Poverty is Unaffordable. Really.

Warning! This will be a recurring theme…all of the things we can no longer afford. But we’ll start with poverty, because it has the happiest outcome. No more poverty!

Some people tolerate poverty because the Bible said so. I’ve always wondered whether Jesus’ comment was actually a comment on humankind. There will always be poverty because human beings are too self-centered to end it. Those with money, that is. Why give up a good thing?

Then there’s the belief (deeply held but hardly conscious and certainly not spoken) that poor people are poor because they deserve it. They are stupid or lazy or incompetent or something like that. Correspondingly, rich people earn the money they make. Every last cent.

I have two aunts who will tell you so. Both were (very) small town girls with minds and futures to match. They married men from slightly larger towns, and these men happened to have slightly larger minds. They became millionaires. Unfortunately, the women’s hearts did not increase with their pocketbooks. They believe the homeless deserve to sleep under bridges and every last immigrant should be shipped back (except the ones that clean their pools in Arizona of course). In their defense, their attitudes are not so different from those on Wall Street, who are convinced that their paychecks match their skills.

Research has clearly shown that income is related to all sorts of outcomes—health status, educational achievement, crime and incarceration. It is easy to see how my aunts could fall into the trap of thinking that the poor only have themselves to blame. But research has also shown that a tiny bit of money (gumball money for my aunts)—on the order of $50 a month-- can make a huge difference in the lives of the poor. For example, their children learn better in school, and the incidence of domestic violence decline.

Why might that be? Simplistic as is sounds…stress. One study showed that stress in school children (which can be measured physiologically) diminishes their short term memory skills. These skills are essential for learning. And here researchers talk about another factor of stress: demands on one’s attention. Researchers tracked air traffic controllers and found a direct relationship to the hecticness of their work day and the way they treated their children and spouse and home.

It is stressful to be poor in our society! And I would argue that we can no longer afford to keep people stressful. I don’t know about you, but I no longer want to pay for the costs in lost educational achievement, incarceration, welfare, and poor health.

Here’s an idea. Instead of paying people not to work (welfare or unemployment) how about paying them to work by giving them a wage supplement? They’re better off, our businesses will be more competitive, and the costs to society will drop. Besides, it costs $800 million in Minnesota to process income supports in Minnesota. Last I looked, we had a huge budget problem. And counting. Any chance it's related to this graph?

thanks to Trout Lowen for sending along the video clip

Who's Your Daddy?

Earlier this week, I met with employees from two of Ecumen’s senior housing locales, Centennial House in Apple Valley and Lakeview Commons in Maplewood. We were talking about the challenges of paying for long-term care when we age. A casual comment at Centennial House turned into a really important learning moment for all of us.

Linda, Barb, Peggy, Peggy, Mary, Lisa at Centennial House

Jessica, Audrey, Mary, Glenn and Joyce at Lakeview Commons

Nursing home care is expensive—as much as $80,000 a year, so it’s not surprising that people might need public assistance to pay for this care, which is uninsured. Most of the women (the group was all women) at Centennial House knew of someone who had turned to public assistance to pay for their care. I asked them—“How does this make you feel? Happy that your friends are cared for? Resentful? After all, public assistance is your money. It has to come from somewhere, and it comes from our taxes.”

You could feel the energy in the room shift as the women took this in. I heard comments like “Wow, I never thought about it this way,” “Hmm…I’ll have to think about that,” and “I always looked at it as beating the system, not as my money.” I asked them if they thought it was important for everybody to understand that the “system” is nothing more than our money. Yes, yes, yes, yes, yes.

And so they helped me realize how disconnected we have become from understanding our collective responsibility to one another, even though the evidence is all around us. It’s easy to point fingers at the family who turns to Medicaid for their long-term care or the family who runs up credit card bills, but this starts at the tippy-top, with dear old Uncle Sam.

The national debt now stands at $12.6 trillion and ticking (see the debt clock I've added on the side bar). That’s equal to $40,700 for every man women and child in the U.S. Do you have an extra $41,000 laying around for our dotty relative? Just where do we imagine repayment will come from? Baby boomers are about to retire, and for the most part haven’t even saved enough for themselves. If the demographics weren’t about to go upside down for the first time in the history of mankind (i.e., more elderly than children-- in 1950 there were six social security beneficiaries for every worker; it 2030, there will be 46) we could cross our fingers and hope our kids will pay for our excesses. Maybe the Chinese will take pity on us. Or maybe we can keep printing money and the Fed can experiment with negative interest rates. That would create a painless way of erasing our debt —people would pay the Treasury for the privilege of lending it money.

All of this doesn’t even count the looming Social Security and Medicare crashes ahead—both will become insolvent. Social Security’s cash flow could turn negative any year now. So what does our government do? It recommends giving Social Security recipients a bonus check of $250, for a total of $14 billion. I have no doubt that many retired people have trouble making ends meet. But the pocketbook is empty.

A recent study estimated the uninsured health care costs faced by a couple at 65 years of age for the rest for of their lives. I don’t want to bum you out if you didn’t know this already, but it averages $197,000-- $260,000 if you include nursing home costs.

I once was moderating a conversation about leadership with a group of nonprofit and government executives. Everyone agreed that things need to change, but no one seemed willing to be the one to do it. “What’s the barrier?” I asked. “Why not change?” One person replied, “It’s politically risky. I guess we would all need to hold hands and jump off the cliff together.”

Ahh, the power of those invisible cultural tentacles that bind us all to the status quo. Maybe, I’m wondering, the same is true of saving. Why be the only stupe to save? After all, according to the marketing whizzes, we deserve not to save! One of the women at Centennial House suggested that there ought to be a payroll deduction for savings for health care expenses in our retirement years. Most of the group at Lakeview Commons really liked this idea— as if they want to be forced to save. Maybe a group jump over the cliff is precisely the answer.

******

A big thank you to thank the folks at Centennial house-- Barb, Peggy L., Peggy B., Mary, Lisa, Linda and for a great conversation, and Janis for setting it up. Ditto for everyone at Lakeview Commons- Joyce, Jessica, Mary, Glenn and Audrey, and Andrea for making the arrangements.

Sci Fi Accountability

I was talking with an educator a few weeks ago. The topic was standardized testing and “accountability” and she said, “Let's face it. We don't do this for the kids. It's all for the adults-so we can tell ourselves we're doing the right things.”

Blow me away. In twenty years in public policy, I don't think I've ever heard such a spring rain statement. I hoped her admission might clear the air for some effective work, but unfortunately, she was resigned to the situation. Her logic went something like this. It doesn't help the kids. It's probably not right. There's nothing I can do about it. So be it.

Accountability is the big buzzword in government and among television commentators. President Obama must be held accountable. Toyota must be accountable and Tiger Woods must be accountable. But how does accountability work when no one is in control of the outcomes?

Few people I've met, including the leaders of reputable nonprofits and government agencies actually think they can change “the system.” They expect the governor or the legislature to do it for them. I once asked a large group of nonprofit leaders what their plan was for getting their agenda accomplished. They said, “The election of a new governor.” I replied, “I hope you have Plan B.”

What does accountability mean in a world where the problems are BIG but no one thinks the underlying system can be changed? What if the system is the problem? Was the CIA held accountable for 9/11? Was the SEC accountable for failing to investigate Bernie Madoff despite ongoing tips about his wrongdoing? We've become creatures of a new world order ruled by “systems.” Our systems have become the man-made artificial intelligence machines of science fiction that take over the world and cannot be defeated. We created them, but cannot change them. Health care reform be damned. (Even if it passes, everyone knows it's not real reform; the system lives!)

Our current version of accountability is part of the problem, not the solution. Yes, government should show positive outcomes with all of the taxpayers' money. The premise of the way we practice accountability, however, is incorrect. You cannot hold a system accountable because it's not a living thing-it has no capacity to act on its own, to make decisions. I'd like to hold the chair accountable when I ran into and bruised my shin, but really, the chair doesn't care. Neither does the system, which may be one reason people feel so powerless.

Face-to-face with the goliath system, we have cowered and substituted real accountability with three things: blame, paperwork and measurement. When something goes wrong, we look for someone to blame. Anderson Cooper is fond of asking, “And why has no one been fired over this?” Would firing someone have prevented 9/11? I doubt it. Being accountable should mean fixing the problem. But in systems where rules, procedures, and organizational and professional cultures suck you in like quicksand- there's no escaping- firing someone is a veneer of accountability that distracts attention from the real issue.

We have also equated paperwork with being accountable. Government agencies are fond of posting large incomprehensible spreadsheets on their websites, and then proclaiming, “It's all there!” Chances are, not even they can tell you what was accomplished from spending the funds just so. They may not even be able to explain the spreadsheet. When I was the director of public works for Saint Paul, I was appointed just in time to find out that the sewer fund had blown through $16 million of cash in a few years and the department was faced with borrowing to meet its cash reserve covenants. When I asked the accounting staff how this happened, they replied, “It's too complicated to explain.”

I had lunch once with a journalist. He quit his job as a county social worker because it was just paper-pushing. As he described it, he reviewed 18 page applications (reduced from 36!) that went like this:

Page one: are you poor?
Page two: are you sure you’re poor?
Page three: are you really sure you’re poor?
Page four: are you sure you’re really poor?
Page five: are you really sure you’re really poor?
And so on….

In the meantime, research has shown that it is very common for recipients in this system to be worse off the more they work. The paperwork may be in order, but as they start working, their loss in benefits exceeds their wages, so they actually have less money to take care of their family. What does it mean to be accountable in such a system? And accountable to whom? Is it not odd (and totally unacceptable) that being accountable to my family and being accountable to taxpayers work at cross-purposes?

And finally, measurement. It’s all the rage! Cities have become fond of indicator projects, which report key statistics to mark progress. Somehow, key has come to mean about 150 indicators (which suggests we don’t really have any priorities) and note, that nothing happens if progress is good, nonexistent, backwards, sideways, mirror image, whatever.

Of course you should fire bad employees (I did at Public Works), take measurements (I do this for clients) and keep your paperwork (I do my taxes religiously and honestly). But who am I keeping accountable? In every instance, myself. It is my job to do these things.

So if we want real accountability, we have to recognize two things. First and foremost, people are accountable to themselves. People will take care of themselves and their family first, because that is what we are indoctrinated (and required) to do under capitalism. Second, the only person I can really control is myself.

Can you build public policy under such a notion of accountability? Absolutely. Have we done it? A teenie weenie bit. The boogie man (aka the system) lurks.