We can expect President Obama’s big speech Tuesday night to be full of his usual class-warfare bloviation about the “lack of upward mobility” being the “defining problem of our time.” He wants more and bigger government, so he defines problems in a way that demands another federal solution.
A new study by economists at Harvard and the University of California at Berkeley — not exactly bastions of conservative thought — concludes that the federal government has rarely solved anything.
The numbers crunched by professors Raj Chetty and Emmanuel Saez put the lie to the old saw about the rich getting richer and the poor getting poorer. Over the past half century, the prospects of the poor haven’t changed at all.
Waging the 50-year war on poverty has left the poor no better off than when the “war” began. The trillions spent on a host of programs were wasted. Children who were in Head Start as 4-year-olds perform no better than peers who were not Head Start graduates. The list of failures is a long one. This was a large “randomized” study.
The professors conclude that other factors were more relevant to upward mobility. Family structure matters, as does “social capital,” which is the jargon of economists for strength of community.
A community with a larger percentage of families with two parents, a family with strong religious beliefs, and where those parents get involved in schools and communities are rewarded with greater access to a better life.
Regional variations come into play. The Mountain West tends to exhibit far more income mobility than the Rust Belt or the Southeast. It is far easier to move up the income ladder in California’s Silicon Valley or Salt Lake City than in Milwaukee or Charlotte, N.C. There are no easy fixes for the poor in Milwaukee to match the opportunities in Salt Lake City.
The vast redistribution apparatus put in place by Lyndon Johnson to eradicate poverty left the calculus of upward mobility essentially unchanged. Even access to higher education has little to no relationship to income growth.
The United States has fallen in almost every ranking of economic freedom over the past decades. Government has ballooned, the regulatory burden has become onerous and property rights are precarious and insecure.
The Great Recession ended five years ago, but few feel the effect of an improved economy. These are the barriers to upward mobility, not the prosperity of entrepreneurs and investors.
If Mr. Obama really wants to make a difference, he’ll negotiate a truce in the war on poverty and the culture, and call in his State of the Union speech for a restoration of the freedoms that gave birth to the American dream. Only then can we hope to see morning in America again.