Politically, the bailout seems to be wildly unpopular.  The bailout gets to a critical question at the heart of a lot of political philosophy:  do we help others who have screwed up, or punish them at cost to ourselves?

It might be easier to think of in a context other than the current bailout.  So here's another program that I reluctantly approved of (yes, I know, I'm not a real libertarian.  Having a workable political philosophy is actually more important to me than hewing rigidly to my label, thanks.):

Culhane then put together a database--the first of its kind--to track who was coming in and out of the shelter system. What he discovered profoundly changed the way homelessness is understood. Homelessness doesn't have a normal distribution, it turned out. It has a power-law distribution. "We found that eighty per cent of the homeless were in and out really quickly," he said. "In Philadelphia, the most common length of time that someone is homeless is one day. And the second most common length is two days. And they never come back. Anyone who ever has to stay in a shelter involuntarily knows that all you think about is how to make sure you never come back."

The next ten per cent were what Culhane calls episodic users. They would come for three weeks at a time, and return periodically, particularly in the winter. They were quite young, and they were often heavy drug users. It was the last ten per cent--the group at the farthest edge of the curve--that interested Culhane the most. They were the chronically homeless, who lived in the shelters, sometimes for years at a time. They were older. Many were mentally ill or physically disabled, and when we think about homelessness as a social problem--the people sleeping on the sidewalk, aggressively panhandling, lying drunk in doorways, huddled on subway grates and under bridges--it's this group that we have in mind. In the early nineteen-nineties, Culhane's database suggested that New York City had a quarter of a million people who were homeless at some point in the previous half decade --which was a surprisingly high number. But only about twenty-five hundred were chronically homeless.

It turns out, furthermore, that this group costs the health-care and social-services systems far more than anyone had ever anticipated. Culhane estimates that in New York at least sixty-two million dollars was being spent annually to shelter just those twenty-five hundred hard-core homeless. "It costs twenty-four thousand dollars a year for one of these shelter beds," Culhane said. "We're talking about a cot eighteen inches away from the next cot." Boston Health Care for the Homeless Program, a leading service group for the homeless in Boston, recently tracked the medical expenses of a hundred and nineteen chronically homeless people. In the course of five years, thirty-three people died and seven more were sent to nursing homes, and the group still accounted for 18,834 emergency-room visits--at a minimum cost of a thousand dollars a visit. The University of California, San Diego Medical Center followed fifteen chronically homeless inebriates and found that over eighteen months those fifteen people were treated at the hospital's emergency room four hundred and seventeen times, and ran up bills that averaged a hundred thousand dollars each. One person--San Diego's counterpart to Murray Barr--came to the emergency room eighty-seven times.

"If it's a medical admission, it's likely to be the guys with the really complex pneumonia," James Dunford, the city of San Diego's emergency medical director and the author of the observational study, said. "They are drunk and they aspirate and get vomit in their lungs and develop a lung abscess, and they get hypothermia on top of that, because they're out in the rain. They end up in the intensive-care unit with these very complicated medical infections. These are the guys who typically get hit by cars and buses and trucks. They often have a neurosurgical catastrophe as well. So they are very prone to just falling down and cracking their head and getting a subdural hematoma, which, if not drained, could kill them, and it's the guy who falls down and hits his head who ends up costing you at least fifty thousand dollars. Meanwhile, they are going through alcoholic withdrawal and have devastating liver disease that only adds to their inability to fight infections. There is no end to the issues. We do this huge drill. We run up big lab fees, and the nurses want to quit, because they see the same guys come in over and over, and all we're doing is making them capable of walking down the block."

The homelessness problem is like the L.A.P.D.'s bad-cop problem. It's a matter of a few hard cases, and that's good news, because when a problem is that concentrated you can wrap your arms around it and think about solving it. The bad news is that those few hard cases are hard. They are falling-down drunks with liver disease and complex infections and mental illness. They need time and attention and lots of money. But enormous sums of money are already being spent on the chronically homeless, and Culhane saw that the kind of money it would take to solve the homeless problem could well be less than the kind of money it took to ignore it. Murray Barr used more health-care dollars, after all, than almost anyone in the state of Nevada. It would probably have been cheaper to give him a full-time nurse and his own apartment.

The leading exponent for the power-law theory of homelessness is Philip Mangano, who, since he was appointed by President Bush in 2002, has been the executive director of the U.S. Interagency Council on Homelessness, a group that oversees the programs of twenty federal agencies. Mangano is a slender man, with a mane of white hair and a magnetic presence, who got his start as an advocate for the homeless in Massachusetts. In the past two years, he has crisscrossed the United States, educating local mayors and city councils about the real shape of the homelessness curve. Simply running soup kitchens and shelters, he argues, allows the chronically homeless to remain chronically homeless. You build a shelter and a soup kitchen if you think that homelessness is a problem with a broad and unmanageable middle. But if it's a problem at the fringe it can be solved. So far, Mangano has convinced more than two hundred cities to radically reëvaluate their policy for dealing with the homeless.

"I was in St. Louis recently," Mangano said, back in June, when he dropped by New York on his way to Boise, Idaho. "I spoke with people doing services there. They had a very difficult group of people they couldn't reach no matter what they offered. So I said, Take some of your money and rent some apartments and go out to those people, and literally go out there with the key and say to them, 'This is the key to an apartment. If you come with me right now I am going to give it to you, and you are going to have that apartment.' And so they did. And one by one those people were coming in. Our intent is to take homeless policy from the old idea of funding programs that serve homeless people endlessly and invest in results that actually end homelessness."

Believe it or not, the Bush administration was putting a fair amount of juice into this strategy before they got distracted by the war, and I was in favor of it.

The chronically homeless are not, as fable would have it, people who have had some hard luck.  They are people who have repeatedly made bad decisions--mentally ill people who stop taking their medicine, drug addicts and drunks.  Those who have merely had a spell of bad luck get in and out of the shelter system pretty quickly.  The people on the street are people who can't stay in the shelter system because their behavior is so extreme.

For many people (including me) giving someone an apartment as a reward for refusing to deal with their drug addiction violates our inherent sense of fairness.  And for many bleeding hearts (including me) simply giving someone an apartment without forcing them to get help for their underlying conditions violates our inherent sense of mercy.  We don't want them to just have a roof over their heads; we want them to stop drinking themselves to death and/or hearing voices.

But people on the street are people who have refused help, or can't, for whatever dark psychological reason, use it.  And they are people who cost a phenomenal amount of money when they get one of the many diseases inherent in sleeping on the street.  How much money are we willing to pay to maintain our sense of fairness?

(Yes, I know, the hardcore libertarians are protesting that we shouldn't pay for their medical care.  Leaving aside the morality of this, we are going to pay for their medical care, because a majority of Americans are horrified by the idea of letting someone die outside the hospital door.  Assuming this is so, what should we then do?)

Some people are willing to pay quite a lot.  Psychologists call them "altruistic punishers".  We all have a little bit of this in us, as illustrated by a common experiment.  You take a pair of people, and give one of them twenty dollars.  You then tell them they can give any amount of that $20 to the other person.  But if the other person rejects their offer, both gets nothing.

The perfectly rational amount to offer is $1; after all, it's better than nothing.  But experiments repeatedly show that if the offer goes much below 30-40% of the original amount, the other party will almost invariably reject the offer, leaving them both with nothing.

This is a pretty wise evolutionary strategy in small groups; it enforces sharing and reciprocity.  But the homeless are already people with extreme disregard of social norms and also, personal suffering.  Unless we're actually willing to let them die, and I hope we aren't, we don't have any leverage.

In large groups, I'm not sure these norms work so well.  Should we punish stupid bankers by plunging the entire country into recession?  Most of the stupidest ones have already been punished; as I understand it, Dick Fuld lost about $100 million in the Lehman collapse, while the head of Bear lost $1 billion.  The mortgage bankers have already been fired.  We're sending a message to a largely empty room.

But even if there were some people there to send that message to, it wouldn't be a good idea.  The people protesting and flooding their representatives with phone calls almost certainly do not grasp what a financial collapse implies. But policymakers should.  I don't know, however, if they can ignore our altruistic, punishing genes.  Since those genes will probably vote them out of office in November if they do.

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