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Income inequality and moral hazard, or why are the poor poor?


Those who consider the plight of the poor will think about why people are poor.  Some will say because of character failings, bad behavior, or the like while others will cite social and family circumstances, bad luck, or victimization by theft or fraud.  None of these explanations is completely effective at throwing light on the totality of the circumstances of the poor.

During the early nineteenth century in England, a change in general opinion about the reasons for poverty occurred.  The old moral hazard theory, in other words, the notion that sin causes poverty, was abandoned for the theory that poverty causes sin.  Consequent reasoning about the issue motivated a popular move to alleviate poverty as a Christian way to prevent sin.  This lead to reforming legislation and gradual improvements in the way the poor were treated.

Nowadays, however, conservatives have reverted to the old moral hazard theory, which basically states that if you are poor, it is your fault.  This reasoning decreases motivation for measures to alleviate poverty.  This also leads to measures to criminalize poverty, which have proliferated in contemporary America.  For example, laws that prohibit vagrancy are being considered or strengthened in many city halls.  Programs that help poor people, such as assistance with child care expenses so that a single mother can go to work, are drying up.

We should recall that no-one is in control of the circumstances of his or her birth.  Overcoming adverse circumstances is considered heroic because it is rare.  Failing to live up to the advantages of one’s birth, however, is common.  Being poor or rich is not necessarily a consequence of a person’s actions, whether they be constructive or destructive.   Therefore, a person’s moral worth should not be related to his or her net worth.

Most important, we have all inherited from our distant ancestors a sense of compassion and an urge to help our fellow human beings.  There is no sense in denying that this impulse exists, is strong, and is ancient.  I submit that the organization of an efficient mechanism for delivering compassion that includes everyone is only one more step up the evolutionary ladder for mankind.

That means, you guessed it, a Federal Department of Human Welfare, or if you prefer, a Department of Compassion.

Don’t buy that?  Well, here’s the capper: it’s in the Constitution.  The Preamble states:

“We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America.”

In addition, the power to pass laws that “provide for the general Welfare” is specifically vested in the Congress.

Please note the words: “promote the general Welfare” as in “Welfare.”  That means the  institution that Bill Clinton and Newt Gingrich agreed to “end as we know it.”  It is clear that those who would deny welfare to “ourselves and our Posterity” are breaking their oath to the Constitution and fighting against the greater forces of Evolution.

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