Yes. Poor people are stupid.
Because poor people are stupid, they make stupid decisions. Their bad decisions only make their situations worse and leave them even more poor. And, of course, being even poorer makes them even more stupid, leading them to even more stupid decisions. It is a vicious, circular spiral.
Thank God poor people have government! Government has the power to take decisions away from poor people. This prevents them from acting upon their stupidity.
Some haughty intellectuals believe that all people, being created equal, should be treated equally under the law, meaning poor people have a right to exercise their stupidity, to make bad decisions, just like people with money are empowered to do (of course they don’t, being smart and all).
This type of idealist thinking is plainly cruel to the poor.
A caring society has a duty to rip poor people away from their ability to direct their own affairs. It’s for their own good and well-being. And it has the added benefit of making the rest of us feel benevolent.
Fortunately, there is a legal way to satisfy both the lofty intellectuals who demand that the poor be empowered to make the same decisions the wealthy do while still taking decision-making power from the poor.
You simply take the possibility of making the stupid decision away from both rich and poor. We just outlaw what rich people see as the stupid options.
This way we’re all still technically equal under the law, but it doesn’t really dis-empower the wealthy. Since wealthy people are so much smarter than the poor, they wouldn’t choose the stupid option anyway, changing nothing for the rich guy. It only stops the poor, stupid person from making the wrong choice.
It’s so very kind, really.
School choice is a fair example. Giving a voucher or scholarship to a poor family means that family could make the wrong choice for their kid and send them to bad private school. A wealthy family can already send their kid to a private school. Being smart, they’ll choose the right one. By taking away all educational vouchers it only stops choice for the poor. And we can sleep well knowing they can’t screw it up for their children.
The poor smoke at a much higher rate than rich people. This is a bad decision. So, we pile massive sin taxes on cigarettes to make them unaffordable for the poor. People with money don’t smoke at the same proportion (although they do seem to like their cigars), making the sin tax largely a non-issue to them. Raise it as high as you like. The more you do, the more you help the poor by dis-empowering them.
You’ll have the opportunity to help poor people this fall by dis-empowering them a bit more, to take away what sure looks like a bad decision. At least it looks that way to anyone with money — payday loans.
Proposition 111 will limit the interest a lender can charge a person for an advance on their paycheck to 36 percent per year. This seems like an obscenely high rate to lower it to — 36 percent? Who would agree to pay more than 36 percent for any loan? Obliviously only stupid people who have no money, who need us to save them from being exploited.
Getting a payday loan is an option of last resort, like a mom who needs to pay for a car repair today, but won’t get paid until next week. She can’t just put it on the credit she doesn’t have and can’t qualify for.
Payday loan guys aren’t saints, but their customers are in fact terrible credit risks. Many rack up massive debts to then declare bankruptcy, leaving the lender with nothing. To make up this loss, lenders charge wildly high rates and fees.
Prop 111 likely will pass easily and make voters feel virtuous. But to help people not be exploited by the payday loan shark industry, and also get money needed to fix their cars, the advocates of Prop 111 might want to put their money and efforts into a competing loan product to get small loans to people with bad credit.
If payday loan sharks make the profit margin alleged, any real competition should put them right out of business.
Unless of course you really do believe poor people are stupid. I don’t.
Jon Caldara is president of the Independence Institute, a free market think tank in Denver.