US law professor exposes system that makes a profit from poverty

poverty cc 1

Consider that one of the classic forms of “welfare” in this country is also absolutely a form of corporate welfare too – food stamps. Many big corporations owe a large part of their bottom lines to these programs. In some places one can even buy McDonalds and other fast food directly with EBT cards. Years ago we did a story on how JPMorgan has EBT servicing contracts with states worth hundreds of millions of dollars.

Add in Walmart and other discount stores that see immense flows from government programs and one begins to see the picture. The poor are absolutely a revenue stream for many companies. Enough streams create a nice big river of (often taxpayer provided) cash.

The state exploits the poor directly too. For instance a $100 speeding ticket is enough to break some people. And the poor are often specifically targeted by law enforcement for these sorts of fines. But the cops, the private jail companies, the companies which process the tickets, the companies which maintain the speeding cameras have to get paid somehow. And sometimes the people with the least money are relatively speaking (when considering amount of effort per dollar) the fattest prizes.

Being poor can be very expensive.

(From The Guardian)

Against this backdrop, a new book published last week by law professor and advocate Daniel L Hatcher, The Poverty Industry: The Exploitation of America’s Most Vulnerable Citizens, exposes a largely unrecognised yet deeply disturbing additional dimension to the issue: the vast scale of disadvantaged people being fleeced for profit. In this meticulously researched book Hatcher, who has represented vulnerable people in court for years, including children in foster care, lifts the lid on a system that rather than helping the needy, systematically turns them into “a source of revenue”.

His summary of what he has coined the “poverty industry” is: “the private sector partnering with the state and local governments to use the vulnerable as a resource for extracting funds … strip-mining billions in federal aid and other funds from impoverished families, abused and neglected children, the disabled and elderly poor”…

…He reveals how freedom of information requests for contracts show children in the foster system blatantly referred to as “units”, with “data match algorithms” used to identify “which children would bring in the most money” in federal aid.

Ploys such as hiring private contractors to recommend ways to increase the number of children designated as disabled so the agencies that care for them can claim benefits on their behalf – with the money not going to the children – are common.

Click here for the article.