America’s safety-net programs are meant to help the poorest and most vulnerable access meet their basic needs—food, medical care, and safe housing—and there’s an ongoing debate about just how robust and successful these programs are.
In his new book, The Poverty Industry: The Exploitation of America’s Most Vulnerable Citizens, Daniel L. Hatcher, suggests that the problems plaguing programs such as foster care and Medicaid are deeper and more troubling than most realize. Hatcher, a professor at the University of Baltimore’s School of Law, writes:
States and their human service agencies are partnering with private companies to form a vast poverty industry, turning America’s most vulnerable populations into a source of revenue … The resulting industry is strip-mining billions in federal aid and other funds from impoverished families, abused and neglected children, and the disabled and elderly poor.
How does this happen? Hatcher uses the example of the foster-care system, where some states enlist the help of private consultants to come up with strategies to maximize disability claims for children in its care. That results in higher payouts from the federal government. But instead of using that money to care for children, the money is diverted, and used for other things the state deems necessary.
I spoke with Hatcher about his book, how states and private groups help abuse the safety net, and how to prevent such abuses. The interview below has been lightly edited for clarity.
Gillian B. White: One of the central themes you discuss in the book is this premise of an “iron triangle” related to poverty. The term “iron triangle” is a general way of describing the intersecting relationship between government agencies, special-interest groups, and legislators. Can you walk me through how this concept applies to the mechanisms that are supposed to protect the poorest Americans?