How gov­ern­ment makes the poor poorer

End­ing poli­cies that hand­i­cap up­ward mo­bil­ity would be good for all

The Washington Times Daily - - COMMENTARY - By Stephen Moore

For all the ob­ses­sion in Wash­ing­ton and in col­lege fac­ulty lounges over in­come in­equal­ity, why isn’t there more out­rage over gov­ern­ment poli­cies that ex­ac­er­bate the prob­lem? There are hun­dreds of pro­grams that make the poor, poorer and in­crease poverty in Amer­ica. Many of them were ex­posed last week by my col­leagues at the Her­itage Foun­da­tion fo­rum on this very topic.

Econ­o­mist Don Boudreaux of George Ma­son Univer­sity un­masked two such poli­cies. One is trade pro­tec­tion­ism. Trade bar­ri­ers raise prices and “act as a re­gres­sive tax” on Amer­i­cans, Mr. Boudreaux ex­plains. They also stunt the very in­no­va­tion process that makes goods and ser­vices widely avail­able to peo­ple at af­ford­able prices to be­gin with. Think about who the

con­sumers are that shop for those ev­ery­day low prices at Wal­mart. It’s not Hil­lary Clin­ton.

Min­i­mum wage clearly fits into this cat­e­gory as well. In ev­ery other in­dus­try, Mr. Boudreaux notes, when some­thing is more ex­pen­sive we buy less of it. Why do some econ­o­mists think that isn’t so when it comes to buy­ing la­bor. Es­pe­cially for the young and the low­est skilled, min­i­mum wage be­comes a toll that pre­vents many from en­ter­ing the work force and gain­ing the skills that can make a low in­come or mid­dle class worker a high in­come worker. This is so ob­vi­ous that one won­ders why lib­er­als keep cham­pi­oning the min­i­mum wage cause.

Marlo Lewis of the Com­pet­i­tive En­ter­prise In­sti­tute points out that the fuel econ­omy stan­dards pro­moted by the left­ist en­vi­ron­men­tal­ists add thou­sands of dol­lars to the cost of a new car. He es­ti­mates that these “green” poli­cies could mean that 7 mil­lion fewer Amer­i­cans each year can’t af­ford a new car. And, again, those 7 mil­lion vic­tims are surely not peo­ple like Al Gore or the board mem­bers of the Sierra Club.

An­other green pol­icy that hurts the poor is the anti-frack­ing cru­sade of the en­vi­ron­men­tal­ists. In my book with Kath­leen Hart­nett White, “Fu­el­ing Free­dom,” we point out that the lower cost of elec­tric­ity due to cheap shale nat­u­ral gas has ben­e­fited low in­come house­holds to the tune of well over $4 bil­lion a year. This is four times the ben­e­fit of the low in­come home en­ergy as­sis­tance pro­gram. So if lib­er­als re­ally care about the poor, why not get rid of LIHEAP and pro­mote frack­ing in­stead?

So­cial Se­cu­rity is the great­est swin­dle of the poor ever. A new study by Peter Fer­rara for the Com­mit­tee to Un­leash Pros­per­ity shows that the av­er­age poor per­son who works 40 hours a week dur­ing his or her work­ing life would re­tire with a larger monthly ben­e­fit and would have $1 mil­lion or more in an estate that could be left to a spouse or chil­dren at death if they could sim­ply put their pay­roll tax dol­lars into a per­sonal 401k re­tire­ment ac­count and tap into the power of compound in­ter­est.

Un­der So­cial Se­cu­rity poor (and mid­dle class) house­holds leave next to noth­ing for their kids at death. So So­cial Se­cu­rity robs nearly ev­ery low and mid­dle in­come fam­ily with a full time worker of at least $1 mil­lion over their life­time. What a deal.

Oc­cu­pa­tional li­cens­ing laws — in trades like mov­ing com­pa­nies, real­tors, hair dressers, limou­sine ser­vices, beau­ti­cians, phys­i­cal ther­apy and on and on — stunt small busi­ness start-ups, de­stroy jobs, and raise prices for lower in­come con­sumers. What about the right to make a liv­ing?

Big gov­ern­ment ad­vo­cates de­fend these statist oc­cu­pa­tional bar­ri­ers to en­try by ar­gu­ing that they are needed to up­hold pro­fes­sional ser­vice qual­ity. Mr. Boudreaux shows ev­i­dence that to the con­trary, li­cens­ing re­quire­ments re­duce ser­vice qual­ity by shrink­ing com­pe­ti­tion in the in­dus­try.

Ar­guably the pro­gram that has set back up­ward in­come mo­bil­ity for the poor the most is the gov­ern­ment school sys­tem in in­ner cities. Ev­ery study finds abysmal ed­u­ca­tional out­comes and even un­safe en­vi­ron­ments for school chil­dren de­spite cities spend­ing up­ward of $20,000 per child. In Catholic in­ner-city schools, these same kids could and should be re­ceiv­ing a bet­ter ed­u­ca­tion at half the cost. Yet lib­er­als who cham­pion the poor op­pose school choice pro­grams that would raise ed­u­ca­tional achieve­ment and fu­ture earn­ings. (Look at the dis­grace­ful treat­ment of Pres­i­dent Trump’s ed­u­ca­tion chief Betsy DeVos).

These ex­am­ples merely scratch the sur­face of scores of gov­ern­men­tal po­lices that are re­gres­sive. Could it be that the grid­lock and po­lar­iza­tion in Wash­ing­ton could be ended by a bi­par­ti­san re­form move­ment to scout out and re­move laws and rules that hurt those at the bot­tom of the in­come scale the most? One uni­ver­sal goal that we should all agree on and as­pire to is equal­ity of op­por­tu­nity — which these laws squelch.

Where are Bernie San­ders and El­iz­a­beth War­ren and Nancy Pelosi and the class war­fare war­riors on re­vers­ing gov­ern­ment poli­cies that are steal­ing money and op­por­tu­ni­ties for low in­come and mi­nor­ity fam­i­lies? Do they care more about pro­tect­ing the poor or big gov­ern­ment? It’s time to re­ally find out.


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