The thing I've learned most about poverty is how expensive it is to be poor. It's super easy to pay rent every month if you earn enough to pay rent and have a decent job. It's super hard to pay rent if you need a coupon from the state and then need to go find an apartment that will accept that coupon and only that coupon.
Interpretation
Poverty comes with high hidden costs that make life challenging.
The quote highlights the paradox of poverty, illustrating how being poor is not just a lack of money but involves navigating a system that can create additional burdens. It emphasizes the difficulty faced by those in poverty who must contend with obstacles such as finding housing that accepts government assistance and other socioeconomic barriers that make basic living expenses seem insurmountable.
In practice
In a discussion about economic policy, this quote can illustrate the systemic issues that keep people in poverty.
The most powerful forces in economics are not numbers or facts. They are prejudices and preferences. No amount of evidence will ever change the degree to which many of the rich and powerful prefer themselves to be richer and more powerful and others poorer and weaker.
Raising the minimum wage allows business people to stop thinking about workers simply as costs to be cut and allows you to start thinking about workers as customers to be cultivated.
When you have a tax system in which most of the exemptions and the lowest rates benefit the richest, all in the name of job creation, all that happens is that the rich get richer.
The most insidious thing about trickle-down economics is not the claim that if the rich get richer, everyone is better off. It is the claim made by those who oppose any increase in the minimum wage that if the poor get richer, that will be bad for the economy. This is nonsense.
You show me a highly unequal society, and I will show you a police state. Or an uprising. There are no counterexamples. None. It's not if, it's when.
If low taxes were the way that people like me created wealth, then we'd be starting our companies in the Congo or Somalia or Afghanistan, but we're not. We come to places where there are lots and lots of customers.
Economics is a highly sophisticated field of thought that is superb at explaining to policymakers precisely why the choices they made in the past were wrong. About the future, not so much.
Economic growth is the aggregate effect of the quest to accumulate capital and extract profit. Capitalism collapses without growth, yet perpetual growth on a finite planet leads inexorably to environmental calamity.
No bank should be too big or too complex to fail, but almost any bank is too big to liquidate quickly, particularly in the midst of a crisis.
We used to think that you could spend your way out of a recession and increase employment by cutting taxes and boosting government spending. I tell you in all candour that that option no longer exists, and in so far as it ever did exist, it only worked on each occasion since the war by injecting a bigger dose of inflation into the economy, followed by a higher level of unemployment as the next step.
The real tragedy of minimum wage laws is that they are supported by well-meaning groups who want to reduce poverty. But the people who are hurt most by higher minimums are the most poverty stricken.
If bankers become overly conservative in response to past lending mistakes - or if examiners force such behavior - it will hurt bankers' own long-term interests and the economy in general.
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