Tag Archives: Wealth

What is life really like for Americans living in poor households?

Investigation in progress
Investigation in progress

This article is from the Daily Signal.

Excerpt:

Today, the Census Bureau will release its annual poverty report. It will almost certainly report that over 40 million Americans “live in poverty.”

But what does it mean to be poor in America? To the average American, the word “poverty” suggests significant material deprivation. But the actual living conditions of those the government defines as poor differ greatly from this perception.

According to the government’s own reports, the typical American defined as poor by the Census Bureau has a car, air conditioning, and cable or satellite TV. Half of the poor have computers, 43 percent have Internet, and 40 percent have a wide-screen plasma or LCD TV.

Far from being overcrowded, poor Americans have more living space in their home than the average non-poor person in Western Europe. Some 42 percent of all poor households actually own their own homes; on average, this is a well-maintained three-bedroom house with one and a half baths, a garage, and a porch or patio.

According to the U.S. Department of Agriculture, only 4 percent of poor children were hungry for even a single day in the prior year because the family could not afford food. By its own report, the average poor person had sufficient funds to meet all essential needs and was able to obtain medical care for his family throughout the year whenever needed.

The left likes to claim that the U.S. has far more poverty than other advanced nations. But those claims are based on comparisons that set a higher standard for escaping poverty in the U.S. than elsewhere.

When a single uniform standard is used, the U.S. is shown to have poverty rates that are very similar to other advanced nations, slightly higher or lower depending on the exact measure used.

I think we definitely want to be careful about the outcry on the secular left about “poverty”. Their solution always seems to be that we need to move in the direction of socialism. And socialism means that the government gets bigger by taking money and liberty away from families, churches and businesses.

As a Christian, my goals are all gospel-centric. My interest in politics is because I want to live in a society that respects my right to work, earn and save, so that I can spend and give in a way that advances the gospel. My job is not to transfer my money to lazy people in their dependence on government. I go to work so that I can have the fuel I need to respect God in my decision-making. The secular government is interested in other goals – like getting elected. I don’t want them using my money for their goals. I have my own goals.

Is there evidence of systemic racism in the United States?

ANNOUNCEMENT: I explained my answer to this question on an episode the Free Thinking Ministries podcast, with host Tim Stratton. We discussed Black Lives Matter, Christianity and more. And I explained my plan to achieve the American Dream as a person of color and legal immigrant to America. Live stream link here.

Systemic racism is the idea that people can’t lift themselves out of poverty by making good decisions, because powerful groups in society that hold the poor down, regardless of their decisions. Do you think that America is a place where no matter what choices you make, you’ll never be able to be more properous? That’s what the leaders of Black Lives Matter think.

Here’s what Nikole Hannah-Jones, creator of the 1619 Project, says in the New York Times (a former newspaper):

To summarize, none of the actions we are told black people must take if they want to “lift themselves” out of poverty and gain financial stability — not marrying, not getting educated, not saving more, not owning a home — can mitigate 400 years of racialized plundering.

Got that? It doesn’t matter what individual choices a non-white person takes in America, they’re going to be poor. The “systemic racism” of the powerful whites will always keep them down. Single motherhood doesn’t make people poor, and marriage doesn’t make people wealthier. Dropping out of high school doesn’t make you poor, and getting a Masters degree in computer science won’t make you wealthier.

But let’s take a look at the data from the 2018 Census, and see the evidence.

White people are doing a bad job of keeping non-whites downWhite people are doing a bad job of keeping non-whites down

Well, it looks like at least SOME people of color are able to do well in America despite all the “systemic racism” that keeps non-whites down. And do you know what those non-white groups at the top have in common? They’ve made good decisions, they’ve worked hard, they haven’t blamed other people when they fail, and they’ve saved their money instead of spending it on shiny junk.

Let’s look at some decisions that the non-whites who are prosperous have made, that those further down have not.

Asians marry before they have children, so the kids have two parentsAsians marry before they have children, so the kids have two parents

Education and marriage

This article is written by the far-left radical Nicholas Kristof, writing in the radically-leftist New York Times (a former newspaper).

Excerpt:

A new scholarly book, “The Asian American Achievement Paradox,” by Jennifer Lee and Min Zhou, notes that Asian-American immigrants in recent decades have started with one advantage: They are highly educated, more so even than the average American. These immigrants are disproportionately doctors, research scientists and other highly educated professionals.

It’s not surprising that the children of Asian-American doctors would flourish in the United States. But Lee and Zhou note that kids of working-class Asian-Americans often also thrive, showing remarkable upward mobility.

[…]There’s also evidence that Americans believe that A’s go to smart kids, while Asians are more likely to think that they go to hard workers… Asian-American kids are allowed no excuse for getting B’s — or even an A-. The joke is that an A- is an “Asian F.”

One reason Asians students do so well is because their parents are usually married:

Strong two-parent families are a factor, too. Divorce rates are much lower for many Asian-American communities than for Americans as a whole, and there’s evidence that two-parent households are less likely to sink into poverty and also have better outcomes for boys in particular.

American blacks have a 73% out-of-wedlock birth rate. A huge difference compared to Asians.

So, when Nikole Hannah-Jones tells you that education and marriage don’t matter, she’s just wrong.

Compound interest

Education and marriage are important, but so is saving your money. The wealthiest people in America are typically the ones who are experts at saving money early, and investing it. They know about the law of compound interest. If you invest money early and leave it alone, then it will grow into a fortune by the time you are read to stop working.

This graph explains compound interest:

Don't trust people with non-STEM degrees to tell you how to get richInvesting $24,000 from age 21 to 41 vs investing $24000 from age 47 to 67

What does Nikole Hannah-Jones say when she looks at that graph? She doesn’t think that saving money makes a difference to having more or less wealth. She thinks skin color determines whether saving money makes you wealthy or not. The graph clearly shows what we should be recommending to young people of color. They need to stop spending money and start saving it, and the earlier the better. It doesn’t matter what your skin color is, saving money early JUST WORKS.

Similarly, when she says that home ownership doesn’t make you more wealthy, this is just terrible advice. It’s always better to pay down your own mortgage (at least when interest rates are low like they are now) than to pay someone else rent. You have to live somewhere, and paying for your own home is better because it costs about the same as rent, and then you get to keep the home when you’re done paying for it.

Communism

Nikole Hannah-Jones does have a “solution” to disparities in wealth. Her solution is communism. She wants to transfer money from those who earn, to those who don’t. But we already have tried that in the 20st century and it resulted in the deaths of over 100 million people. That’s not my opinion, that’s all documented in a book published by Harvard University Press.

You don’t even have to read the book to know the truth – just look at countries that score low on the Index of Economic Freedom, and compare their GDP per capita to countries that score high on the Index of Economic Freedom. The more communist a nation goes, the less wealth there is for the citizens. That’s why people in Venezuela are eating zoo animals and selling their bodies in prostitution in order to get food to eat and water to drink. Nikole Hannah-Jones wants to reduce economic freedom, but we know by looking at other countries that this reduces per-capita GDP over time.

There’s a lot more than could be said here, but the point is that we need to be telling American blacks to make decisions that match the decisions of other successful non-white communities in America. We need to start teaching young people basic economics so they don’t fall prey to charlatans.

Jay Richards: How to end poverty in 10 tough steps

Jay Richards: How to end poverty in 10 tough steps
Jay Richards: How to end poverty in 10 tough steps

Why are some nations more prosperous than others? Is it because the wealthier nations exploit the poorer ones, keeping them poor? Or are there certain policies, laws, and cultural beliefs that lead to prosperity? Dr. Jay Richards delivers a lecture for Impact 360, in which he identifies 10 different factors that lift nations out of poverty, and explains why they work.

Summary:

  1. Establish and maintain the rule of law.
  2. Focus the jurisdiction of government on maintaining the rule of law, and limit its jurisdiction over the economy and the institutions of civil society.
  3. Implement a formal property system with consistent and accessible means for securing a clear title to property one owns.
  4. Encourage economic freedom: Allow people to trade goods and services unencumbered by tariffs, subsidies, price controls, undue regulation, and restrictive immigration policies.
  5. Encourage stable families and other important private institutions that mediate between the individual and the state.
  6. Encourage belief in the truth that the universe is purposeful and makes sense.
  7. Encourage the right cultural mores—orientation to the future and the belief that progress but not utopia is possible in this life; willingness to save and delay gratification; willingness to risk, to respect the rights and property of others, to be diligent, to be thrifty.
  8. Instill a proper understanding of the nature of wealth and poverty—that wealth is created, that free trade is win-win, that risk is essential to enterprise, that trade-offs are unavoidable, that the success of others need not come at your expense, and that you can pursue legitimate self-interest and the common good at the same time.
  9. Focus on your comparative advantage rather than protecting what used to be your competitive advantage.
  10. Work hard.

Solving economic problems is just like solving any other problem. First, we read to learn what has been proven to work. Then, we do what works. I want to encourage Christians to move beyond good intentions to good results when voting for economic policies. Often, people on the left want to “fix” inequalities by doing what feels good to them, or what sounds good to them. Economics is about choosing policies that we know have worked in other times and places.

Let’s talk more about #4 from Richards’ list.

Economic freedom linked to prosperity

Consider the book “The Poverty of Nations: A Sustainable Solution” by famous conservative theologian Wayne Grudem.

You can even read an article about it from the left-wing Christian Post here:

In a presentation of his new book at the Family Research Council, biblical theologian Wayne Grudem argued that poor countries can become rich only by producing their own prosperity, and that the free market is not only the economic answer, but in tune with the Bible’s moral teachings.

“Every nation that has escaped poverty has done so by producing its own prosperity,” said Grudem, professor of theology and biblical studies at Phoenix Seminary in Arizona. Perhaps best known for his book Systematic Theology: An Introduction to Biblical Doctrine, Grudem presented the key themes in his new book The Poverty of Nations: A Sustainable Solution. The very first of his 79 factors to help nations escape poverty in “a free market economy.”

[…]Grudem argued that the wealth of a country is determined by its per-capita income – the average amount of money each citizen makes. The only way to increase this is to increase the production of goods and services, creating more wealth for everyone, he said.

[…]The professor pointed to 79 factors to help a country produce more goods and services, in three different key areas: the economic system, government, and cultural beliefs and values.

For the economic system, Grudem mentioned the Index of Economic Freedom, a report put out by the Heritage Foundation to judge each country’s openness to trade and wealth creation.

You can find the Heritage Foundation Index of Economic Freedom right here. Take a look at the countries at the top… these countries also have a very high per capita income. Their citizens are earning a lot of money by selling what they produce to willing customers. The ones at the bottom are run by socialist governments. You wouldn’t want to try to make a living in Venezuela or Cuba or North Korea. But these are the places that American socialists admire and support. Does that tell you something about what they would do to you, if they got hold of the reins of government?

The Fraser Institute in Canada did a similar ranking of economic freedom (economic freedom = low taxes, low regulation, free trade), and they concluded:

Countries in the top quartile (25 per cent) of economic freedom (such as the U.K., Japan and Ireland) had an average per-capita income of US$40,376 in 2016 compared to US$5,649 for the bottom quartile countries (such as Venezuela, Iran and Zimbabwe). And life expectancy is 79.5 years in the top quartile of countries compared to 64.4 years in the bottom quartile.

Economic freedom works best.