A Fiscal Conservative with a Social Conscience


My last two blogs were “Why racism exists in America” and “Educare and the Academic Achievement Gap.”  I often describe myself as a fiscal conservative but it would be more accurate to say that I am a fiscal conservative with a social conscience.
Capture0By this I mean:

  • First and foremost I want to shrink our annual federal budget deficits enough so that our national debt begins to decline as a percentage of GDP. Right now the public debt (on which we pay interest) is at 74% of GDP which is the highest it has been since the end of WWII. This high level of debt is unsustainable and will inevitably lead to a new and much worse financial crisis if it is not put on a downward path.
  • Closely related to the first goal is the need to get our economy growing faster than the 2% average rate of growth since the end of the Great Recession in June 2009. This will have the twin benefits of producing more tax revenue which will make it easier to shrink our annual budget deficits as well as creating more and better paying jobs for everyone.
  • A third goal is to reduce income inequality. The best way to do this is not with more income redistribution from those with higher incomes to those with lower incomes but rather by achieving faster economic growth which will raise incomes for all. Yet another critical way of making American society more equal is to focus on:
  • Reducing social inequality. There are many different forms of social inequality  in our society but let’s focus on one of the most severe aspects: black-white racism.  America will be a more peaceful and prosperous country if we can reduce the glaring inequalities between the two races.

I am sufficiently optimistic to think it is possible to make progress on all of these fronts at the same time. It won’t be easy but momentum is slowly but surely building in this direction.

Why Racism Exists in America


The First Unitarian Church of Omaha, to which I belong, has formed a sister church relationship with a predominantly black church in north Omaha, Clair Memorial Methodist Church. On Saturday we held a joint workshop, “Confronting Racism” at Clair. Several people said that we should “celebrate diversity, transcend race, and hope that things will be better in twenty or thirty years from now.”
I think the problem is much more fundamental and difficult than this. First of all, there are two main reasons why racism is so prevalent in America, one obvious and one perhaps less obvious:

  • The obvious reason is the very different colors of our skin.
  • The other reason, equally important, is that there are huge socio-economic differences between the two races. Whites are, by and large, better educated and more affluent than blacks. They also have a more stable family structure, with far fewer single parent families. People tend to live in homogeneous residential areas and associate with others of similar socio-economic background. All of these social factors serve to separate the races into largely non-interacting groups of people.

How do we confront and attack such deeply entrenched racism in our society? We need an approach which is more fundamental than programs like “welfare to work” or “residential integration.” Even equalizing educational opportunity is not enough. What we need is a long term effort to improve educational outcomes for blacks and other children from low-income families.
Capture9As the above chart of Nebraska data shows, children from low-income families, who thus receive free or reduced price lunch (FRL), are already behind in reading proficiency by third grade and they just keep falling further and further behind in the later grades. This means that they need major intervention before they even get to kindergarten. In fact what they need is early childhood education, beginning no later than age 3.
Conclusion: Racism is deeply embedded in American life and can only be eliminated with a long term fundamental effort to greatly improve educational outcomes for blacks.  I will discuss proof that this can be done in my next post.

Social Inequality vs Income Inequality


There is today in the U.S. much concern about income inequality and I have devoted many posts to this topic recently such as “Are economics and Social Progress Related to Each Other?”,How to Expand Economic Mobility”, and “Richer and Poorer.”
CaptureThe above CBO chart shows that income inequality has not changed much in the last 30 years once government transfers and federal taxes are taken into account. Along the same line, the Manhattan Institute’s Oren Cass makes a strong case in, “The Inequality Cycle,” that Americans should be paying at least as much attention to the social aspects of inequality as to the economic aspects.
For example:

  • As Charles Murray shows in “Coming Apart,” (http://www.amazon.com/Coming-Apart-State-America-1960-2010/dp/030745343X) the upper class has remained stable with respect to marriage rates (94% in 1960, 84% in 2010), civic involvement, and trust in society while for the lower class marriage rates (84% in 1960, 48% in 2010 and dropping), civic involvement and public trust have all declined significantly.
  • Children in the lower classes are five times more likely to face abuse, violence, addiction and the death or imprisonment of a parent.
  • By the time they reach kindergarten, 72% of middle class children know the alphabet compared with only 19% of poor children.
  • The fraction of children with a single parent is the best predictor of upward economic mobility in a particular region, whereas the level of income inequality is not a significant predictor.

Mr. Cass suggests that public policy should focus on these social problems at least as much as on income inequality. For example:

  • Education reform should be focused on both ends of the K-12 spectrum: early childhood education to ensure that all children are ready to learn when they get to school and better vocational education in high school so that graduates can find a good job if they’re not going to college.
  • Remove onerous regulations on the workplace so that employers are not pushed unnecessarily into independent contractor arrangements.
  • The federal government should be more supportive of marriage (e.g. with tax policy), and the participation of religious organizations in the delivery of public social services (to improve their quality).

Conclusion: Being poorly raised does more to cut off opportunity than being raised poor.