Commentary Magazine


Topic: poverty

Seeking the Welfare of the City

Representative Paul Ryan yesterday released a 73-page plan aimed at reforming anti-poverty programs and increasing social mobility.

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Representative Paul Ryan yesterday released a 73-page plan aimed at reforming anti-poverty programs and increasing social mobility.

The deficit-neutral plan would consolidate nearly a dozen federal anti-poverty programs into a single funding stream for states (called the “Opportunity Grant”); expand the Earned Income Tax Credit to childless workers; streamline federal grant, loan, and work-study programs and give more educational programs access to accreditation (thereby increasing more access to technical careers); revise the mandatory-minimum sentencing guidelines while expanding enrollment in rehabilitative programing; and roll back “regressive regulations” that are particularly injurious to low-income people while easing licensing requirements to enter the workforce. Thoughtful analyses of Ryan’s plan can be found here, here, and here.

There are several features of Ryan’s “Expanding Opportunity in America” plan that are worth highlighting. The first is that his core reform requires and rewards work for those states that would opt in. It would do so by expanding one the best features of the 1996 welfare reform bill, in this case implementing work requirements for people receiving non-cash welfare assistance. States would have flexibility in terms of how they spend federal dollars, so long as it’s spent on programs that require work. This is a way for government to promote not simply work over idleness, but the dignity and self-sufficiency that often result from work.

Representative Ryan is also showing Republicans the importance of structural reforms, which are more important even than only cutting spending. (This applied to his Medicare reform proposals as well.) Mr. Ryan is demonstrating through his proposal that he wants to strengthen the social safety net, not undo it. And by supporting EITC, an effective federal program that promotes work and reduces poverty, Ryan is showing an empirical-minded rather than ideological approach to governing. He’s interested in championing what works.

I’m also encouraged by the fact that Ryan proposes reducing corporate welfare (such as subsidies for agriculture and energy). I’ve argued before that Republicans should be visible and persistent critics of corporate welfare–the vast network of subsidies and tax breaks extended by Democratic and Republican administrations alike to wealthy and well-connected corporations–since such benefits undermine free markets and undercut the public’s confidence in American capitalism. “Ending corporate welfare as we know it” is a pretty good mantra for Republicans.

In the wider context of things, Ryan has shown that he is–along with Senators Marco Rubio, Mike Lee, and others (including governors and former governors like Jeb Bush)–helping the GOP to be both conservative and constructive. They are able to present not just a governing vision but also a governing agenda–one that is designed to meet the challenges of this moment, this era, this century. This contrasts rather well, I think, with modern liberalism, which is increasingly reactionary and exhausted.

One other thing: Paul Ryan’s effort to combat poverty and increase social mobility is important and impressive because great parties and political movements will care about those in the shadows of society. “Seek the welfare of the city to which I have exiled you,” Jeremiah writes, “and pray to the Lord on its behalf, for in its prosperity you shall prosper.”

Politics involves many things, including rather mundane and even distasteful ones. But it also involves, at its best and at its highest, seeking the welfare of the city. That is something worthy of our attention and energies, as Paul Ryan and other prominent figures in the conservative movement understand.

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Thomas Piketty and the Financial Times

The French economist Thomas Piketty has made quite a splash with his new book Capital in the 21st Century, which is now No. 5 on Amazon’s bestseller list. That’s an amazing achievement for a book that positively bristles with charts, graphs, and abstruse economic arguments. I suspect it will be more purchased than actually read.

But the Financial Times has accused Piketty of doing a poor job with his data. I am not in a position to have an opinion on this as it involves complicated statistical analysis that is above my pay grade. But Scott Winship, a senior fellow at the Manhattan Institute, is in such a position and he’s not very impressed with the Financial Times’s analysis:

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The French economist Thomas Piketty has made quite a splash with his new book Capital in the 21st Century, which is now No. 5 on Amazon’s bestseller list. That’s an amazing achievement for a book that positively bristles with charts, graphs, and abstruse economic arguments. I suspect it will be more purchased than actually read.

But the Financial Times has accused Piketty of doing a poor job with his data. I am not in a position to have an opinion on this as it involves complicated statistical analysis that is above my pay grade. But Scott Winship, a senior fellow at the Manhattan Institute, is in such a position and he’s not very impressed with the Financial Times’s analysis:

The Financial Times blew the data issues it identified out of proportion. Giles discovered a couple of clear errors and a number of adjustments that look questionable but have barely any impact on Piketty’s charts. Much of his critique could have been consigned to a footnote to the effect that he uncovered other mistakes and questionable choices that do not actually change Piketty’s results. Giles’s post is written in a way that makes you think the alleged problems with Piketty’s data are more legion than they are. And he’s made some errors himself along the way.

However, the distinguished economist Martin Feldstein, a professor at Harvard and the chairman of the Council of Economic Advisors under Ronald Reagan has other bones to pick with Piketty’s book, principally that Piketty failed to take into account how changes in American tax law affected people’s behavior and thus deeply affected the statistics:

These changes in taxpayer behavior substantially increased the amount of income included on the returns of high-income individuals. This creates the false impression of a sharp rise in the incomes of high-income taxpayers even though there was only a change in the legal form of that income. This transformation occurred gradually over many years as taxpayers changed their behavior and their accounting practices to reflect the new rules. The business income of Subchapter S corporations alone rose from $500 billion in 1986 to $1.8 trillion by 1992. …

Finally, Mr. Piketty’s use of estate-tax data to explore what he sees as the increasing inequality of wealth is problematic. In part, this is because of changes in estate and gift-tax rules, but more fundamentally because bequeathable assets are only a small part of the wealth that most individuals have for their retirement years. That wealth includes the present actuarial value of Social Security and retiree health benefits, and the income that will flow from employer-provided pensions. If this wealth were taken into account, the measured concentration of wealth would be much less than Mr. Piketty’s numbers imply.

And I certainly agree with Prof. Feldstein’s conclusion:

The problem with the distribution of income in this country is not that some people earn high incomes because of skill, training or luck. The problem is the persistence of poverty. To reduce that persistent poverty we need stronger economic growth and a different approach to education and training, not the confiscatory taxes on income and wealth that Mr. Piketty recommends.

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“Something That Was Not Imaginable 40 years Ago Has Happened”

Ron Haskins, co-director of the Center on Children and Families at the Brookings Institution, has written a sobering and important essay for National Affairs on marriage, parenthood, and public policy. I thought it might be useful to highlight data from the Haskins essay, in order to understand just how profound the changes in family composition have been over the last four decades. 

Marriage Rates

In 1970, 83 percent of women ages 30 to 34 were married. By 2010, that number had fallen to 57 percent.

For almost every demographic group, whether broken down by age, education, or race and ethnicity, marriage rates have declined nearly continuously since 1970. Marriage rates for 20- to 24-year-olds, for instance, fell from 61 percent to 16 percent, a decline of almost 75 percent in four decades. The rate for 35- to 39-year-olds declined by 25 percent, from 83 percent to 62 percent. (The only exception to the pattern of decline was for women with a college degree or more. After a modest decline of about 11 percent between 1970 and 1990, the marriage rate for college-educated women stopped declining and even increased by about 1 percent between 1990 and 2010.)

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Ron Haskins, co-director of the Center on Children and Families at the Brookings Institution, has written a sobering and important essay for National Affairs on marriage, parenthood, and public policy. I thought it might be useful to highlight data from the Haskins essay, in order to understand just how profound the changes in family composition have been over the last four decades. 

Marriage Rates

In 1970, 83 percent of women ages 30 to 34 were married. By 2010, that number had fallen to 57 percent.

For almost every demographic group, whether broken down by age, education, or race and ethnicity, marriage rates have declined nearly continuously since 1970. Marriage rates for 20- to 24-year-olds, for instance, fell from 61 percent to 16 percent, a decline of almost 75 percent in four decades. The rate for 35- to 39-year-olds declined by 25 percent, from 83 percent to 62 percent. (The only exception to the pattern of decline was for women with a college degree or more. After a modest decline of about 11 percent between 1970 and 1990, the marriage rate for college-educated women stopped declining and even increased by about 1 percent between 1990 and 2010.)

Non-Marital Birth Rates

The non-marital birth rate among all demographic groups has increased from 11 percent to almost 41 percent over the same four decades. In 2010, 72 percent of births to African-American women were out of wedlock. The Hispanic rate was 53 percent, a 50 percent increase over 1989 (when data on Hispanic birth rates first began to be collected separately from non-Hispanic whites). The rate for non-Hispanic whites, which stood at 16 percent in 1989, had increased to 29 percent by 2010, a larger increase in percentage terms than for any other group over that period.

Teen pregnancy rates have declined almost every year since 1991, and the number of teen births has declined by more than 50 percent since that time. The problem of non-marital pregnancy is now greatest among adults in their 20s and 30s.

Married-with-Children Households

Over the four-decade period, the percentage of married-with-children households declined by well over a third to just 51 percent. By contrast, the percentages of all three other types of households increased: married without children by 72 percent, single with children by 122 percent, and single without children by 165 percent.

Single Parent Households

In 1970, 12 percent of children lived with a single parent at any given time; over the next 40 years, that number increased by 124 percent, rising to 27 percent of children in 2010. Over the course of their childhoods, as many as half of all American children will spend some time in a single-parent household.

Child Poverty

According to the Census Bureau, in 2012 the poverty rate among children living with only their mother was 47.2 percent; by contrast, the poverty rate among children living with their married parents was 11.1 percent, meaning that a child living with a single mother was almost five times as likely to be poor as a child living with married parents.

As the Haskins essay makes clear, there is a high human cost to children in particular when marriage collapses–in terms of high school dropout rates, delinquency, crime and incarceration, drug use, mental illness, suicide, poverty, idleness in later years, and more. “If we want to address the challenges of income inequality and immobility,” he writes, “we must address one of the main causes – non-marital births and single parenting.”

Mr. Haskins, in reviewing programs tried at all levels of government, finds that the results have been mixed and, for the most part, hardly encouraging. We are dealing in a realm of human behavior where the positive effects of public policy look to be quite limited. What will be required is a substantial shift in social mores–in how we view the institution and purposes of marriage, the duties of parenthood, our commitments to one another, and even human fulfillment itself–and there’s little evidence that is about to occur anytime soon. 

In 2000, Senator Daniel Patrick Moynihan was asked to identify the biggest change he had seen in his 40-year political career. Moynihan responded, “The biggest change, in my judgment, is that the family structure has come apart all over the North Atlantic world.” This change has occurred in “an historical instant,” Moynihan said. “Something that was not imaginable 40 years ago has happened.”

Indeed it has. (The trends that concerned Moynihan have, in fact, accelerated.) The historian Lawrence Stone said the scale of marital breakdown in the West since 1960 has no historical precedent. It is unique. And as a civilization we seem unable, or at least unwilling, to do much of anything about it.

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The Liberal Slandering of Paul Ryan

If you want to know how fearful the left is of Paul Ryan, consider the efforts they make to slander him. In the past, they’ve portrayed him as someone eager to (literally) throw grandma over a cliff. The reason? Ryan wanted to make eminently sensible and absolutely necessary changes to Medicare.

Then came Barack Obama, who, when describing Ryan’s budget, made recklessly untrue assertions, saying (among other things) that Republicans want the elderly and autistic and Down syndrome children to “fend for themselves.”

And now, as Jonathan Tobin has written, comes the latest attempted mugging of Ryan, this time for what he said on Bill Bennett’s “Morning in America” program last week. When discussing his forthcoming effort to combat poverty, the House Budget Committee chairman and 2012 GOP vice presidential candidate said this:

We have got this tailspin of culture, in our inner cities in particular, of men not working and just generations of men not even thinking about working or learning the value and the culture of work, and so there is a real culture problem here that has to be dealt with.

The left immediately attacked. Some, like Representative Barbara Lee, accused Ryan of mounting a “thinly veiled racial attack”–one that “cannot be tolerated.” Others, like New York Times columnist Paul Krugman, wrote that Ryan’s words amounted to a “racial dog whistle.”

These charges, and there are plenty of others like them, are grotesquely false. I have known Ryan since he was a colleague at Empower America in the 1990s. One of the reasons he was so close to both Bennett and Jack Kemp is because Ryan had a deep concern for those living in the shadows of society, including in America’s inner cities. He also believes Republicans have not focused enough on the problems plaguing the underclass. Both help explain his latest effort to offer conservative solutions to rising poverty. 

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If you want to know how fearful the left is of Paul Ryan, consider the efforts they make to slander him. In the past, they’ve portrayed him as someone eager to (literally) throw grandma over a cliff. The reason? Ryan wanted to make eminently sensible and absolutely necessary changes to Medicare.

Then came Barack Obama, who, when describing Ryan’s budget, made recklessly untrue assertions, saying (among other things) that Republicans want the elderly and autistic and Down syndrome children to “fend for themselves.”

And now, as Jonathan Tobin has written, comes the latest attempted mugging of Ryan, this time for what he said on Bill Bennett’s “Morning in America” program last week. When discussing his forthcoming effort to combat poverty, the House Budget Committee chairman and 2012 GOP vice presidential candidate said this:

We have got this tailspin of culture, in our inner cities in particular, of men not working and just generations of men not even thinking about working or learning the value and the culture of work, and so there is a real culture problem here that has to be dealt with.

The left immediately attacked. Some, like Representative Barbara Lee, accused Ryan of mounting a “thinly veiled racial attack”–one that “cannot be tolerated.” Others, like New York Times columnist Paul Krugman, wrote that Ryan’s words amounted to a “racial dog whistle.”

These charges, and there are plenty of others like them, are grotesquely false. I have known Ryan since he was a colleague at Empower America in the 1990s. One of the reasons he was so close to both Bennett and Jack Kemp is because Ryan had a deep concern for those living in the shadows of society, including in America’s inner cities. He also believes Republicans have not focused enough on the problems plaguing the underclass. Both help explain his latest effort to offer conservative solutions to rising poverty. 

It should matter that what Ryan told Bennett is true, as anyone who has spent time in America’s inner cities and working with kids there can testify. The reasons for the hardships facing those living in America’s inner cities are complicated and not simply cultural; they are economic as well. But to say that there isn’t a problematic culture that has taken root in America’s inner cities is a lie; and to attack those like Ryan who speak about it is to compound the lie.

Why are some liberals doing this? For one thing, they are intellectually exhausted. They know they cannot win the debate on the merits, and so they resort to ad hominem attacks. It is what some on the left instantaneously resort to. Mr. Krugman is a prime example of this. He is a man who seems to gain energy from nursing his political hatreds and takes delight in degrading political commentary. (The latter isn’t an easy achievement.) 

But as Jonathan points out, there’s something more fundamental going on here. Liberals who have complicity in the problems plaguing America’s inner cities are attempting to make an honest conversation about poverty impossible. They are signaling that they intend to try to take out Republicans who want to address some of the root causes, the behavioral causes, of poverty.

The danger here is two-fold. One is that by promiscuously invoking racism when it doesn’t apply, they are draining the term of real meaning. Many people already have stopped, and many more will stop, paying attention when the term is so carelessly bandied about.

The other is that some on the left not only aren’t focusing on the institutions, policies, and individuals who are responsible for exacerbating poverty; they are actually building a protective wall around them. For them the villain isn’t, say, the ruinous public school systems in Chicago, Detroit, and D.C. that are destroying the lives and future of hundreds of thousands of kids; it’s Paul Ryan, who among other things supports school choice for inner-city parents. This is what large parts of liberalism have been reduced to: the praetorian guard of corrupt, poverty-creating institutions and organizations.

Paul Ryan is among the most decent and admirable politicians in America. He’s also among the smartest. Which explains the obsession and hatred many on the left have with him. He’s a threat to their ideas, to their policies, and ultimately to their power. The viciousness of their attacks is a testimony to his effectiveness. What was said by those who supported Franklin Roosevelt can also be said by those who admire Paul Ryan: We love you for the enemies you have made.

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Inequality’s Inconvenient Truths

Pop quiz: which Tea Party fiscal conservative said the following: “If you want to live in a more equal community, it might mean living in a more moribund economy.” Since this is obviously a trick question, here’s the answer: Annie Lowrey, the economics writer for the New York Times. Lowrey was offering a bit of common sense and basic economics. As such, the Times is a strange place for it: this sort of talk is usually the province of conservatives trying to explain how market economies work.

Lowrey’s piece was occasioned by the release of a study on inequality in American cities by the left-leaning Brookings Institution. To be sure, the study’s author, Alan Berube, does not think a city with high inequality is in the clear: “It may struggle to maintain mixed-income school environments that produce better outcomes for low-income kids. It may have too narrow a tax base from which to sustainably raise the revenues necessary for essential city services. And it may fail to produce housing and neighborhoods accessible to middle-class workers and families, so that those who move up or down the income ladder ultimately have no choice but to move out.”

But the causes of that inequality, the conditions that foster it, and the surest means to reduce it all throw cold water on President Obama’s inequality rhetoric and the class-warfare battle lines the Democrats have drawn. Contrary to the rich-getting-richer rhetoric the president relies on, Berube found that between 2007 and 2012, of the cities that saw dramatic increases in inequality, “most were not places where the rich made astronomical gains, but where low-income households suffered most from the recession and weak recovery…. Inequality increased across cities despite the fact that rich households were less rich in 2012 than in 2007.”

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Pop quiz: which Tea Party fiscal conservative said the following: “If you want to live in a more equal community, it might mean living in a more moribund economy.” Since this is obviously a trick question, here’s the answer: Annie Lowrey, the economics writer for the New York Times. Lowrey was offering a bit of common sense and basic economics. As such, the Times is a strange place for it: this sort of talk is usually the province of conservatives trying to explain how market economies work.

Lowrey’s piece was occasioned by the release of a study on inequality in American cities by the left-leaning Brookings Institution. To be sure, the study’s author, Alan Berube, does not think a city with high inequality is in the clear: “It may struggle to maintain mixed-income school environments that produce better outcomes for low-income kids. It may have too narrow a tax base from which to sustainably raise the revenues necessary for essential city services. And it may fail to produce housing and neighborhoods accessible to middle-class workers and families, so that those who move up or down the income ladder ultimately have no choice but to move out.”

But the causes of that inequality, the conditions that foster it, and the surest means to reduce it all throw cold water on President Obama’s inequality rhetoric and the class-warfare battle lines the Democrats have drawn. Contrary to the rich-getting-richer rhetoric the president relies on, Berube found that between 2007 and 2012, of the cities that saw dramatic increases in inequality, “most were not places where the rich made astronomical gains, but where low-income households suffered most from the recession and weak recovery…. Inequality increased across cities despite the fact that rich households were less rich in 2012 than in 2007.”

What they need most, then, is job creation. The Brookings study finds that cities with high inequality are better at producing wealth–and for good reason. The job market in such cities tends more toward growth industries. Lowrey’s follow-up on the report includes comments from Berube on the desirability of some of the causes of inequality, even if some of its effects are undesirable:

But in some cases, higher income inequality might go hand in hand with economic vibrancy, the study found. “These more equal cities — they’re not home to the sectors driving economic growth, like technology and finance,” said its author, Alan Berube. “These are places that are home to sectors like transportation, logistics, warehousing.”

He added, “In terms of actual per capita income growth, these are not places that would be high up the list.”

Lowrey is of course not far behind with the caveats and qualifications. “That does not mean that measures intended to mitigate inequality will necessarily reduce the vibrancy of a local community,” she chimes in. But she leaves it at that. It’s not much of a defense of efforts to combat inequality. It basically amounts to: Efforts to reduce inequality will very likely pose a threat to economic growth and employment, but it’s possible, certainly, that not every attempt to mitigate inequality will crush the poor and unemployed under the counterproductive weight of liberals’ good intentions.

Roundabout rhetoric on this issue is necessary for the left because they can’t just come out and say what they mean without losing elections. Namely, that their desire to feel morally superior to others is more important than the actual welfare of their intended beneficiaries.

In fairness, elsewhere in the Times piece we do get a suggestion for reducing urban inequality without confiscating the wealth of others or destroying economic growth: “But New York and many other cities have promised to tackle inequality, in part by shifting the tax burden, but also through initiatives aimed at attracting middle-class families with cheaper housing and better schools.”

How do you cut inequality without destroying the economy? You simply import people who aren’t rich and aren’t poor! But what does this tell us about the concentration on income inequality? That it’s a case of misplaced priorities. Importing not-rich-but-not-poor residents doesn’t make any structural change to the city’s economy so much as it papers over the causes of inequality by gaming the numbers.

Democrats and the president make the case that the key to fighting inequality is making the poor un-poor. Importing middle-class folks from the suburbs doesn’t do that, does it? Sure, it may have peripheral benefits for the less well-off. But it doesn’t rescue others from poverty. It simply makes it look like poverty is less endemic. It’s a cosmetic façade, in other words. Which is what may make it so attractive to liberal policymakers.

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CBO: Minimum Wage Snake Oil

Which of the following two factors would have the greatest impact on the economy: Raising the wages of less than a million Americans from slightly below the poverty line to slightly above it or putting half a million poor people out of work? The answer to that question may be the deciding factor in determining whether Congress accedes to President Obama’s demand to raise the federal minimum wage to $10.15 from the current figure of $7.50. But then again, it may not. Raising the minimum wage is a popular idea. The president’s catch phrase, that Congress should “give America a raise,” polled well before and after it was used in the State of the Union address. Every discussion of the proposal hinges on conservatives pointing out the potential harm to the economy and to employment in the government intervening in the market in this manner only to have their arguments dismissed by liberals who simply say that economic principles must bow to the public desire to give low wage workers more money.

But now that the non-partisan Congressional Budget Office has issued a report about the potential impact of the president’s minimum wage hike proposal, it’s no longer possible to ignore the fact that a lot more harm than good will be done if Congress is foolish enough to pass such a bill. The CBO report is being reported as having “mixed results,” and that is true. The report says the wage hike will boost the income of 16.5 million Americans. That is not news. You don’t need an economics degree to understand that giving people more money means they will have more money. However, the increase would be enough to push some 900,000 over the poverty line. That’s the good news for the president in the report. Less helpful to his cause is the fact that it also says that an estimated 500,000 Americans will loose their jobs, just as conservatives have been arguing all along.

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Which of the following two factors would have the greatest impact on the economy: Raising the wages of less than a million Americans from slightly below the poverty line to slightly above it or putting half a million poor people out of work? The answer to that question may be the deciding factor in determining whether Congress accedes to President Obama’s demand to raise the federal minimum wage to $10.15 from the current figure of $7.50. But then again, it may not. Raising the minimum wage is a popular idea. The president’s catch phrase, that Congress should “give America a raise,” polled well before and after it was used in the State of the Union address. Every discussion of the proposal hinges on conservatives pointing out the potential harm to the economy and to employment in the government intervening in the market in this manner only to have their arguments dismissed by liberals who simply say that economic principles must bow to the public desire to give low wage workers more money.

But now that the non-partisan Congressional Budget Office has issued a report about the potential impact of the president’s minimum wage hike proposal, it’s no longer possible to ignore the fact that a lot more harm than good will be done if Congress is foolish enough to pass such a bill. The CBO report is being reported as having “mixed results,” and that is true. The report says the wage hike will boost the income of 16.5 million Americans. That is not news. You don’t need an economics degree to understand that giving people more money means they will have more money. However, the increase would be enough to push some 900,000 over the poverty line. That’s the good news for the president in the report. Less helpful to his cause is the fact that it also says that an estimated 500,000 Americans will loose their jobs, just as conservatives have been arguing all along.

How do you weigh the impact of these two aspects of a wage hike? It’s actually not all that complex. Nor does it require knowledge of higher calculus. While the increase will marginally help some people, the difference won’t be enough to make much of a difference for them. An extra $3 per hour would be useful to anyone. But the difference between $7.50 or whatever low wage some people are currently earning and the $0.00 they will be receiving when their employers are forced to lay them off because of the increased costs the new law will impose on their businesses will be felt far more both by the newly unemployed and the government that will now have to pay them unemployment benefits. The damage the minimum wage increase will do far outweighs the minimal helps it gives some recipients.

The problem with highlighting the advantages the extra money will give those who will receive the hike is that the jobs affected are still entry-level positions which were never meant to be enough to support a family. While we should not entirely dismiss the help a wage increase gives an individual, the figures are so modest that they are not likely to make that much of a difference. The wage hike will be welcomed but it won’t be enough to change anyone’s life.

Moreover, a large percentage of those who will benefit from the increase are not the working poor or any other kind of disadvantaged group. These are largely made up of teenagers of middle and upper middle class families working at summer or part-time jobs who will be among the biggest winners of the minimum wage proposal. The report points out that a whopping 29 percent of those who will benefit from the president’s largesse are actually members of families earning three times the income deemed to be at poverty level while a further six percent come from families with six times or more the poverty level.

Balanced against the minimal help given the working poor and well-off teenager is the far greater pain of those who will lose their jobs. Sending half a million Americans into the ranks of the unemployed and the grinding poverty that goes with it is bad enough. But doing so will also place intolerable demands on the public purse that will be further drained to pay for the poverty benefits for which these newly unemployed will now be eligible.

What do Democrats say to these facts? Their answer seems to be the traditional liberal practice of sticking their fingers in their ears and saying, “la, la, la.” The administration and people like House Minority Leader Nancy Pelosi are now reduced to claiming that the CBO is wrong and that there will be no impact on employment even if logic and basic economics tells us otherwise.

The minimum wage increase may be popular but, as the CBO points out, it remains economic snake oil. Though succumbing to public sentiment and the president’s demagoguery may seem like the better part of valor, Republicans need to stand their ground and protect the nation and the half million poor Americans at risk from this dangerous proposal.

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Poverty, Social Mobility, and the Party of Lincoln

Yesterday Senator Marco Rubio delivered a major speech on poverty and social mobility. It’s impressive for several reasons.

While not ignoring the issue of income inequality, he made what I think is the correct and important point: Lack of social mobility, not income inequality, is what we should focus on. And the speech was intellectually impressive in part because it was intellectually honest. Senator Rubio explained with some sophistication the reasons for what he calls “opportunity inequality”–including long-term economic, social, cultural, and educational causes. This speech was not politically partisan or shallow; it admitted the causes of poverty and decreasing social mobility are complex. (Many European countries now have as much social mobility as, and more opportunity than, the United States; and today a child’s future depends on parental income more in America than it does in Canada and Europe.) Senator Rubio’s address deepened the public’s understanding of these issues, and that’s all to the good.

On the policy side of things, Senator Rubio’s proposals on the Flex Fund (which would consolidate many anti-poverty programs that in turn would be distributed to the states to enact their own anti-poverty agenda) and transforming the Earned Income Tax Credit into a real wage subsidy are promising steps, with more, I gather, to follow.

What Mr. Rubio unveiled yesterday merits support on federalism and subsidiary grounds, in terms of how we should think about the working poor versus those who are unable to work, because it incentivizes work and creates incentives to avoid unemployment programs, and because it makes upward mobility more, not less, likely. (For a more detailed and illuminating discussion of the merits of Rubio’s proposals, see here and here.)

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Yesterday Senator Marco Rubio delivered a major speech on poverty and social mobility. It’s impressive for several reasons.

While not ignoring the issue of income inequality, he made what I think is the correct and important point: Lack of social mobility, not income inequality, is what we should focus on. And the speech was intellectually impressive in part because it was intellectually honest. Senator Rubio explained with some sophistication the reasons for what he calls “opportunity inequality”–including long-term economic, social, cultural, and educational causes. This speech was not politically partisan or shallow; it admitted the causes of poverty and decreasing social mobility are complex. (Many European countries now have as much social mobility as, and more opportunity than, the United States; and today a child’s future depends on parental income more in America than it does in Canada and Europe.) Senator Rubio’s address deepened the public’s understanding of these issues, and that’s all to the good.

On the policy side of things, Senator Rubio’s proposals on the Flex Fund (which would consolidate many anti-poverty programs that in turn would be distributed to the states to enact their own anti-poverty agenda) and transforming the Earned Income Tax Credit into a real wage subsidy are promising steps, with more, I gather, to follow.

What Mr. Rubio unveiled yesterday merits support on federalism and subsidiary grounds, in terms of how we should think about the working poor versus those who are unable to work, because it incentivizes work and creates incentives to avoid unemployment programs, and because it makes upward mobility more, not less, likely. (For a more detailed and illuminating discussion of the merits of Rubio’s proposals, see here and here.)

As for politics: This kind of effort can only help the Republican Party, which has been too disengaged and morally indifferent to the problems facing the poor for too long. It has not offered a compelling agenda that addresses the economic and structural problems that face (especially) those living in the shadows of society. Whether or not to support or oppose Senator Rubio’s proposals should hinge on the substantive merits. But of course you can’t take the politics out of politics, and so as a purely political matter, focusing on the plight of the poor would certainly make middle-class voters, and especially middle-class women, more amenable to the GOP.

I’ve written before that social mobility is the central moral promise of American economic life; the hallmark of our system is the potential for advancement and greater prosperity rooted in merit and hard work rather than in the circumstances of one’s birth. This was the key insight of Lincoln, who noted that “the progress by which the poor, honest, industrious and resolute man raises himself, that he may work on his own account and hire somebody else … is the great principle for which this government was really formed.”

It’s time that the Party of Lincoln more fully embrace the philosophy of Lincoln. That is, I think, what Marco Rubio (and congressional Republicans, like Representatives Eric Cantor and Paul Ryan and Senator Mike Lee) are doing. More Republicans should follow their lead. 

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Conservatives and Poverty

In a recent Mars Hill Audio Journal discussion, Ken Myers interviewed the church historian Peter Brown on the early church’s approach to wealth and poverty. (Brown is also author of the masterful 1967 biography, Augustine of Hippo.)

According to Myers, while those in ancient Rome did participate in alms giving, in Roman and Greek culture there wasn’t the compassion for the poor that was present in Jewish and Christian understanding because “there was nothing like Yahweh’s love for the oppressed in their moral imagination.” For the pre-Christian cultures of antiquity, he observed, civic generosity involved a love for the city but not a love for the poor as such.

This is how Professor Brown put it in a lecture:

In directing so much attention to the care of the poor, Jews and Christians were not simply doing on a more extensive scale what pagans had already been doing in a less whole-hearted and well-organized manner. Far from it. It takes some effort of the historical imagination to realize that around the year 360 CE, love of the poor was a relatively novel and for many humane and public-spirited persons still a largely peripheral virtue. As for organized care of the poor, this was a practice that cut against deeply ingrained and still vigorous traditions of public giving from which direct charity to the poor was notably absent.

It is this Jewish and Christian understanding that eventually helped shift people’s attitudes. “Securing justice for the poor and upholding the cause of the needy,” in the words of the Psalms, became not just a private but also a public concern. Throughout the Scriptures, in fact, rulers are judged by whether the weak and the disadvantaged in society are cared for or exploited.

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In a recent Mars Hill Audio Journal discussion, Ken Myers interviewed the church historian Peter Brown on the early church’s approach to wealth and poverty. (Brown is also author of the masterful 1967 biography, Augustine of Hippo.)

According to Myers, while those in ancient Rome did participate in alms giving, in Roman and Greek culture there wasn’t the compassion for the poor that was present in Jewish and Christian understanding because “there was nothing like Yahweh’s love for the oppressed in their moral imagination.” For the pre-Christian cultures of antiquity, he observed, civic generosity involved a love for the city but not a love for the poor as such.

This is how Professor Brown put it in a lecture:

In directing so much attention to the care of the poor, Jews and Christians were not simply doing on a more extensive scale what pagans had already been doing in a less whole-hearted and well-organized manner. Far from it. It takes some effort of the historical imagination to realize that around the year 360 CE, love of the poor was a relatively novel and for many humane and public-spirited persons still a largely peripheral virtue. As for organized care of the poor, this was a practice that cut against deeply ingrained and still vigorous traditions of public giving from which direct charity to the poor was notably absent.

It is this Jewish and Christian understanding that eventually helped shift people’s attitudes. “Securing justice for the poor and upholding the cause of the needy,” in the words of the Psalms, became not just a private but also a public concern. Throughout the Scriptures, in fact, rulers are judged by whether the weak and the disadvantaged in society are cared for or exploited.

Which brings me to the here and now. According to a recent Washington Post story, next year, for the 50th anniversary of Lyndon Johnson’s “War on Poverty” crusade, Representative Paul Ryan “hopes to roll out an anti-poverty plan to rival his budgetary Roadmap for America’s Future in scope and ambition.”

A conservative plan to combat poverty would of course differ–and in my estimation should differ–from a liberal anti-poverty approach. But for the purposes of this post, I don’t want to examine the substantive policy differences, as salient as they are. Rather, I want to underscore the fact that focusing attention on those living in the shadows of American society is the responsibility of a great political party; and how to create greater opportunity and social mobility for those stuck on the bottom rungs of society should be part of any conservative governing vision.

To be sure, the problem of poverty is complicated, different in important respects from in the past, and defies simplistic partisan explanations. The solutions certainly extend beyond the actions of government. Indeed, misguided government policies have done a great deal to perpetuate inter-generational poverty. But it’s hard to argue that politics and government don’t have significant roles to play, direct and indirect, both in putting an end to failed policies and in supporting what works. And certainly the Republican Party has to do better than declaring utter indifference to the poor (which was the approach some otherwise very impressive individuals took in the 2012 presidential race). 

Helping those most in need should be considered more than a peripheral virtue; and like Jews and Christians of old, we should all make more room in our moral imaginations for the care of the poor. Certainly if we’re told that God identifies with the least of these, so should we.

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Paul Ryan’s Quiet Anti-Poverty Quest

What should be the goal of conservative anti-poverty programs? The obvious answer is: help those in poverty find their way to some measure of economic security. That, at least, is what the subjects of anti-poverty programs would expect. It is a challenge–more so than Republican politicians seem to appreciate–to convince someone in dire economic straits about the long-term value of the economic process of creative destruction that may have put them in near-term financial crisis. You can’t eat character or life lessons.

But to listen to Republican legislators, the goal of these programs seems to be to cut the budget, or to reduce dependency on the federal government, or create jobs–all important items on the GOP’s agenda, and all which can, certainly, help alleviate poverty in various ways. But that also means that when conservatives talk, they are often talking about those in poverty, not to them. That was part of the basis for Chris Christie’s reelection strategy, which saw him go into disadvantaged neighborhoods and show reliably liberal voters that Republicans weren’t afraid to be in the same room with them.

But what to do beyond that? This is the question Paul Ryan is grappling with. Ryan’s anti-poverty drive is the subject of a lengthy profile in the Washington Post, which notes that the Wisconsin congressman, who ran as Mitt Romney’s vice presidential nominee last year, was positively mortified by Romney’s infamous “47 percent” comment. “I think he was embarrassed,” Bob Woodson, a civil-rights activist who worked with Ryan’s mentor Jack Kemp on poverty issues, told the Post. “And it propelled him to deepen his own understanding of this.”

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What should be the goal of conservative anti-poverty programs? The obvious answer is: help those in poverty find their way to some measure of economic security. That, at least, is what the subjects of anti-poverty programs would expect. It is a challenge–more so than Republican politicians seem to appreciate–to convince someone in dire economic straits about the long-term value of the economic process of creative destruction that may have put them in near-term financial crisis. You can’t eat character or life lessons.

But to listen to Republican legislators, the goal of these programs seems to be to cut the budget, or to reduce dependency on the federal government, or create jobs–all important items on the GOP’s agenda, and all which can, certainly, help alleviate poverty in various ways. But that also means that when conservatives talk, they are often talking about those in poverty, not to them. That was part of the basis for Chris Christie’s reelection strategy, which saw him go into disadvantaged neighborhoods and show reliably liberal voters that Republicans weren’t afraid to be in the same room with them.

But what to do beyond that? This is the question Paul Ryan is grappling with. Ryan’s anti-poverty drive is the subject of a lengthy profile in the Washington Post, which notes that the Wisconsin congressman, who ran as Mitt Romney’s vice presidential nominee last year, was positively mortified by Romney’s infamous “47 percent” comment. “I think he was embarrassed,” Bob Woodson, a civil-rights activist who worked with Ryan’s mentor Jack Kemp on poverty issues, told the Post. “And it propelled him to deepen his own understanding of this.”

Ryan faces two obstacles. First, his placement on the ticket implicated him, even if once removed, from Romney’s comments. And second, he is the author of a budget reform plan that aims to shore up the social safety net before it goes bankrupt. Conservatives are virtually alone in their willingness to address the looming entitlements crisis. When Ryan proposed an earlier iteration of his budget, the Democrats ran lunatic murder-fantasy ads depicting a Ryan lookalike throwing an old lady off of a cliff.

Reforming entitlements isn’t the same as addressing poverty, but Ryan is pushing back against the stigma of the Democratic attack ads that emerge, like clockwork, any time the Democrats have an opportunity to scuttle attempts to put those programs on sound economic footing. The Post describes how the Ryan-Woodson collaboration has taken shape:

Ryan had sought Woodson’s help with his poverty speech. The two reconnected after the election and began traveling together in February — once a month, no reporters — to inner-city programs supported by Woodson’s Center for Neighborhood Enterprise. In Milwaukee, Indianapolis and Denver, Woodson said, Ryan asked questions about “the agents of transformation and how this differs from the professional approach” of government social workers.

Like Woodson, the programs share a disdain for handouts and a focus on helping people address their own problems. In Southeast Washington, Ryan met Bishop Shirley Holloway, who gave up a comfortable career in the U.S. Postal Service to minister to drug addicts, ex-offenders, the homeless — people for whom government benefits can serve only to hasten their downfall, Holloway said.

At City of Hope, they are given an apartment and taught life skills and encouraged to confront their psychological wounds. They can stay as long as they’re sober and working, often in a job Holloway has somehow created.

“Paul wants people to dream again,” Holloway said of Ryan. “You don’t dream when you’ve got food stamps.”

Trips to Newark and Texas are slated for later this month. Woodson said Ryan has also asked him to gather community leaders for an event next year, and to help him compare the results of their work with the 78 means-tested programs that have cost the federal government $15 trillion since 1964.

Ryan’s focus on the effectiveness of these programs vis-à-vis the federal government’s programs strikes me as the key to this experiment. The Democrats’ solution to poverty is to increase dependence on the federal government to bolster its expansion and give politicians ever more control over the public. As such, it cedes plenty of ground to anyone more concerned about helping the poor than about their own quest for power.

Yet the right cedes much of that ground right back by subsuming specific existing anti-poverty programs into the larger fights over the budget or more abstract battles over ideological principles. The ineffectiveness of government programs isn’t enough to discredit them in the minds of politicians looking for votes: otherwise, Medicaid–an expensive failure that is actually expanded under ObamaCare as a wealth transfer–would be a constant target of reform.

These programs often follow the rule that you can’t beat something with nothing. A bad government program easily persists when there is no alternative. If Ryan can prove there are workable alternatives, the Democrats will need more than disturbing attack ads to derail conservative attempts to save the social safety net.

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The President, His Budget, and the Poor

There is much one could say about President Obama’s Rose Garden statement on Wednesday announcing his FY 2014 budget. On the plus side, the president endorsed a “chained CPI”–a measure of inflation that is a more accurate way to factor rises in the cost of living into Social Security benefits. It’s a good idea, if quite a modest one (this Wall Street Journal editorial explains why there is less to it than meets the eye). And of course if the president really believed in a chained CPI, he would be a strong advocate for it rather than viewing it as a concession to Republicans. (Jay Carney, in this interview with Fox News’ Bret Baier, concedes that a chained CPI is “is not preferred policy by this president.”)

In any event, the downsides of the record-setting $3.78 trillion budget overwhelm the upside. A quick summary of the budget can be found here, but here’s some of what you need to know: Over a 10-year period it would raise taxes by $1.1 trillion–on top of $1 trillion in taxes from the Affordable Care Act and more than $600 billion from the president’s recent tax hike. It increases spending by $964 billion. And it adds $8.2 trillion to our debt. The debt held by the public as a share of the economy is predicted to reach 78.2 percent in 2014–nearly double what it was in 2008.

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There is much one could say about President Obama’s Rose Garden statement on Wednesday announcing his FY 2014 budget. On the plus side, the president endorsed a “chained CPI”–a measure of inflation that is a more accurate way to factor rises in the cost of living into Social Security benefits. It’s a good idea, if quite a modest one (this Wall Street Journal editorial explains why there is less to it than meets the eye). And of course if the president really believed in a chained CPI, he would be a strong advocate for it rather than viewing it as a concession to Republicans. (Jay Carney, in this interview with Fox News’ Bret Baier, concedes that a chained CPI is “is not preferred policy by this president.”)

In any event, the downsides of the record-setting $3.78 trillion budget overwhelm the upside. A quick summary of the budget can be found here, but here’s some of what you need to know: Over a 10-year period it would raise taxes by $1.1 trillion–on top of $1 trillion in taxes from the Affordable Care Act and more than $600 billion from the president’s recent tax hike. It increases spending by $964 billion. And it adds $8.2 trillion to our debt. The debt held by the public as a share of the economy is predicted to reach 78.2 percent in 2014–nearly double what it was in 2008.

The Obama budget, then, continues the Obama project, which is to increase the size, the cost, and the reach of the federal government even as it continues to raise taxes. In that sense, it’s merely the latest extension of the progressive philosophy of President Obama.

But there’s another area worth focusing on: Poverty and care for the most vulnerable members of society. That was a repeated theme in Mr. Obama’s Rose Garden statement. The president said he would accept some ideas as part of a compromise–“if, and only if, they contain protections for the most vulnerable Americans.” He said “no one who works full-time should have to raise his or her family in poverty.” And the president said that unlike his opponents, “the people I feel for are the people who are directly feeling the pain of these [sequester] cuts–the people who can least afford it.” (Never mind the fact that the sequester idea originated with the president, not Republicans.)

The Obama message, then, is this: I care about the poor while Republican do not. The president, however, has a rather odd way of demonstrating his solidarity with the poor. To see why, it’s worth focusing not on a budget that will never be implemented but on conditions that touch real lives. For example, during the Obama years the U.S. has seen the highest poverty spike since the 1960s, leaving nearly 50 million Americans poor–including nearly 20 percent of the country’s children. The poverty rate has increased nearly every year of the Obama presidency (between 2011 and 2012 it was level). Income inequality has risen. Add to that the fact that the number of people on food stamps is at an all-time high of more than 47 million, compared to fewer than 31 million people on food stamps the month Obama was first elected.

Obama defenders will say that this is the result of the very nasty recession that hit the country in 2008, to which the response is (a) the recession officially ended the first summer of the president’s first term and (b) historically the worse the recession the stronger the recovery. Yet under Obama, we’ve experienced the weakest recovery since before the middle part of the last century. (Last Friday, amidst a terrible jobs report, we learned that the labor-force participation in March dropped to its lowest point since the late 1970s.) 

Now, I’m not inclined to blame every bit of bad news on the president or his policies (which is more than Mr. Obama ever did when it came to his predecessor). The problems plaguing our economy, and the causes of poverty, are deep and complicated. Still, the president’s economic policies have been, by any reasonable measure, a failure. And while many people have suffered because of it, none have suffered more than the most vulnerable members of our society.

The left likes to talk the compassion game. But it shouldn’t be too much to ask that progressives be judged by outcomes, not inputs; by real-world results, not rhetoric. By that standard, liberalism over the last several decades–from policies on welfare, crime and education to economics and family structure–has often done great and lasting harm to the poor. Conservatism is the best way to advance the common good. That is an argument more Republicans ought to think about making.

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Why Is North Korea So Poor?

The answer should be stunningly obvious, but don’t tell Reuters. In the course of an article about the divergent fates that await victorious North Korean athletes and those who have failed, comes this:

The reality is that life is tough in North Korea in the best of times, however. International sanctions over its nuclear weapons program, a decaying economy and a defective food distribution system have left almost a third of its 24 million people poor and hungry and it has few friends besides its neighbor China.

It really takes an intellectual contortionist wearing blinders to miss so utterly the reasons for North Korea’s failure: it’s a totalitarian state that holds its own citizens in contempt. International sanctions may target the North’s weapons program but, if sanctions were waived tomorrow, the only beneficiaries would be Kim Jong-un and the military. The food distribution system is not defective, just misaligned. After all, it was the regime and military that benefited when the Clinton administration shipped food aid to North Korea. The regime maintains the Songbun, a social classification system that marks North Koreans for life. A tiny few benefit; most are disposable.

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The answer should be stunningly obvious, but don’t tell Reuters. In the course of an article about the divergent fates that await victorious North Korean athletes and those who have failed, comes this:

The reality is that life is tough in North Korea in the best of times, however. International sanctions over its nuclear weapons program, a decaying economy and a defective food distribution system have left almost a third of its 24 million people poor and hungry and it has few friends besides its neighbor China.

It really takes an intellectual contortionist wearing blinders to miss so utterly the reasons for North Korea’s failure: it’s a totalitarian state that holds its own citizens in contempt. International sanctions may target the North’s weapons program but, if sanctions were waived tomorrow, the only beneficiaries would be Kim Jong-un and the military. The food distribution system is not defective, just misaligned. After all, it was the regime and military that benefited when the Clinton administration shipped food aid to North Korea. The regime maintains the Songbun, a social classification system that marks North Koreans for life. A tiny few benefit; most are disposable.

Nor was North Korea’s economic decay a passive process. Rather than invest in expanding the economy, the North Korean leadership siphoned all investment into its million plus man army. There is no better illustration today of the human cost of communism and dictatorship than the juxtaposition between North and South Korea.

Reuters may have thought that their explanation of North Korean woes to be a throwaway sentence, a bit of background for those who do not the poverty that blankets North Korea today. When it comes to North Korea, however, there can be no way around blame: The responsibility for North Korea’s dire situation rests solely and completely on its murderous, totalitarian regime.

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Poverty and Politics

According to a story in the Associated Press, “the ranks of America’s poor are on track to climb to levels unseen in nearly half a century.” The story goes on to say that poverty, which is closely tied to joblessness, “is spreading at record levels across many groups.” (The most recent poverty rates are from 2010; Census figures for 2011 will be released this fall.)

According to demographers:

  • Poverty will remain above the pre-recession level of 12.5 percent for many more years. Several predicted that peak poverty levels — 15 percent to 16 percent — will last at least until 2014.
  • Suburban poverty, already at a record level of 11.8 percent, will increase again in 2011.
  • Part-time or underemployed workers, who saw a record 15 percent poverty in 2010, will rise to a new high.
  • Child poverty will increase from its 22 percent level in 2010.

As the election nears — it is now less than 100 days away — the issue of poverty in America will hopefully play a somewhat more central role. It’s perfectly appropriate for candidates of both parties, and at all levels, to focus on the plight of the middle class. But while the effects of the Great Recession, combined with the worst recovery on record, have taken their toll on every strata in American society, it is the poor who suffer disproportionately. (I understand that the definition of poor is subjective and that what qualifies as poor in America qualifies as extravagant wealth in, say, parts of Africa.)

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According to a story in the Associated Press, “the ranks of America’s poor are on track to climb to levels unseen in nearly half a century.” The story goes on to say that poverty, which is closely tied to joblessness, “is spreading at record levels across many groups.” (The most recent poverty rates are from 2010; Census figures for 2011 will be released this fall.)

According to demographers:

  • Poverty will remain above the pre-recession level of 12.5 percent for many more years. Several predicted that peak poverty levels — 15 percent to 16 percent — will last at least until 2014.
  • Suburban poverty, already at a record level of 11.8 percent, will increase again in 2011.
  • Part-time or underemployed workers, who saw a record 15 percent poverty in 2010, will rise to a new high.
  • Child poverty will increase from its 22 percent level in 2010.

As the election nears — it is now less than 100 days away — the issue of poverty in America will hopefully play a somewhat more central role. It’s perfectly appropriate for candidates of both parties, and at all levels, to focus on the plight of the middle class. But while the effects of the Great Recession, combined with the worst recovery on record, have taken their toll on every strata in American society, it is the poor who suffer disproportionately. (I understand that the definition of poor is subjective and that what qualifies as poor in America qualifies as extravagant wealth in, say, parts of Africa.)

When he was the director of the Office of National Drug Control Policy, William Bennett — in pointing out that illegal drugs inflicted more harm on the underclass than any other group — used an earthquake that shook California in 1989 to make this point. Few people knew that the earthquake that hit the Bay area was more powerful than the one that hit Mexico City a few years earlier. Why? Because the casualties were much higher and the overall damage was much worse in Mexico City. The reason, Bennett said, is that when the earth shakes, the devastation often depends less on the magnitude of the quake than on the stability of the structure on which you stand.

As a general matter, the wealthy have more stable structures than the middle class, and the middle class have more stable structures than the poor. I’m not arguing that the poor ought to occupy all or even most of the attention of the political class. But those in the shadows of society should become an object of all of our attention.

A decent society, including its political leadership, should be judged in part on how well we treat the weak and the disadvantaged. That isn’t the only criterion that should be used, but it ought to matter. And so as the election draws near, the American people should judge those running for public office based in some measure on who has the best plan to assist the poor in terms of their material well-being and in helping equip them to lead lives of independence, achievement, and dignity. I’m one of those who believe that conservative policies – in economics, education, welfare, crime, and heath care, as well as in strengthening civil society and our mediating institutions — offer the greatest hope and opportunity to those who are most marginalized.

Here’s the thing, though: conservatives have to make that case. No one else will.

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