Preet Bharara:

From CAFE and the Vox Media Podcast Network. Welcome to Stay Tuned. I’m Preet Bharara.

Matthew Desmond:

Aren’t we part of the issue, which means aren’t we part of the solution too? So I think the blunt fact is, in America, some lives are made small so others may grow. And we have to just face that fact if we want to really end poverty here.

Preet Bharara:

That’s Matthew Desmond. He’s a professor of sociology at Princeton University where he specializes in the study of poverty. You might know Desmond as the author of his 2016 book, Evicted, which won the Pulitzer Prize for its incisive examination of poverty and housing policy in America. Now he’s turned his attention to a broader canvas with a new book, Poverty, By America. In it, he explores the often overlooked ways poverty is entrenched, from tax codes to bank fees to certain federal policies. Professor Desmond joins me to discuss all of that. We tackle the efficacy of past government programs, the challenges of passing anti-poverty measures through Congress, and the intriguing idea of instituting a poverty czar. That’s coming up. Stay tuned.

Before answering your questions, a quick programming note. I’ll be discussing the gut-wrenching Israel Hamas War with Aaron David Miller of the Carnegie Endowment for International Peace in a special episode of Stay Tuned in Brief, that will be released on Friday instead of Monday. Now let’s get to your questions.

Q&A

This question comes in an email from Elisa, “Dear CAFE team, I’ve heard the defendants have a right to a speedy trial. Does this right extend to prosecutors? Can Trump delay his trials till after the 2024 election? Don’t the people/prosecution have the same, right? Can we not demand these trials happen in speedy fashion? Thanks. Deep gratitude for keeping us informed and staying tuned.”

Elisa, that’s a great question, one that we’ve talked about a little bit on the podcast and it’s in fact an argument that has been made in federal court in Washington, DC with respect to the pending trial in the January 6th case brought by Special Counsel Jack Smith. As you may remember, that trial date has been argued about between the Trump team and the special counsels team for a number of weeks now. And the government very specifically said that although it is absolutely true for very important fairness reasons and constitutional reasons, that a defendant, if he or she wants one, is entitled to a speedy trial. That right also extends to the public and to the government.

And I’ll say something here that I’ve said before but it bears repeating, the particular reason why we need a speedy trial with respect to Donald Trump in all four of the matters, but certainly with respect to the federal matters, is that the clock is ticking and accountability may not even be possible if the clock ticks too long.

By my estimation, there are at least three ways that Donald Trump can avoid accountability or any kind of trial altogether potentially if the trials don’t happen before the election and if he becomes president again. Number one, it would be controversial, it would have to be litigated, but he might seek to pardon himself preemptively and therefore eliminate the two federal cases against him. Number two, with respect to the federal cases again, he could appoint someone as the Attorney General of the United States, and almost certainly would, who would seek to dismiss the cases and not prosecute or pursue them in any way, shape or form. And number three, and this applies to all four matters, the two federal cases and the state case in Georgia and the state case in New York, he could argue likely with some success that the same OLC opinion, Office of Legal Counsel opinion in the Department of Justice that prevented Bob Mueller from prosecuting Donald Trump while he was the sitting commander in chief, would also prevent the continued prosecution of him in any one of those four cases.

So you are absolutely right. The speedy trial right belongs not just to the defendant but also to the government for very specific important reasons as I’ve outlined. Now, will Donald Trump succeed in delaying one or all four of these trials to after the election? He’s certainly going to try. I think without question, we will not be able to get through all four trials. Whether we get through any is something we have to stay tuned for.

This question comes in a Thread from Thread user @mattwendorf, and the question is, “What are the chances Jack Smith tax on additional charges based on new reporting that Trump shared sensitive nuclear information with foreign nationals?”

Well, that’s a great question. Arguably from what we see from the reporting initially by ABC News and now confirmed by other sources as well, is that Donald Trump very deliberately told confidential secret classified information to a billionaire Australian businessman, specifically about the nuclear capability of our submarines, in particular, according to the reporting, the specific number of nuclear warheads that those submarines carried and how close they can get to Russia without being detected. The conversation apparently occurred in the context of Donald Trump suggesting to the Australian businessman that his country should buy submarines from the United States. The reporting also says that the Australian billionaire told literally dozens of people this information that was told to him that shouldn’t have been by Donald Trump.

Now is that a violation of law? It sure seems like it could be. To your particular question, would it be added to the pending case in the Southern District of Florida? I guess there’s a chance of that. I guess there’s some argument that it doesn’t relate to the same nucleus of facts relating to the documents. This is not about retention of classified documents, it’s about the relaying of classified information to a non-US person who was not supposed to be in possession of that information. My guess is, and this is just rank speculation on my part, that in the interest of getting the trial done efficiently based on the charges already brought, that you wouldn’t want to add these particular charges. Maybe you don’t need them, maybe you reserve them for another time.

There’s also the complicating factor of the sensitivity of the information that was conveyed. And it might be difficult in the government’s estimation to bring that case to trial if they want to keep that information that’s highly, highly sensitive with respect to nuclear warheads and our submarines keep that out of court and it may not be worth it at the end of the day, given that they already have a substantial, powerful, strong and streamlined case with respect to the documents already pending in the Southern District of Florida.

I’ll be right back with my conversation with Matt Desmond.

THE INTERVIEW

Despite being one of the wealthiest countries in the world, the US grapples with a significant poverty problem. Princeton’s Sociology Professor Matt Desmond studies the origins of the issue, exploring why poverty persists in such an affluent nation and the solutions to eradicate it. Professor Matthew Desmond, welcome to the show.

Matthew Desmond:

Thank you, Preet, for having me.

Preet Bharara:

So I don’t think we talk about this issue enough. We’ve talked about it a little bit on the show, the problem of poverty, which persists, which doesn’t have a large voting block in favor of remedying the problem. You’ve been studying it for a long time, but before we even talk about it at all, let’s do some definitions. Who is poor? What does it mean to be poor? How do you define poverty in your academic work? And is that different from how people in the public square who make policy think about and define poverty?

Matthew Desmond:

Well, officially, poverty is a line, income line that we draw around $26,000-$27,000 a year for a family of four. And if you just use the official poverty measure, there’s about 38 million of us below that line. That’s a lot of Americans. It’s around 11% of us. If the American poor founded a country, that country would have a bigger population than Australia. But that’s just the beginning. Poverty isn’t just an income level, it’s this exhausting piling on of problems that’s harder to quantify. Poverty is chronic pain on top of tooth rot, on top of eviction, on top of your cousin getting arrested, on top of you not being able to have enough food to feed your kids. It’s the suffocation of your talents and your dreams. It is death come early and often. So, far from a line, it’s really this tight knot of humiliations and agony. It means million of us are denied security and safety in this land of abundance.

Preet Bharara:

I think you have paraphrased or written about this concept that James Baldwin mentioned many years ago about how extremely expensive it is to be poor. What does that mean?

Matthew Desmond:

Yeah. Baldwin is a source that I go back to again and again. And you’re right, he said that it’s extremely expensive to be poor in America. It’s expensive to be a poor renter in America. Most poor renting families now today spend at least half of their income on housing costs. One in four of those families spend over 70% just on rent and utilities. They can’t afford housing even at the bottom of the market. It’s hard to get money and get access to capital if you are a person of limited means. Every day, $61 million in overdraft, pay, lending and check cashing fees are pulled out of the pockets of the poor in fines and fees.

Preet Bharara:

All of which things are extremely regressive.

Matthew Desmond:

Absolutely, yeah.

Preet Bharara:

I mean, if you bounce $100,000 check, it’s the same fee, right? As if you bounce a $20 check.

Matthew Desmond:

That’s right. And I think that we also have to recognize that we often aren’t innocent here. Many of us benefit from free checking accounts, but it turns out they’re not free. Those accounts are subsidized by $11 billion a year industry in overdraft fees, most of which are charged just 9% of bank clients. The poor made to pay for their poverty. So I think what thing that the book tries to do page after page is say, “This is a policy discussion, it’s a political discussion, but this is also a moral discussion about you and me too and how we’re kind of unwittingly implicated in this problem.”

Preet Bharara:

I want to quote some other things back to you. By the way, I should mention the book that you recently wrote called Poverty, By America, which talks about a lot of these issues. You write in your book, “It’s a useful exercise evaluating the merits of different explanations for poverty like those having to do with immigration or the family.” But then you go on to say, “But I found that doing so always leads me back to the taproot, the central feature from which all other rootlets spring, which in our case is the simple truth that poverty is an injury, a taking.” So that implies that there are perpetrators. Who are the perpetrators?

Matthew Desmond:

Well, they are often the usual suspects, but there’s a lot more than the usual suspects. And so we can think of the poor being exploited, which I think is a word we should use in the labor market and the housing market and the financial markets. You could think of the perpetrators being companies that keep wages as low as possible, housing providers that drive rents as high as possible, and financial institutions that burden the poor with unnecessary fines and fees. But I think many of us who have found some economic security in the country are also the perpetrators. Don’t we benefit when, for example, we consume the cheap goods and services that working poor produce, or we fight for tax breaks that accrue to the top 20% of Americans, or that we defend our neighborhoods from affordable housing that developments and hoard opportunities behind our walls? Aren’t we part of the issue, which means aren’t we part of the solution too? So I think the blunt fact is, in America, some lives are made small so others may grow. And we have to just face that fact if we want to really end poverty here.

Preet Bharara:

This is from a New York Times review of your book, and I wonder if you think it’s a fair characterization that I have a question about it. The Times Review in analyzing your books says, “The endurance of poverty in the United States is a product not only of larger shifts such as de-industrialization and family dissolution, but of choices and actions by more fortunate Americans.” A, is that accurate? And B, I’m just wondering when I read that if as a political matter where if you’re an advocate for anti-poverty programs and tools to fight poverty, that as a message, whether it’s accurate or not, is it the most effective way to get people who are more fortunate to join the consensus in favor of things that would help those who are in poverty?”

Matthew Desmond:

I do think it’s a way of building political will. And I think we’ve seen this in terms of other social issues. We’ve seen-

Preet Bharara:

Yeah, except that people don’t love to hear. I’m not saying this is my argument, but I just want to test it out, test out your argument. Whether it’s the case that people who are not punitive landlords or penny saving punitive employers, but there’s fortunate in the United States taking advantages of all the things that their privilege allows them to, whether it’s the tax code or anything else. Are they receptive to the message that they’re to blame, which is part of your message for the impoverishment of many people?

Matthew Desmond:

Yeah, yeah. I think they are.

Preet Bharara:

Okay.

Matthew Desmond:

That’s a signal I’m getting on the road. I’ve been on the road since March, since the book came out. And I think there’s plenty of people that can feel this in their daily lives, that somehow know this. Or when then they come to learn it, our spur to action. And I think that that spurring to action part isn’t just about, “Hey, this is the moral thing to do.” It’s also about painting a picture of a better country. And I think many of us recognize that we could have a safer, freer, more vibrant country if we had a lot less poverty. I think we also recognize that this isn’t everybody wins story, that some of us are going to need to take less from the government.

Preet Bharara:

Well, it sounds like you’re meeting more enlightened people than I sometimes hear about in the public square.

Matthew Desmond:

I don’t know. I mean, the studies kind of have my back too. Most Democrats and most Republicans now claim that poverty is a result of structural failure, not a moral failing. Most Americans think the rich aren’t paying their fair share of taxes. I think they’re right. Most Americans want a higher minimum wage. I think neighbor level, there’s a lot of us who want more economic justice.

Preet Bharara:

Well, I guess it depends on the thing you’re talking about, right? So a more efficient tax code, people paying their fair share if they have a lot of money, not engaging in tax evasion, those kinds of things. But what about increasing the safety net? I guess there’s a lot of popularity with respect to some of those things, including medical care. They just don’t manage to ever get through Congress.

Matthew Desmond:

Yeah, I think that’s the challenge. So I think that among the American public, there is a deep and widespread desire for more economic justice in the country. Frankly, there’s a lot of anger toward all this inequality, but how to translate that sentiment into real political action from Congress, that’s the challenge.

Preet Bharara:

Can I ask a dumb question? Is there a difference between the problem of poverty and the problem of income inequality?

Matthew Desmond:

Yes.

Preet Bharara:

Okay, explain that.

Matthew Desmond:

So the problem of poverty, at least as I see it, says no one in the country should fall below a certain basic level of existence, that all this poverty is undignified, it’s incredibly damaging and it’s really a focus on folks that have the least in the country. The inequality debate is connected but separate. It’s often a debate between the middle class and the rich. And the poor are often out of the debate altogether. And so I think that an America without any poverty is still an America that can have widespread inequality. There are different problems.

Preet Bharara:

Every time I think about this issue and in preparing for this interview, and it’s already become apparent in the few minutes we’ve been talking, there are all sorts of tools and policy mechanisms to alleviate poverty, right? But they fall into different areas. There’s the issue of unions and labor power, there’s taxes, there’s healthcare, there’s housing. There are a million different things all which fall under the auspices of some different agency or some different committee in Congress. Unless I’m missing something, and I may be, there’s no one sort of in charge of, and maybe such a bureaucracy would not be workable, but there’s no one sort of in charge of thinking about poverty in all of its forms and more specifically thinking about all the tools to alleviate it because they fall under the umbrellas of so many other different agencies. How big a problem is that and is that resolvable in some way at the government level?

Matthew Desmond:

Yeah, on the one hand, it is a problem. And I would love to see something like a federal poverty commission or a poverty czar being created at the highest level and that person could think of how to bring in the Department of Education and Housing and Transportation all with the shared goal of improving the lives of economically vulnerable Americans and even ending poverty with those buckets. But I think the bigger game afoot is just that we as a country tolerate a lot of tax evasion and a lot of tax shenanigans, and it really starves our public capacity to fight this problem.

A few years ago, there was a study that showed if the top 1% of Americans just paid the taxes they owed, we could raise an additional 175 billion a year, which is a huge figure. You could double our investment in affordable housing and still have money left over or bring back the extended child tax credit that it’s so much to reduce child poverty during COVID with that kind of figure. And so in a way, I think that keeping our eyes on that ball really matters too.

Preet Bharara:

But is that how money would be spent. If suddenly the government got a windfall due to more tax policing of 100 billion or 170 billion, that wouldn’t go dollar for dollar towards anti-poverty programs in the current political climate, would it?

Matthew Desmond:

In the current political climate? I don’t know. I’m also a little, to be honest, a little suspicious of these framings because it kind of is like us accepting a reality as practical or inevitable. And even in recent years, we saw things that for years have been thought of as impossible just change overnight.

I’ll give you just a real wonky example. When I wrote my last book, Evicted, on the housing crisis, I had a clear pay for expanding more housing. It was to reduce the mortgage interest deduction. And you’d go around and everyone in Washington left right and center would say, “You can’t touch that thing. That’s impossible. You just stay away. That’s the third whale.” And then Trump reformed it, just dialed it back. And so, things were impossible until they’re suddenly not. So I don’t mean to dismiss real political challenges, but I also think we should be honest about how much resources the country has and how we could really end poverty in a real tangible way if we leverage just some of those resources.

Preet Bharara:

You wrote that, quote, “We don’t need to outsmart this problem, we need to out hate it.” What does that mean?

Matthew Desmond:

I think that means we need to make a bigger collective investment in ending poverty and also see it as a real attainable goal. One of the things that I love about the War on Poverty, which was launched by the Johnson administration in ’64, was that when they launched the war, they set a deadline. It wasn’t rhetoric. They set a deadline for the abolition of poverty in America. So I think the first step is to recognizing that the end of poverty is an attainable goal, and then to understand that we need to deepen our investments and deepen those investments by fair tax implementation. But we don’t just need that. We also need different policies, policies that really address the root causes of poverty, like policies that expand worker power for example, or housing choice. And then we need to end our embrace of segregation. That’s kind of the three-step argument that I make for the end of poverty in the country. There’s no silver bullet here, right? And there’s no-

Preet Bharara:

No, there never is.

Matthew Desmond:

Yeah, there never is. And I think that I put that outsmarting, outhating a bit there because honestly, we don’t need new ideas actually. We need a political will in a way that this book is my call for that.

Preet Bharara:

You mentioned Lyndon Johnson and the War on Poverty. How did The Great Society with respect to the War on Poverty fail? Or did it succeed to some extent?

Matthew Desmond:

I think you have to look at the War on Poverty and The Great Society as a success. These were things like establishing food aid as permanent, expanding Medicare, Social Security benefits, headstart, job corps. So 10 years after the War on Poverty and great society relaunched, the poverty rate was cut in half. It made a big difference. Now, poverty was cut in half not only because of those programs though, and I think we have to recognize that. The War on Poverty was launched when a time when one in three American workers belonged to a union where real wages were climbing 2% every year, which is very far away from the situation we are now. So it was launched when a time when the job market was really delivering for workers and it was kind of a one-two punch. And that’s something we’re lacking today in the country. Even if we make deeper investments from the government, we also need the basics of American society, the job market and housing market especially to really deliver for all Americans.

Preet Bharara:

Was Social Security the greatest reducer of poverty in modern America? Or is it some other policy or mechanism?

Matthew Desmond:

I think it has a real case for being the biggest thing we’ve done to cut poverty. I mean, the elderly poverty rates before Social Security were out of this world. So many Americans in their sober years were just dying penny less. And you can just see these huge reductions in elderly poverty after Social Security. So I think there is a real case for that.

Preet Bharara:

Two things I want to mention to you. Before we started recording, I mentioned to you that I took a class on the issue of poverty when I was in college with one of your academic colleagues, Paul Pearson. And I remember for the first time when I was an undergrad grappling with two very difficult issues. One is if you want to improve something, we’ll take them one by one as a policy matter. And you’re advocating for something, let’s say it’s an anti-poverty program, but it could be anything, do you take the half loaf or do you fight until you get the full loaf? Which to my very young naive undergraduate college ears was a revelation, like, “I don’t know. What’s the answer to that?” And here I am three and a half decades later and I still don’t know the answer to that.

And then second, it’s related, because Professor Pearson opined on this, on the issue of whether you’re going to add to the safety net. Do you means test it or not? And on the one hand, means testing, people like because folks who have a lot of money don’t need the free care, don’t need the free perk, and you’re more efficient. On the other hand, if you means test, those programs are more likely to fall out of favor as people, as you have mentioned already, exploit and take advantage of the poor. And if you want universal political support, you always want to do something universal like Social Security. So can you come back to the classroom with me from three, five years ago and address the half loaf, whole loaf issue, and then the means testing issue?

Matthew Desmond:

Well, it’s always a privilege to be in conversation with Paul Pearson, one of my intellectual heroes, even if that conversation is a few years removed from today. I think for me there’s a bigger issue on the half loaf, full loaf, and then there’s a more pragmatic issue. The bigger issue is, I do think that these are conversations that go on in the halls of Congress and policy schools all the time. Do you want to expand housing vouchers by 50% if it means the people that get it get 50% less? These kinds of conversations, I think they’re really important, but I also just think we need to step back and recognize that this is the land of abundance and we could do a lot more if we had a lot more. So not to repeat myself, but for me it’s really hard to think of the half loaf and full loaf conversation when you have a trillion dollars a year according to the chairman of the IRS being lost in tax evasion and fraud and avoidance.

Preet Bharara:

Yeah. But I’m saying, but let’s say there’s a bill that’s coming up for a vote and it achieves the half loaf and there are enough… I’m going to assume the Republicans are against it. There are enough Republicans to pass the half loaf and you have a pragmatic-

Matthew Desmond:

You pass the half loaf?

Preet Bharara:

You pass the half loaf.

Matthew Desmond:

Yeah, absolutely. And you celebrate that passing. And you celebrate it by saying, “Look, we’re not at the mountaintop, but look at this visa.” And I think that the celebration is a non-trivial point because I do think that if we’re going to just not give any word of praise or promise unless we get the full loaf, we really rob political capital and rewards from folks in Congress doing the work. And I do think we have to recognize when progress is made, even if that progress isn’t where we wanted.

To get to your other part of the question though about the universal or targeted, I think that I like the middle. I like the middle between those two things. One idea comes out of J. Powell, the law professor at Berkeley, who has this idea called targeted universalism where he says, “Okay, let’s set a goal and just recognize that different folks will need different things to meet that goal.” So maybe our goal is every American should have access to safe, affordable housing. We all agree on that goal. Now, folks in rural America are going to need different things than folks in urban America and homeowners might not need anything at all. And so I think that that kind of idea is a more nimble kind of intervention into those two sides of the debate.

Or you could think of something that might be called bigger tent targeting. So the problem that Professor Pearson laid out is that when it’s means tested, it’s really efficient, but man, it stinks if you’re $1 over that line, right? If you make $1 more, it feels unfair and it causes division between working class Americans and poor Americans. So many Americans today, they can’t afford a mortgage, but they’re too rich to afford a housing voucher. That stinks. And so bigger tent targeting is to recognize that and to say, “Look, we’re going to open up this tent to a lot more Americans, bring in middle class, working class, and poor Americans into a benefit.”

And so the extended tax credit in COVID, it did that, right? It was a child subsidy that reached middle class families, working class families, and the poorest families. It had a huge effect on poverty, reduced poverty by about 46% in six months. But a lot of folks that weren’t poor got that benefit too. So I think those kinds of designs really make a lot of sense. You don’t have to go full on universal to still get a lot of folks to have buy in.

Preet Bharara:

I’ll be right back with Matt Desmond after this.

Is there a particular lesson to learn from the success of Social Security in doing such a great job in lowering the poverty rate among a certain population of Americans? And can that be replicated elsewhere? Or has it been?

Matthew Desmond:

I mean, one lesson is the buy-in part of the design is really smart, right? So Roosevelt wanted Social Security connected to taxes. So when we pay that tax, we’re like, “No, we’re buying into our future.” And that idea-

Preet Bharara:

Yeah. You’re investing in the thing you’re getting later.

Matthew Desmond:

Right. I think that was a really smart part of the design, and he did that because he knew the program would one day fall under attack and he wanted it to have sticking power. And I think that bet paid off. I think that’s one lesson.

Another lesson that folks would just draw on is the idea that payments work, cash payments really work. And there is a lot of evidence that supports that, from the extended child tax credit to evidence showing that homelessness can be reduced by just simple tax transfers. I don’t see tax transfers as a silver bullet. I don’t think there are enough, but I think that they could be expanded to be part of the solution.

Preet Bharara:

Can we talk about something that has gained, I think, some currency whereas it had less before, not a lot of currency, but the idea of universal basic income?

Matthew Desmond:

Mm-hmm.

Preet Bharara:

How do you think about that as someone who studies these issues? Is that a viable thing if there was a will to do it? Is it overly universal? Because universal basic income, most people I think when they propose it, they’re talking about it as the word implies, universal. It’s not means test, it’s not targeted. Putting aside the politics of it, is that an effective way to combat poverty?

Matthew Desmond:

I mean, one of the-

Preet Bharara:

You sound conflicted, professor. I heard the sigh.

Matthew Desmond:

I mean, I think I am conflicted. On the one hand, we can see evidence of universal basic income in real tangible ways, real good ways. Just take the child tax credit during COVID. By making the child tax credit refundable and making it reach the very bottom of our economic structure, we were able to see real reductions in poverty. We turned the child tax credit into something like a universal child allowance. It was kind of close to UBI actually. And it’s really hard to argue with the results. On the other hand-

Preet Bharara:

Uh-oh.

Matthew Desmond:

… if we do this, do we just walk away from the labor market? Do we think that the labor market’s going to just run over workers and we shouldn’t invest in increasing worker power or making sure jobs are dignified? So there’s something about a UBI that I find a little unsatisfying because I think that we need policies that make sure workers are protected, have voice and power.

Preet Bharara:

I really don’t follow that. If you took the current labor regime and structure and you added a UBI, what would that do to the labor market?

Matthew Desmond:

I think folks are conflicted on that issue. Some folks say that would be good for workers because workers, especially those at the bottom of the market, could quit. They’d have a basic UBI to fall back on and they’d have a bit more power. Other economists say that’s a really good way to just let capitalism run amok and give it kind of license to run over workers or cut jobs because there is a UBI standing there.

And so I think we need something more comprehensive actually than a UBI. I think we need to make deeper investments in ending poverty, and that could be through cash transfers or expanding affordable housing, but we also need to attack exploitation in the labor market and the housing markets. And let me tell you why. I mean, if we don’t account for where that money would go, where the UBI would be spent, I think that the power of the investment would be diluted. So there’s studies that show that when cities raise the minimum wage for example, that really helps tenants pay their rent for a little bit and then the housing market catches up with the wage benefit and that’s less money in the family’s pocket. So I think paying attention to those kinds of dynamics is incredibly important too.

Preet Bharara:

So if I understand correctly, the minimum wage obviously should be increased and is an important thing, but not as effective as some people think. Is that fair?

Matthew Desmond:

Well, if that’s the only thing we do, it has a limited effect because markets can catch up. So look what happened during COVID. Workers finally got a raise, right? There was serious wage inflation. But in 2021, rents went up 11% nationwide, which is the highest on record. So suddenly, those wage bumps don’t get you very far. And so I think that this kind of floor and ceiling approach is really necessary to make sure money stays in folks’ pockets.

Preet Bharara:

If you had to rank these things or do a pie chart of the things that affect income at the lowest levels, and among your choices, and I’m probably leaving some out, were housing, healthcare, education, job training, et cetera, how would you rank those things?

Matthew Desmond:

That’s a toughie. I feel like you’re putting me in a scarcity mindset and I don’t want to be there. You know what I mean? Like, I don’t want to choose.

Preet Bharara:

I’m an old-fashioned old guy.

Matthew Desmond:

I am not going to wiggle out. I’m going to answer your question, but I just want to say it makes me a little uncomfortable because it gives the impression that we have to choose, and I don’t think we do in this land of dollar.

Preet Bharara:

Well, I guess it’s not choosing. The way I think about it and where I’m coming at it from, if I was a policymaker, and I know you can do everything all at once, but you really can’t unless you’re making a movie that wins the Academy Award, time and political capital are, I think, scarce resources. And I love your mindset about wanting to do everything and not pick and choose. But if I were a senator or a governor and I was going to my first term and I wanted to do something, I can’t do 10 things at once, I would want to know what had the most devastating effect on poverty and which obstacles that I could most easily remove would have the biggest effect, at least initially, on the problem of poverty. That’s what I would ask my staff to do, not because I don’t also want to do those other things, but I want to know where do I begin.

Matthew Desmond:

That’s a fair question. So I’d start with housing. I think without stable shelter, everything else falls apart. You see this in the data, in the Housing First studies that kind of rehouse chronically homeless folks with serious health problems or addiction issues, and you see real effects on those issues but only after stable housing is established. So if you want kids to go to the same school year after year, you got to have stable housing. If you want them to form pro-social connections with people in their neighborhoods, role models, guidance counselors, they got to be able to stay in the neighborhoods. If you want kids to get enough to eat, their parents have to stop paying 70, 80% of their income to rent. There’s this really moving finding that you see in the data on what families do when they finally receive a housing voucher after years on the waiting list when they finally receive this ticket that allows them to pay only 30% of their income to rent. What they do is they buy more food. And so, I think that starting with housing is an essential part of the solution.

Preet Bharara:

Pause on housing for a second. And something I know you’ve written about, and I would say quietly to shocked liberals and conservatives alike, when I was young, though I fully took advantage in my life of this tax policy of the mortgage deduction if you own a home, the mortgage interest tax deduction. Can you explain what that is, what the logic behind it is, and whether or not you think that’s a good thing?

Matthew Desmond:

It’s not a good thing. The mortgage interest deduction was a mistake in the tax code. It was an accident actually. It was something that we had in the tax code to support small businesses, but then after the GI Bill kind of created homeownership in the country, we suddenly had something that was baked into a lot of Americans budget. It’s become this real incredibly regressive tax policy where most of the deduction is provided to homeowners in the top 20% of the income distribution. We spend about $190 billion every year on homeowner tax subsidies and only about $50 billion on direct housing assistance.

Preet Bharara:

This is the idea. Most people may know this, but maybe there’s some young folks who don’t appreciate it because they’re not homeowners. If you’re carrying costs for an apartment is $5,000 a month, which would be totally normal in New York City, you pay $5,000 a month. There’s no tax benefit whatsoever. I guess it might be different if you’re renting your apartment, it’s a difference potentially if you have a condo or you have a co-op in New York. But if you bought a house and you have a mortgage and your total monthly payout is $5,000, some portion of that is you’re paying back the principal, but some portion of that is the interest for which you get a tax deduction at your general taxable rate. So that $5,000 that you pay out, you end up getting a considerable portion of that back. Have I stated it correctly?

Matthew Desmond:

That’s right. Now in the abstract, it seems like for a middle class homeowner, it could make a lot of sense. But only about what? One in four, one in five of us did itemize our taxes anymore. You got to itemize to take the deduction. If you’re itemizing, you’re already pretty well off. And if you look in the data, this isn’t a middle class benefit. This is really an upper class benefit. So I would be all for keeping the mortgage deduction if it could be a middle class, working class benefit. But right now you can take the deduction for a second home, an RV, or a cabin.

Preet Bharara:

So why is that so persistent? This is an example of something, I mean sort of a little bit like Social Security, right? Everybody likes it. They’ve gotten used to it. That’s how they’re budgeting homeownership and their payments. I don’t know how you would phase it out. It’s harder to take something away from people than to give it to people. Do you have an understanding? I mean, that is a load star of money for the Federal Treasury that is enormous, right?

Matthew Desmond:

It’s not trivial. And I think that that law of politics that Arthur Okun articulated that when you give something to someone, thou shall not take it away, it really only applies to the middle class and rich.

Preet Bharara:

The SALT deduction.

Matthew Desmond:

I mean, yeah, the SALT deduction. But man, look at public housing, right? We built it, then dynamited it. Look at COVID, we expanded the child tax credit, then took it away. And so a lot of times we’re doing that for poor folks. But for middle class and upper class folks, man, those programs can be really sticky. And part of the reason the mortgage interest deduction is sticky is because it has a massive lobby behind it. The realtors actually are the second-biggest lobby in America just by dollar spent every year just right after the chamber of commerce. So that’s a powerful lobby group, and they really care about keeping this thing around because it inflates the value of homes and they’re in the business of selling and buying homes.

We also need to face the fact that a lot of our Democratic representatives are in really high housing markets. So a $700,000 home in New York or San Francisco is a pretty good deal, and the rest of the country’s not like that. So there have been Democratic representatives and incredibly high housing markets that have defended the mortgage deduction as a middle class benefit because where they live, it kind of is, but they live in pretty unique places in the country.

Preet Bharara:

So in my unfair question about ranking in a hierarchical manner the various problems, housing you put first. What would you put next? Would it be employment? Jobs?

Matthew Desmond:

Well, the jobs have to be good in a way. And so, our unemployment numbers are pretty good right now. The problem is wage stagnation. For men today without a college degree, their real wages, their inflation adjusted wages are less than they would’ve been 50 years ago. And so, I think that the lack of power in the market, it really matters. No matter what anyone thinks of unions or labor power, it’s really hard to argue that when unions were at their peak strengths, that was our most economically equitable time in America in the 1970s. And so I think that investing in a worker power and finding ways of making organizing easier than it is today is an incredibly important part of the solution.

Preet Bharara:

You talked about the poverty line and where you put it, where academics and others put it. I wonder if there’s a metric for measuring, I’m not sure how to phrase this, how many people are liable through some single bad circumstance, like a catastrophic illness, are vulnerable to crossing back into the poverty line even though they’re above it at the moment. Does that make any sense, that question?

Matthew Desmond:

Yeah. I don’t know the answer to that question. I do know that if you spend a lot of time in poor neighborhoods, you see a lot of sickness and you see a lot of folks dealing with chronic pain and disability. So I think that having a full throated adequate healthcare system, which includes dental care, which might sound incidental to you and me, but for a lot of folks in poor neighborhoods, they just can’t afford it and they’re living with real painful stuff going on in their mouth. Dangerous stuff too.

Preet Bharara:

Yeah. Look, they’re simple things I had not appreciated, and maybe a lot of people didn’t appreciate, how big a deal it is to have medical programs, health insurance programs cover hearing aids, right? That’s become a big deal, no?

Matthew Desmond:

Yeah, absolutely. And again, this is kind of the American trade-off we made with the Affordable Care Act. We kind of let prices be what they are and the Affordable Care Act would cover it. So now we have this kind of dubious distinction of spinning the most on healthcare of any other advanced democracy, but still not having full coverage. I think the models that are working in other countries make a lot more sense.

Preet Bharara:

There are people who say that the thing that over the course of human history that has improved the quality of life of people and most lifted them out of poverty has been the advent of capitalism. Discuss.

Matthew Desmond:

Well, I think that on the one hand, it’s really hard to argue with the leaps forward globally that the world has experienced with the opening up of trade and the opening up of markets. On the other hand, it’s interesting. If you make the cutoff for that story like $2 a day, the number of people living in $2 a day poverty, there’s a lot of progress. If you move the cutoff to $3 a day, $4 a day, there’s a lot less progress actually. And so I think that for me, you could have a capitalism that’s incredibly anti-poverty, that’s incredibly just economically. I don’t feel like we have that capitalism in America today. And the early defenders of capitalism, that’s what they wanted, right? John Stuart Mill was like, “Hey man, if this thing doesn’t lift everyone out of poverty, I’m going to become a communist.”

Preet Bharara:

I want to ask you a comparative question. Are there things to learn from other countries with respect to this issue having fewer people under the poverty line?

Matthew Desmond:

I mean, on the one hand, the biggest thing to learn from other countries about the secret sauce… And the secret sauce is the fact that we’ve got a lot more poverty than other advanced democracies, right? Our child poverty rate is double, Germany’s and South Korea’s and Canada’s. So we’re really in a different class when it comes to our peer nations with respect to the level of poverty. So what are they doing differently? And in a phrase, they’re just collecting a lot more taxes than we are. We collect about 25% of our GDP in taxes every year. Switzerland, Sweden, the Netherlands, but even Italy and Ireland are collecting between 35 and 38% of their GDP and taxes. So they can just make deeper investments in the public. I think that’s one lesson.

But also the lesson about what you get from doing that is you get a different feel of a country. I was in Nuremberg, Germany not too long ago. I stayed out late and I walked back to my hotel very late at night. It was a long walk. I didn’t once worry about my safety, for example. I think you get higher levels of public safety in those countries. You get public infrastructure. That is something that a lot of people want to use. And so I think you get a different feel on the ground that we often have in our cities. I mean, I think one of the things that shocks Europeans when they come here is just how much public facing poverty we have in cities like New York or San Francisco.

Preet Bharara:

Who’s the last public political figure of national stature who placed the issue of poverty at the centerpiece of their campaign? The one that comes to mind for me who passed away before I was born is Robert Kennedy. Have there been others that I’m forgetting about?

Matthew Desmond:

Well, in a way, there’s a lot of people still working on this, right? So if you think of someone like Congresswoman Rosa DeLauro who represents New Haven, Connecticut, she’s been a poverty advocate ever since she arrived in Congress. She has a bill right now called the American Families Act to reinstate the extended child tax credit. She’s been fighting for this for a while. And you think of folks like Barbara Lee or Elizabeth Warren that this has been part of their agendas.

On the national level, on the presidential level, I think that when folks run for that office, they suddenly stop saying poverty. I remember talking to Senator Cory Booker maybe a couple months ago, and the senator told me that when he ran for president, he asked his team to look up when the last time they asked a debate question about child poverty in a presidential debate. It was like 25-30 years ago, you know? And so-

Preet Bharara:

Well, what’s interesting is there’s a focus, and I worked for Senator Schumer for a number of years who caress about poverty, cares about a lot of issues. But when you choose the thing you emphasize publicly, and I think there’s good reason for this obviously, middle class, we talk about the middle class in this country a lot, and I think that’s important and that’s good. Is that at the expense of talking about people who are impoverished? Or can they both be done together with equal emphasis?

Matthew Desmond:

I don’t know. It’s hard to solve a problem you don’t name, you know?

Preet Bharara:

Yeah.

Matthew Desmond:

It’s really hard to solve a problem that you refuse to talk about. And so I do think there are policies that can help the middle class and do very little to help the poor. Like the regular old child tax credit,, that was a middle class benefit. It really didn’t reach poor families in America. And so I do think that there is a politics of solidarity that we have to keep in mind of. We don’t want the middle class thinking they’re against or somehow come at the expense of the poor. But I also want to see more folks running from president, more folks at our highest offices say, “You know what? There’s just too much poverty in this land and I want to work to end it.”

Preet Bharara:

Professor Matthew Desmond, thanks for your work on this issue. Congratulations again on the book and thanks for being on the show.

Matthew Desmond:

No, thanks for this great conversation. I really enjoyed it.

Preet Bharara:

My conversation with Matt Desmond continues from members of the CAFE Insider Community. In the bonus for Insiders, we flesh out the role of a potential US poverty czar.

Matthew Desmond:

Did you know that the Department of Housing and Urban Development does not know how many people it evicts every year in the housing that it itself owns? Eviction isn’t part of their evaluation process? So I think a poverty czar would say, “That’s a problem. We should know that data.”

Preet Bharara:

To try out the membership for just $1 for a month, head to cafe.com/insider. Again, that’s cafe.com/insider.

BUTTON

I want to end the show this week by talking about the devastating news that has emerged out of Israel and Gaza over the last week. Hamas militants last Saturday launched a brutal and barbaric terrorist attack on Israel, killing over 1,200 Israelis, including babies and the elderly. The Israeli government has responded with airstrikes against Gaza and are seemingly preparing for a ground invasion.

As of this taping on Wednesday, over 1,000 Gazans have been killed in violence that continues to spiral. Hamas has also taken around 150 hostages, including American citizens. The growing conflict has led to divisive debates in the United States. But amid the ranker and the nonstop reporting of atrocities and carnage, there are also stories of courage, selflessness, and heroism. The news is still clouded by the fog of war, but the stories are incredible. This is what I’d like to focus on.

When evil comes, heroes often appear. Here’s one example. Itay and Hadar Berdichevsky were a 30-year-old couple with 10 month old twins. They lived at the Kfar Aza kibbutz near the badly hit border town of Sderot. As Hamas gunmen closed in, the Berdichevskys hid their twins in a secret safe room in their home. The couple then fought the gunman and were killed, but their children were discovered unharmed by Israeli security forces around 12 hours later. What a brutal and heroic act of self-sacrifice.

Here’s another story of profound selflessness. Alexandre Look was a 33-year old from Montreal who was at the Supernova Music Festival, an outdoor electronic music event that Hamas attacked, killing at least 260 attendees. Look called his parents as he ran from gunfire with a larger group and tried to hide in a bunker. His parents heard shooting and listened to Look tell his friends that the terrorists were coming back. Then, no more. Shortly after that, Looks’ parents received a message from another attendee who told them that Look had died protecting many others. The woman told Look’s parents, “He was our shield. I swear to you, he was our shield. If it wasn’t for him, all 30 of us in there would be dead.”

Many of the hostages taken by Hamas have led inspiring lives devoted to seeking peace between Israel and Palestine. One is the Canadian-born 74 year old Vivian Silver, who was abducted from Kibbutz Be’eri near the eastern border with Gaza. Silver is the director of the Arab Jewish Center for Empowerment, Equality and Cooperation, and a founding member of Women Wage Peace. Both organizations work with Israeli and Palestinian activists to find common ground. In 2021, Silver told Forbes about her passionate commitment to securing peace between the two sides. “We made peace with Jordan and we made peace with Egypt when Israelis didn’t think it would happen. And the same thing can happen with Palestine, and that’s what I expect, and that’s what I’m working for. That’s what I’m putting my life on the line for.”

And as innocents from Gaza, Israel and around the world are killed in the crossfire, the peaceful words of a father are resonating around the world. Yaakov Argamani’s daughter, Noa, 25, was kidnapped by Hamas militants from the Supernova Festival and taken away on the back of a motorcycle, a video of her abduction has gone viral. Yaakov, while pleading for the safe return of his daughter on Israeli news, also took a moment to plead more broadly for peace and to acknowledge the brutality of the growing war on Gazans and Israelis alike. “They, the Gazans, have casualties and dead too. Let’s use our emotion. We are two people from one father because of the Bible. Please, let’s have real peace. Real peace. Real peace. I wish that it will happen.”

My heart goes out to all of those who have lost loved ones and who are suffering amid this terrible violence. And I hope that these stories of humanity in the face of unthinkable horrors can give some solace to those who are in so much pain.

Well, that’s it for this episode of Stay Tuned. Thanks again to my guest, Matthew Desmond. If you like what we do, rate and review the show on Apple Podcasts or wherever you listen. Every positive review helps new listeners to find the show. Send me your questions about news, politics, and justice. Tweet them to me at @PreetBharara with the hashtag #AskPreet. You can also now reach me on Threads. Or you can call and leave me a message at 669-247-7338. That’s 669-24-PREET. Or you can send an email to letters@cafe.com. Stay Tuned is presented by CAFE and the Vox Media Podcast Network. The executive producer is Tamara Sepper. The technical director is David Tatasciore. The senior producer is Matthew Billy. And the CAFE team is Noa Azulai, David Kurlander, Nat Weiner, Jake Kaplan, Namita Shah, and Claudia Hernández. Our music is by Andrew Dost. I’m your host, Preet Bharara. Stay tuned.