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Wall Street Journal Op-Ed: Homeless Shelter Volunteers Are The Real Cause Of Homelessness

By Scott Keyes on July 9, 2013 at 2:08 pm

"Wall Street Journal Op-Ed: Homeless Shelter Volunteers Are The Real Cause Of Homelessness"

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According to a hedge fund manager writing in the Wall Street Journal, homelessness isn’t caused by deep-seated inequities in society, but rather by people like his teenage son who volunteer at homeless shelters.

Andy Kessler, who founded the billion-dollar Palo Alto investment firm Velocity Capital Management, penned an op-ed Monday in which he mocked young people for volunteering, arguing that they were delusional for thinking their efforts would make a difference. Instead, Kessler contended, they should try to make as much money as possible and trust that economic growth will help the world more than volunteering.

To illustrate his argument, Kessler points to his 16-year-old son, who has been volunteering at a homeless shelter. Though his son wants to do good, Kessler writes that it’s volunteers like him who are keeping homeless people on the streets “because someone is feeding, clothing and, in effect, bathing them.” The answer, instead, is old-fashioned trickle-down economics:

My 16-year-old son volunteers with an organization that feeds the homeless and fills kits with personal-hygiene supplies for them. It’s a worthwhile project, and I tell him so—but he doesn’t like it when our conversation on the way to his minimum-wage job turns to why these homeless folks aren’t also working. Perhaps, I suggest, because someone is feeding, clothing and, in effect, bathing them? [...]

Given the massive wealth created in the U.S. economy over the past 30-plus years, it’s understandable that the mantra of the guilty generation is sustainability and recycling. But obsessing over carbon footprints and LEED certifications and free-range strawberries and charging for plastic bags will not help the world nearly as much as good old-fashioned economic growth. Gen-G will wise up to the reality that the way to improve lives is to get to work. If Woodstockers figured this out, so will they—as soon as they get over their guilt.

It’s highly unlikely that Kessler, an extraordinarily wealthy man who managed a hedge fund for years, has ever known what it’s like to go hungry or sleep on the streets, where random acts of violence are all too common.

In reality, his claim that homeless shelters cause homelessness mixes up the direction of causality. People are not poor because of charity anymore than people get headaches because Tylenol exists. Indeed, the causes of homelessness are vast. As the National Coalition for the Homeless explains, the rise in foreclosures, a lack of well-paying jobs and affordable housing, as well as the decline in public assistance are all factors that contribute to homelessness in the United States. Others can include domestic violence, medical emergencies, and mental illness. Not included as a cause of homelessness is because people volunteer at shelters.

Even if we consider his solution to homelessness — take the effort you spent volunteering and use it to line your own pockets instead — at face value, it completely falls apart when considering economic evidence over the past 40 years. Median household income has actually declined, even as CEO pay has shot up exponentially. Combine that with the fact that the cost of living has increased rapidly and the result is massive income inequality in the United States. Kessler may imagine a trickle-down world where unbridled economic growth is a salve that we can use to cure all our problems, but it bears no resemblance to the world we actually live in.

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