Unraveling the Poverty Myths Obama Is Promoting
Stephen Moore /
Our class warrior in chief was at it again last week complaining about our “ideological divides that have prevented us from making progress” in solving problems like poverty. Just when you thought you’d heard it all.
Our most ideological president perhaps ever is arguing that there is too much ideology in Washington. Wow. Apparently an ideology is a firmly held belief that is held by other people—especially those on the right.
In a discussion on poverty at Georgetown University, the president managed to blame the slow-growth economy and stagnant wages on everything from Ayn Rand (who promoted “cold hearted policies” and classified everyone as a “moocher”) to California’s Proposition 13 (which is responsible for the Golden State’s dreadful schools). Everything has contributed to our current malaise except for his own failed policies.
Here’s a brief truth squad examination of Obama’s mythologies and misstatements of fact.
President Obama: “The stereotype is that you’ve got folks on the left who just want to pour more money into social programs, and don’t care anything about culture or parenting or family structures … ”
After more than $22 trillion spent on the War on Poverty since 1964 (in inflation adjusted dollars)—how is it a stereotype to say the left only wants to pour money at programs?
This official poverty rate has remained virtually stagnant since the War on Poverty began.
Just a few weeks ago the president blamed the Baltimore riots on Republicans for not spending and borrowing even more money on his social programs. He sounded like a parody of himself.
If the left really wants to advance cultural values like work, why do they oppose reforms to a welfare system that requires able-bodied adult Americans to work in exchange for receiving welfare benefits like food stamps?
Obama: “It is a mistake for us to suggest that somehow every effort we make has failed and we are powerless to address poverty. That’s just not true. First of all, just in absolute terms, the poverty rate when you take into account tax and transfer programs, has been reduced about 40 percent since 1967.”
There are two problems with this defense of the welfare state. First, the official poverty was falling before 1965 and at a faster rate than after the Great Society got rolling in the mid-1960s. This official poverty rate has remained virtually stagnant since the War on Poverty began.
Second, the decline in poverty that Obama is boasting about is only after taking into account tax credits and government handouts and welfare benefits. When excluding these programs there has been little progress at all.
Redistribution may have raised the material living standards of some of the poor. But it has not increased self-sufficiency.
The original purpose of the welfare state was to lift people into self-sufficiency, not to create a permanent underclass dependent on taxpayers. Lyndon Johnson told us when he started these programs that “the days of the dole are numbered.” We have passed day 18,000.
Obama also wants it both ways. He says over and over, even in this speech, that the biggest problem with the economy is income inequality because the rich are getting richer and the poor poorer. So if the poor are getting poorer, how have his social programs worked to reduce poverty?
Obama: “In some ways, rather than soften the edges of the market, we’ve turbocharged it.”
Wait, we’ve turbo-charged the free market? When? Where?
Obama: “There are programs that work to provide ladders of opportunity … but we just haven’t figured out how to scale them up.”
Hold on. One of the few programs that has proven to provide “a ladder of opportunity” is the Washington D.C. Opportunity Scholarship Program for roughly 1,500 kids each year to attend private schools. They are all poor and almost all black. The graduation rates for these kids have improved in some cases markedly.
But guess who doesn’t want to “scale up” this successful program (which is, by the way, one of the few programs that would actually be appropriate for the federal government to scale up)? In every budget Obama has submitted, he has proposed eliminating the program.
It’s more than a little hypocritical for a president who sends his own daughters to private schools that cost $30,000 a year to prevent poor children in Washington, D.C., from attending those same schools.
Obama: “And so over time, families frayed. Men who could not get jobs left. Mothers who are single are not able to read as much to their kids.”
The president acts as though “families frayed” by accident. No, there were major cultural shifts that contributed to the major decline in marriage and rise in unwed births, not to mention the introduction of a massive government welfare system that financially took the place of the father.
In 1960, not even one in four black children were born without a father in the home. By 2013 that number had soared, tragically, to nearly three of every four black children being born outside of marriage. As economist Thomas Sowell has put it: “the black family survived centuries of slavery and generations of Jim Crow, but it disintegrated in the wake of the liberals’ expansion of the welfare state.”
Obama: “You look at state budgets, you look at city budgets, and you look at federal budgets, and we don’t make those same common investments that we used to. … And there’s been a very specific ideological push not to make those investments.”
In 1950 total state, local and federal government spending was just over $500 billion (in constant 2015 dollars) and 22.2 percent of our GDP. Today it is nearly $6 trillion and 33 percent of our GDP. Under Obama federal spending will reach $4 trillion next year and borrowing to finance these “common investments” will have risen by $8 trillion over his tenure.
The only thing that has been underfunded over the last decade is middle-class family incomes, which have stagnated.
Obama: “We don’t dispute that the free market is the greatest producer of wealth in history—it has lifted billions of people out of poverty. We believe in property rights, rule of law, so forth.”
No, you don’t. And that’s the whole problem.