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Commentary by James Shott

Most Americans think that helping truly needy people, whether they live here or in some other country, is a worthy objective. Looking at charitable contributions as a benchmark, Americans are the most generous people in the world, giving $316.23 billion to charitable organizations in 2012, about 2 percent of GDP, according to Charity Navigator, and preliminary figures for 2013 indicate a significant increase to $328 billion.

Double those numbers and it still would not be good enough for the federal government, which believes that if private sources don’t relieve every semblance of suffering for every single suffering American, the government must step in and do the job better.

Except that government can’t do it better, never has, and never will.

Government’s failure to achieve better results than normal people doing what normal people do has never been a deterrent to wasting billions of taxpayers dollars in a futile effort to try one more time to do so.

The most notorious failure was Lyndon Johnson’s “War on Poverty” which began 50 years ago in Mr. Johnson’s State of the Union message. From the beginning of the war on poverty until 2013, local, state, and federal spending on welfare programs totaled $16 trillion, according to data from the U.S. Census Bureau. Currently, the United States spends nearly $1 trillion every year to fight poverty.

When the War on Poverty began, 33 million Americans were in poverty and the poverty rate was 19 percent. Today, approximately 46.5 million live in poverty and the poverty rate is 15 percent. Even though the poverty rate is lower than 50 years ago, because our population is much larger now than then, more people are poor today than in 1964. We have fought a long and expensive fight, and lost. Yet we still fight on.

President Barack Obama’s cause du jour is income inequality, and it’s significant other, the minimum wage. And now that “reforming” the best healthcare system in the world is well underway, he wants to declare war against income inequality.

In no free or relatively free economic system can there be income equality, for two reasons. First, inequality is a fundamental part of life. Some people sing better than others. Some are better athletes than others. And some people make more money than others, and that’s because some people are better at their job than others and deserve higher pay, and some jobs require more skill and training than others, and pay better.

So, like poverty, another area that will always exist, we will always have income inequality.

Far more important, however, is whether there is the opportunity to move up from the lower income levels, and that is an area that has been fairly stable, according to The New York Times, which reported last month that “the odds of moving up — or down — the income ladder in the United States have not changed appreciably in the last 20 years….”

That means that people in the lowest quintile are not condemned to stay there, and people in the top quintile are not guaranteed to stay there, and there is substantial movement in and out of all quintiles.

It’s a favored piece of envy politics that the rich get richer and the poor get poorer. But the data tell a different story. From 1967 to 2009, the real mean household income increased for every quintile, which means the poor became richer, not poorer. Americans in poverty could afford more goods and services in 2009 than in 1967, according to U.S. Census Bureau data.

Other factors, like where people live, have an effect. Harvard University’s Raj Chetty reported “the probability that a child reaches the top quintile of the national income distribution starting from a family in the bottom quintile is 4.4 percent in Charlotte but 12.9 percent in San Jose,” and factors such as better primary schools and greater family stability also aid upward mobility, he wrote.

Larry Kaufmann, senior advisor at Pacific Economics Group, discussed findings of the Pew Charitable Trust, which showed that “Half of children born to parents with bottom-third income levels experience upward relative mobility when the parents remain continuously married; the figure falls to 26 percent when this is not the case,” he wrote.

The Pew study shows that the poverty rate among married couples is only 6 percent, and among married couples who both have full-time jobs the poverty rate is practically zero. The poverty rate among single dads and single moms, however, is much higher: 25 percent for single dads and 31percent for single moms.

Investor’s Business Daily Senior Writer John Merline notes that income inequality has increased faster since Mr. Obama took office than under any of the three previous presidents, and that inequality is now greater than at any time since the Census Bureau started recording it back in 1947.

The message from this is that to assist folks in moving up the income ladder, Mr. Obama should replace his administration’s policies that impede economic recovery, and seriously encourage the restoration of family values among Americans. That would accomplish far more than making people think they are victims, and fomenting division among Americans.



Cross-posted from Observations

End of an error? The State of the Union campaign event needs to go

The State of the Union address to Congress is really just a routine presidential duty defined in Article II, Section 3 of the U.S. Constitution, ratified in 1787-88: "He shall from time to time give to the Congress Information of the State of the Union, and recommend to their Consideration such Measures as he shall judge necessary and expedient."

That simple requirement to update the Congress and recommend certain things the president thinks are important has evolved into the political orgy we now witness each year.

We have become accustomed to the spectacle of last week because that is the way the message has been delivered for a hundred years. However, there is no requirement for the president to actually appear before the Congress and orally deliver the message. And in fact, beginning with Thomas Jefferson's first State of the Union in 1801 and lasting until William Howard Taft's final message in 1912, the State of the Union was a written, often lengthy, report sent to Congress at the beginning of a new Session of Congress.

It’s time to return to the more sensible and less hype-driven process of Jefferson through Taft, because instead of a restrained message addressing the problems the country faces and perhaps some discussion of the successes that it has experienced, for years we’ve been treated to a campaign event all dolled up into a grandiose political revue that is little more than an exercise in political expedience.

It is a stage perfectly set for the delivery of propaganda with no real-time truth detector. The president says whatever he wants to say, and with the possible exception of a sour expression on the face of someone in the audience, or an unacceptable verbal complaint like the one back in 2009, there is no contrary opinion expressed until after the speech when the opposition party responds. By that time, many have tuned out, and given the setting and the pomp, and the fact that people still respect the office enough to often accept a president at his word, the damage is pretty much done.

Remaining true to form, at this year’s address President Barack Obama did not let the opportunity pass without making sure he got his points across, even if they were at odds with reality.

No less a dependable source for advocating liberal positions than The Washington Post identified six of Mr. Obama’s claims that attracted the attention of fact-checkers, presenting them in “a guide through some of President Obama’s more fact-challenged claims.”

In one of them the president noted, “the more than eight million new jobs our businesses have created over the past four years.”

Subtracting the jobs created not by businesses, but by government, that number is actually 7.6 million, and that number is correct, as far as the claim goes. The Post says the net new jobs created during the Obama administration is 3.2 million, and that there are 1.2 million fewer jobs today than when the recession began in December 2007.

Further, Newsmax reports that by last April, the number of Americans on food stamps had grown by 16 million since January 2009, which is more than twice as many people as got jobs.

“Our deficits — cut by more than half,” Mr. Obama bragged.

However, according to The Post, ”the federal budget deficit has declined in half since 2009, from $1.3 trillion to about $600 billion, but that’s not much to brag about. The 2009 figure was not just a deficit Obama inherited from his predecessor, since it also reflected the impact of decisions, such as the $800 billion stimulus bill, enacted early in the president’s term.

“Moreover, the deficit soared in the first place because of the recession, so as the economy has improved, the deficit naturally decreased.  The United States still has a deficit higher than it was in nominal terms and as a percentage of gross domestic product than it was in 2008 and a debt much greater as a percentage of the overall economy than it was prior to the recession.”

The only beneficiaries of this sort of event are the president and his fellow party members. Those who take the president at his word – and that certainly includes the millions of Americans who do not investigate what they read and hear – are less well informed than before the address.

One thing the president was accurate about was his intention to continue using Executive Orders to enact measures the Congress won’t pass, or to change them to his liking. Apparently, the former constitutional law lecturer doesn’t remember the full text of the authorizing language for the State of the Union, with emphasis on the phrase “recommend to their Consideration.” It does not say, “tell them the edicts he will issue if the Congress does not act.”

President Obama needs a remedial class in what the Constitution means. The Executive and the Legislative Branches are co-equal, along with the Judicial Branch; the president cannot make law, dictate what laws Congress will pass, or alter laws he does not like.

Why won’t the Congress stand up and defend its Constitutional prerogatives and obligations and make the president behave constitutionally?