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Defying the Odds

Defying the Odds
New book about the 2016 election.

Thursday, January 9, 2014

Poverty, Social Mobility, and the Midterm

The New York Times reports:
Senator Kay Hagan, a North Carolina Democrat who is up for re-election, is admonishing Republicans back home as “irresponsible and cold-hearted” for slashing unemployment benefits. Senator Marco Rubio, Republican of Florida, says that her party’s thinking is “stale and old and doesn’t really address the magnitude of the problem.”
Poverty is suddenly the subject of bipartisan embrace.
President Obama will highlight income disparity in his State of the Union address this month, part of a broader effort by Democrats to push a populist theme for their midterm campaigns against Republicans. Republicans are offering solutions that would give the states and the private sector, not the federal government, more authority to help improve the plight of the poor.
Peter Wehner writes at Commentary:
Yesterday Senator Marco Rubio delivered a major speech on poverty and social mobility. It’s impressive for several reasons.
While not ignoring the issue of income inequality, he made what I think is the correct and important point: Lack of social mobility, not income inequality, is what we should focus on. And the speech was intellectually impressive in part because it was intellectually honest. Senator Rubio explained with some sophistication the reasons for what he calls “opportunity inequality”–including long-term economic, social, cultural, and educational causes. This speech was not politically partisan or shallow; it admitted the causes of poverty and decreasing social mobility are complex. (Many European countries now have as much social mobility as, and more opportunity than, the United States; and today a child’s future depends on parental income more in America than it does in Canada and Europe.) Senator Rubio’s address deepened the public’s understanding of these issues, and that’s all to the good.
On the policy side of things, Senator Rubio’s proposals on the Flex Fund (which would consolidate many anti-poverty programs that in turn would be distributed to the states to enact their own anti-poverty agenda) and transforming the Earned Income Tax Credit into a real wage subsidy are promising steps, with more, I gather, to follow.
What Mr. Rubio unveiled yesterday merits support on federalism and subsidiary grounds, in terms of how we should think about the working poor versus those who are unable to work, because it incentivizes work and creates incentives to avoid unemployment programs, and because it makes upward mobility more, not less, likely. (For a more detailed and illuminating discussion of the merits of Rubio’s proposals, seehere and here.)
Michael Barone writes of New York Mayor de Blasio and the liberal perspective:
Liberal pundits are hailing de Blasio and his politics as a harbinger of the political future and a return to the liberal tradition of Franklin Roosevelt and his political ally New York Mayor Fiorello La Guardia.
But in 1944, the heyday of FDR and La Guardia, the five boroughs of New York City cast 7 percent of the nation’s votes. In 2012 they cast only 2 percent of the national vote.
It’s interesting that New York, which has had more liberal and redistributionist public policies than almost anywhere else in the nation over those 68 years, also has one of the nation’s highest rates of income inequality.
High tax rates and high housing costs (exacerbated for many years by rent control) have squeezed middle-class families out of New York. They have migrated in the millions to lower-tax, lower-housing-cost places like Florida and Texas.
The Obama Democrats did reduce economic inequality somewhat by raising the top income tax rate back to 39.6 percent. The proposals they’re talking about now are either small potatoes, or moves to have the working middle-class subsidize non-workers or the young to subsidize the old — redistribution, but not very progressive.