Where Government Went Wrong: The Great Society

The 1964 Presidential election was a turning point in American history with repercussions throughout this country that reverberate today, more than 50 years later.  It pitted two starkly opposing ideologies against one another- the reduced government mantra of Republican Barry Goldwater versus the “government will take care of you” philosophy of Lyndon Johnson.  Johnson won in a landslide and he wasted no time in ushering in his Great Society legislation.

Mind you, unlike other massive social changes, the country was not heavily involved in a shooting war, nor was there any national crisis or emergency like the Great Depression.  In fact, in 1965 the national economy was humming along nicely.  Instead, this was an effort to remake society based on technocratic ideals coming from academia.  It was the culmination of a variety of elements, reformist aspirations that dated to the 19th century, and a rebuke of the free market.   It was a society provided for by government with government deciding the needs of the people.

If the goal of the Great Society was to turn America’s tax consumers into taxpayers, it failed miserably.  The war on poverty- the cornerstone of the Great Society- was problematic and approached by Johnson with the government filling the income gap.  The problem of poverty among affluence does not have a straightforward answer as Johnson believed.  Of course, there were pockets of problems in 1965- blighted inner cities, the Mississippi Delta region, Appalachia- just as there are today.

But well before the war on poverty began, income and standard of living among the less affluent were rising.  Instead, Johnson- drunk on his landslide victory over Goldwater and riding a wave of feelings after the assassination of Kennedy- used 1964-65 to perhaps the best advantage any president ever has (some would argue Wilson, FDR, or even Obama).  It started with the Civil Rights Act of 1964 which broke down Jim Crow laws and which was mainly a Republican effort.  On balance, perhaps this was the only good thing to emerge from the Johnson administration.

This was followed in quick order in 1965 by the passage of a tremendous number of bills that established Medicare and Medicaid, Head Start, the National Endowment for the Arts, National Endowment for the Humanities, the Elementary and Secondary Education Act (ESEA), the Higher Education Act, the Voting Rights Act of 1965, and the often overlooked Immigration and Nationality Act of 1965 (INA).

The INA changed US immigration law into what it is today.  Prior to its passage, the US had illegal immigrants, but not to the extent as today.  The reason is we had a workable program that had bugs that needed to be fixed.  It was the Bracero program which started in World War II as a means to attract Mexican farm laborers.  In 1951, Truman codified the program, but it had a serious flaw- a lack of employer sanctions.  Unfortunately, although it established an orderly visa program that guaranteed cyclical immigration, it also attracted many illegal immigrants prompting the Eisenhower administration to launch Operation Wetback.

The flaw was the lack of employer sanctions.  Once granted a visa, the immigrant was basically promised to the sponsoring employer.  There was no portability and employers took advantage of the situation.  By 1964, the problem led to some organized strikes by farm workers.  The INA then negated the Bracero program and opened the door to immigration from Latin America and Asia.  Instead of immigration based on economic needs of the country, family unification was now the goal.  It is this law that drew the large influx of Central American immigrants to the United States.

The Voting Rights Act has recently been the subject of some high profile Supreme Court cases.  However, it was meant as a temporary measure designed to protect the voting rights of blacks in the South.  In fact, it had a sunset provision that Congress has repeatedly extended, the most recent being in 2006.  But within five days of Johnson signing it, race riots broke out in Watts leaving 34 dead and more injured.  Black activists began to question the goals of the newly initiated war on poverty.  Federal money was directed to community organizations that often used those funds to finance demonstrations.  Big city mayors began to complain.

And perhaps the biggest losers in Johnson’s landmark economic legislation- the war on poverty- were minority communities.  Before being launched, 82% of blacks lived in two-parent homes.  About 40% of blacks were business owners.  Overall, between 1959 and 1966, the poverty rate in the country plunged from 22.4% to 14.7%- slightly lower than today.  Among blacks, it had decreased from 87% in 1940 to 47% in 1960- still unacceptable, but a trend that was continuing to be positive without the war on poverty.

In effect, the war on poverty created today’s welfare state.  Today, 29% of all Americans live in a household receiving some form of mean-tested benefits.  The federal government runs 80 programs targeted towards the poor.  Roughly 100 million Americans receive aid of some kind and we spend close to $1 trillion annually on these programs.  Not counting social security or Medicare, that comes to $9,000 per recipient.  And it has been estimated that the war on poverty has cost us $22 trillion since its inception- an amount that far exceeds the cumulative costs of all wars the United States has been involved in including the American Revolution.

And what has it wrought despite the costs to the government?  Perhaps the two greatest societal checks on poverty- a stable home and employment- were disincentivized by these programs.  In 1963, the illegitimacy rate in America was 6%.  Today, about 40% of all babies born are born out of wedlock.  Among Hispanics, the rate is 53% and a whopping 73% among blacks.

However, the illegitimacy rate among blacks had been rising prior to the war on poverty.  Daniel Patrick Moynihan, working for the Labor Department at the time, produced an explosive analysis showing that black families were under stress and that out of wedlock births were the leading cause.  Thus, although the war on poverty cannot be singularly blamed for this phenomena, it certainly exacerbated the problem.

Empirical studies back up this assertion.  A University of Washington study showed that a $200 monthly increase in welfare benefits correlates to a 150% increase in illegitimate births.  Harvard found that of 3.8 million families receiving welfare, greater than 50% had been on welfare for more than 10 years with many exceeding 15 years.  The lofty goal of creating taxpayers out of tax consumers was having an opposite effect.  Under Obama alone, food stamps reached historical highs.

As concerns employment, in 1968 before the war on poverty was fully implemented, 3% of men age 30-49 had dropped out of the workforce.  Today, that number stands at a staggering 12%.  In 1964, 80.6% of males over the age of 20 were employed.  Today, it stands at 67.6%.

Yet today’s Democratic Party and other “progressive” voices call for a doubling down on a failed program, but they disguise the talk in terms of “wage disparity” and “income gaps.”  But let us consider the poor today and the Census Bureau provides us with some interesting facts about those living below the poverty line.

We find that 99% have a stove and refrigerator, 67% have a plasma TV and cable, 43% have Internet access and 50% have a video game system.  Another 75% own a car, 80% have air conditioning.

Where do they live?  Less than 10% live in trailers, but 40% live in apartments and half in single family homes.  Another 41% of the poor actually own their homes.  The average poor person’s home has 1,400 square feet of space- more than 23 of 25 of the richest European countries.  Their daily consumption of proteins, minerals and vitamins is the same as that of the middle class and they consume more protein than those in the upper middle class.  They self report that 84% have adequate food with only 4% complaining of a lack of food.  One wonders what their cell phone ownership figures look like.

More than a monumental waste of money which is a tragedy in and of itself, the Great Society and war on poverty eroded societal checks on poverty.  Perhaps this was the plan all along, but one doubts it.  The musings of academics and technocrats often ignore reality.  Blacks went from being proud of learning to becoming high school drop outs.  Drugs, crime and broken families populate our urban centers populated by blacks.  There has been a steady degradation of aspiration.

And when tools are introduced to break these cycles- especially to those families most afflicted and willing to break the cycle such as school choice- the tool is shouted down and the proponent made to feel like a uncaring piece of scum.

Perhaps the Great Society set off with the best of intentions, but if fell woefully short of its lofty goals.  Instead of Martin Luther Kings, we have Al Sharptons.  Instead of aspiration, we have victims and blame.  Instead of responsibility, we have a welfare state.