Sorting Out Homelessness

 We were impressed with the turnout at the recent campaign event supporting the candidacy for governor of New Mexico by Deb Haaland.  After the event, however, Margaret commented on her surprise that the segment allotted for questions did not produce anything on the topic of homelessness.  That might have just reflected the short time available, but it still seems that the subject might have had a higher priority of concern.

It seems people may just be overwhelmed by the size and seeming intractability of the problem of homelessness.  Most efforts to combat the problem have often seemed superficial, or just  a shifting ot the problem from one locale to another.  

Estimates of the scope of the problem and ineffective remedies are probably mostly accurate.  Less clear are perceptions of the fundamental causes.  There seems to be a widespread tendency to ascribe moral and behavioral impropriety to the homeless, with an accompanying suggestion of a need for correction or punishment.  In fact, about half of the people confined in Albuquerque's jails are classified as homeless.

It seems more likely that successfully analyzing the fundamental causes of homelessness needs to look more broadly at historical and economic  trends.  That thought prompted me to submit a request to Google's AI Mode to produce a chart comparing the trajectories of homelessness and economic inequality since the beginning of the Reagan Presidency in 1981.

The congruence of the the two trend lines seems far too close to be ascribed to coincidence.

Comparing homeless rates among different countries and economies does not yield easily to statistical analysis because of different national statistical approaches.  However, some relevant facts emerge from queries about homelessness internationally.

 The U.S. has the highest income inequality of the major advanced economies. While its reported homelessness rate (approx. 23.1 per 10,000 in early 2025) is lower than some European peers, it has a much higher percentage of "unsheltered" homeless people living on the streets rather than in temporary facilities. In 2023, approximatel  653,104 people experienced homelessness in the United States on a single night in January. 

 Finland is widely cited as the only EU country where homelessness has consistently declined, driven by its "Housing First" policy. This approach provides permanent housing as a fundamental right before addressing other issues like addiction or mental health, rather than requiring people to be "housing-ready" first.  Since the strategy began in 2008, the country has successfully converted almost all temporary shelters into permanent housing units.  According to 2023 data, there are fewer than 3,500 people experiencing homelessness nationwide in Finland.

The Root Cause

I listened to a good broadcast this morning on Native America Calling about the high levels of homelessness among Native Americans and the setbacks in efforts to combat it all over the country.  Most discussions about the topic focus on bandaids to the problem, I think.

    The government economic aid packages of the Covid years reduced homelessness by a significant amount.  It seems pretty clear that homelessness has developed in parallel with the constantly increasing economic inequality in the U.S.  Reducing inequality should clearly be a priority in regard to homelessness, along with approaches to a lot of other chronic problems in this country such as medical care.  An important first step would be a massive overhaul of the U.S. taxation scheme.

Worthwhile Reading

The prices of most magazines has soared over the past few years.  I never buy any from newsstands or bookstores.  I am, however, able to follow a couple I like through online access provided by the Albuquerque Public Library.  One of those is The New York Review of Books.  The January 18, 2024 issue had a particularly good review by sociologist, Matthew Desmond, of three books about Tools to End the Poverty Pandemic.

Desmond describes some pretty amazing economic outcomes that accompanied the Covid pandemic which were overlooked by many of us who were focused on our own vulnerabilities at the time, and which have now been largely swept aside by other concerns of the moment.  The opening lines of the review provide a good summary of the messages of the three books:

"In normal times, the United States stands out among advanced democracies for its high levels of poverty and its low levels of aid. In 2019, right before Covid struck, America’s relative child poverty rate resembled that of Mexico or Bulgaria. Then, during the pandemic, the federal government enacted three enormous and historic relief bills. These reduced child poverty by an astonishing 57.5 percent, more than doubling the government’s typical impact and suddenly placing the United States alongside Germany and Switzerland on this score..."

real news

Big Media continues to keep the country focused on the antics of the Trump circus.  There are, however, alternatives which provide perspective on real problems and point to real solutions.  One of these is the on-going work of Thomas Piketty in compiling comprehensive data on income inequality and drawing rational conclusions from that data about how to turn around the country's destructive trend lines which have been going in the wrong direction since the 1970s.

Piketty, along with colleagues Emmanuel Saez, and Gabriel Zucman recently published a paper with a focus on those issues, “Distributional National Accounts: Methods and Estimates for the United States”.  An overview of the paper is available at the web site of the Washington Center for Equitable Growth.

Here are a couple excerpts:

"...To understand how unequal the United States is today, consider the following fact. In 1980, adults in the top 1 percent earned on average 27 times more than bottom 50 percent of adults. Today they earn 81 times more. This ratio of 1 to 81 is similar to the gap between the average income in the United States and the average income in the world’s poorest countries, among them the war-torn Democratic Republic of Congo, Central African Republic, and Burundi..."

"...Policies that could raise the pre-tax incomes of the bottom 50 percent of income earners could include:

• Improved education and access to skills, which may require major changes in the system of education finance and admission
• Reforms of labor market institutions to boost workers’ bargaining power and including a higher minimum wage
• Corporate governance reforms and worker co-determination of the distribution of profits
• Steeply progressive taxation that affects the determination of pay and salaries and the pre-tax distribution of income, particularly at the top end"

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Update:  Some additional information on the trajectory of inequality in the U.S. is presented in an article by Ben Casselman at the 538 site.

Where we are now.

At this moment between the end of the primaries and the final stretch to November it seems to be a good time to reflect on lessons learned.  My first thought at this point is that Bernie Sanders candidacy showed the usefulness of backing an individual, who though he may have not been faultless, nevertheless brought out a lot of truths about our society and brought together a diverse coalition of the left.  It is not surprising at this point that the coalition is breaking up into its component parts, but it seems to me that the Sanders run showed the importance of committing to an actual electoral effort.

Another thing which I think has been clarified by the contest is that none of the primary aspirants really addressed the importance of digital technology and its relationship to the economy.  For instance, there are significant relationships between technological developments and the need for patent and copyright reform, along with internet governance issues which hardly have been touched on in the election so far.

Sanders had good ideas about educational reform, but I don't recall him mentioning the revolutionary possibilities offered in that area by digital technology, or any real specifics about the distortions created by commercialization and monopolies.  Even with free tuition, there would still be many economic disincentives to education holding us back, one of the foremost being the cost of text books at all levels.  There is really no excuse for that to continue in this digital age.  India and Brazil have made huge progress toward making texts universally accessible in digital form and on line, and those examples could easily become part of the electoral conversation.

The Sanders team made some real strides in exploiting the possibilities for on line campaign financing from small donors.  Like the other candidates, however, I did not see Sanders exhibiting any real appreciation of the importance of the digital components of the economy.  Clinton obviously lacks an understanding of digital security issues.  Trump does not seem able to get beyond Twitter trolling.  All of them seem to be focused on rather low-level tech support and statistical and polling techniques rather than broader issues of importance to tackling economic development and economic inequality.  It would be nice to see the inclusion in their teams of economists, educators and social scientists with some real competence to address these issues.

gaps and bridges

Joseph E. Stiglitz has a nice little article today entitled The New Generation Gap in which he offers some explanation as to why the Sanders campaign has accumulated the overwhelming majority of the under-30 vote in the primary race.  I am not so sure the gap is a new one,  but I think it is probably right that it has widened.  As Stiglitz notes, the exponential draining of the middle class to fill the coffers of the 1% has had a particularly severe impact on the young who are faced with a difficult present and a glum future.  As a result, the young are well attuned to detecting political and economic bs and they are making their discontents known.

One bright spot in an otherwise dim and threatening landscape is the fact that the young own information technology.  It is hard to find an American under thirty these days who is not engrossed and proficient in the use of all kinds of modern communications tech.  My granddaughter was an expert tablet and pc user before she got to the first grade.

I understand the cynical view of many that a lot of high tech is a commercial cesspool and a distraction from engaging reality, but it also seems undeniable that it has been a great source of empowerment for the young.  Just compare the accessible sea of information being navigated by today's youth to the little ponds in which previous generations like mine swam. We had landline phones, tv stations fed by just three big networks, and scribbled notes exchanged furtively with classmates behind the teacher's back.

Not only are today's youth able to communicate effortlessly with each other, they are also able to access a staggering range of information and opinions from throughout the world on every conceivable subject, and little of importance seems to go unnoticed or unrecorded.  Powerful statistical analyses are presented in ever more concise graphical formats, and machine translation of all the major languages has made great strides in unbuckling America's straightjacket of monolingualism.

To be sure, powerful control over media is exerted by the big money players, but people like Stiglitz and those of lesser stature are still able to reach vast audiences to express dissident views and interpretations.  Using modern communications technology as an organizing tool may not be the exclusive property of progressive youth, but the transparency of the medium seems likely to tilt the board in their favor.

(For an insider view of the use of communications tech and how it meshes with campaign organizing see the article at The Nation, How the Sanders Campaign Is Reinventing the Use of Tech in Politics.)

when r > g

If you are seeking amusement, take a look at the critical responses in the Wall Street Journal's editorial pages to the publication of Thomas Piketty's Capital in the Twenty-First Century.  As might be expected, the WSJ commentators are not economists but rather business-schooled money managers.  Their arguments either ignore the inequality issues raised by Piketty or claim that obscene levels of compensation for CEOs have no significantly deleterious effect.  Much of the verbiage is devoted to an attempt to portray the French economist as a doctrinaire anti-capitalist Marxist.

What the WSJ folks do not do is to look at the central claim made in Piketty's work:

"Piketty uses a simple formula to illuminate the dynamics at work. Inequality tends to rise, he argues, when the average rate of return on capital exceeds the economy’s growth rate (or, as he puts it, when r > g)...

...Per capita growth for developed economies, Piketty believes, has settled at approximately its maximum sustainable rate, around 1 percent annually. That was enough to make people in the nineteenth century feel they were caught in perpetual revolution, but judged by the best of the twentieth century, or China and India today, it seems positively anemic. With growth reduced, escalating income inequality is all but inevitable without aggressive policy intervention."

Those are the words of Timothy Shenk in an extraordinarily articulate article in The Nation, in which the writer presents an analysis of Piketty's work in the proper historical context, which is totally lacking in the WSJ critiques.