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  The rest of this book is dedicated to applying these three lessons in politics, policy, and, most important, ordinary life. Armed with this knowledge, we turn first to the people who most need a hand up in their pursuit of happiness: the poor.

  Chapter 2

  WHY AMERICA HASN’T WON THE WAR ON POVERTY:

  Spending Trillions Without Moving the Needle Where It Matters Most

  For most of our nation’s history, the key ingredients for happiness were common knowledge throughout America. No matter how much money they made or how educated they were, the vast majority of citizens were united in a civic culture that prized the institutions of faith, family, community, and work.1

  My AEI colleague Charles Murray shows in his bestselling book Coming Apart that this is no longer the case.2 Tragically, the secrets to a flourishing life have become less of a universal birthright and more of a luxury good. More and more, these building blocks of the pursuit of happiness are disappearing in the communities that need them most of all.

  Today, the poorest 20 percent of American adults are only a fifth as likely to be married as the richest 20 percent. They are about 30 percent more likely to say they never attend religious services and over 60 percent more likely to say they never spend time with neighbors.3 They also work, on average, about 20 percent fewer hours per week. These patterns are decidedly not concentrated in any racial or ethnic group. As Murray shows in great detail, they afflict all sorts of economically vulnerable Americans.

  In other words, modern American poverty goes far beyond financial need, as though that weren’t bad enough. Of course, many low-income Americans do enjoy great lives filled with faith, family, community, and work. But on average, poor communities are disproportionately deprived of these four secrets to happiness. Combine all this with the added strain of material deprivation, and it comes as no surprise that Americans in the bottom fifth are only half as likely to say they are “very happy” about life as are those in the top fifth (18 to 36 percent).

  We could argue endlessly about causality. Do work and family dysfunction cause poverty, or vice versa? Probably both. But whichever way the cycle runs, the effects on happiness are undeniable. If conservatives want to rebuild the pursuit of happiness for everyone, we need to start with poor Americans. We need to understand both the cultural factors and the economic circumstances faced by America’s most vulnerable citizens. We must grasp why poor communities in America have stagnated while poverty has plummeted around the world, and why our sprawling entitlement programs have mostly failed to improve poor people’s lives. And we have to start explaining how conservative solutions can solve the problem.

  This will require a major update of conventional conservative “up-by-your-bootstraps” mythology. I cannot count the number of frustrated elected officials who have explained to me how the aspirational, rags-to-riches stories they’ve been telling their whole career just don’t connect with voters anymore. It turns out there’s a reason for that. To be sure, conservatives should never cease to emphasize personal responsibility and hard work. But we must also acknowledge that failing schools and stagnant wages have made simple effort an insufficient guarantee of thriving in large swaths of America.

  This new approach will also require an autopsy on decades of failed progressive policies. Government technocrats have spent trillions of dollars standing up sprawling bureaucracies that have succeeded only in making poverty marginally less painful. They have failed to make it less permanent.

  To do these things, we have to look squarely at the ugly truth about poverty in America today.

  ROSA LEE’S STORY

  In September 1994, a Washington Post reporter was exposing Americans to a shocking, slow-motion tragedy.4 The journalist, Leon Dash, had spent three years following and speaking with a woman named Rosa Lee Cunningham. The stories he collected became an eight-part, 39,000-word masterpiece that took the newspaper a week to publish. It won prestigious awards, including a Pulitzer Prize.

  When I first read the series, I could scarcely believe it. For me and many other Americans, it permanently changed the conversation about poverty.

  Born in 1936, Rosa Lee was raised in Washington, D.C. Life was difficult from the beginning, and she underachieved in school.5 She became a mother at fourteen and had seven more kids, fathered by five different men. Her only marriage began at age sixteen and lasted less than a year: An abusive husband turned out to be even worse than the abusive mother she was trying to escape.

  Life did not improve for Rosa Lee after the federal government’s massive antipoverty programs began in the 1960s. Her material needs declined marginally, but her misery continued unabated. She was a lifelong shoplifter and, at different times, a prostitute, a heroin dealer, and eventually a heroin user. Rosa Lee went to jail a dozen times throughout her adult life. She was complicit in the crime and drug addiction of six of her children. Desperate for money, she prostituted her own daughter at age eleven. And at the age of fifty-eight, she died of AIDS, unsure if she contracted it through sex or by sharing needles.

  Dash painted the squalid truth of modern poverty in stark colors. His story shocked readers so much that the Post had to set up a special hotline for fans and critics of this one series. Two decades later, reading the story is still like staring at a car accident. You can’t stand it. But you can’t turn away.

  It is scarcely believable that anything like this could happen in modern America. Yet it did. Even more disturbing, such extraordinarily tragic stories were unfolding in neighborhoods just a few blocks from the White House, decades after a War on Poverty had been declared by the president of the United States. Dash shines a spotlight on this irony in one particular anecdote: As Rosa Lee weeps for her daughter who has been arrested for murder, a television in the background is tuned to Bill Clinton’s inauguration. She ignores it. Rosa Lee has never voted: “It’s not going to make one difference in my life.”6

  Still, government was not absent from Rosa Lee’s life. To the contrary, all throughout the story, the government is a focal point. It appears in the form of a revolving-door criminal justice system, and as a major player in the miserable ecosystem that aided and abetted her destructive behavior.

  In every chapter of her story, some well-intentioned government program rears its head in a perverse way. On the first of the month, when welfare checks are cashed at the corner liquor store, they are used for drugs as well as rent. Family members and drug dealers demand payments and loans taken from her government support check. Public housing is used as a safe haven for crime. People exaggerate their roles in caring for children to elicit additional aid and food stamps.

  In short, in Rosa Lee’s story, the welfare system is a nameless, faceless wellspring of poorly directed resources. She feels entitled to the assistance and is utterly dependent upon it, but it fails to fundamentally change her tragic life.

  Except perhaps to make her life worse. A man who fathered three of her children wanted to join Rosa Lee in a stable family. But he never did. Dash asked why. “Back in them days,” Rosa Lee explained, “the welfare didn’t permit no man to live with you. That’s how I lost him. We were going to try to live together, but the welfare wouldn’t let us.”7 The man had a job, but Rosa Lee didn’t see how they could make it without welfare.

  Not all of Rosa Lee Cunningham’s family was a disaster. Two of her sons formed stable families and held solid jobs. These sons had two key victories in common. With the encouragement of dedicated male mentors, both resisted drugs and earned their own livings. Their seemingly random success amid all the chaos was hard for Dash to understand:

  How is it, I wondered, that many . . . had prospered against considerable odds while some, like Rosa Lee, had become mired in lives marked by persistent poverty, drug abuse, petty and violent crime and periodic imprisonment?8

  The series did not meet with universal praise. Some readers denounced the reporting as racist because Rosa Lee Cunningham was African American. (So was the repor
ter.) The Post received more than 4,600 calls in response to the series, and many were blistering. But most callers praised the story.9 Readers recognized that Rosa Lee’s story was being repeated in communities of all ethnicities. They understood that the entire country was implicated in this disaster.

  At its core, Rosa Lee’s case was a story of institutionalized human degradation. In her impoverished youth, she suffered the scandal of pre-1960s poverty. As an adult, she was caught in a dystopian government system that allowed the worst behavior to thrive and tended only to the most glaring material needs of the poor through cold, hard cash. Government myopically managed to this one metric—money—while society forgot about the human beings like Rosa Lee whose lives were at stake.

  THE FAILURE OF THE WAR ON POVERTY

  How did our nation fail Rosa Lee Cunningham, even as we invested trillions of dollars specifically to help her and the rest of America’s poor?

  To answer this question, we need to travel back to May 22, 1964. It was on that day, in Ann Arbor, Michigan, that President Lyndon B. Johnson formally announced the Great Society. A few months earlier, Johnson had declared an “unconditional war on poverty” in his State of the Union address.10 But at Ann Arbor, the president explained that his vision was about much more than simply eradicating poverty:

  The Great Society rests on abundance and liberty for all. It demands an end to poverty and racial injustice, to which we are totally committed in our time. But that is just the beginning. The Great Society is a place where every child can find knowledge to enrich his mind and to enlarge his talents . . . where men are more concerned with the quality of their goals than the quantity of their goods. . . .

  [It is] beckoning us toward a destiny where the meaning of our lives matches the marvelous products of our labor.11

  What was the ultimate goal of the Great Society? Johnson put it clearly: “. . . to pursue the happiness of our people. Our success in that pursuit is the test of our success as a Nation.”

  That encompasses much more than the alleviation of material need. Johnson was pledging to bring true human flourishing within every American’s reach. He pledged that every one of our citizens, whatever their origins, would have the chance to expand their talents, earn their success, and pursue happiness.

  These are wonderful and noble goals. They are worthy of a great nation. Have we met them?

  The day before Johnson delivered that speech, I was born in Spokane, Washington. I am, quite literally, a child of the Great Society era. That means that both the Great Society and I just turned fifty, which is a good time to pause and reflect. Johnson laid out a clear test to measure “our success as a Nation” in his effort. So, is government successfully pursuing “the happiness of our people”?

  There has been at least one undisputed victory. The Great Society’s crusade for civil rights culminated in the Civil Rights Act, the Voting Rights Act, and other overdue steps that ended legal discrimination in our country. Today, African Americans still face many barriers to their pursuit of happiness, but Jim Crow laws are not one of them. This is a tremendous achievement of the American people.

  But what is the Great Society’s legacy on poverty? That question is much more complicated.

  Let’s start with poverty understood most narrowly—pure material need. The situation was dire as Johnson stepped up to the podium. Just a few months prior, in January 1964, Life magazine had published a photo essay titled “The Valley of Poverty.” Shocking images detailed the plight of people living in eastern Kentucky’s Appalachian Mountains.

  Their homes are shacks without plumbing or sanitation. Their landscape is a man-made desolation of corrugated hills and hollows laced with polluted streams. The people, themselves—often disease-ridden and unschooled—are without jobs and even without hope.12

  One photo showed a family eating a dinner of surplus commodities in a room wallpapered with sheets of newspaper. Another showed a man and his son scavenging for frozen lumps of coal to heat their overcrowded home. The lives on display shocked the nation.

  In addition to this crushing rural poverty, need also gripped America’s cities. In 1964, nearly half of the 34 million Americans below the poverty line lived in large cities and bleak suburbs.13 Most poor families in the 1960s lacked a car. Most lived in cramped quarters without a bed for each family member. Unbelievably, while most of the poor were white, fully half of all nonwhite families fell below the poverty line.14

  What has happened in the ensuing decades? Fortunately, day-to-day life below the poverty line has become much less uncomfortable. Both the length and quality of life have increased dramatically among the poor, infant mortality has fallen, and access to public education has expanded.

  In 2011, the average poor American possessed more living space than the U.S. average for all citizens in 1980.15 And that’s even more living space than the average person today across all economic classes in France, Sweden, Germany, and the United Kingdom. Three-quarters of poor Americans today have one or more cars.16 Most have refrigerators, dishwashers, televisions, and microwave ovens. Enjoyable items like personal computers, video game consoles, and Internet access have become commonplace.17

  To give an idea how these things have become within reach of the poor, take a quick example. In 1964, a color television cost $379. That is about $2,849 in today’s dollars,18 meaning it was an unimaginable extravagance for most Americans. When I was a kid, a color TV was totally out of the question for a lower-middle-class family like mine—we had a black-and-white Zenith that you had to whack every half hour when the picture conked out. Today, a forty-inch flat-screen TV costs $220 at BestBuy,19 placing it within the reach of most Americans.

  Most of the lifestyle improvements listed above are due to technological progress. But some of the reduction in material deprivation can indeed be attributed to Great Society programs. To the extent that government played a role in increasing the availability of food, medical care, and housing, we should celebrate. But we have to consider an important caveat before we declare the Great Society any sort of success: Poverty was already in retreat when Johnson turned on the government spigots.

  In 1950, roughly 25 percent of Americans were officially poor.20 By 1966, just two short years after the War on Poverty formally began, the number was down to 14.7 percent. That 10 percent drop translates into a 41 percent cut in the poverty rate—a truly amazing accomplishment. Surely, you might be thinking, Johnson’s government-centered agenda was a stunning success!

  There’s just one problem with that narrative. Almost all of the decrease in poverty took place before Johnson’s policies went into effect. It was a vibrant economy that did the trick.

  In the 1950s, the U.S. economy grew by a remarkable 4.25 percent per year, on average.21 Growth was even stronger in the 1960s, averaging 4.53 percent.22 Many economists (me included) believe that much of this prosperity flowed from President John F. Kennedy’s supply-side tax cuts, which reduced rates across the board by 20 percent. For some perspective, consider that our growth in the 1950s and ’60s was two-and-a-half times the anemic percent growth rates we’ve averaged over the last decade. Suffice it to say things were going well.

  As a result of this economic expansion, the poverty rate had already fallen from 25 percent in 1950 to 19.5 percent by the morning Lyndon Johnson strode to the podium in 1964. By 1966, as major Great Society efforts like Medicare were struggling to get off the ground,23 the poverty rate had fallen further to 14.7 percent. Like some especially image-savvy general, LBJ publicly declared war on an enemy that was in the middle of beating a hasty retreat. Thanks mainly to free enterprise, America was already winning the War on Poverty by the time Johnson’s initiatives were up and running.

  In other words, what happened in America in the 1950s and ’60s is exactly what happened abroad after 1970. Free enterprise wiped out a massive amount of poverty. But this reduction was arrested soon after the War on Poverty began. The poverty rate in 1966—when a few of President Joh
nson’s programs had been implemented and many others were still coming on line—was 14.7 percent. In 2013, at least $15 trillion later, the poverty rate in the United States of America had fallen all the way to . . . 14.5 percent.24

  By any fair standard, the government’s War on Poverty would be classified as a failure. Certainly, any private-sector CEO would be fired under remotely equivalent circumstances.

  Now, many policy experts (on both left and right) complain that the poverty rate is a flawed metric. They argue that the official measure of poverty is a poor way to measure people’s material standard of living. That’s because the official metric actually excludes many of the most prominent government transfer programs that aim to reduce deprivation. What’s more, it doesn’t take into account other important phenomena, such as (as we just saw) the falling price of many modern conveniences.

  This argument is true as far as it goes. But just because it doesn’t count food stamps or cheap televisions, the official poverty rate is not useless. That’s because, in addition to some government assistance, it does capture most of the total resources that families earn for themselves. If the trillions we’ve spent on the Great Society had helped huge numbers of Americans become self-sufficient and empowered them to earn their own success since the mid-1960s, we would see a big drop in the official poverty rate.

  Yet no such drop took place. Since the first day that all the major policy pillars of the Great Society were in place, the poverty rate has dropped only by 0.2 percent. That is basically a rounding error. Instead of boosting poor Americans into the workforce and on a trajectory toward the middle class, government programs have only helped them subsist in poverty by attending to a few physical needs.