I was fascinated by a recent column in which Paul Krugman examined the geographical clustering of low credit scores.
Krugman was deconstructing some recent research showing what he described as a “big band of credit-score calamity that stretches across the American South.” The research confirmed that, in virtually every part of the South and across all demographic groups– every race, every income bracket — credit score are low.
Low credit scores penalize people in a number of ways. As Krugman notes,
The region’s poor credit means Southerners are paying more to borrow money, assuming they can qualify for loans at all. That sets them back in everything from car and home purchases to credit card rewards.
But why the South?
Many of us would suggest the influence of racism. But that turns out not to explain the phenomenon.
Our first guess about what might be happening here involves race. Almost 3 out of every 5 Black Americans live in the South, and they make up almost 20 percent of the region’s population. Centuries of slavery, sharecropping, apartheid and exclusion from many elite educational institutions left some Southern Black folks with little credit and even less collateral.
When researchers ran the numbers, the Blackest parts of the South had roughly the same credit scores as the least-Black areas. And their scores were far lower than places with similar Black populations outside the South. So while race may play a role, it’s clearly not a defining factor.
Well, what about poverty? The South has the highest poverty, lowest income and lowest education rates of any region in the U.S., and counties with lower income and lower college graduation rates are likely to have lower credit scores.
Nope.
Even some of the South’s biggest, most dynamic cities — think Atlanta or Dallas — have the same below-average credit scores as their more rural Southern neighbors. Within every income bracket, the typical Southerner has a lower credit score than someone who lives in the Northeast, Midwest or West.
So–if it isn’t racism and it isn’t poverty, what explains this phenomenon?
The answer, it turns out, is America’s refusal to follow virtually every other modern nation and offer national health care. Medical debt is the reason credit scores are so low in the South.
It turns out the South has the highest levels of medical debt in the country.
Of the 100 counties with the highest share of adults struggling to pay their medical debt, 92 are in the South, and the other eight are in neighboring Oklahoma and Missouri, according to credit data from the Urban Institute. (On the other side, 82 of the 100 counties with the least pervasive medical-debt problems are in the Midwest, with 45 in Minnesota alone.)
And sure enough, when you look at areas across the nation where adults are struggling to pay down medical debt, they have similar credit scores.
This raises an obvious question: why is this problem concentrated in the South?
One answer is that the South is simply less healthy than any other region. Data from the Centers for Medicare and Medicaid Services shows that among Medicare recipients, the population for which we have the best data, those in the South are substantially more likely to suffer from four or more chronic conditions. And poor health tends to go hand in hand with people having overdue medical debt and poor credit scores.
Poor health isn’t the only factor–Red State policy choices are a huge contributor.A recent analysis in the Journal of the American Medical Association found that medical debt “became more concentrated in lower-income communities in states that did not expand Medicaid. The share of residents with overdue medical debt is more strongly linked to a county’s credit score than any other factor– including debt related to car loans, credit cards and student loans.
Last year, the federal Consumer Financial Protection Bureau (CFPB) issued a scathing report finding that medical debt is “an unexpected, unwanted, and financially devastating expense” that is “far less reliable and predictive of people’s ability to pay their bills” than other kinds of borrowing.
The lack of national health insurance–or even Medicaid availability–means that folks in the South pay higher rates on mortgages and car loans, and have more trouble getting credit.
But there are social as well as individual costs involved.
Insecurity fosters anti-social behaviors. When a serious illness means you might lose your house or go bankrupt—you tend to take those worries out on others. Research shows that countries with better social safety nets are more tolerant of differences in race, religion and sexual orientation, and some studies have suggested that Canada’s lower rate of gun violence can be attributed to their stronger social safety net.
But national health insurance would be “socialist” and Southerners wouldn’t want that…
Crushing medical debt is just one of the many problems resulting from our crazy tax laws that make it far easier for the wealthy to siphon money from the poor than vice versa. Where’s Robin Hood when you need him?
Was education, IQ levels or mental health considered in these studies? “Insecurity fosters anti-social behaviors.” Insecurity fosters racism on both sides of the color spectrum; I lived in Florida from 1994 to 2001 and segregation was obvious. During the 7 years I lived on the Gulf Coast there was ONE black cashier at one of all of the businesses I patronized…for 2 or 3 days. Blacks afraid to cross the color line and whites afraid blacks would try to cross the color line; segregation was obvious in neighborhoods and schools where socialization usually begins for children. The southern support of Donald Trump and his MAGA party speaks loud and clear to racism, lower education systems and anti-health care for the masses (think anti-vaccine during the pandemic) is evidence of the lack of a social safety net for all. It also draws attention to the mental level of voters and their governing bodies which refuse to move into this 21st Century and are escalating divisiveness as the norm. Southerners, born and bred, have not yet conceded their loss of the Civil War and are following their leader who is still refusing to concede his loss of the presidential election. National health insurance would not remedy any of their problems with their mind set of “Save your Confederate money boys, the south’s gonna rise again!”
Sheila writes, “But national health insurance would be “socialist” and Southerners wouldn’t want that…”
That’s the same part of the argument with Hoosiers, which also closely mocks Mississippi. That’s why I posted yesterday on Facebook the big real estate deal which went down in Boone County the Indiana Capital Chronicles covered. The State is buying the land from farmers, building the ready-made plants, and then leasing to corporations “already on a pipeline.”
Pure socialism.
When the people have presented a deal like that, the press decries “socialism,” and people don’t can’t have it because it’s “big government.”
And this all goes back to Sheila’s clamor about the “under-educated.” Even the cowboys in our statehouse accepting checks from the Irish and Italian mobs and Koch’s dark money. Casinoes and coal, baby!!!
Todd’s comments are good, but he says that people will look at many land-use decisions that governments at all levels make, as socialism. I’m sure he is right about that “label,” but that just shows how poorly the average person understands what is going on. It really is oligarchism. A country with socialist leanings would have universal medical care, and uniform regulations about many other facets of the social service system.
I guess I’m supposed to hate Southerners according to the post. I don’t see anyone north.of the Mason-Dixie Line doing more for Healthcare than giving it lipservice and denigrating the less fortunate. I reckon this is called Northern privilege.
When we studied the Civil War part of what we came to understand was the agricultural South versus the industrial North. Now the agricultural South has been expanded to include the agricultural Mid-West and the industrial North has morphed into the financial/industrial coasts.
But the problem has not changed. When your assets are land, you mostly settle for low-return investments in it. When your assets are means of production of goods and services, returns are much higher. For one reason they are global returns, not just local.
Healthcare costs are an unnecessary burden for the whole country but are more affordable by the wealthier coasts. In fact, they subsidize the rest of the country.
Do credit rating firms disclose their algorithms in detail? Imagine their algorithms noticing higher defaults in a certain region and then readjusting themselves to ding most people in that region.
Hospitals shouldn’t be allowed to sell their medical debt to companies that use harassing methods to collect. When someone is sick the last thing, they need is collectors using threatening methods to collect.
Pete; exactly what is the agriculture south and mid-west producing and where is it being sent? Our produce is mostly imported and of poor quality; how the hell can lettuce be tough and fruit be beautiful but tasteless? Indiana, known as the mid-west, used to have miles and miles of farmland with acres of fields with corn, soy beans and other items of produce, now empty acre after acre. Expensive cookie-cutter housing developments are popping up on former farmland and in our much needed green spaces to clean the environment. Nothing is the same anywhere today and what is considered to be “progress” does not mean improvement for any of us.
in trucking going south means cheap freight to get home$$. the whitey game there. the wages and the living standards are demanded to the less fortunate,that means all races. if the bossman can and will,cheap $ ya into workin for him/her, they win. hunger be damn. many a corp/co has exploited since god was a child down there. very little representation for the worker exists. the big bossman rules,and his life is first in any community he exists. look at the employment ads, and or call them and ask whatchapayin$.seems they expect you to give alot for their own personal needs over yours. if you dont act like that,dont apply. driving truck to various industries like lumber and whatever industry that ships out of the area, all have a sense the worker doesnt care much. they have no resources to leave or get above water. it doesnt matter what race,if your near dirt poor or looking for work,your expected to live and die for any pittnanc they “allow “you to earn. its ripe for any person who has some authority in that job to wield it against anyone they dont like. far fetched? i mingle with many a employee while ya wait for a load or your just sitting. ( truckers get no compentsation to sit and wait while on a job site,even the owner of the truck,we are the poster child of exploited labor,anywhere) seems its both white and black down south,the ones who made it,only atest to kissing the bossmans ass,or its family related. ive never seen anyone who made it offer a hand up to another.instead its a badge to keep another down for the cheap while they find solice in keeping people poor to mock them.its segragated,mean and the local elect is the biggest issue. seems the state will never have a finacial stake in education because of its self proclaim to make sure they,the people, xtay poor while gathering a cheap work force for someone to bennifit. if the credit rating exists to exploit,then only the credit org has itself to blame. many a debt today is because of exploitation of people.the rich have slowly started to become the investors in debt,and im sure we will see jail time again handed down to those who only want to live decently. theres a buncha really hard workin people down there.but we only allow it to continue.
JoAnn:
Issue,the row crops we use to see are few,and no longer in alot of areas. ive hauled produce back in the 1980s, the packing houses where its processed,cant pay for labor. since the water issues and weather,big packing cos,have invested and moved to mexico. look at the tiny label on produce,and make a effort to keep that label on that produce. the majority of greens and such are imported. investors have flooded the farming market in Mexico to bulld greenhouses and technology south of the border. leaving our land to open speculation and jobs that only require manuf labor or tech. land farming here has become a past. the costs of startups is staggering and banks and investors will not finance domestic farming as we know it today. this will sooner than latter become corp owned farms. which is being fought. for profit corp farming here will only fatten the pockets of the investor and again screw the people.
Can’t claim much ag expertise JoAnn but I assume farmers grow now in concert with the resources they have and market speculation including post harvest logistics. IOW, not for local consumption. All in all we’d all quickly starve without plentiful shipping resources.
Does that mean less tasty food? Probably for seasoned palettes but the young don’t know or care about what used to matter.
pandemic:
no one here makes anyone want to hate.educate yourself in real time issues and enjoy some educated views..
When I read the first paragraph of today’s blog, the first thing that came to mind as an obvious answer was bull headed notions about nearly every aspect of life. For example, we can’t have universal healthcare, even though it would cost everyone so much less that the money left over from the current system is more than the economies of many countries, because it’s SOCIALISM. Why is the south so poor? Attribute it to a poor education system or to a lack of left brain function. If you add 2 + 2 and come up with 5, you probably won’t see the logic behind any social safety net program.
Not all farms produce veggies and fruit. Here in the mid-west our thousands of acres produce the food that chickens and cattle eat. Our land here in Indiana, mostly north of Interstate 70, is some of the richest soil in the world. Boone and Tipton Counties in particular are priceless. Not protecting and preserving that land may well turn out to be the dumbest thing this state ever did.
Far be it for me to question the findings of one of my favorite and prize-winning economists, but I think short shrift was given to the south’s poverty levels. Ever notice when a new foreign automaker comes to our shores that they locate in the south or (see Toyota in Princeton, Indiana) in a northern state that has a “right to work” statute? (Read cheap wages and protection from union demands for employer medical coverage etc.)
I have, so which comes first, the chicken or the egg, i.e., can the south’s credit woes be attributed to other factors than medical debt, which may itself be not the cause but rather the result of poorer wages and punctured social safety nets? I think I am on to something with this analysis, i.e., that if people had bigger paychecks and union-negotiated employee health coverage for the employed and their families along with Medicare for All and/or Medicaid for the rest there would not be a big difference between medical debt levels irrespective of geography.
Taking my view of this problem a step further, I think these medical debt levels among the underpaid and underorganized are to be found in increased shareholder dividends, corporate stock buybacks, and executive compensation. Ah, capitalism!
If you think the credit rating/debt cycle traps aren’t intentional, you aren’t paying attention. And “medical debt” is just one useful tool to the oligarchs. Add in things like expensive appliances that barely last a couple of years, and are designed so they can’t be repaired, but must be replaced.
I see Peggy, and Rose nailing it.
Our for-optimizing-profit medical system is unlike anyone else’s that I know of. And, yes, the more poorly educated are much more apt to see Amy change to that as Boogy-Man Socialism!
Theresa; I keep thinking about those empty acres filled with hemp, Indiana is reportedly a prime place to grow that money crop. But small minds believing people will toke up on hemp, they believe they are protecting us from producing more drug addicts.
Jack and Pete, right on!
If one was to trace back the trouble the south is having right now after the end of the civil war, the assassination of Abraham Lincoln 5 days after the South’s surrender, was like a stab to the heart of the South. Reconstruction never completely happened.
Read the history of the lunatic and successor to the presidency Andrew Johnson!
Theresa Bowers,
It really isn’t everything grown for cattle so much, it’s all of the corn being used and a lot of the soy being used for ethanol production which is mixed with gasoline from 10% to 80% depending on the year and model of the vehicle. So food is taken directly out of the mouths of those who can least afford it, to make fuel for the vehicles of those who can’t afford them. Go figure? I don’t think figuring has anything to do with it!
With that being said, so many politicians in the South demonized the socialized health care, of course they didn’t demonize Medicare, they didn’t demonize social security, and so many of the fools voted against their own best interests. I remember in Kentucky, they had the hover round motorcade against expansion of healthcare. All of these people couldn’t walk, were grossly overweight, and were rallying against health care, the affordable Care act and expansion of Medicare and Medicaid.
There is a caveat to this, stupidity is not an epidemic in the south, it’s just as verile in the North! Look at the violence in the so-called civilized North, the barely masked racism, the hypocrisy, and the superiority complex.
Kind of an example, in the south they’ll tell you “You have a face that’ll stop a clock!”
In the north they say”when I look at your face, time stands still!”
Metaphorically parabolic but accurate.
Hey Pete, about those tasteless patties,
Think of Soylent Green,
But they also had Soylent red and Soylent yellow! What were those?
Also, I was thinking about it,
Integrity!
What is it? Something that’s complete, a moral soundness, someone who manifests compassion and empathy, attempting to be faultless or blameless, IE manifesting integrity.
Humanity does not portray true integrity in any form or fashion. Morally, compassionately, lovingly, completely, or soundly!
When it’s all said and done, humanity would gladly climb over the less fortunate, the ill and the dying The starving and the homeless to reach its goal, whatever that may be!
These are the symptoms of the government sepsis everyone puts faith in! This is the disease that infects the entire world and the whole of humanity.
How can the few IE politicians or religious leaders or even corporate CEOs and COOs, control the mass of humanity?
It’s because humanity can’t guide his own footsteps, humanity needs to be led by something other than men. Because civilization controlled by men never lasts or functions as hoped for. And it’s plain to see that if it benefits too many individuals, anything that was passed in fairness, is repealed.
How did the song go? The mean, oh mean, mean green! And I don’t think they were talking about Soylent, I believe it was the almighty dollar! And there is your God!
My point about Indiana’s land is not about what is being grown for what purpose. It is the destruction of the land itself. It’s the building of super large warehouses, the paving over, the endless track housing developments, strip malls and commercial buildings. It’s the idea that the earth is disposable.
Absolutely Theresa,
I remember back in the day, crops would be rotated. You would only grow a certain crop at the most, two years in a row. Different crops thrive on different nutrients.
Now they just dump fertilizer on the ground, some states use human sewage to spray on cropland used for ethanol production. Yeah right! That’s why you have so many people getting diseases (E coli and such) from eating raw vegetables. The various organizations that were supposed to be watching, have been gutted of personnel. And their level of authority has been rolled back. And that’s even if they were honest brokers in the first place.
They grind up flesh and blood remains and feed them to bovine herbivores, ie the beef cows and such. Some of this you’re getting in the milk, after all, who is really watching?
Why do you think some of these idiots claim the earth keeps getting larger? Why do you think some of these dupes claim that oil is a renewable resource? Because people believe it. so why not drill for more oil, why not pave paradise and put up a parking lot. The Earth keeps getting bigger so obviously they’ll be more land, and we will never run out of oil. All the while the pollution magically disappears!
The area my brothers and sisters and I grew up in, was mostly wild. We had 10 acres carved out of a 200 acre parcel. There was a quick running through the field, there would be frogs and turtles on our front lawn every morning. Garter snakes, we would go out at night and catch night crawlers to go fishing, there would be so many butterflies you couldn’t count them all, we had hives, hundreds of thousands of bees would go out into the clover fields, and of course all of the flowers my mother would plant on the property. All of the fruit trees, Apple, pear, cherry, peach would be so loaded with fruit my dad would have to put wooden supports under the branches so they wouldn’t snap. Those trees would be loaded with bees when they would bloss them out. Now, no land there, just row upon row of prefab houses, no creek running through, no snakes, no frogs, no turtles, no tadpoles or fish, no fruit trees, no blackberry vines, no grapes, no raspberries, and that’s just in this small area. All of that stuff is permanently gone! I remember my mother canning tomatoes and apples and pears and cherries and peaches and making pickles and making grape jam and making blackberry, raspberry preserves, It really is sad!
For Theresa Bowers: Big Yellow Taxi by Joni MItchell
Don’t it always seem to go
That you don’t know what you’ve got
Till it’s gone
They paved paradise
And put up a parking lot
Cree Indiana Prophecy
Only when the last tree is cut down. Only when the last river has been poisoned. Only when the last fish has been caught. Only then will you find that money cannot be eaten.
It is already almost too late; are we at the end of the beginning or the beginning of the end of life as we know it? None of us will get out of here alive; but what are we leaving for those who are left behind?
Growing and preserving your own fruits and vegetables is really hard, time consuming work. Most people who stopped doing it did so not because of a shortage of land but because they could afford to. Even now, if you want to do home canning, fresh produce is available in bulk, but by the time you buy the equipment and add in the cost of your time and labor, it is both cheaper and far easier to buy from a grocery. Even most of the farmers I know don’t want to spend enough of their time cultivating, planting, weeding, picking, washing and processing to produce all they eat. I suppose there are exceptions to this but for most people home canning has become a hobby carried on more from nostalgia than from necessity.
Sharon,
True, there is a lot of work involved in living off the land, but, that in itself is part of society’s problem. Everything can’t be easy, and when kids think can vegetables are made in a factory, which I suppose might happen in the future, that’s a pretty sad state of affairs.
Both of my folks grew up on farms, my grandfather’s grew up on farms, my great-grandfather and his father and his grandfather and his great grandfather all were farmers. Back then they had to be.
I have an uncle Ed that lives up past Stevens point Wisconsin, they still have a huge root cellar. It’s under the barn. In the winter they fill that with snow, a good 3 ft or so and then cover it with straw. When the vegetables are ready to be picked in the late summer and fall, that root cellar is about 39°. They put all of the root vegetables, apples, some squash, in that seller. During the winter they can a lot of that stuff. Onions last for a year, potatoes even longer. Carrots last about as long as the onions. So, you always have food! Then the next year before the snow is gone outside, they throw more of that snow down in that root cellar and fresh straw on top. Ready to start the cycle all over again.
As far as canning goes, you get a great big 30 qt cauldron, those cost about $130 bucks today, cast aluminum. You get your quart canning jars, with the lids, and some paraffin wax. After you sterilize the jars, you fill them up with whatever you’re going to can, and put those jars in the cauldron and let that water boil. The jars and what’s in them heat up, when they get to a certain temperature pour paraffin wax over The top of whats ever in the jars, and then put the lid on lightly. Let it set for about 10 minutes in that boiling water, then take out the jars without screwing the ring down all the way. The vacuum will set in and suck that lid down and then you crank the The ring down tight. Let it cool and put it away. Easy peasy.
Like I said, I suppose there are exceptions. All of my great grandparents, grandparents, most of my aunt’s and uncles were and some of my cousins still are farmers. I spent most of my formative years on farms. I have cultivated gardens, planted (including trees), weeded, sprayed, hand picked Japanese beetles off crops, picked everything from beans to cherries, washed, chopped, peeled, froze and canned a LOT of food. I don’t do it anymore because my body can’t stand the work. None of it is “easy peasy”!
Sharon,
Dawn dish soap and water. Kills Japanese beetles by the pound. Picking Japanese beetles off of crops? Just the thought of it makes my back hurt.
We never did much blanching and freezing, because if you lose the juice, everything goes bad.
I seem to remember a biblical quote along the lines of you will reap what you sow. Sounds like the roosters are coming home to roost.
Fascinating analysis! While it’s not clear to me if health care is the overriding reason for low credit scores, it’s definitely a factor. The answer is right in front of us. Let’s look at what is working in other countries and borrow some of their ideas. Norway ,Sweden, Finland and Germany are the top four.