Has the War on Poverty been a failure? Well, of course it has. If you devote 50 years and $21.5 trillion (in 4Q2013 dollars) to anything, and people are arguing about whether it was a success or a failure, then you can be sure that it was a failure.
Have you noticed that, 50+ years from its inception, no one is suggesting that the Apollo program was a failure? The Apollo program was an unchallenged success because it accomplished its stated goal: “…to land a man on the moon, and to return him safely to the earth.”
The stated goal of the War on Poverty, as enunciated by Lyndon Johnson on January 8, 1964, was, “…not only to relieve the symptom of poverty, but to cure it and, above all, to prevent it.” Measured against this objective, the War on Poverty has not just been a failure, it has been a catastrophe. It was supposed to help America’s poor become self-sufficient, and it has made them dependent and dysfunctional.
This is fact is illustrated most vividly by the “Anchored Supplemental Poverty Measure Before Taxes and Transfers*” (ASPMBTAT). This metric was devised to assess the ability of people to earn enough, not counting taxes and subsidies, to keep themselves and their dependent children out of poverty. The income required to do this varies by family size and composition, but, for a family comprising two adults and two children, it is $25,500/year (in 4Q2013 dollars).
The ASPMBTAT is the ultimate quantitative test of the success (or failure) of the War on Poverty, at least in terms of its stated objective. Shortly after the War on Poverty got rolling (1967), about 27% of Americans lived in poverty. In 2012, the last year for which data is available, the number was about 29%.
This result would be shocking, even if we had not spent $21.5 trillion “fighting poverty” over the past 50 years. Here’s why.
Between 1967 and 2012, U.S. real GDP (RGDP) per capita (in 4Q2013 dollars) increased by 127.3%, from $23,706 to $52,809. In other words, to stay out of poverty in 1967, the two adults in a typical family of four had to capture 26.9% of their family’s proportionate share of RGDP (i.e., average RGDP per capita, times four). To accomplish the same thing in 2012, they only had to pull in 12.1% of their family’s share of RGDP. And yet, fewer people were able to manage this in 2012 than in 1967.
What turned the War on Poverty into a social and human catastrophe was that the enhanced welfare state created a perverse system of incentives, and people adapted to their new environment.
That people would adapt to a changed social/economic environment should have surprised no one. After all, everyone living today is here because 50,000+ generations of their ancestors managed to adapt to whatever circumstances they found themselves in, at least well enough to produce and raise offspring.
The adaptation of the working-age poor to the War on Poverty’s expanded welfare state was immediately evident in the growth of various social pathologies, especially unwed childbearing. The adaptation of the middle class to the new system took longer to manifest, but it was no less significant.
Even people with incomes far above the thresholds for welfare state programs were forced to adapt to the welfare state. As crime rates (driven by rising numbers of fatherless boys) rose in the cities, and urban schools systems became dangerous and dysfunctional, the middle class (of all races) was forced to flee to the suburbs.
Because many middle-class mothers had to go to work to permit their families to bid for houses in good school districts (as well as pay the higher taxes that the expanded welfare state required), self-supporting families had fewer children.
Before we look at how the poor adapted to the War on Poverty’s enhanced means-tested welfare programs, let’s look at how America adapted to Medicare and enhanced Social Security benefits.
Desperate to spin the disastrous War on Poverty as a success, progressives have tried to divert our attention from America’s growing underclass by pointing to the large decline in the Official Poverty Measure (OPM, which includes cash transfer payments) for senior citizens. The OPM for Americans age 65 and above fell from about 30% in 1967 to about 9% in 2012.
Not so fast, progressives. It is not clear that the OPM for seniors would be higher today if the War on Poverty had never been mounted.
Because the War on Poverty made Social Security benefits more generous, and also created Medicare, it produced an instantaneous reduction in the OPM for senior citizens. And, obviously, if Social Security and Medicare were terminated tomorrow, the OPM for senior citizens would rise. However, because both Medicare and enhanced Social Security have now been in place for the entire working lifetimes of the people retiring today, these calculations prove nothing.
Progressives want us to believe that the people that started working after 1965 would have managed their lives and their finances exactly the same way if the welfare state had not been expanded during the mid-1960s. This is not likely.
As Social Security and Medicare benefits were made more generous, people reduced their savings. The Personal Savings Rate (which is calculated as a percent of disposable income) has fallen by more than half since 1967 (from 12.2% to 5.6%). In other words, when people found that they didn’t need to save as much to avoid being poor in old age, they didn’t save as much. Also, because of higher payroll taxes, workers had less money to save.
This was particularly problematic because GDP is driven by capital investment. America’s lower savings rate translated into slower economic growth. Because, as Albert Einstein once said, compound interest is the most powerful force in the universe, our economy is considerably smaller today than it would have been if people had been required to save more for retirement. And, there are far fewer good-paying jobs than there would have been with more investment and higher GDP.
Among other things, a smaller GDP means that supporting our non-working senior citizens imposes a larger burden upon today’s working people than it would have if savings and investment had been higher over the past 50 years.
So, it is not clear at all that the War-on-Poverty-enhanced welfare state for senior citizens produced any long-term benefit, even for seniors. However, at least we can afford it.
With correct economic policies, the U.S. can sustain RGDP growth rates of 3.5% or higher, and this level of growth would make Social Security and Medicare affordable, with no tax increases and no benefit cuts.
What America cannot afford is a welfare state that makes government dependency a feasible career option for its young people. The War on Poverty made welfare (broadly defined) into a viable entry-level job, and poor people signed up for it in droves.
The pathologies that resulted from the War on Poverty were not the fault of the poor themselves. They simply adapted, in a logical and predictable way, to a welfare state designed and promoted by our progressive elites.
It is amazing that progressives, who treat the theory of evolution as religious dogma, also seem to believe that there is no such thing as “human nature.” They also seem to believe that “nurture” (which presumably includes exhortation from government bureaucrats) trumps “nature.”
Unfortunately for progressive programs like those making up the War on Poverty, there is an essential human nature that we all share, and humans respond predictably to the incentives present in the environment around them.
Children are programmed by evolution to rebel against their parents’ control, and to seek to be independent. Prior to the welfare state, the only way for girls to escape the authority of their parents was to become economically self-sufficient, by getting a job and/or getting married.
The progressive welfare state, especially after it was expanded by the War on Poverty, provided a third option for teenage girls seeking to get away from their parents’ control: have a baby. As soon as a young, unmarried girl had a baby, she officially became a “poor family,” and the government would force taxpayers to support her and her baby.
Girls of all races responded predictably to shifts in welfare state policy, as shown below in a chart excerpted from a Heritage report.
The poorer a demographic group is in terms of its ability to earn market income, the more members of that group will find the welfare state attractive. However, individuals in all demographic groups responded to the changed incentives.
BTW, the response to welfare reform occurred when it became a serious possibility. People didn’t wait for it to be enacted. They aren’t stupid.
Unfortunately, the damage to poor communities was done long before the half-hearted welfare reforms of 1996. Once the number of responsible fathers in a community falls below a certain level, the adults lose control of the adolescent males. Gangs take over the streets, and gang values (mainly, getting “respect,” by violence if necessary) become established among the young males.
Urban crime rates rose rapidly from the 1960s through the early 1990s, at which point the public got angry, rebelled against soft-on-crime progressives, and cracked down hard on criminals. The result was an exploding prison population, with the majority of those incarcerated being young, fatherless males. This impacted the “sex ratios” in poor communities, as we will discuss later.
Evolution has shaped human males differently than human females. However, the consequences of adapting to the expanded welfare state has been no less devastating for poor young men than it has been for poor young women.
Of paramount concern to young men is, “What do I have to do to get laid?”
In 1950, the answer to this question was, “Get a job, make money, get married, and support a family.” The War on Poverty changed this to, “Just show up. Don’t worry, you won’t have to support the children that you might father—the government will force taxpayers to do that. In fact, you might even be able to live off the women and children that are living off the welfare state.”
We are the descendents of the early humans that had the most surviving children. Given human nature, a male’s ideal reproductive strategy is to have sex with as many women as he can, and sire as many children as he can, while (somehow) getting other people to support his children, so that they will survive to reproduce.
Because an attempt by one male to implement this ideal reproductive strategy conflicts with the interests of the mothers of his children (who want him to stick around and help raise them), and with the interests of the other males (who could get stuck having to support children that are not their own), society evolved strong defenses against this strategy. As late as the 1960s, “shotgun weddings” were common in America.
The War on Poverty changed this. The expanded welfare state transferred the burden of supporting the offspring of irresponsible males from family members and/or the local community to a diffuse group of taxpayers. This benefited irresponsible males in an evolutionary biological sense, but there were huge costs to society.
As the dependent underclass expanded, struggling middle class families were increasingly forced to delay having their own children, and to have fewer of them. This was because the middle class not only had to pay the taxes required to support the welfare state, but also found itself forced to pay for private schools, or to bid for expensive housing in school districts where their children would not be exposed to the children of the increasingly chaotic underclass.
None of this had anything to do with race. The black middle class fled Detroit for exactly the same reasons as the white middle class. President Obama, who presumably is not a racist, lives in the heart of Washington, DC, but sends his kids to a private school. And, as Charles Murray has documented in his book, Coming Apart, underclass social pathologies are taking hold among poor whites.
Compounding the damage done by the welfare state is the long-term shift in “sex ratio,” which is the number of adult males per 100 adult females.
Western civilization as we know it evolved during a time when women were in relatively short supply, due mainly to death in childbirth. From 1790 to 1910, the sex ratio in the U.S. hovered around 104.
Around 1910, medical science began to get a handle on death in childbirth, and the sex ratio began falling. It hit 100 in 1945 and bottomed out at about 95 in 1970.
The decline in the sex ratio broke the “female sex cartel,” which had permitted women to demand marriage and fidelity as the price of dependable sex. Today, only men that want to get married for reasons other than sex get married. Lots of college-educated men seem to want to be married, but it appears that a much lower percentage of high school dropout males are looking to wed. This may be because those men feel that they have little to offer to a family, or because today’s welfare state strongly discourages low-income people from marrying each other.
The impact of the shift in the national sex ratio has been amplified in poor communities by mass incarceration. This has produced extremely low sex ratios in areas of concentrated poverty. It does little good to promote marriage as a solution to poverty, if there are no marriageable men. Also, conservatives need to understand that poor women are getting married. They are marrying the welfare state, in many cases “until death do us part.”
So, the War on Poverty has been a catastrophe. Why wasn’t anything done about this before now? And, what should be done about it now? And, why are progressives falling all over themselves calling Congressman Paul Ryan a racist? We’ll discuss these topics in future installments of’ “Unconventional Logic.”
* See: “Trends in Poverty with an Anchored Supplemental Poverty Measure” (December 5, 2013) by Christopher Wimer, Liana Fox, Irv Garfinkel, Neeraj Kaushal, and Jane Waldfogel
