An Unhappy 50th Anniversary
Most 50th anniversaries are considered happy if not “golden.” This one is neither. I’m speaking of Lyndon Johnson’s War on Poverty whose 50th anniversary passed almost without notice early this year.
Johnson launched the “war” in his State of the Union speech a half century ago:
We have declared unconditional war on poverty. Our objective is total victory … I believe that 30 years from now Americans will look back upon these 1960s as the time of the great American Breakthrough … toward the victory of prosperity over poverty.
Well, the 30 years came and went along with 20 more and we still wait for the great American Breakthrough and its “victory of prosperity over poverty.”
Like so many government programs, this one – with a tip of the hat to Will Shakespeare – was “full of the sound and fury signifying nothing.” Taxpayers are $20 trillion poorer and 47 million people remain in poverty, an all-time record. The poverty rate today is 15% compared to the 17% rate in Johnson’s day 50 years ago, but the US population was also smaller then so his 17% represented fewer people. Sadly 22% of children live in poverty today. Even 1% is too many.
Three and a half years ago I wrote about Johnson’s Lost War on Poverty. Obama was at the height of his powers, the country was mired in the Great Recession, and the solution to high unemployment and its induced poverty was, predictably, to spend more money. As I mentioned in that blog, poverty is quite different today than it was when Johnson declared war on it. In Johnson’s day a 21-inch B/W tabletop TV cost about $1,800 in today’s dollars and could receive only a handful of channels, a refrigerator with freezer cost the equivalent of $1,510 in today’s dollars, and a two-speed automatic washing machine, primitive by today’s standards, cost the equivalent of $1,100. Only 12% of homes had air-conditioning versus over 88% today.
Do these higher living standards for the poor mean that the war on poverty has succeeded? No.
Welfare has lifted what it means to be “poor” but the underlying causes of poverty are worsening. A prosperous economy will always be the best anti-poverty program, but we’ve had little of that since Obama was first elected. Unlike Obama, LBJ’s aim was to give the poor improved economic opportunity, not a permanent dole, so that in time those on welfare would become independent of it, support themselves, and become taxpayers instead of tax recipients. That hasn’t happened. Quite the opposite. As so often happens with government programs, the Law of Unintended Consequences reared its ugly head. Today taxpayers essentially pay the bottom 20% of the income earners more than a trillion dollars a year basically not to work.
Earlier this month the US House Budget Committee chaired by Paul Ryan issued a report entitled, The War on Poverty: 50 Years Later. Ryan and his colleagues thought they had been sent to Washington to be good stewards of taxpayer money. To that end, the report concludes that government anti-poverty programs have grown, many are duplicative, and more than a few work at cross purposes. For example, there are 92 assistance programs for low-income families, 17 food aid programs, 20 housing programs, and dozens of education and job training programs.
Most of these programs fail to accomplish their purpose. If they existed in the private sector they would have been shut down faster than you can read this sentence. Has the government insisted that the administrative leaders of the agencies in charge of these programs (i) make them work, (ii) shut them down, or (iii) hand in their resignation? No. None of the above. The government – primarily Congress – simply creates more programs. The new programs, of course, are never coordinated with existing programs. So not infrequently you find the equivalent of one agency digging a hole and another filling it up – year after year, billions after billions. Managers in these agencies know that competing programs are a waste. But what the heck. Who really cares?
I’m sure you’ll be shocked, as I was, to learn that last year the CBO found that poverty programs cause many low income households to face implicit marginal “tax” rate of nearly 100%. In other words, for every additional dollar a low income family earns through work, it loses a dollar either in income taxes or the loss of welfare benefits. Now, these people are poor, not stupid. They figure out that more work nets nothing because government programs take it away, so they don’t work. That’s how we end up transferring a trillion dollars in program money to effectively pay many poor not to work or not to work more than they do.
A while back, Morning in America talk-show host Bill Bennett invited Ryan to discuss his government poverty program findings and his committee’s report. Ryan observed:
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.
Oops. Wrong thing to say. You can’t use “inner cities,” “men not working,” and “culture” in the same sentence. If you do you’re raaaaa-cist. Predictably the liberal website Think Progress “just happened” to be recording Ryan’s appearance on the Bennett show and the Left Media went ballistic.
The headline on the Think Progress hit piece is “Paul Ryan Blames Poverty On Lazy ‘Inner City’ Men.” He never used those words or inferred the allegation. But who’s quibbling about truth in journalism?
Representative Barbara Lee (D-CA) joined the Left chorus saying, “Let’s be clear, when Mr. Ryan says ‘inner city,’ when he says, ‘culture,’ these are simply code words for what he really means: ‘black.’” Ms. Lee happens to be black. She also happens to be a member of the Congressional Black Caucus, an organization that only black members of Congress may join.
Neither Ms. Lee nor members of the Black Caucus have offered a solution to the appalling ineffectiveness of government-sponsored poverty programs. This is surprising because poverty disproportionately affects black households. Nor did Ms. Lee’s criticism of Paul Ryan acknowledge the undisputed fact that 50 years after the war on poverty began a large part of our citizens – mostly black – are even more dependent on government assistance and less capable of managing their own economic wellbeing. If conservative white lawmakers had set out 50 years ago to cripple the black community in American society and disintegrate its family structure, I believe there would be civil unrest. But that’s precisely what liberal and black lawmakers have done.
Is political ideology so important that the liberal bloc of elected officials would rather continue policies that have failed to help the poor? Are Ms. Lee and members of the Black Caucus willing to stick out their necks, as Ryan has done, and state for the record the way government measures the success of these programs is the number of people it enrolls for assistance, not the number who have been liberated from assistance?
I don’t have government experience, but in my world – the world of business – we would judge program success in very different terms.
It seems to me that the viciousness with which Ryan (and Rubio who favors consolidating all poverty programs into a single state-administered grant) is not a policy critique as much as it’s a warning shot across the GOP bow that poverty is “our” program – i.e. the poverty franchise is owned by the Liberal Left. Yet, if the GOP were to credibly compete with the Left and find more effective ways to help the most vulnerable in society, the poor votes could no longer be taken for granted by Democrats. That’s the real issue. And like any political issue, Democrats would have to appeal to poor constituents by showing their solution is demonstrably superior to the Republican plan.
The poor would benefit if there were competition to help them, I’m convinced of that. But the Democrat party wouldn’t benefit. I’m convinced of that too. I don’t think Paul Ryan has all the answers. He may not have the best answers. But at least he took a political risk, more than I can say for Ms. Lee and the Black Caucus. I think Ryan is a decent guy. He’s not looking for poor votes. He’s looking for a more cost-effective solution than current poverty programs. Otherwise the poor remain the turf of the Democrat party, which persuades them – as it always has – that Democrats not Republicans really care about them and the poverty aid shell game continues.
In commenting on the Ryan report George Will recently recalled another report that was the impetus for the War of Poverty:
A year from now, there surely will be conferences marking the 50th anniversary of what is now known as the Moynihan Report, a.k.a. “The Negro Family: The Case for National Action.” In March 1965, Moynihan, then 37 and Assistant Secretary of Labor, wrote that “the center of the tangle of pathology” in inner cities – this was five months before the Watts riots – was the fact that 23.6% of black children were born to single women, compared with just 3.1% of white children. He was accused of racism, blaming the victims, etc.
Forty-nine years later, 41% of all American children are born out of wedlock; almost half of all first births are to unmarried women, as are 54%?and 72% of all Hispanic and black births, respectively. Is there anyone not blinkered by ideology or invincibly ignorant of social science who disagrees [that family breakdown and poverty programs correlate]?
Fifty years ago, LBJ promised that the war on poverty would be an “investment” that would “return its cost manifold to the entire economy.” It hasn’t done that.
It’s time to take a different approach and give ideas like those of Ryan and Rubio a chance. It’s hard to imagine their ideas making poverty worse or more expensive to fight.