Creating Opportunities for Generosity

Recently, John Oliver tackled the payday loan industry on Last Week Tonight. It is often assumed that people in financial distress turn to payday lenders because they do not know what a horrible deal they are. This is not so. Towards the end of this clip Oliver refers to a survey by Pew Research which shows that a majority of borrowers say payday loans take advantage of them but they take them out anyway because they also provide relief. As Oliver points out, many people have other options including borrowing from friends or relatives or pawning possessions, and many are driven to do these things anyway once they get trapped in the circle of unending payday loan debt. It is easy to say that this behavior makes no sense, and it doesn't, if you consider no values except the purely financial.

But that is not the world we live in. It fails to take into consideration the value of personal relationships, the very real need human beings have to feel that they are valued members of their communities. For most people, the real agony of being poor is not going without things, even missing a meal or two. It is not even being harrassed by impersonal creditors, as stressful as that is. The real pain has to do with the emotional deficit that is created when a person feels his need to receive help out paces his ability to give help. The real pain has to do with strain on the most valuable personal relationships, the fear of the loss of respect among those one loves and values. The fear of being unable to act as caregiver to someone who one loves. The horrible thought of straining important friendships until they break and leave a person isolated and alone. There is a logic to trying one's best to avoid seeking help. A person facing a short-term financial hardship does a quick cost/benefit calculation which includes not only the interest on a payday loan, but ideas about quality of life. They make the calculation that they would prefer to struggle to repay a stranger than struggling to repay a friend.

Most charities try to meet people's immediate physical needs. They either take the "give a man a fish" approach or the "teach a man to fish" approach, but inevitably they focus on what the poor person needs, not what he can give. I wonder if the vicious cycle of payday lending could be ameliorated by programs that provided people of limited means with opportunities to be generous. If there were a focus on eliminating the giving deficit, by helping poor people to find ways to give and to feel that their contributions made a real difference, then perhaps the calculus would change and people would be less likely to go to a lender they know is taking advantage. Sometimes you receive, sometimes you give, and all is in balance. I don't actually know what such a program would look like. But creating programs that allow people with little money to be the givers, and for those with more money to see them in that light, would go a long way to relieving shame and suffering.

Taxation without Representation?

Salon today has an in-depth article about the under representation of the working class in government.

If millionaires were a political party, that party would make up roughly 3 percent of American families, but it would have a super-majority in the Senate, a majority in the House, a majority on the Supreme Court and a man in the White House. If working-class Americans were a political party, that party would have made up more than half the country since the start of the 20th century. But legislators from that party (those who last worked in blue-collar jobs before entering politics) would never have held more than 2 percent of the seats in Congress.

Crash, Boom, Pop! An Economic Education Comic Book

Here is a Kickstarter project that looks like it is worth backing:

Does the Current Economic System Encourage Bad Innovation and Discourage Good?

There is an interesting, but a bit heavy and academic, article on Alternative Economics today.  Under the current system, the author argues:

"The type of innovation that occurs will depend not upon its social utility, but upon whether its proceeds can be appropriated privately. And this incentivizes dark innovation."

Follow the link above to read more.

Quote of the Day: Stop Judging People for Being Poor

One participant mentioned that when we give to the poor, we should ask their forgiveness. It is the poor and marginalized who have been failed by our society and system and we’re all part of the problem. Another person said we need to stop judging people for being poor; we need to change our system to make it easier for people to get the help they need....

These opinions made me rethink my behavior. I’ve never thought of asking a person for forgiveness when I hand them a dollar outside a supermarket. But it makes sense. By asking for their forgiveness and blessing, I’m reaffirming their inherent worth and dignity by treating them with respect; I’m asking them for something only they can give. And I need to stop caring how they ended up being homeless. It’s not my place to judge and I’m not qualified to ask.

All I know is that as a man of faith, it’s my responsibility to respond with compassion. This is the hard truth of faith; this is where conversion of the heart takes place. When we stop punishing and start forgiving. When we stop blaming and start helping. When we treat our neighbor as ourselves.-Justin Almeida, Walking in Their Footsteps

Quote of the Day: The Conservationist Ethic of the Working-Class

Given this fact, it is naive and inappropriate to try to convert everyone to “green living.” We can’t ask struggling communities to change their values; we have to rally them in a different way. Mainstream environmental groups don’t tend to see underresourced neighborhoods as forward-thinking, but poor and working-class people have an intrinsic conservationist ethic, born out of necessity. They need only to develop their own vocabulary so that their actions aren’t dismissed as insufficiently “green” but are valued for their intrinsic merit. This notion goes back to the kind of pedagogy practiced by Paulo Freire, who helped members of oppressed Brazilian communities find new meaning in their everyday actions and use these insights to transform their own lives. The nonprofit-industrial complex, by contrast, too often imposes a set of values that is not easily transferred to the people it is meant to serve.-Marc Bamuthi, Creative Time Reports

Yucky Framing of the Day: When Your Workers Suffer, You Don't Make as Much Money

The Australian publication The Age recently ran an article that says that investing in mental health for staff pays off, not because it means human beings will suffer less, but because you can gain a tidy return on your investment.

Employers urgently need to treat the mental health of their staff as seriously as their physical health and safety, according to Australia's first campaign on mental health in the workplace.

With an estimated one in five Australian workers experiencing mental illnesses such as depression and anxiety, the cost to businesses is at least $10.9 billion a year, says mental health group beyondblue.

But if Australian businesses are willing to invest in effective mental health strategies they stand to gain an average return of $2.30 for every $1 spent, according to a report beyondblue commissioned from PricewaterhouseCoopers.

Read more: http://www.theage.com.au/victoria/investing-in-mental-health-pays-off-study-shows-20140519-38k7p.html#ixzz32G7orvBB

Another Sign that Economic Recovery Isn't Reaching Everyone

Chase is rolling out new ATMs that dispense $1 and $5 bills.

The option to get exact change will be a plus for customers -- including those with low account balances who want to take out less than $20 or who need $25 but don't want to take out $40, for example, said Greg McBride, senior financial analyst at Bankrate.com.

"Particularly in difficult financial times when peoples' account balances have been lower, not having to withdraw more money than you really need is helpful," said McBride.

Yucky Framing of the Day: Don't Force a Generation of Into Debt or they Won't Buy Stuff From Us

From Truthout today comes another example of  moral arguement reduced to a market place equation.  Why is it a bad idea to saddle the next generation with debt before they even get started in life? Because, if you do that, they can't buy as much stuff and "we," presumably, will not make as much money.

Americans with piles of student loan debt have less money to spend on anything from consumer products to homes.

And as The Washington Post points out, first-time home buyers, usually college graduates, are, or at least used to be, "the bedrock of the housing market."

But, since millions of college graduates are drowning in debt, they can't afford to buy a home, which is killing America's housing recovery.

Meanwhile, according to a report from the One Wisconsin Institute, the devastating effects of student loan debt also translate into more than $6 billion in lost car sales each year.

And, the chief economist for General Motors has even said that student loan debt is one of, if not THE major reason why millennials aren't buying cars.

Quote of the Day: Paying Do Gooders

So in the for-profit sector, the more value you produce, the more money you can make. But we don't like nonprofits to use money to incentivize people to produce more in social service. We have a visceral reaction to the idea that anyone would make very much money helping other people. Interesting that we don't have a visceral reaction to the notion that people would make a lot of money not helping other people. You know, you want to make 50 million dollars selling violent video games to kids, go for it. We'll put you on the cover of Wired magazine. But you want to make half a million dollars trying to cure kids of malaria, and you're considered a parasite yourself.-Dan Pallotta, TED Talk