America, The Land of Opportunity

That’s what we like to think, but a new book, Creating an Opportunity Society, by Ron Haskins and Belle Sawhill of the Brookings Institution proves otherwise. They took a close look at intergenerational mobility and found that 42% of American men with fathers in the bottom income quintile remain there as compared to: Denmark, 25%; Sweden, 26%; Finland, 28%; Norway, 28%; and the United Kingdom, 30%. They present a wealth of new and old research evidence to support the conclusion that if you’re born poor in America, you’re likely to remain poor.

This book is not a liberal polemic. It is carefully researched, quite readable, and takes pains to stick with what’s proven to work regardless of ideology. Haskins was President Bush’s Senior Advisor on Welfare Policy at the White House in 2002 and was at the center of the historic 1996 welfare reform legislation as the staff director of the House Ways and Means Human Resources Subcommittee. He is a conservative Republican. Belle Sawhill has conducted landmark research in a long career at the Urban Institute and then Brookings with a stint from 1993 to 1995 as an Associate Director of President Clinton’s Office of Management and Budget. She is a liberal Democrat. Haskins is a PH.D. psychologist and Sawhill is a PH.D. economist.

I commend these two for developing such an outstanding research partnership. Listening to them present their book at Brookings yesterday morning, I was struck by how much each was willing to concede to the other on research findings that ran counter to political labels and by how much they are willing to set aside ideology to promote solutions proven to work. If only Congress would do likewise!

Unlike most expert experts, after a thorough examination of the literature and explanation of their own findings, Haskins and Sawhill explore public attitudes and cultural conventions to get at why so many past efforts at alleviating poverty have failed. They come up with strong conclusions and policy recommendations that take from both Republican and Democratic playbooks:

  • We start out life with advantages and disadvantages which are hard to alter.
  • We underinvest in the disadvantaged.
  • Personal responsibility it very important.
  • Promoting education, work, and family is very important. Convince disadvantaged kids at an early age that they need to go to college, develop a strong work ethic, and get married. Policy incentives aren’t enough. Publicity campaigns are needed to change attitudes.
  • Government should do more, but it can’t do it all.
  • Slow the growth of benefits for the elderly to fund a $20 billion per year program of specific policy changes, including some spending cuts.

You’ve got to have a lot of guts to push policies like this. Children don’t vote, and the elderly vote over 70% of the time. Their political muscle has toppled anyone who stands in their way. But even the elderly can understand that their future is imperiled if the younger generation falters.

Commentator Juan Williams held up the vilification heaped on Bill Cosby when he had the courage to demand personal responsibility of poor minority fathers. Williams asked why we blame the poor instead of fighting racism?

New York Times columnist David Brooks called for moving beyond the Republican-Democratic divide to revive Progressivism. He urged that we stop looking for what causes poverty and devote ourselves to attacking it. He argued strenuously for reaching out to the unconscious mind, embedding the disadvantaged in schools and other institutions that 1) enlist the power of love; 2) teach impulse control; and 3) employ the lessons of attachment theory that those raised by unreliable parents aren’t capable of enough trust to climb out of their circumstances by themselves.

New York City’s Deputy Mayor for Health and Human Services urged reauthorizing TANF, Temporary Assistance for Needy Families. She commended the 1996 welfare reform, but noted it skipped childless adults. She urged more be done for children from birth to age 5 and to help raise the 20% graduation rate of those enrolled in community colleges. She initiated such programs in New York City. She noted our extremely high incarceration rate provides alternative education we could do without and that we need to do much more to create economic opportunity for those aged 15-24.

The webcast is well worth watching. I asked an early question about the Earned Income Tax Credit, which I formulated back in 1975. Others raised good points about the decline of middle class jobs and how we consign the disabled to poverty.

Photo: tenaciousme

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About Pete Davis 99 Articles

Affiliation: Davis Capital Investment Ideas

Pete Davis advises Wall Street money managers on Washington policy developments that affect the financial markets. President of his own consulting firm since 1992, Davis Capital Investment Ideas, he draws on 11 years of experience as a Capitol Hill economist with the Joint Committee on Taxation (1974-1981), the Senate Budget Committee (1981-1983), and Senator Robert C. Byrd (1992). He worked in the House and Senate, and for Republicans and Democrats.

Davis brought the first computer policy model, the Treasury Individual Income Tax Model, to Capitol Hill in early 1974, when he became a revenue estimator on the Joint Committee on Taxation. He formulated the 1975 rebate, the earned income tax credit, the 1976 estate tax rates, the 1978 marginal tax rates, and the Roth-Kemp tax cut. He left Capitol Hill in 1983 for the Washington Research Office of Prudential-Bache Securities, where he advised investors for seven years.

Davis has long written a newsletter on the Washington-Wall Street connection for his clients; Capital Gains and Games is his first foray into the blogosphere.

Visit: Capital Gains and Games

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