Matthew Desmond (on poverty)

Welcome, welcome, welcome to Armchair Expert, Experts on Expert. I'm Dan Rather and I'm joined by Modest Mouse. Hi. You're not really a modest mouse, but that is a great band, Modest Mouse.

It is a great band. Yeah. I don't think I'm a... It depends on the kind we're talking about.

Well, not in your style. Not in my style. Yeah, yeah. Me either.

I'm a beautiful, beautiful gray Burberry sweater that my friend bought me. What do you do that? My friend. Oh, your friend has great taste.

She has incredible taste and I am so grateful for her and modesty in this department. It's such a nice sweater. It is. I love it.

It's going to be softer. Okay, today's guest is kind of ironic. Oh, shut up. Shameful, actually.

Almost shameful. No, we got to keep it. Jesus. Matthew Desmond.

Matthew Desmond is a Pulitzer Prize winning author and sociologist. His books include Evicted, Poverty and Profit in the American City, The Racial Order, Race in America, and his newest book that's out now that we are here to talk about today is Poverty by America. Great fucking book. Hard, hard truths to confront.

Yeah. And he is a sweet, wonderful person. I love getting to spend a few hours with him. Yeah, and I wasn't here for this.

Same fish. Same day as Paul Giamatti. Yeah. But it was really nice to listen and learn.

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He's an old chaser. He's an old chaser. He's an old chaser. Cream top.

It's just gone. It's pretty damn delicious, Matt. You might want to give it a shot. There's a liner on the block.

I feel like I've got to go in there. And are you wearing a Shinola watch? I am. Look at this.

We're bound together. You have to have one. From Detroit. That's right.

Yeah. And aesthetically, I would get one anyways, I think. For probably the same reason you did. No, that's creamy.

It's an indulgence, for sure. I've got a Shinola watch wallet. Is there anything functionally different about it that makes it? Just a good stand-up wallet.

Okay, nice leather. Brown leather wallet. Had it for years. Oh, wow.

Okay, so it's standing the test of time. It is. And you're originally from Standing on a Corner in Winslow, Arizona? Winslow, Arizona.

I was born in San Jose, California. But really grew up in Winslow. Row Road Town. You ever seen the show Cars, the cartoon?

Yes. So that was modeled off of, like, our high school rifle. Oh, really? My town is like that.

Like a Route 66. Hence the Eagle song. Standing on the Corner. Winslow, Arizona.

I think he was actually in Flagstaff. Because Route 66? But I think Winslow was better pentameter in the song. It floated in the song.

So I think the actual corner wasn't there. But we made use of it. I'm telling you sincerely, Matt. I'm delighted to actually meet someone from Winslow, Arizona.

Simply because of the song. I've traveled this planet for 48 years and yet to meet someone from Winslow. Here it is. Flagstaff's not a metropolis, so I can only imagine Winslow is even less a metropolis.

Small town, one high school, right on the southern edge of the Navajo Reservation. You know, big industries there are railroad and prison. I think it was 10,000, 13,000 folks if you counted the prison population. My high school is, like, majority of Native American.

And dad was a pastor? Yep. It was the First Christian Church in Winslow, Arizona, which is basically a Baptist church. Small congregation.

And then he lost that job. Was there any propriety? There was no propriety. When you lose your job as a pastor, it does make a question.

I'm still kind of confused about what happened. That was tough times for our family. How old were you when that happened? I was in junior high when that happened.

Okay. Already a dicey time period, junior high. Yeah. Some guys are 5'11", like I was.

Other guys are 4'9". You were like the back row kid. Every parent felt bad for my mom. I'm like, oh, this poor woman's kid is flunked like three or four times.

But this is the guy with a mustache back there. Yeah, this is the guy who rode up on Harley smoking cigarettes. So then you experienced for the first time some major economic insecurity. We did.

And you bounced around from where to where. You lost the family house because of this? Yeah, before it was all the rage. Family declared bankruptcy.

And then the bank foreclosed our home. My child's home was $60,000. We just couldn't make payments. So it was a small, tiny ranch home.

And the family moved into a little tiny rental. I was in college at this time. So I remember going back, moving my family into that place. I remember being embarrassed.

Of course. I remember blaming my dad. One of the beauties of my job is taking these personal problems and making them political problems. I mean, like, this isn't just on you.

So this is paraphrasing. C. Wright Mills, he was a great mid-century sociologist. This is basically the mission of sociology.

A thing you think is on you. It's your fault. It's about something inside of you. To pull back the curtain and say, look, there's millions of folks.

This is a societal thing. There's a bigger game of luck. Right. There's a system in place that's producing this outcome.

And so then questioning the system that results in that. Despite all that, you found your way to college. It's ASU. Sun Devil?

ASU Sun Devil. My dad had a phrase. Whenever we saw someone like, they got to do some really hard labor, he'd turn to us kids and say, you want to do that for the rest of your life? Oh, yeah, yeah.

And then we'd be like, no, go to college. But there was no plan. There was just like an expectation. And so when it was time for me to go to college, I applied for my in-state colleges in Arizona.

If you graduate at the top of your class, you get tuition for free. ASU gave me the most financial aid. That was my choice. You arrived after they had shut down Flaky Jakes, right?

Flaky Jakes? You know Flaky Jakes? I know Flaky Jakes. I know Gus's.

I know Gus's, which is the best piece on Tempe. Yes, but Flaky Jakes was like the original photo record, so I'm obsessed with it. I go to Arizona as a kid because my stepdad was an engineer and he worked at the Proving Grounds, and the big trip was to go to Flaky Jakes and build your own hamburger. I have the warmest feelings for that, but it was directly across the street from the campus.

I miss out. Oh, man. Yeah, I had a hunch. I think I'm three years older than you.

You know Philly D's? You know Filibertos? No. You know Big Burritos?

You know Philly D's? Okay. In Santa Barbara, we had T-O Burritos. I know what the T-O Burritos is all about.

Yeah, so no one to really model this, but my mom did the exact same thing, so there was a very wealthy area of Oakland County where we grew up, and we would take pilgrimages out to Bloomfield Hills, and we'd pull in the driveways and look at Utah's, and my mom would go, these people went to college. That's interesting. You just knew you had to do it, but you didn't know how, kind of thing? No, she was really supportive.

When I graduated, I was like, I'm not going to college. I read on the road. I'm going to live in a car and write. I don't understand why we wouldn't need to go to college.

Broke her heart. I did find that way at UCLA eventually, because it came with free rent. The only ones for me are the mad ones, yeah. Yeah, yeah.

So when you're there, you're originally, you major in communications and justice studies. That's a triggering study for me. Yeah, yeah. It was kind of a pre-law degree, but it was interesting because, you know, if you want to be a sheriff or go into law enforcement, go into FBI, you took those classes, too.

The students of those classes were really politically diverse. You had folks that were very pro-law enforcement, and you had folks that were much more kind of pro-social justice. The conversations you had in those classes were really heated and interesting. I bet.

I would even guess that ASU is a little bit more politically diverse, just as a baseline. Yep, totally. There's way more white people. I think I just read a statistic that only 20% of current students are conservative, but I would imagine at ASU it was more like 40-60 or 50-50.

And it was taught by a law professor. He's a law professor now. His name is Donald Tibbs. And he started the class.

It was just about tort law. Boring. Yeah. And then one class, it just switched, and it became about racial inequality.

Years later, I realized what he was doing. He was making sure the drop deadline passed, so the folks that needed to be in their class. Yeah, yeah. Get them over a barrel.

That was an important class to me. That was one of the many classes I took where I was like, really? This is how it is? And so we grew up where money was tight, but we always had the story of what America was like.

So I got to my church and my boy scout troop. It was the American dream story. And I was one of those kids that went to college. It was kind of having my mind blown.

And so when I wasn't working, I worked all through college. Some fun jobs, by the way. Yeah, some fun jobs. Barista, firefighter, telemarketer.

I too was one of those. Did you make a sale? Yeah, well, I had two versions of it. One is my father invented subleasing in Michigan, so it was right at the birth of leasing cars.

And people were getting these six-year leases, and they wanted out of them, but there was no way. So we would call people who were selling a car in the newspaper for 16 grand. I would look at the Kelly Blue Book value. I know they owed 18,000, and I'd say, would you like us to take over the payments?

And I was 14, and I would be convincing people to transfer ownership over my father. And then I was raising money for Hugs, Not Drugs as a telemarketer. The thing that blew me away about telemarketing is it works. And I'd get folks on the phone, and I remember my first sale, and I was like, really?

But you're probably discovering something that now later comes into this book, which is you're probably noticing who says yes. And it's heartbreaking. Yeah, a lot of lonely folks, yes. A lot of lonely folks, a lot of not-worldly folks, a lot of confrontation-adverse folks.

I think even me immediately was like, ugh, I don't love how I feel about people saying yes. That's right, it didn't make me feel good. But my truck broke down, and I needed it. That's right, those old F-150s are troublesome.

Okay, so what turns you on to sociology? Why go get a PhD in? I'm hanging out, just kind of like, what's this about? This is very peculiar and deserves a dig.

You would acknowledge that's a very abnormal thing for a college student to do. Yeah, I think there was part of me that was like, go to the street for your answer. And I think that instinct is certainly pretty okay. But you can even relate to that tiny bit, right, at this moment.

And we chose different paths, which is I had to do an ethnography on the homeless as part of my anthropology degree. So I went down to Skid Row, as we would professionally call it. I know there's 13 shelters there. You know, there's just thousands of people.

And I mailed around, and I talked to people in my own shelters. And my conclusion was, mind you, I'm an addict. I'm like, there's almost nobody here who's not an addict. This is an addiction problem.

I just was like, this isn't me and my mom and my brother and my sister out on the street. That's not what this is. This is a mental health crisis and an addiction problem. And so many of them are on disability.

And they actually are housed with a relative until they get their disability check. And they come downtown, and they're just there downtown getting high. And so the money runs out, and they go back. And mind you, I only spent a month doing that.

But that's my nature was to go like, oh, I don't even think we're talking about what the two problems are. And I don't hear anyone proposing. What was it we're going to do? Mass mental health?

You know, and I just was like, oh, it's overwhelming, and nothing can be done. And it's not really about more houses. And you went in a completely different way. I guess maybe.

Have you had homelessness as a housing problem? No, I have not read that. You know, he does these analyses where he's like, is it drugs? Is it mental illness?

And what you find is that there's a lot of folks struggling with addiction all across the country. A lot of folks that are suffering from mental illness. But that doesn't manifest as homelessness. It does in a place like L.A.

Because what it is, it's just rinse. That's what the thing is. It's abstract rinse. So another shocking statistic that's come out about the L.A.

homeless is that 40% are from the foster care system. Yeah. What you said earlier, too, is these kind of failing systems. There's a system of addiction that we're failing at.

There's a system of mental health treatment that we're failing at. And, you know, for these young folks that are aging out of foster care, they're giving 500 bucks and a pat on the back. No, it's devastating. That's my issue.

It's like, well, you want to say 35 years later when we fail all these people, we're going to give them an apartment. And that's going to work out. To me, it seems a little naive and a little unrealistic and not totally honest. And so for me, I donate the whole war chest to upriver solutions.

I'm a little pessimistic about the downriver solutions. The downriver solutions are tougher. Because, you know, for every day you're spending outside, your problems get a lot worse. And the likelihood that they can stay outside increases.

Yeah, so the new study out of California that shows a lot of folks start taking drugs after they become homeless. Because it's scary. They want to stay up. They start juicing.

So then the problem is accentuated and doubled. Can I add one thing I think is also the problem is we're using one word to describe what is 55,000 people in L.A. I don't know what the number is, but it's something like that. And you have such specific groups within that.

You have a lot of people which your book addresses. People are like two checks away from being affected. That's one group. They're actively striving to have housing.

I wish we could separate out these different groups a little more surgically and delineate the difference between those groups that I do think exist within the overall group. Yeah, right policies for the right people. Some folks, they just need a pretty shallow intervention and that really matters. Some rent forgiveness for six months.

Some legal aid. Some folks need a much deeper intervention. Yeah, and it's hard because the policy is supposed to address everyone. In California specifically, a massive attack on the high level of rents would really make a difference.

It seems like the evidence is there. Okay, but can I just push back a little bit? Yeah. The world's on your side.

So I'll be the one that looks like an asshole about this. But I also have a little bit of an issue in this national debate, which is it ignores the market. The housing market? Adam Smith's invisible hand.

So does everyone have a right to be housed in Beverly Hills? I think we would all in the service go, no, that's kind of crazy. You don't have a right to live in Beverly Hills. That seems fundamentally flawed.

I don't know why the goal is to get all the people housing in the most expensive cities in the world. Let's not send them all to Tokyo and Singapore and Beverly Hills and San Francisco and LA. That seems really illogical. Does that make any sense to you, that objection?

Tokyo's different. Tokyo's a pretty affordable city for the size and desirability it is. Our expensive cities don't have to be like this. And if you go to other countries, you see very desirable, very awesome cities without this level of homelessness.

Okay, it's already getting fun. Yeah, what makes the difference is in places like New York, LA, San Francisco, people have just been completely priced out of their own communities. And that's the thing. So we used to think, okay, people are coming to San Francisco to be homeless.

They're coming to Portland to be homeless. That's not true. So a lot of folks are coming to Portland because Portland's awesome or coming to San Francisco because Central's awesome. But I mean, a huge study came out of San Francisco Chronicle last year that showed that most folks who are homeless in the Bay Area are from the Bay Area.

Things happened, you know, and they just couldn't get back in. That's where their family is. That's the place they know. That's where their friends are.

Their networks are. It's a really scary thing, I think, to be thinking of like, hey, why don't you move to Cleveland? But homelessness is so bad and so traumatic. I do wonder why there's like a stickiness in super expensive cities.

But the Beverly Hills thing is interesting because like, no, I don't think anyone has a right to live in Beverly Hills. But does Beverly Hills have such a right to exclude so many people? That would imply there's a nefarious overlord that's making that decision. It's just literally, what is the price of a house there?

There's only laws. There are laws in most residential land that says it's illegal to build a district in the middle of Rio. Yeah, or to build decent multifamily housing. Yeah, that's true.

And so a lot of times these debates kind of ignore the fact that on most residential land, you literally can't build a affordable house. That's something that we have to confront, too, if we're going to get serious about this. And this is where California is like, are we in a progressive state here? Well, but look, I live here and you don't, right?

It's really relevant. I hear people be critical. And if I didn't live here, I would be, too. I drop my kids off at school.

Literally, dozens of times there's people taking a shit right in front of the school. That's my life. We have thrown a ton of money at this. We have rent control.

We have had liberal policies. And we have watched the rate of homelessness increase, increase, increase, increase. So the approach isn't working. There's data in San Francisco that if you combine the state revenue and the philanthropic efforts, that they're spending an average of $60,000 on each homeless person.

And it's increasing. So that can't be ignored. The policy, and I'm going to add one thing that's going to infuriate. Month four of COVID lockdown.

Driving around LA. And I noticed, and I say to my wife, where are the homeless people? Literally, where are they? They're gone.

So I thought, has there been a massive FEMA? Is there a tent somewhere? Have they gathered everyone to take care of them during this lockdown? Start looking in LA Times, researching.

That doesn't exist. And all of a sudden I go, oh, I know what happened. There's no one on the streets to panhandle from. And humans aren't going to sit on the street and die of starvation.

They went somewhere. They went to a relative. They left because they couldn't sustain without the pain handling. Just interesting that we have no support and they're gone.

We have a ton of support and it's growing. Yeah, I don't know what happened. Yeah, I don't know what happened. I do know what happened in cities like Houston that have massively reduced homelessness.

The Houston reduction in homelessness is a real thing. And it seems to have been driven by this massive coordination effort across social services industries in Houston and the fact that Houston has no zoning laws. It's the fourth biggest city in the country and it's way less expensive than other large cities in America. And so they're able to get folks housing quickly and efficiently.

So my solution to this is look at Houston and look at all the evidence of the housing first programs. You're right. We are spending so much money triaging this problem. The top 5% of hospital ER users consume half of all ER costs.

Guess who they are, right? Homeless folks with serious medical conditions. Just from a sheer heartless, what are we spending our money on perspective? Regardless of the human moral argument, we have to get serious about this.

My solution is housing. Now, housing isn't going to solve many of the other problems, but there is a lot of evidence that when you say, OK, this guy's dealing with a lot of stuff, let's get him housed first. Let's start there. And then let's address addiction issues or health issues, mental health issues.

That can really work. So another big pushback you'll hear from conservatives here is that we have tons of unfilled beds because people won't piss clean. If you've got to piss clean to be somewhere, you can't be there. And we have a ton of empty places because of that.

But I understand what you're saying. Let's just start here. That's not the housing first, right? That's the get clean first.

Yes, yes. And so it's kind of like, all right, that's an issue we want to address. But the primary issue is let's get a roof over this person's head and then let's start on these other issues. I thank you for placating me.

You've won a Pulitzer writing about eviction and the housing crisis. I want to acknowledge that. I appreciate it. I want to acknowledge this part, though, that you talk about living in California, because I think this is something that does get to the heart of it.

And it's also about this kind of recognition that poverty, it drags us all down. Yeah. I mean, I feel bad for the police. I feel bad for the city workers.

I feel bad for them. It's heartbreaking. It puts you in this very bizarre position as a parent, which is you can't take it on. It's overwhelming to the kids and to you.

So you put up a wall. That's weird. You're ignoring human beings. The whole thing is a mess.

You're right. It impacts everyone. It diminishes the hall. Yes.

For me, this is really important because a lot of times when we talk about ending poverty, we kind of say, hey, it's the right thing to do. It's also like, don't we want a safer, more vibrant, healthier country? Yeah. Yeah.

My little girls will walk to the store and like, they'll cross the street three times because there's someone fighting a bird scooter. Shit's popping at all times. But I agree with you. It's maddening to me that people won't acknowledge the downriver costs of not dealing with it, which is like, you think you can just go and not dealing with it, but you are.

Unless you're going to change the policy at the hospital that we don't take people without insurance, which is never going to happen. Of course, we're not going to turn people away dying. So once you admit that, then you have to work backwards from that. What does that cost?

And same with prison. It's very expensive to keep someone in prison. So all of these things, even if you're economically conservative, you should be able to acknowledge it's a much better investment to do it upriver with what we do with kids in foster care, what we do with helping parents who are struggling. It would be much cheaper.

And the outcome would be so lovely. The outcome would be lovely. Yeah. And so this is where I'm writing about public poverty and private populace.

A lot of rich people living alongside a lot of poor people that creates this momentum where the rich kind of withdraw from the public sector. Yeah, build bigger walls. Build bigger walls, you know, buy our own schools, buy our own parks, buy our own pools. And suddenly the public becomes degraded.

And that actually affects everyone, including those of us pretty secure in our money because our kids have to cross the street three times or because we can't enjoy our public parks like we used to, or because we just feel implicated, right? It's like, I find there's this thing where people of privilege have this very patronizing tone with waitstaff and service workers where they're overly nice. And oh, and how was your day? And how was your weekend?

Yeah. They don't do that to the doctor because they know they're paying their doctor. They're like, we pay you. I don't have to fucking placate you.

I wouldn't say all the time. Oh, that's great. That's them feeling guilty. That's right.

I think a lot of us don't want that. I really do. Yeah. I think a lot of Americans want this conversation in part because they feel complicit and broiled in these morally compromising relations.

They don't do that. Yeah. And if I'm being my most selfish person, I go like, well, I'm giving half my money away. I'm happy to do that.

But also there's a frustration where it's like, well, I'm giving half my money. What could fix it? It doesn't appear that money could, but we'll get there. All right.

I think first we should define poverty because that's what the new book is. Greatest title ever. Poverty by America. So poverty by America.

I think first we should know what we're calling poverty. And there's an interesting background with the government employee. So technically poverty is an income level. And so Johnson launches the war on poverty.

We have no idea how many poor people are in America. Suddenly it's like, well, how do we know if we're in the war? And so social security administrator named Molly Orshansky, she's like, all right, poverty is, you can't afford basic things. There's nothing more basic than food.

And so she takes this basic food budget, says if a third of more of your income goes to food, you're poor. And that's literally our official poverty measure just for inflation over the years. If you use that measure, family four falls below about $29,000 today. They're poor.

There's 38 million Americans under the line. Yeah. You said if our poor were a country, they would be more numerous than Australia or Venezuela. That's right.

But also like notice how low the poverty line is. You know, $29,000 in LA. You can double that. And you're still facing pretty significant hardship.

Absolutely. You couldn't do it realistically. But for what you're talking about, what you want to tackle, what will we add to that? Are we going to use that?

No, we shouldn't. That's just the start. It's like what the poet Leila Longsoldier said. It's the boil on the surface.

Poverty is like tooth rot. It's like your cousin getting roughed up by the police. It's the navigating fear of eviction. It's giving your kids not enough food to eat.

It's literally death. Come early and often, studies show that poverty is the fourth leading cause of death in the United States. So for me, poverty is a pile. It's this problem on top of this problem on top of this problem.

It all goes together. And so it's much worse of a problem than often we think. It's the reduction of people born for better things. And just to put it in perspective, I think the really reasonable question you're asking is, OK, so we have 38 million people living below the poverty line.

Yet if you take our GDP, it is bigger than two through seven combined. Japan, Germany, England, India, all of them combined. We are bigger than. So how is it that we could have both ends of this enormous spectrum?

We're by all accounts the wealthiest democracy of all time. And we have the most amount per capita people below the poverty line compared to other rich democracies. So that's the thing that makes America a disgrace class on its own. Like our child poverty rate, the share of our kids living in poverty, it's not just higher.

It's a double. One in nine Americans is in one in eight children. I was shocked to read that a million school children right now are homeless. And that two million don't have running water or functioning toilets.

Two million households. So it would be at times however many people live in there. Those are staggering than when you look at the opposite of our wealth. Yeah, totally.

Economists have estimated that you need $4 a day to afford the very basic bare minimum necessities in America. Five million of us get by on that. There's a lot of abject poverty in America. Just real, truly horrendous poverty in this nation of dollars.

And that's the thing that's so confusing and raging to me because it means that it's unnecessary. Do you think it's something that's accelerating in that as we get more segregated, we get less and less aware of it? Like I would imagine these will be shocking numbers as they were for me. And by the way, I'm from a lower class area of Michigan.

Half my childhood was hanging out in trailer parks and dirt roads. But even I wouldn't have guessed that two million people don't have running water or flushing toilets in a household. Rather, two million households. Where the million kids are going to school, waking up in a car.

I think the increasing economic segregation does blind us a lot to other people's poverty. And it's like what happened when Michael Harrington published The Other America 60 years ago, where it was really this way of revealing how many poor folks really were in America. And it's shocked the American middle class and upper class. And I think that we should be shocked still today.

You know, America for a chunk of the country works great. And it can feel like it's really working. And when I hear folks say like, the American dream is real, you know, it's because you're in the front of the plane. But I do think that kind of chasm that's defined American life can really blind us to this other layer of what America is to.

I, of course, I'm in that boat. I have achieved the American dream probably times 10. You have. You're a professor at Princeton and we're at Harvard.

So you two have done it. And for our own story, it does feel threatening to admit that we aren't the rule or the exception. That if you look at the gross data of how much actual vertical movement there is within socioeconomic categories, it's almost non-existent. It's a coin flip today, basically.

Whether your kids are going to do better than you. It wasn't like that in the 50s, 60s, 70s. But today, social mobility has declined. There's like more American dream outside of America in some countries than inside of it.

So you write this great book, Evicted. You went to Poulter. You've been studying forever. You've been interacting with folks in poverty since you were in college.

And A, you had no explanation for what was going on when you finished this, right? You had no idea of the theory of why it is this way. You left Evicted still with this question of what is actually causing this. Yeah.

And previously, every attempt at looking at this really focused on the poor. And you took a different approach. Yeah. No, you're right.

You know, I was spending all of my time researching poverty. I was talking about it. I was teaching classes on it. I was just convicted.

And I was like, look, if someone stopped me in the street, I was like, all right, Matt, break it down for me. Why do we have so much poverty here? How can we get rid of it? What would be my answer?

I just felt like I have to have an answer to that. So in a way, like I wrote this book to get it out of my system. I had to get it down for myself. Yeah.

And I felt like for over 100 years, we've focused on the poor. They've asked a million questions about their work ethic and their families and their welfare dependency and you name it. And I felt like there was a bigger game afoot. And if you wanted to understand the causes of poverty, that's not where you look.

You've got to look elsewhere. Now, first, actually, I would love for you to do the analogy of the people jumping out of the burning building. Right. So this comes from Tommy Orange, California writer.

And he has a novel there, there. And we should have been focusing on fire. Who lit it? Who's warming their hands by it?

So this is a book about the fire. This is a book about how the other half lives. Right. What we have to recognize is that the American poor live in the epicenter of global capitalism and they have access to a bunch of cheap goods and services like the rest of us do.

And so Michael Harrington once wrote, it's easier to be decently clothed in America than decently housed or fed or doctored. I think that's still the case. Easier to have a 70-inch TV? Yeah.

You can get a 70-inch TV and a cell phone pretty cheap. But do you have a dentist? Right. It even screws with me growing up in the 80s, which is only rich people had this 27-inch zenith color TV.

Some people didn't have a phone line. So when I look around, I'm like, well, people have everything now. It's kind of misleading. But you just can't eat a cell phone, right?

Right. You can't trade that TV in for a living wage. You can't trade those sneakers in for affordable housing. And so I think that social progress, technological progress, gives us the impression that, gee, when I was a kid, no one had a cell phone, no one had a computer.

I remember when our family got our first computer. And as those things have been more accessible, that can give us the impression that no one's poor anymore. But all these basic things, housing, health care costs, the cost of education, those things have gotten more expensive. And so the things that are the most important to our thriving have actually gotten further out of hand.

Stay tuned for more Armchair Expert, if you dare. So given that that's the case, how are we assessing it? And what is your personal opinion? Has it increased or decreased?

Where are we at in the historical continuum for this country? Okay, this is a big question. So forgive me if I go into Professor Motenai. I love it.

This is my free continuing education. So if you look at the official poverty measure, what the government uses, that measure has basically stayed the same over the last 50 years. But that measure's a lot. It doesn't account for government spending, like on food stamps or housing assistance, and it doesn't account for cost of living differences.

So $27,000 in LA and $27,000 in rural Mississippi are counted the same. That didn't make a lot of sense. So in 2011, the government put out another measure. It's called the Supplemental Poverty Measure, and it says we're going to account for living expenses, and we're going to account for health care expenses, and we're going to account for government aid and transfers.

So those food stamps and housing assistance, you get it, we're going to count that as part of your income. When they release those numbers, America officially gained 3 million more poor people. Well, that had to be counterintuitive. It was counterintuitive, and it was because the rising cost of health care and housing costs outpaced what the government was doing.

And if you use that measure, the Supplemental Poverty Measure, you still see a pretty flat line over the last 50 years. Now, this scares people, because government spending on poverty has increased. 37% from 1998 to 2017? 237%.

Oh! These are means-tested programs, per capita spending, and they're inflation-adjusted. So these are things like Medicaid, food stamps, housing assistance. Between Reagan and Trump, you get an over 200% increase in spending.

Most of that's Medicaid, Medicare. Most of that's health care spending. But even if you take that out of the equation, you still see an over 100% increase between Reagan and Trump. So if you're spending more and poverty is not changing, that makes people super nervous.

I think there's a deeper paradox. There's a ton of evidence that government programs work. They're lifesavers. They lift millions of families above the poverty line.

But poverty is so persistent, in part because the labor market isn't pulling its weight. Explain that a little bit. So if you think about when the War on Poverty and Great Society launched in 1964, they made huge reductions in poverty. They basically cut the poverty rate in half.

They did so by expanding food assistance, expanding Social Security massively, Medicaid, Medicaid refounded, Job Corps. These are deep investments in the poorest people. Cut poverty in half. But they didn't do it by themselves.

One of three workers belonged to a union back then. The middle class was right. Wages were climbing. Even folks at the bottom of the market were getting pay raises consistently every year.

We experienced this economically equitable time in our country. But as our jobs got a lot worse, as unions lost power, the job market has turned anti-poverty programs into something like dialysis. They help, but they don't attack the fundamental root causes of poverty. There's also this thing that's happening where I feel we're spending more to stay in the same place.

It's because we're not going to the root cause. So the Great Depression hits. What do we do to address it? We strengthen the unions.

We regulate the banks, right? We have an intervention that really tries to get at the heart of the problem. Those are a ton of government-funded industries, the WPA and all these other programs. But since then, we've kind of turned to programs that aren't really intervening in these markets.

We're just helping. Now, I want to be super clear. These programs are essential. They do really work.

Like housing assistance or the earned income tax credit, which is like a bump, a pay raise for our poorest paid workers, or food stamps. And food stamps are just incredibly anti-poverty. It's rare that you say a lifesaver, and it's not a metaphor, but this is a literal lifesaver. So I think this is the paradox that we actually have to lean into and take into account.

This all started because you asked me how to measure poverty. And there's also measures that show poverty is going down. We can talk about why they technically show that or not. But for me, let's look at actual hardship measures.

So evictions have increased about 20% since 2000. The share of families visiting food pantries has increased about 19%. Since 2000, the number of homeless public school kids has increased by over 70% since the Great Recession. These are pretty troubling signs.

So it does suggest that something is really broken in our society. Let's look at what the book focuses on, which is the other half and how we profit from this, which I think would shock some people. Let's talk about 2008 really quick. You have a line.

Poverty was positioned as a cause of it instead of a consequence of it. And that's not ringing a bell because I probably didn't get the call from it. I'm reaching, I'm reaching. But anyways, this happens to be one of my, for whatever reason, a thing I got obsessed with in 08 during the collapse.

And I started in a place that was probably like a lot of Americans, which is like, oh, these assholes went and fucking got these subprime mortgages and bought houses they can't afford. And now they're defaulting on the debt. Then I learned that there was some deregulation. And then I learned that the bank lenders were actively pursuing a class of borrower, full sales forces deployed to convince these people to take on these loans because of a regulation going away and come to find out all those people that sold that paper didn't even keep that paper.

So they're not even defaulting on these people who sold them the loan they committed to. They bundled that up and they made mortgage backed securities that they had then offloaded to Germany. Everyone made money along the way and Germany is holding a significant percentage of these. And then I come to find out, well, that whole mass of toxic loans really only amounted to something like 85 billion or I forget what the number was.

But then on top of that had been built $2 trillion in derivatives of financial products, one of them being credit default swaps, where you can actually take out an insurance policy on an investment you don't even have and come to find out that $1.4 trillion was bet against all these stocks and mortgages and securities that they didn't even hold. That that's a fucking product in our financial system. And that that was the actual collapse. And that there are legions of people.