Joseph V. Kennedy. Ending Poverty. Rowman & Littlefield. 288 pages. $39.95
Recall the gop’s “Contract with America,” issued several months before the 1994 midterm elections: It delineated specific legislative actions congressional Republicans would undertake in the first day of the 104th Congress should voters grant them majority control. Republicans went on to pick up 54 seats in the House of Representatives that year, and they did win the majority, for which successes they owed much to their well-publicized pact with the public. Ten years later, David Skinner, writing as assistant managing editor of the Weekly Standard, noted that “the Contract with America remains one of the most popular things Republicans ever did.”
Perhaps this legacy inspired Joseph Kennedy, former chief economist of the U.S. Department of Commerce, to place at the center of his new book, Ending Poverty, a contract with which the author would replace most of the nation’s extant entitlement programs. These programs (Social Security, Medicare, Medicaid, etc.) originated in the “War on Poverty” President Lyndon Johnson declared in 1964. After more than 40 years, mounds of legislation, and trillions of dollars, the nation hasn’t come close to winning it. Kennedy believes the United States can and must fight poverty, but that a different tack is necessary, one that requires the poor to meet specific obligations before receiving government assistance. Thus, the contract, which, simply put, is this:
Any American citizen older than 21 years who agrees to 1) work at least 40 to 45 hours a week; 2) abstain from taking illegal drugs, becoming an alcoholic or nurturing the alcoholic he already is, committing any crimes, and having children before age 21 (before, that is, he signs the contract); 3) complete high school and at least two years of additional school or training; 4) pay taxes; and, finally, 5) save at least 15 percent of his earnings will be guaranteed by the government an annual income of $20,000.
It seems like a fair deal — in return for propitious behavior, a worker would get an annual income guarantee. Kennedy believes “that access to a decent life free of poverty should be seen as a conditional right in American society,” and that if citizens meet the conditions he identifies in his contract, they should be guaranteed annual earnings ($20,000) that allow them all to live a life removed from poverty’s pangs. And so what his book proposes is not one contract, really, but in fact millions of contracts between the federal government (taxpayers, that is) and its citizens.
Kennedy’s motivation for restructuring how the U.S. confronts poverty is sound. He is rightly piqued by and opposed to the mishmash of federal anti-poverty programs whose modest results are in no way comparable to their massive costs. Despite the welfare reform legislation of 1996, the U.S. today continues to fund a bevy of unsustainable entitlements that the economist Edgar Browning calculates cost about a trillion dollars per year. Kennedy is right to believe that taxpayer dollars could be divvied up far more efficiently than they are currently.
Certainly he is not the first to think so; nor is he the first to propose a radical break from the nation’s bloated welfare programs. Charles Murray — who concluded in his 1984 book Losing Ground (the New York Times called it “the book that many people believe begat welfare reform”) that welfare was toxic to all those it touched and should be abolished — outlined in 2006 his own scheme, which shares much with Kennedy’s, for guaranteeing income to the poor. It came in his book In Our Hands, and it was called “the Plan”: Programs such as Social Security, Medicare, Medicaid, welfare, and their entitlement ilk would be abolished, and instead, each American over age 21 would receive annually a $10,000 check. Like Kennedy’s $20,000 income guarantee, the monetary amount of Murray’s annual checks would be reduced for those individuals who work — who have jobs.
The beauty of Murray’s “Plan” purportedly lies in its simplicity: Everyone over 21 receives a check; all other entitlement programs are eliminated. While simple solutions can be lovely, they are considerably less so when the quandaries they address demand complexity, and this is the case with poverty. Murray’s proposal inexplicably forgets or ignores the underlying lesson of Losing Ground: that poverty festers not because poor Americans are systemically oppressed but because certain of their behaviors, behaviors that welfare reinforced, render their low-income situation almost inevitable and inescapable. Murray never identifies how making everyone $10,000 richer will combat the vices that create poverty and give it its permanence.
The elimination of perverse incentives, which Murray recommended, was surely a smart start, though. Before welfare reform, for instance, the income a woman could accrue for giving birth to a child out of wedlock exceeded that which she could earn from a minimum-wage job. Thus, “from an economic point of view,” Murray wrote in Losing Ground, “getting married is dumb.” In this bumbling and negligent way, federal policy for years provided incentives for unproductive behavior, making it easier for unmarried mothers to stay that way and for young men to stay unemployed. But despite its many missteps, that policy was not the root cause of single-parent homes and jobless males. Lawrence Mead, who has written extensively about welfare, notes that the “evidence suggests that having children out of wedlock . . . is not caused to any important extent by economic incentives.” Myron Magnet, City Journal’s editor-at-large, wrote that Losing Ground’s “one weakness” was its confusion on this point. Welfare reform, he continued, should have catalyzed a major “decline in illegitimacy. It didn’t, however: Almost 70 percent of black children continue to be born out of wedlock. . . . Murray’s social-scientific thinking makes human behavior a matter only of incentives and disincentives, rather than of values and beliefs.”
Any agenda that hopes to reduce poverty cannot be agnostic about these values and beliefs, specifically the values and beliefs of the poor. Surely the government has an obligation to avoid encouraging harmful behaviors, as Murray so trenchantly argued, but a worthwhile anti-poverty program must go further than that — it must actively attack those behaviors and the attitudes that nurture them. Murray is content simply to slash the government’s entitlement forests; he is unconcerned that his yearly checks are sent without regard to whether their recipients have jobs, spouses, and live responsibly or whether they are unemployed, unmarried, and frequently unhinged. Again, a check alone will not improve the situations of chronically poor Americans, and eliminating perverse incentives, while necessary and important, will not — has not — on its own defeated most poverty-inducing behaviors.
Kennedy attempts to address this issue by outlining in his own contract specific conditions for payment (working 40 to 45 hours per week, abstaining from drug use, etc.). But he stumbles on at least two crags. The first: For the government to verify compliance with all the conditions he sets would require building more bureaucracy, spending more money, and flirting with impossibility. And the second: Those who meet his conditions are quite unlikely to be poor in the first place, and they almost surely would not be chronically poor.
Kennedy’s contract comes with its own perverse incentives. For example, whereas welfare once foolishly paid mothers for having children out of wedlock, Kennedy jerks the wheel 180 degrees and excludes from his contract those, even married couples, who have had a child before age 21. Thus, he transforms millions of babies into $20,000 liabilities (for a couple, a child could be a $40,000 setback) and makes abortion quite a lucrative option for young American women. Kennedy attempts to sidestep this point, but in so doing he undercuts his own rules: “a breach [of the contract’s no-child-before-age-21 condition] should not lead to immediate disqualification from all current and future benefits. But it should lead to significant intervention aimed at ensuring that the child is raised properly.” To paraphrase: This rule is not binding and, if breached, will simply be reformulated with new entitlement programs, the likes of which it was supposed to supplant in the first place. The no-babies-before-21 provision is by no means the only part of his own contract that Kennedy emasculates.
Ending Poverty offers no good alternatives for those would-be signatories who do not or cannot meet its contract’s terms, however amended. Consider, for example, the contract’s educational requirement. A report released in July 2008 by the Urban Institute finds that over 70 percent of poor parents “have no more than a high-school diploma or a ged.” Kennedy’s contract — if its stated conditions are to be regarded as rigorous, which is a big “if” — would exclude this 70 percent because of the requirement of two additional years of training after high school. Seventy percent of poor parents, then, are ineligible for Kennedy’s anti-poverty program.
The Urban Institute report goes on to note that a third of poor parents do not have a high-school diploma. Ending Poverty claims, “Because the United States offers free k-12 education to all children, there are few excuses for someone not completing high school.” That statement falls flat; one might as well write that because the United States offers myriad chances for financial and personal success, there are few excuses for someone being poor. The reality, of course, is that many people are poor and many people do not finish high school, for scads of complicated reasons. Kennedy tries to move quickly past the latter problem on his way to remedying the former — the reforms in Ending Poverty’s chapter about education, for instance, assume that the contract has already been implemented — but he’s putting the cart before the horse. Before his contract can work, Kennedy has to figure out how to mint more high-school graduates.
His answer to that question, and to so many others, is an incentive-based one: If government offers $20,000 for productive behavior, productive behavior (graduating high school, saving for the future, etc.) will flourish. But here Ending Poverty repeats Murray’s mistakes. As Magnet wrote of Murray, so might one say that Kennedy, too, is wrong to believe that “human behavior [is] a matter only of incentives and disincentives.” Whereas Murray’s writing suggests that removing perverse incentives is sufficient to lessen the incidence of poverty-inducing behaviors, Kennedy assumes that creating incentives for, say, graduating high school is sufficient to create lots more high-school graduates.
Experience belies that assumption. Indeed, there are many, many incentives for graduating high school, not the least of which is substantially reducing one’s chance of being poor. And yet, millions of Americans do not possess high-school diplomas. Readers of Ending Poverty are left to wonder what Kennedy’s program will do for these dropouts. Kennedy’s unsatisfactory answer: “As a contracting party, the government would have the right to waive this [educational] requirement in certain cases.” After reading which, one wonders: Do we have a real contract here or not? If we do, then it is one engineered to assist those who need no assistance and to exclude those who do, in contradiction of its own author’s declaration that “government assistance should be targeted directly to those it is meant to help.”
Ending Poverty’s plan is doomed to fail for reasons that have a common ancestor: the supposition that poverty can be substantially decreased through wealth transfers (constructed as either incentive or reward) from financially secure Americans to poor ones. Kennedy’s contract implicitly assumes, for instance, that significant numbers of poor Americans are educated and law-abiding, save their money, have avoided becoming mothers and fathers at a tender age, and reject unhealthy habits — these people require only a small boost, an income guarantee backed by the government, to succeed. But to understand poverty only in this way, as the absence of money, is to misunderstand it entirely. In the Fall 2007 issue of Education Next, Professor Stefanie DeLuca examined why the Moving to Opportunity program — a part of Johnson’s vast, varied, and vain anti-poverty programs that provides housing vouchers for poor families to move to more-affluent neighborhoods — did not improve the academic performance of the poor children affected. She and her colleagues conducted a number of lengthy interviews of voucher recipients (mostly mothers) in Baltimore. She writes:
While neighborhood change could be a necessary condition to protect children and improve their schooling, it is not sufficient in light of the deep morass of issues that characterize the lives of the urban poor. Many social policies assume that all low-income parents approach opportunity the same way that most middle-class families do, and that the main problem is a lack of financial resources. Our interviews provide a reminder that poor families are not just wealthy families without a bankbook.
Here crystallized is the truth that Murray’s “Plan” and Kennedy’s contract do not recognize. Lack of money is but one facet of poverty. It is counterintuitive but not incorrect, in fact, to say that dearth of dollars is more an indication of poverty than poverty’s actual cause. Yes, the common definition of being poor is being without money, just as the condition of being ill is familiarly considered the suffering from symptoms such as a headache and a runny nose. But a headache does not cause illness, and illness is not cured through palliatives — Ibuprofen, Aspirin, and suchlike — that merely alleviate the pain for short periods of time. The “illness” of poverty likewise cannot be cured by palliating the trials of the poor with a few thousand (or a few trillion) dollars, spread here and there.
Kennedy ends his book by writing that his contract will clarify the obligations that individuals owe American society and vice versa, and that it will “make explicit the concrete obligations that each person owes his or her neighbors.” Again, his assumptions are suspect. Here, he assumes that a workable contract of sorts and incentives to live responsibly are not already in place in America, and that the government is actually capable of establishing an effective contract of its own. Yet America already offers its citizens a bargain, one that is not explicit because it’s so wonderfully flexible and potentially lucrative — that by working hard, seizing opportunities, and eschewing harmful behavior one is likely to be successful, regardless of race, religion, or class. This American bargain is not a promise, of course; opportunity is distributed unevenly, and bad things surely happen to good people. But is Ending Poverty really prepared to suggest that a government-run contract with several rigid requirements would better create success than the implicit, responsive, market-based, individualized, flexible American bargain that now exists?
The question, really, is not how to draw up another contract but what to do when citizens fail to fulfill their end of the unspoken American bargain we already have. To what are the nation’s citizens ultimately entitled? To what are they entitled despite “contractual violations,” even repeated violations? This book offers no answers.
To eliminate poverty in toto is impossible, as Kennedy acknowledges, frequently quoting the biblical wisdom that the poor will always be with us. Lessening poverty, however, is a right and manageable goal, but one that has suffered in America from 40-odd years of misguided policies. Kennedy offers an alternative route, but it is one strewn with debris and obscured by brambles, and unfortunately it will not lead us where we need to go.
