folks are feeling this acutely right now. The response is often that they should just buy the larger package or go for bulk. Neither of these are good solutions. The larger size package is too expensive. And buying in bulk isn’t an option if your store doesn’t have a bulk section, which, you know, a lot of stores do not. Bulk tends to be more common in upscale stores, I’ve noticed, which are both more expensive and located in areas poor folks may not be able to reach.

Being able to buy large sizes is also a function of having a place to put them. People who are homeless or who live in small spaces (like, say, people renting rooms in a house where there’s no safe place to put supplies other than their rooms) do not have oodles of space for stacking up their bulk goods. People living alone (already experiencing a higher cost of living) may not be able to finish something packaged in bulk on their own before it goes off, and thus buy small containers. I do this a lot with things I know I can’t eat in full and I hate it, because I hate the waste of packaging involved, but throwing out food is pretty awful too.

People act like poor folks are too stupid to know they’d save money by buying large packages. Trust me, most poor folks are well aware of the fact that per-unit costs drop radically when they buy stuff in bulk or in big packages. They would much prefer to pay $.39/roll than $.99/roll for their toilet paper. But that option is not available to them because their bottom line won’t permit it. When you are operating on a very limited budget, you cannot simply decide to blow your whole week’s available funds on a giant package of toilet paper even though you know it’s cheaper and would be a better buy.

The focus on improving conditions for poor folks is often on individual education, treating it as a personal rather than a cultural and systemic problem. The issue here is not that poor people don’t know how to do math and are getting bamboozled into buying miniature containers of everything. The issue is that they cannot afford to buy things with high overall price tags, even when the per-unit cost is cheaper and they are well aware of it. You cannot get blood from a stone; if you have a limited food budget you cannot exceed, you cannot magically make more money appear so you can buy things in bulk. You can’t cut your food budget to save money for bulk purchases because, probably, your food budget already doesn’t really cover your food costs.

Every time we tell poor folks they are failing at life, we are telling them that everything is their fault, their problem, and their responsibility. Poor folks didn’t wake up one morning and decide to make it more cost effective to package in bulk than it is to package in small sizes and they most definitely didn’t think it would be awesome to have limited food budgets that force them to make crappy purchasing decisions.

The Benefit Trap

Originally posted on this ain’t livin’.

I’ve often noticed that many people who have never had to rely on government benefits, or who have never come into close contact with those who do, do not really understand how benefits work. This is not terribly surprising. It’s hard to understand an experience you haven’t lived and there are lots of things I don’t understand because I haven’t experienced them or interacted with people who have. But I think one of the problems we face when it comes to talking about benefits programmes is that a lack of understanding about them creates a lot of confusion and sometimes that expresses in odd ways.

So, let’s talk about welfare and disability benefits, because the systems for both are deeply broken, and there’s a very specific issue I want to address today, because it’s important: the poverty trap. Both welfare and disability, by design, keep recipients poor, limit opportunities for advancement, and in fact actively penalise people for trying to get ahead. This is a serious problem, especially when many people want to be on benefits temporarily, not for life, or want to use benefits to supplement their lives to create a safety cushion, using financial planning to think ahead about how they want to manage their money. Both of these things are very hard to do (legally) on benefits and as a result they create a situation where people are stuck on benefits even when they don’t want to be.

If you want to get government benefits, the income threshold varies by region, but it is generally extremely low. Just for example, looking at this .pdf of eligibility guidelines for SSI, I can see that as an individual, to qualify I need to make $674 and I cannot have more than $2,000 in assets. As I say, eligibility guidelines are a bit more complicated than this (there’s a range of incomes to qualify, with a 300% max, usually) and in some regions they are higher to reflect cost of living and other issues. In all cases, they are very, very low, though.

If you make more than the income threshold, you may be eligible for partial benefits. If you make too much, none at all. This becomes very important. If you’re not working because of a disability or unemployment and you go on benefits, you get full pay[1. Which, by the way, is nothing to write home about. The amount you can get varies depending on a lot of factors but reviewing my own Social Security statement, I can tell you right now I could not afford to live on the amount the government would give me if I went on disability or welfare.]. So here you are, on benefits.

You are not allowed to have any assets, really. $2,000 is not a lot of money. It can seem like it, but it’s really not. Imagine only being allowed to have that much money. You can’t start a savings account and put money in whenever you can set some aside. Depending on how assets are calculated, your ability to own things is limited. If you have any assets, you have to put them in trust, in someone else’s name, to be administered on your behalf. You cannot independently control your assets. So, you’re on benefits, you don’t need them, right? How are you going to pay the deposit when you need a new rental? What about when the rear differential on your car goes and you need to fix it? What if Medicare/Medicaid refuses to pay for a treatment you need and you have to pay out of pocket?

Functionally, people on benefits are actively discouraged from saving money. Despite being told left and right that we need to take charge of our finances and put aside funds for a rainy day, despite being given tax advantages for certain types of savings schemes, we tell people on benefits that they cannot save and should not have assets. Does anyone else think there’s some serious classism going on here, when we tell certain groups of people that they shouldn’t strive to achieve what society expects people to achieve? What, indeed, society judges people for not achieving? Home ownership, for example, is held up as the holy grail of accomplishment, yet it’s effectively denied to anyone on benefits.

It gets more complicated than that. Eking out a living on benefits is very, very hard. Many people have to have roommates, they scrimp and save, they may compromise their safety and health to survive. And as soon as they start working, they start losing benefits. You are allowed to earn up to a certain amount, and then your benefits get correspondingly cut. Eventually, you pass beyond the threshold of eligibility, and you’re on your own. But you’re not making enough money to survive, really. And thus, you often find yourself looping right back around to being on benefits. Which aren’t enough, so you try and find work, you finally start to get ahead, your benefits get yanked, you fall behind, you go back on benefits, and the merry go round is endless. Endless.

There’s a reason for this; the government very much doesn’t want people who don’t need benefits to access them. I think this is entirely reasonable. However, in its zeal, it’s also actively punishing people through the benefits system, and I cannot help but feel that since the poverty trap created by benefits is a well known issue, since the government can clearly see that benefits are not pacing inflation, that this is being done deliberately. There’s no earthly reason to keep people in a state of enforced poverty, unless you think they should be poor. And the government seems to think that a lot of people…should just be poor.

Zombie economics

From the New York Times:

When historians look back at 2008-10, what will puzzle them most, I believe, is the strange triumph of failed ideas. Free-market fundamentalists have been wrong about everything — yet they now dominate the political scene more thoroughly than ever.

How did that happen? How, after runaway banks brought the economy to its knees, did we end up with Ron Paul, who says “I don’t think we need regulators,” about to take over a key House panel overseeing the Fed? How, after the experiences of the Clinton and Bush administrations — the first raised taxes and presided over spectacular job growth; the second cut taxes and presided over anemic growth even before the crisis — did we end up with bipartisan agreement on even more tax cuts?

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