'Progressive' politics not so progressive
Neil Reynolds
Wednesday, June 06, 2007
OTTAWA ? Which American families with children increased their earnings most in the past 15 years - the poorest or the richest? For most people, the answer comes as a surprise. For "progressive" people, it comes as a shock. The answer? The poorest.
Divided into five groups with the same number of families in each, the highest-income group reported 50-per-cent higher earnings in 2005 than in 1991. Moving down, the next three groups reported 20-per-cent higher earnings.
At the bottom, the poorest group recorded 80-per-cent higher earnings. Adjusted for inflation, these families - the poorest 20 per cent of families with children in the United States - achieved by far the highest percentage earnings gains.
And these poor families mostly increased their incomes the old-fashioned way - by working more.
In 1991, these families had income of $12,400 (U.S.) a year. They collected $6,100 from "earned income" - wages; $4,000 in cash payments from various welfare programs; and $2,000 from such sources as gifts, inheritances and interest income. They collected another $300 in "earned-income" tax credits, a federal rewards program that compensates people who lose welfare payments when they work longer hours, earn more wages and no longer qualify for welfare.
By 2005, these families had income of $16,800, an increase of 35 per cent. They collected $11,000 from wages, an increase of 80 per cent, and received $700 in cash welfare payments, a decline of 82.5 per cent. They collected $2,700 from other sources - and, reflecting the movement from welfare to wages, $2,400 as earned-income tax credits. Now they earned almost twice as much in wages and got only half as much income from the government.
The U.S. Congressional Budget Office (CBO), the federal research agency that produces independent economic analysis for the Senate and the House of Representatives, published these conclusions last month in a report that dispels some of the popular mythology of worsening economic inequality in the U.S. - mythology now emerging as demagogic fodder for the 2008 presidential election campaign.
Writing last week in The Washington Post - "The Rise of the Bottom Fifth" - Brookings Institution economist Ron Haskins called this return to work by poor families with children "the biggest success in American social policy in decades." The CBO numbers, he said, should make Republicans proud: "Low-income families with children increased their work effort, many of them in response to the 1996 welfare reform law that was designed to have exactly this effect."
"These families not only increased their earnings but also slashed their dependency on cash welfare," he said. "In 1991, more than 30 per cent of their income came from cash welfare payments. By 2005, it was 4 per cent. Earnings up, welfare down - that's the definition of reducing welfare dependency."
In the 1990s, to reverse a prolonged descent into dependency by the American underclass, the Republicans needed the support of Democratic President Bill Clinton - who had campaigned for Republican votes in 1992, and won them, by promising "to end welfare as we know it." The historic bipartisan legislation - extravagantly called "the Personal Responsibility and Work Opportunity Reconciliation Act" - ended cash welfare as a federal entitlement for poor families with children.
The fashionable American left, identifying itself as "progressive," is now ascendant in the Democratic Party as the presidential campaigns of Hillary Clinton, Barack Obama and John Edwards demonstrate. In a major campaign speech last week, entitled "A Progressive Vision for America," Mrs. Clinton asserted that she considered herself "a thoroughly optimistic and modern progressive."
Can "progressive" politics, however, be either optimistic or modern - in any degree other than rhetorically? The "progressive" philosophy now concedes that free markets can work - but only when governments do the thinking for them. It requires a pessimistic doomsday sensibility. Checking over this baggage, Washington labour economist Stephen Rose warns liberal Democrats that they must stop exaggerating the extent of poverty. "It is an occupational hazard of people with big hearts," he says, "to overestimate the share of the population living in economic distress." Not to mention demagogues. Class-warfare politics survives on the preservation of the underclass.
In a report written for the Progressive Policy Institute, Mr. Rose argues that progressives keep trying to win national elections in the U.S. with fewer and fewer core supporters. "How else are we to explain the Reagan Democrats," he asks, "who have flummoxed the Democratic Party for two-and-a-half decades?"
From his own statistical analysis of economic classes in the U.S., Mr. Rose calculates that progressive politics can appeal to 23 per cent of the population. Now, with the rise of the bottom fifth, the core constituency of "progressive" politics looks to be shrinking yet again.
© The Globe and Mail
