TPMCafe
Josh Marshall’s new site TPMCafe is up and looks very interesting.
Se. John Edwards is guest blogging there this week, his first post is about how being poor is more expensive. I am not a huge fan of Edward’s divisive populism, but the problems he points out are very real.
Unlike the common liberal perception, I, and most other Conservatives, do care about the poor. We tend to believe though that the handout programs so popular with Liberals tends to exacerbate rather than diminish the problem.
Nonetheless, the problems Edwards describes here are very real, and we should consider these problems and look for solutions. He links to this study which describes some of the extra expenses that poor people end up paying.
I think think you can pretty much group these into three broad categories.
One is medical expenses. As the study points out, the uninsured cost for a given medical treatment is often dramatically higher than the insured cost. This is not because hospitals hate the poor, most end up losing money on uninsured patients, but rather it reflects that simple fact that the uninsured are much less likely to pay their bills. If only one out of four uninsured end up paying, then it makes sense to charge four times as much for care that is uninsured, this is especially true when hospitals are forced to treat people regardless of their ability to pay. Unfortunately, this creates a vicious cycle. The more costs rise for uninsured patients the less likely they are to be able to pay their bills, and thus costs will rise even more. Exacerbating the situation is these same people are unable to afford preventive care, making their treatment more expensive than it would otherwise be.
I don’t have a good solution to this problem. I am deeply distrustful of socialized medicine, in fact I believe the partial socialization via Medicare and Medicaid have contributed greatly to the increased cost of health care. I am also very worried about the rationing that a socialized system would have to utilize, as well as the dangers of loss of R&D incentives. This is an issue I am very interested in, but so far I have been unable to find a solution.
The second category is lack of education and failure to apply good financial planning. This is fairly common through all strata of our society, but the poor with less margin for error tend to be disproportionately effected. This problem, and the solution, was explained eloquently by Charles Dickens over 200 years ago:
Annual income twenty pounds, annual expenditure nineteen nineteen six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.
We could do a better job educating our citizens about Financial planning, the actual cost of living on credit, and how beneficial it is to save. One thing we should do is make this a part of the High School curriculum. In addition, I believe that seminars on this subject would be a beneficial and appropriate use of tax dollars. Obviously improving education in all aspects would have a hugely beneficial effect on the poor, but even this more limited focus would have, I believe a dramatic effect.
The third category is hinted at, but danced around, by the study. Crime and lack of Police protection. To many poor neighborhoods, especially in the inner cities, are effectively lawless territory. This makes opening a business in those areas a chancy proposition which is a double whammy on the poor. Not only do those businesses end up charging a premium to cover extra theft, vandalism and insurance costs, but the limited number of businesses willing to deal with this makes jobs rare. This probably also accounts at least in part for the higher auto insurance rates in poor neighborhoods mentioned by the study.
This is something we can, and should fix. Protecting it’s citizens from crime and enforcing lawful behavior is a fundamental government responsibility. From a practical stand point, it is probably a good investment as well. Rudy Giuliani’s Broken Windows method shows how we can effectively combat crime. In addition, most inner cities have strict gun control laws, leaving the poor unable to defend themselves. This is intolerable and a direct cause of increased crime, in my opinion. Lastly, we should reform our drug laws. The drug laws have created a very adversarial relationship between poor neighborhoods and the Police that are supposed to be protecting them. Many view this as a victimless crime, their sympathies lie with the marijuana smoker who gets busted rather than with the cops. This makes it more difficult for the police to fight violent crime, and they are not trusted by the citizens. It also of course takes many not violent people and sends them to prison where they get a graduate course in more serious crime. It a futile and dangerous policy we are pursuing and the poor are paying for it.
Poverty is something we can, and should look at. Successful poverty reduction strategies must be more than handouts or flavor of the week programs though. They must be focused on changing the environment that exacerbates poverty in the first place.



You make some very interesting, and very valid, points regarding this article. I wish I had more time to respond to this in full, but I will say that I agree with your sentiments.
It was once suggested that hospitals should have to compete against one another in terms of how much they charge for services. I don’t know how I feel about that, but I can say that we have many examples of how this can work to favor the consumers of a service. Have you ever seen an empty parking lot at a 24 hour wal-mart?
Obviously there are problems with the health care system no matter what you do. I think that there are never enough health care professionals, and never enough money for the individuals requiring care to provide quality care for everyone. There are downsides to the system that I proposed above, certainly it would mean that health care for those with more money would be more readily available and probably of a higher quality. In socialized medicine, having enough supplies to treat everyone is a problem. In our system, many people who really need health care go without it because they can’t afford it.
I don’t think there is a good solution to the health care issue, but I do admire those who try to come up with those answers. It shows that deep down you have compassion for your fellow man. Maybe if we all had a little more of that, we would’t have a health care issue.