Poor people are just stupid (gotcha ! )
2013-08-31
Here’s a study that’s going to cause a lot of controversy: it shows that poor people can’t think as well as rich people, and it’s because they are worried about not having any money.
This wonderful bit of science was passed along through Science News, reporting on a study published in Science recently by an economist, Anandi Mani of the University of Warwick, Coventry, and her colleagues.
The Mani group did two basic studies: one tasking poor people and rich people with thoughts about money problems, and one following a group of people who were poor, then became temporarily rich after the harvest time.
The hypothetical experiment, evoking thoughts about money, revealed that when these thoughts were in the back of one’s mind, so to speak, one’s reasoning ability is diminished by about 13 IQ points, or the equivalent of a lost night’s sleep, but only if one is already poor. If one is rich, money concerns don’t affect one’s reasoning ability.
In the real experiment, farmers were tested before and after the harvest, which yielded an entire year’s worth of income at once. Before the harvest, when money was tight, farmers had relatively poorer reasoning abilities than right after the harvest, when money was abundant. The farmers were under relatively more stress before the harvest, but stress alone was not enough to explain all the lost IQ points.
The study apparently convinced most of the scientists who ran it that poor people need help with complex decisions: I quote from the Science News article :
” Policymakers should consider reducing or simplifying decisions poor people have to make, perhaps by providing help in filling out tax and welfare forms or reminders about planning for the future, says study coauthor and Princeton University psychologist Eldar Shafir. “Impose less of a mental load on people struggling with having too little, and they’ll be better able to deal with other aspects of their lives.” “
This suggestion would reverse a policy with welfare forms, for example, which are complex, difficult to fill out, and consume page after page of intrusive questions.
Personally, I think a more radical plan is called for: in short, I would call it “It’s not fair to gull a dummy.” It should not be possible for a person to sign a contract that is not in his or her best interests or is unreasonable. The legal minimum wage should be high enough for a person to support himself if he or she works full time; and full time employment should be required. Everyone should have medical insurance that they can afford. Taxes on wealthier people should be progressive, high enough to support welfare programs that actually lift people out of poverty.
After all, a rich person got that way by taking money from other people, albeit willingly. But he also got that way by being smarter and getting the better end of the deal; and the people he got the better of had to get the better of someone else to survive. At the very end of that chain of transactions is a poor person who has paid more than he can afford, not realizing that he could have gotten a better deal because his thoughts are consumed with worry about how he’s going to pay for food tomorrow.
There’s nothing wrong with being smart and making a deal that is good for yourself. At the same time, a smart person should realize that he or she cannot be a success without the help of a lot of other people and the support of government and infrastructure. No-one succeeds all by himself, and taxes should mirror that principle.
Instead, we have a total tax burden that is highly regressive (capital gains are taxed at 15% while ordinary income is taxed at twice that to start.) Never mind federal income taxes: let’s consider state sales taxes, a notoriously regressive system, and baseline Medicare and Social Security taxes. The “payroll tax” is not only flat, but disappears at higher income levels. If you add the total tax burden together, you find that taxes are indeed regressive in the US and contribute to the widening wealth inequality which threatens to tear this country apart.
As another part of this general principle, ignorance of the law should be an affirmative defense if the law can be shown to be obscure and the “crime” at least ambiguous. I give you one example: an illiterate immigrant deposited her meagre savings each week in cash into her mattress. Over several decades, this amounted to a hundred thousand dollars. Since the money was all in small bills, she was only able to carry about eight or nine thousand dollars at a time to the bank when she was finally coaxed into making a deposit.
The “Feds” confiscated all of her money and charged her with “structuring”, which by itself is a Federal crime, because she deposited just under ten thousand dollars at a time, about twelve or thirteen times. Now, structuring is what criminals do to try to avoid having the amount of ten thousand dollars or more appear in deposits, which is automatically reported to the Justice Department and noted. Such criminals, of course, are highly sophisticated and have almost always obtained the cash in illicit ways, particularly as payment for drugs delivered.
Criminals usually know better than to do things that get them caught, but stupid people think they can avoid reporting to the Feds, and get caught anyway because all transactions are recorded by a computer that looks for patterns such as multiple nine thousand dollar deposits. Innocent people are trapped in a web of obscure laws that try to criminalize every activity that might support crime.
I am relieved to report that the woman got a lawyer and managed to have her money returned to her; you can imagine that the lawyer’s fee was substantial. This incident was recorded in a letter to the New Yorker last week.
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Conrad Theodore Seitz 