War on the Poor

One of the biggest differences in how the left and the right view the world concerns the welfare state. Currently, the federal government spends about $1 trillion a year on 126 means tested welfare programs. That amounts to almost $22,000 for every poor person in America, or $88,000 for a family of four.

What difference does all this spending make?

Among people on the right, there is little doubt. These programs are destroying the culture of the recipient communities. They are replacing a culture of self-reliance and self-help with a culture of dependency. Amazingly, a record 91.5 million people of working age — almost one third of the entire population — are not working and not even looking for a job.

Among conservatives I have met who were once poor (and I have met a surprising number of them), the view that welfare subsidizes and encourages dependency is almost a self-evident truth. I’m not sure I have ever met a liberal who was once poor. But then again, the liberals I encounter are all in the academic and public policy world ― far away from the poverty population they so often talk about. I think this is a fascinating sociological phenomenon. If my experience is different from yours, weigh in in the comments section.

[BTW, I am ignoring the shake down artists ― Jesse Jackson, Al Sharpton and the like. We have no idea what these folks really think, since (as Juan Williams has documented) they routinely use liberal causes to line their own pockets.]

New York Times columnist Paul Krugman claims that Republicans who want to trim back welfare spending are waging a “war on the poor.” Most people on the right think it’s the other way around: it’s the welfare state and its apologists who are really harming the poor.

Who is right?

Walter Williams on black families and the welfare state

How Culture Matters

Let’s be clear about what we are talking about. The Dallas Independent School District recently announced that every student in the school district will now get a free breakfast and a free lunch. The reason? So few students qualified for “full price” or “reduced price” meals that trying to identify them cost more than it was worth. And as I pointed out in a previous post, kids who receive free lunches and breakfasts are increasingly getting a free supper as well. Think about that. We have decided that the parents of every single child attending public school in Dallas are too poor to feed their own kids.

Have you ever stopped to consider how much of modern life is conditioned by the fact that millions of young women are having children they cannot support? Turns out that the same parents who can’t afford to feed their children also can’t afford to house them or pay for their medical care. They also fail to provide a home environment that is conducive to learning. That’s why there is now a big push for government funded preschool.

Clearly we are not helping a few people down on their luck. We are subsidizing a way of life.

And a culture. Another recent article in The Dallas Morning News reported that 11 public schools that were temporarily closed in South Dallas have been vandalized:

“Anytime you leave something closed in South Dallas, they are going to tear it up and destroy it,” said Tim Sweet, who has lived across the street from [Pearl C. Anderson Middle Learning Center] for 20 years. “It’s just a waste of money.”

By way of contrast, on my morning jaunt in North Dallas I pass daily by a home that has been boarded up for more than a month and there is not a spec of graffiti anywhere on it.

A One-sided Debate

Let’s begin by noting that when it comes to welfare, we are not having a real debate. On the one side there is scholarship. On the other side there is invective.

The scholarly works on this topic range from George Gilder’s Wealth and Poverty (1981) to Charles Murray’s Losing Ground (1984) and more recently to Charles Murray’s Coming Apart (2012). In The Redistribution Recession (2012), University of Chicago economist Casey Mulligan concludes that half of the excess unemployment we are experiencing is due to programs that are paying people not to work. (See my review here.) Other serious economic studies also lend support to the conservative point of view.

I am not aware of even a single book or study on the left that proposes a credible alternative explanation of what is going on. Along with other New York Times readers, however, I am regularly exposed to arguments ad hominem in the columns of Paul Krugman. This is from his latest:

Republican hostility toward the poor and unfortunate has now reached such a fever pitch that the party doesn’t really stand for anything else — and only willfully blind observers can fail to see that reality…

They’re still clearly passionate about making sure that the poor and unlucky get as little help as possible…

So there is indeed a war on the poor, coinciding with and deepening the pain from a troubled economy. And that war is now the central, defining issue of American politics.

Why does he bother? It is now well known that folks to the right of center actually care more about people in need than people on the left. They give more money, more of their time, more blood, etc. (See Arthur Brooks, Who Really Cares.)

Bottom line: We’re not having a debate. One side is serious. The other side is slinging epithets.

The Race Card

Make the statement that “welfare causes poverty” and it won’t be very long before you will be accused of being a racist. Krugman does that routinely. In his latest column on the subject, he cites the results of a left wing public opinion poll:

They found the Republican base “very conscious of being white in a country that is increasingly minority” — and seeing the social safety net both as something that helps those people, not people like themselves, and binds the rising nonwhite population to the Democratic Party. And, yes, the Medicaid expansion many states are rejecting would disproportionately have helped poor blacks.

Ah yes. Ad hominem again. Let’s take a brief detour and consider some evidence ― first from a country where there virtually are no whites and then from a study that focused exclusively on whites. These are two different ways of taking race out of the picture and observing whether any fundamentals change.

Barbados. This is a country that is almost all black (96%). It has some similarities to the United States. Their relative poverty rate is similar, their welfare programs are similar and their out-of wedlock birth rate is similar. But, there the similarity ends. Since the 85% of the population that is not poor is also non-white, Barbados is an island nation with its own black culture. And it’s a remarkable one.

Barbados has one of the highest literacy rates in the world. Its income per capita is one of the highest in the Caribbean. One reason for these accomplishments is the heavy emphasis the Barbadians place on education. Secondary education in Barbados is like our university system in the United States. Students (and their parents) can choose what school they want to attend, but they have to be accepted. Competition is fierce to get into the highest performing institutions. Do you know someone who thinks school choice is bad for black kids? Send them to Barbados.

You don’t have to do a formal study to know that the culture of Barbados is different. Climb in any taxi cab once you arrive there. With little prompting the driver will probably tell you all about his own children’s school choices and their aspirations. (See my Howard Law Review article.)

A high percent of high school graduates from Barbados are admitted to Ivy League colleges in the United States. In fact a little known secret in U.S. higher education is that our elite universities are achieving their diversity goals with black students ― not from the U.S., but from the Caribbean.

Coming Apart. In his most recent book, Charles Murray describes a nation that is coming in two. One part is self-motivated, self-reliant and extremely productive. The other is basically not working at all and relies on government to meet its basic needs. And the study was devoted exclusively to non-Hispanic whites. From my review of his book:

Upper-middle class professional types may pretend that they are cultural relativists, accepting of whatever lifestyle their fellow human beings happen to choose. In reality, they live by old fashioned puritan values, however. They get married and stay married. They work hard and work long hours.

Not so for the blue collar, never-got-beyond-high-school class, however. A shocking number aren’t even working at all. Many are not getting married in the first place. Of those that get married, the divorce and separation rates are soaring.

What about happiness and well-being? About 65% of the upper middle class professional types say they are in happy marriages. That number has been dropping steadily for the past 40 years for the working class types; and today it stands at 25%!

So What Can Be Done?

I’ll discuss solutions in a future post.

Comments (22)

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  1. Ken says:

    Excellent post.

  2. Bob Hertz says:

    Overall this post makes some good points, but I do have to quibble about that 91 million outside the labor force.

    I assume that this number includes at-home spouses in more or less secure hard-working families. So the number sounds more alarming than it may actually be.

    In the 1950′s, the percentage of adults outside the work force was probably just as large. That was due to the custom of paying a ‘family wage’ to male breadwinners, and it was considered a sign of progress not decay.

    I realize that times are not the same, but we should get a more precise number than the 91 million to see where we really are.

  3. Kent Lyon says:

    The only solution is to get rid of the Democratic Party. It enforces poverty, racism, and lack of opportunity. It prevents school choice, and condemns America’s children to poor education. It demands welfare, and expands the welfare state, all for it’s electoral advantage. Unfortunately, Democrats have dumbed down education enough that the majority of Americans now accepts the welfare state as the way things should be, and the enforced poverty as the reason to perpetuate the welfare state. America is transforming itself into a ward of the State, and is happy to let “government” take care of it. America as founded does not exist any longer.

  4. Buster says:

    Krugman…

    Republican hostility toward the poor and unfortunate has now reached such a fever pitch that the party doesn’t really stand for anything else…

    They’re still clearly passionate about making sure that the poor and unlucky get as little help as possible…

    So there is indeed a war on the poor, coinciding with and deepening the pain from a troubled economy.

    The war is not really on the poor. Rather, it is a marauding predatory political elite, who know they can take from one group and distribute resources to another and for political gain. It’s sort of like a controlled looting. A little looting allows the looters to feel like they are getting something. The key is to make sure the looters don’t destroy the economy.

    • Adam says:

      Just like in the Roman Republic. It’s no longer about voting for who is best, but voting for those who give you the most.

  5. steve says:

    1) I grew up poor. Going to boot camp was great. Everyone else complained about the quality of the food, but it was nice to have as much as you could eat. I know some people where dependency might have been a problem. I know a lot more who benefited from some temporary help.

    2) I grew up conservative, but have moved to the left. I do a lot of those things liberals arent supposed to do. I own guns (and use them), go fishing, work at the soup kitchen, go to church and believe that tithing is where we should start in our giving. I am comfortable enough in my beliefs that I dont need to turn those with whom I disagree into caricatures. I wish you would do the same. Lord, how I wish there was just one serious right of center writer who could write on health care w/o having to resort to what you did in this piece. You have very good ideas, but you diminish yourself and your cause when you turn your opposition into cartoons.

    3) A couple of guys at MIT looked at the Brooks study and it does not hold up. I always wondered about it since my liberal church runs a soup kitchen. All of the soup kitchens in our area are run by churches and none by the evangelicals.

    4) I think the $1 trillion number does not include what is commonly thought of as welfare. You are using welfare in the broader sense used by economists, but it will be misquoted and misunderstood.

    Steve

  6. Charlie Bond says:

    Friends,
    Helping the sick and injured is not about how they vote–or how we vote. Would it be possible to elevate the level of discussion about how best to care for the poor to a nuts and bolts discussion of how we can do it, not whether? America is not a “let them lie in the street and bleed” society, nor are our people as fiscally irresponsible as some wish to paint us. Let us retreat from the judgmental characterizations of those whose views differ from ours and roll up our sleeves and get to work.
    We all agree there is massive cost-shifting in health care, which is only made possible by a completely irrational and ridiculously flexible pricing system. So the first rule–like any good poker game– is all hands above the table. In other words, let’s stop the gamesmanship. Contracting has been fun. (It’s been highly lucrative for those of us in the legal profession). But it is a race to the bottom and it is dishonest. The bargaining power in health care is overwhelmingly disparate between the parties. On the one hand, the payors are either the government or health plans (who are exempt from antitrust laws). On the other hand, the patient (who should hold the power) must sit at the table but has no cards to play.
    Now the question is how to get individuals back in the game. I believe all agree that individuals must assume responsibility for a fair share of their costs, consistent with their ability to pay. Whether through their employer or through individual policies,however, working Americans are paying more than their fair share to pay for uninsured and underinsured fellow Americans. Most people would say that is inequitable.
    It would be, were health care industry not over-inflating costs and clinging to perverse economic incentives that promote gross inefficiencies–not to heal or care for people–but to enrich the industry at the expense of the rest of us. Lower the costs by reforming the delivery of care to incentivize cost-effectiveness and eliminating the malpractice lotto system, then cost-shifting can work fairly and equitably and compassionately.
    For now, the deck is stacked. The poker game is rigged. And the law says we all have to play. Clean up the game and the ante will be a lot lower and we will all win.
    Cheers,
    Charlie Bond

    • perry says:

      Well said, Charlie.
      I think the problem is the left tries to paint the right as non-caring racists, and the right tries to portray the left as ivory tower do-gooders or outright commies.
      This leaves little room for reasonable discussion.

  7. Vicki says:

    I like Walter Williams.

  8. Milton Recht says:

    When workers get paid, whether in the private or government sector, those workers are free to spend their paychecks pretty much as they choose. When the poor get help from the government, the poor are restricted in what they can purchase, except for the earned income tax credit. Food Stamps (SNAP) are for food. Section 8 and housing vouchers are for housing only. Medicaid is for medical services only, etc.

    Liberals and politicians that support the current array of government programs for the poor do not trust the poor and do not see the poor as equals. If they did they would just give them cash as they would to a family member, a close friend or relative.

    Just give unrestricted cash to the poor and there will be an increase in savings, an increase in entrepreneurship and an increase in skill training. Revise the means tests for benefits and revise the tax code, so that for every extra dollar earned the total of after tax income plus decreased benefits is always more than with a lower income and higher benefits.

    Poverty will disappear except for those physically and mentally unable to work.

  9. Wanda J. Jones says:

    John and Friends….

    The writing of Thomas Sowell, a black economist, is particularly apt in this discussion. He agrees with John and Charlie Bond, as I do. Being from Mississippi, I learned from Sowell that the black culture of the North is heavily influenced by the demise of tenant farming, where the owner had kept the farmer in food throughout the year, settling up after harvest. This culture of dependency on an other persisted when these displaced tenant farmers migrated up the North-South railroad lines to Chicago, Detroit and other cities with jobs for unskilled workers.
    They again looked for a protector, spawning the kind of quasi-welfare arrangements of political parties, which promised benefits in exchange for votes. (ACORN, anyone?)

    In contrast, the black middle class in the South–the children of ministers, the Post-master, the house-painter–were free to distribute themselves wherever they wanted, so diffused West and East. During WWII, many of both groups migrated to San Francisco, with the one from the Mid-West locating in Hunter’s Point, for shipyard work, in housing built for them, public schools that were substandard, and with few middle class to set an expectation. Now that the shipyards have closed, a high proportion are on welfare with teen children that did not complete school, etc.

    The other group, from cities with a black middle class, ended up in the “Western Addition,” where they are doctors and nurses, small business owners, etc. They are distinct in their culture as between the two black groups from the European country of origin groups. Less welfare, a jazz culture that persists, even producing a new jazz center, and one that helped lead the board of a Jewish hospital, at which I did my residency. For Krugman to say that conservative people created the culture of dependency is an advertisement for his ignorance and inability to see the effects of history. [But then, we knew that.]

    As a health professional, I think there is a single law that did wreck havoc in the black community, and that is the welfare program that paid only women without men in the home. The level of single parenthood, soared after that. It is now expected that the average black mother will be without a male breadwinner 75% of the time. Clinton’s reform law had a far-reaching positive effect.

    Conservatives should stop allowing themselves to be bullied. A good beginning would be to write an omnibus law that consolidated all programs for the poor so they could be evaluated for effects, for costs, for externalities.

    Wanda J. Jones, President
    New Century Healthcare Institute
    San Francisco.

  10. Ron says:

    The biggest issue in the current level of generational poverty is that too many in minority communities have never seen, experienced, or even believe in the American Dream.

    Many on this blog site have either lived, experienced and understand the potential to get ahead financially through education and hard work. Not so in central urban ghettos. They accept that financial security means personal freedom of choices and options in life.

    Blacks also have national leaders who constantly tell them that they can not get ahead because the “system” is against them…so why try. Notice that Asians do not have such race-baiting “leaders.”

    It is a shame that President Obama has not only NOT changed the thinking to open the American Dream to millions of blacks, but he has increased the problem by expanding welfare programs, dependency on government and continuing the message of white sin through his belief in Black Liberation Theology (his 20+ years at Rev Wrights “Christian Church.”)and collective salvation defined as white retribution for past economic dominance over Blacks. I believe this is the core of his redistribution of wealth political philosophy.

  11. Centrist says:

    John,
    So that you can end your life-long search for a poor-made-good liberal, I was once poor and am now well-healed and fit ‘your ‘definition of … one of those liberals.

    I’m also calling a Candy Crowley on you for making a ‘Romney47%’ error in this statement: “These programs are destroying the culture of the recipient communities. They are replacing a culture of self-reliance and self-help with a culture of dependency. Amazingly, a record 91.5 million people of working age — almost one third of the entire population — are not working and not even looking for a job.”

    Your statement gives your readers the impression that there are a lot of lazy, cultureless, and dependant people out there; however, the 91.5 million ‘Not In Labor Force’ that you used in your citation is defined–by the BLS–as follows:

    [Persons [16 years or older] who are neither employed nor unemployed are not in the labor force. This category includes retired persons, students, those taking care of children or other family members, and others who are neither working nor seeking work.] http://www.bls.gov/cps/lfcharacteristics.htm#nlf

    Therefore, your lazy masses are the same retired seniors, stay-at-home-moms, students, and financially autonomous individuals that Romney used to create his ‘47% tax-dodging freeloader’ statement … unless you are intentionally denigrating all Social Security and Medicare participants (including Allan (formerly Al)) as well as SAH Moms and students???
    Is this the’conservative’ message you want to convey?

  12. Steve Dell says:

    Dr. Goodman,

    You are correct: government programs can deter, diminish or promote poverty. While the wealth of a society, overall, may be a cross-product of history (stage of productivity per capita), resources, location…poverty has much more to do with internal relative wealth and incomes, and is definitely a social construction. As one who works with poor people, daily, I very aware of the negative incentives you describe.
    The answer to this isn’t moral suasion, any more than the answer to airplane accidents is yelling at pilots to be more careful.
    The answer is not far to seek: make work more rewarding, and more will seek it. Raise the minimum wage, increase EITC, fund education more generously, make OJT a routine part of employment (on the German model)…No doubt many of these measures won’t work. (But they are not so expensive as one might fear, if we give up our empire of bases and armed attempts top dominate the world.) Try.
    What makes Liberals so skeptical of Conservatives — the movement, not individuals, who tend to be more generous to others than any other social group save the poor themselves — is the latter’s routine opposition to such measures, or indeed anything that might reduce the skewness of the income distribution; while wholeheartedly endorsing programs to enrich corporations and the wealthy (often the same people).
    The New Testament, in particular the Synoptic Gospels, is full of references to the evil of wealth and of pursuing wealth, and overall is a communitarian, some would say communistic, document. That so many proclaimed Christians can ignore their plain text, is an example of cognitive dissonance, much studied but unresolved. (I mention this for afterthought. The problems discussed above, are not psychological.)

  13. Floccina says:

    The means tested programs are the tip of the iceberg. Ask a Democrat why we have government schools and they will mostly say because poor people would not be able to afford to send their children to school without them. Ask them about SS and medicaid and they will say without them poor people will not be able to afford to retire and get medical care in old age. The middle class and the rich must be able to afford these things things because they pay for then now. I thing that we should replace all these things with a guaranteed basic income or$150/week for each adult citizen plus some means tested schooling for the poor and some health for those with very high medical bills.

  14. Karl Stecher says:

    For Charlie Bond: You are absolutely correct on the malpractice lotto problem. Malpractice insurance costs and defensive medicine likely eat up 20 cents of each medical dollar.
    When asked if he was going to include tort reform as a part of Obamacare, Obama directly said no.
    HSAs, long mentioned here by John, would also decrease medical costs.
    And regulations…how would you like OSHA inspecting your office (as a doctor) to see how you dispose of blood and infected equipment? Many others.
    As you, Charlie, pointed out, the insurers (incl govt) and the patients are the interface on purchasing. But I would also add the corporate superstructure that runs hospitals as a main parasite on the medical dollar.
    Guess who has no voice in the fee negotiation for medical care: doctors. By FTC law they cannot get together in any form to negotiate. But the insurance companies, as you pointed out, can do whatever they wish per antitrust law. The insurance company (incl govt with Medicare and Medicaid) owns the patient, sets the fees, and the doctor can take it or leave it from each individual insurance company.
    And now, to point back at John’s editorial, encompassing blacks, dependency, incentives, education: One of the first things Obama did when he came to DC was to end the charter school program…a program sought by DC inner city families (I heard that 250 of the 250 accepted last year were black)…which allowed their poor children to go to suburban charter schools. (BTW,, as we all know, Obama sends his daughters to the private Sidwell Friends). Obama’s decision was so unpopular that it was reversed. Why did he do a thing like that?

  15. Ron says:

    If raising the minimum wage was a solution for poverty, why not make the minimum the average income on Americans? Steve’s liberal solution to poverty is more dependency! Typical. Don’t reward teachers who teach, just increase funds for education. Don’t Create jobs in the evil private market, just add government jobs.

    The wealthy are just evil wanting the poor to stay poor! What a crock. Those that have worked hard for themselves and their families want EVERYONE to experience the American Dream of upward mobility. They have the abilities and desire to help others but too often the poverty enablers dismiss the concepts of “tough love” for their own liberal guilt. It is the wealth created by those who build businesses that is paying for the liberal enablers who ensure that the poor never advance. FACT from the Pew Research report…Anyone born into the lower economic quintile are at a 65 percent change of living their life in poverty (stay in the lowest quintile or maybe move up one level). Maybe we need to have real “Hope and Change” in this country.

    When will they ever learn?

    • Centrist says:

      Ron, I don’t think ANYONE relishes having their tax dollars used to promote perpetuate dependency. Believe it or not, reasonable Right and Left ideologies are not that far apart when it comes to social programs. With respect to more extreme R&L positions (tough-love vs. free-ride), can you give us an example of any successful country, throughout history, that has provided either no social services … or that has provided free all-inclusive social services? In fact, give me a country that has never bickered about the ‘proper’ balance of social services and taxes.

  16. Goran Haag says:

    John,

    Excellent article!

    I was born out of wedlock and spent my first two years in an orphanage in Stockholm, Sweden. My biological mother was allowed to bring me home after that. I grow up in one of the roughest and poorest neighborhoods in Stockholm, but my mother always emphasized how important studying and hard work were and never allowed me to dwell on our situation. Got my first summer job when I was 13 years old. Worked all weekends and holidays through college. Studied chemical engineering at the Royal Institute of Technology in Stockholm where I earned a B.Sc. and M.Sc. with honors. Worked then in four different countries on three different continents. Came to US in 1986. We started up our manufacturing company in 1988, which is based in the northern part of Houston, TX. Today we are the leader in our market segment and have a total of 85 employees. (Yes, ObamaCare will hit me hard in 2015).

    My wife and I have always worked very hard and still are. I am now 60 years old and have no plans for retirement. Our daughter just got her masters in marketing and is now working hard in her first job.

    John – Keep up the good work. I often circulate your articles to my employees and friends and I know many of them enjoy reading them.

    • Centris says:

      Goran, Inspiring story.

    • Centrist says:

      Goran, I am glad that you were afforded the ability to immigrate to the U.S. and start a successful business. Since you specified 2015, could you expand, for us, on what the ACA’s ‘hard hit’ will be to you?

  17. Centrist says:

    Goran, without your response, I’m trying to reconcile the “hard hit” comment, so forgive my thinking in public.

    Since you are your ‘market segment leader’, we must assume that you have good talent in your 85 member workforce, and odds are that you are affording them health care benefits. Since the average U.S. employer health care costs have risen 80% in the last 10 years but only 4% in years 2012 and 2013, what excessive (‘hard hit’) ACA costs do you anticipate outside normal increases? http://kff.org/report-section/2013-summary-of-findings/

    However, if my assumption is wrong and you do not ‘afford’ health care benefits to your ‘market segment leaders’, then you would be on the hook for $108k (54x$2000 or equivalence of 2 FTE) in ACA penalties … for that freedom. If that were the case, the Federal government would then absorb your responsibilities and your market segment leader force would then be ‘afforded’ exchange subsidies by the same government (the American people)that you were afforded immigration.

    Were you aware that you can lower your contribution rate to 60% (if allowed by TX) and still avoid any ACA penalties?

    Please correct my logic if I am wrong.
    Thank You.