 Welcome to Free Thoughts. I'm Aaron Powell. And I'm Trevor Burrus. Joining us today is Michael Tanner. He's a Cato Institute senior fellow and author of many books. His newest is The Inclusive Economy, How to Bring Wealth to America's Poor. Welcome to Free Thoughts. Thank you. Pleasure to be with you. You discussed the history of thinking about poverty, which seems to divide into almost two camps. On the one hand, the poor at fault for their poverty, and on the other, the poor aren't at fault for their poverty. Which is right. Well, I think there's truth to both of them. And if you look at the current debate about poverty, what you find is that a lot of people on the right accept the idea of sort of a culture of poverty, or sort of an individual responsibility idea of poverty. A lot of that is built around this idea of a so-called success sequence. The idea that if you do certain things like get a job, finish school, don't have children until you get married, then you're unlikely to end up in poverty. And that's very true. On the other side of the equation, there are those who I think are on the left who generally say, okay, that's fine as far as it goes, but you also have to look at what influences those choices and decisions that poor people make, and that in a society in which they're not treated fairly, in which there's still endemic racism and gender-based discrimination, as well as economic dislocation, there's going to be constraints on their choices that push them in certain directions, and it's not right to blame them for those choices. In the parts of the history you discuss in the church, did the church make a distinction between... When the church was involved in most of anti-poverty efforts, say, in the Middle Ages, did they make a distinction between the undeserving and the deserving poor? That's an old concept. Not generally. What was interesting was that originally the idea of charity was something between you and God. You were in points in heaven, and that was both the Christian church, but also was in Judaism and Islam as well. The idea that what you were doing was something that was commanded by God, and that's all you really cared about. You didn't really care what the poor did or how they got in that situation or even what they did with the alms that you gave them. That really began to change actually in the Elizabethan age when the state got more involved and began mandating charity, if you will, began to tax people and distribute it. People then sort of resented it and said, wait a minute, if they're taking this money from me, I'm not getting any credit with God for this. It's like a Herbert Spencer line too. Herbert Spencer kind of says, if they take this, I'm not really being charitable anymore. That's right. Charity is not something you do voluntarily. It's not something you do at the point of a gun. Therefore, people began to say, well, maybe we need to make some distinctions about who gets this, and originally the idea of orphans and the lame and the halt widows, they could get charity, but the able-bodied people, they were actually penalized and they could be whipped out of town if they were found begging. Is this distinction even all that helpful when we're talking about how we can actually help the poor? Because it seems like when you look at the way that the left and the right talk about poverty, there's a lot of most motivated reasoning or getting this back. The left wants us to increase spending on anti-poverty programs, say. As a result, they have an incentive to look for evidence that it's not the fault of the poor, that they're poor, whereas the right doesn't want us to spend more money, and so it's easier to not spend more money both politically and to convince yourself you're doing the right thing if you convince yourself that these people deserve their lot. Both of them seem like if the underlying issue is simply like, how are we going to help the poor not be poor anymore? These conversations, do they even really have a role to play in the first place? Well, yes and no. I do think there's a lot of backwards reasoning that people have set their position on what they're going to do as far as policy goes and then they go looking for justification for that policy, and I think that that's mistaken. On the other hand, if you were a doctor treating a disease, you wouldn't start prescribing things until you knew what the underlying problem was. And I think to some degree looking at why people are poor is important in determining what policies you're going to step. Incentives matter, for example, and if, as the right says, that people are not working because welfare pays too much or things of that nature, then we should look at what incentive structure we're creating. On the other hand, if there are things outside of people's control that's pushing them into poverty, government policies in particular, then perhaps we should be looking at those and suggesting ways to change those. It also seems that race issue, which you write about very eloquently and passionately in the book could factor into undeserving and deserving poor concepts for voters at least if there's a racial element where they tend to think maybe that African-Americans are lazier and are more on the undeserving side so they might vote. That's kind of where the welfare queens seem to come in with your perception of what the poor like and then you bring in the racial element and it could get pretty nasty, I think. Absolutely, and I do think there's a racial aspect to people's attitudes towards welfare. One of the things that I found was very interesting was you can go back to the start of the war on poverty and you just came out of Michael Harrington's The Other America and people had a vision of the poor as being laid-off factory workers for coal miners in West Virginia in 1965. People were very supportive of the Great Society. It was very popular. Within a very few years, you have Raul Reagan running on welfare queens and we need to cut back on the welfare state. Now, some of that was the demonstrable failure of these programs but a lot of it also had to do with the change in the perception. There was evidence to suggest that the majority of television news stories, for example, about the poor in the 70s at least, were about African-American women with children and so we got this idea of these women who were unmarried having a lot of children, non-working men and while there's some truth to that in the welfare system, it also is a stereotype that makes it easy to say, well, let's cut off the benefits to them. Does redistribution work? You know, we just redistribute a lot in this country. The federal government has about 100 different welfare programs or anti-poverty programs. I think about 70 provide benefits to individuals, the others to communities like Community Development, block grants and such. We spend about $700 billion at the federal level and about $300 billion at the state level so we're spending almost a trillion dollars. And to some extent you could say it works. I mean in the sense that it's impossible for the federal government even something as ridiculous as the federal government or as inefficient as the federal government to spend a trillion dollars and not get some results. I mean you could fly over the country in an airplane and shovel a trillion dollars out of it and do something about poverty. But if you walk through poor communities, I mean if you go to Sandtown in Baltimore where Freddie Gray was killed by the police or Southeast D.C. or Owensley, Kentucky, the poorest communities in America and you say, are these thriving communities, despite the millions and millions of dollars these communities are getting in welfare benefits and other federal programs, are they thriving and the answer is no. And that has to be accounted a failure. What's the cost of redistribution though? So we can talk about whether it's working to fulfill its goals. But you say we're spending this money but really we're just taking this money from some people and then we're taking it out of the economy into the hands of government and then the government is just putting it back into the economy in the hands of other people who are then spending it. So outside of it not working and then maybe moral questions about whether it's okay to take from some to give to others, is there an economic cost to this? Could we just keep increasing it because we're just shuffling money around the country? Sure, we know that you can't redistribute something that doesn't exist and if your taxes are so high that people are not investing and innovating and creating new wealth, you ultimately run out of money to invest or as Margaret Thatcher said, the problem with the modern welfare state is eventually you run out of other people's money and that is true. It also squeezes out more effective avenues of charity. We know that private charity in many cases is more effective than these government programs and yet the total amount of charity in society seems to be relatively constant allowing for the increase in wealth overall and what happens is the mix between government charity and private charity tends to shift back and forth depending on people's perception of need. So to some degree, we could be making the situation worse by depriving people of the ability to give privately and in fact, on a moral basis of taking that responsibility away from them. So you said we've got these very poor communities that may have been getting millions of dollars in various welfare programs and funds given to them yet they remain quite poor. So what's happening? Where's that money going? Well, the money does basically deal with the sort of bottom rung if you want to look at Maslow's hierarchy of needs so to speak, the bottom rung it feeds people, it prevents people from starving it makes sure that they have minimal amounts of healthcare or education or things of that nature and that's important. The poverty rate would be higher in the absence of welfare programs but yet it's not doing the things that are necessary in order to be people to become self-sufficient to get off of welfare and become sort of the masters of their own fate. It creates kind of a custodial poverty, if you will where we keep these poor people as if they're little children getting an allowance and we'll take care of them but we never allow them to grow up and be adults on their own and that I think is demeaning. What's stopping them from that? I mean if I'm poor and I can't feed myself and you give me food to eat that then doesn't necessarily stop me from then going out and trying to get a job too. Well it might actually. If the situation is such where getting that job would actually end up costing you those benefits and could in fact leave you worse. For all that we worry about high marginal tax rates in Washington some of the highest marginal tax rates there are for someone who leaves welfare and takes a job almost immediately taking that job they have to pay taxes. Payroll taxes on the first dollar you earn. They begin to lose their benefits right away as well so that you earn a dollar and you lose 50 cents in welfare benefits and then you have the expenses of going to work transportation, clothing, childcare and so on. In many cases you could actually end up at least in the short term worse off if you take that job so we've got to look at the incentives in the existing system. I've heard those described as welfare clips I think before where you lose some amount of benefits if you earn more money that if you have $38,000 and you're a woman with four children a single woman if you get a job if you get a $2,000 raise $20,000 in benefits or something like that that seems crazy. Why would anyone have ever designed a policy that has such stark losses to it or did it come about through some sort of more random process? Yeah I think it's just a random thing that's happened. The fact is anytime you have a phase out range of benefits you're going to run into this and we have such a multiplicity of programs with all these different overlapping programs that have different eligibility levels and different rules that you just sort of run into this. There's no rational design behind our welfare system. It's just basically programs spring up because someone in Congress or some special interest group in particular tends to champion them. You have food stamps in part because of course the urban Democrats support them but also because farm state Republicans back them. You have housing programs that are primarily to benefit landlords. You have hospitals that want more Medicaid funding so we've expanded Medicaid. It's a conglomerate of special interest, not a rational thoughtful process. Are things getting worse? That's kind of the consensus attitude you might pick up is that the... Or at least from Bernie Sanders. Bernie Sanders, sure. But just this general that things are especially over the last half century or so things are worse for the poor than they used to be so we better double down or fix it. There's a lot of ways to look at that. If you want to look at just an absolute difference, the poor are much better off. Very few poor people would change their lifestyle today for the lifestyle of say a Vanderbilt or a Carnegie 100 years ago. They could have a much bigger house I suppose but couldn't heat it and it had very little electricity and no internet, no cell phone and probably no car. Lifestyles have gotten better for pretty much everybody over the last 100 years including the poor. You can also simply look at poverty rates through the various measurements in what you find was that poverty has been decreasing throughout the century until probably the mid-70s or early 80s at which point is sort of leveled out and we haven't gained much since then but certainly people are better off than they once were. To return to some of the questions on race because you have a chapter on race and gender and inequality you write that far too many conservatives minimize the cumulative weight of American experience. What sort of residual effects does slavery and racism have and how do we see that in some of the poverty statistics? You hear a lot of conservatives sort of argue as if okay we passed civil rights laws now everything has changed and everybody's equal now and we just need to go forward. The reality is that you can't have a race in which one group has been weighed down by chains for five flaps and they say okay in the last lap we'll just let everybody run free but about $7 trillion I believe is the estimate of how much in terms of wages African Americans were deprived of during slavery. That $7 trillion in wealth that didn't accumulate and build up over the years passed down to their descendants today that doesn't count the losses during say Jim Crow era or they go on with ongoing discrimination today. The fact is that we live only about 50 or 60 years away from the time when the federal government's policy was to discourage home ownership and redlining among insurance companies and things of that nature. Again, more wealth that simply doesn't exist in the African American community today and then there's the mental capital what happens when you saw people who got educated in your community either gain nothing from it or else be persecuted for it in some cases lynched if you were educated in the south. Those attitudes get passed down from generation to generation and you have to take those into account today and that of that of course includes ongoing discrimination and law enforcement and education in other areas that happen now. But wouldn't the conservatives just say, okay, sure, that by and large black communities have less money now or are starting off behind because of this $7 trillion and lost wages and so on, but so much of the problem now is attitude going back to the kind of cultural questions we started at the beginning and so yeah, that attitude came from somewhere but if it's destructive you just change it. Well, yes, it's easy to say just change your mind but if you live in a community that has few economic opportunities where every time you step outside your door you're hassled by the police where your school system basically is lousy and where the teachers don't think you can achieve anything yeah, it's going to be pretty tough to achieve to change your mind that doesn't mean some people don't there's a great many people who were born in poverty, born under the worst circumstances and through their own hard work managed to achieve but to say that everybody should therefore do it I think is a little unrealistic. Does acknowledging then that so in this case that poverty is different in the African-American experience than say poverty for rural whites and so is poverty as a whole different for different races and different groups, different demographics, different geographical areas and does this then mean that we ought to be taking those sorts of things into account basically are a poverty alleviating program that targets everyone is not going to work as well for different groups because of the different experiences? I do think you probably need to look at the individual circumstances in which you're talking about both in terms of race and gender but also in terms of communities. You know that's not to say that a white, rural white person in Owensley, Kentucky who the coal mines have now closed and they're living in poverty is better off than an African-American poor person but they face very different circumstances. The chances how they're going to be treated by society, how they're going to be treated by others and what we expect from them is going to be different and I think that those things need to be considered as part of an overall program. You also discussed gender and there's a lot of discussions of things like the gender pay gap and opportunities for women and paid family leave and things like that but you also seem to think that there are some substantive points that they have, people who focus on gender inequality about how there is discrimination against women and there's things that we can help, we can try to fix. I'm very skeptical of some of the common complaints, things like the gender pay gap and such. I do think that those things are overblown at best but I also think you have to look at the account again that we have a historical legacy of discrimination against women that has influenced attitudes towards education attitudes towards child bearing that we sort of acculturate women to the idea that they should have children and that that's their primary focus and that this can lead them to spend less time in the labor force and that can create a number of problems as well. So I think that it's not as clear cut as it is say on a racial lines but I don't think you can dismiss the fact that women are treated differently in our society still. But what does that mean from a policy standpoint? So the fact that our culture encourages women to have children before that plays that with higher value than having a career say like we as policy people recommending policies at the federal state level like what are we supposed to do with that fact? Well I don't think we should have policies that are based on that. I mean I think the idea that a government can incentivize women not to have children or to have children is I think a number of people in the right want to do but I think we also just need to recognize that it's not always a choice you know one of the things conservatives always say as well these women get pregnant and they've been chosen to. Well yes I mean in a very basic sense they have but they also made that choice under a lot of pressures from society in various ways and we should recognize that those exist I guess it's more a plea it's victim shaming than it is a recommendation for policy. We talk a lot about inequality especially in the last I don't know 15 years maybe it seems to be at least 10. What's the relationship or how should we look at the relationship between inequality and poverty is something we should care about equally as we see poverty people seem to care about inequality when poverty is a little bit worse possibly and what can we do about it? There's actually very little relationship if you look at something what's generally called the genie coefficient which is the way to measure inequality in a society and you track that against poverty levels what you find is there's no correlation that poverty levels are going down even as the inequality in our society is staying the same or going up slightly you know Piketty's famous book he laments the growing inequality in China at a time when 800 million Chinese have gotten out of poverty and inequality is not necessarily bad there's sort of a static pie model if you will it says well somebody got rich therefore somebody else must get poor and the reality is that a growing economy can benefit everybody in fact there's nothing that will reduce poverty more than a growing economy. But we have seen the gains to the very wealthy outstrip the gains to say people without high school diploma it's worse now to not have a high school diploma than before correct? Absolutely I mean I do and one of the things that I talk about in the inclusive economy is that economic growth is the great great engine to get out of poverty but only if it's inclusive if you have policies to sort of lock one group out of that economy while everyone else benefits you are going to create not just inequality but poverty isn't the argument not simply that the inequality is somehow causing the poverty but that it's more when people say like the rich are getting richer or aren't getting richer as fast or whatever it's not so much that you know they believe necessarily that the rich getting richer is what's causing the poor to stagnate but simply it's more of an argument that like look if the rich are getting so much richer we should have say more progressive taxation to try on the back end to level that out that's the relationship between in the poverty is kind of almost one of like a moral care thing as opposed to a strict like causal relationship well the risk of course is that you kill the goose that laid the golden egg that in demanding more higher more progressive taxes on the rich you will reduce economic growth you create a disincentive for the type of risk taking and investment an entrepreneurship that actually creates new wealth and new growth and if you do that you're not going to be able to benefit the poor either on the other hand there is a point to be made to the idea that a lot of wealth today is gained through sort of crony capitalism the idea of using government to promote your business to gain subsidies to sort of gain the system and at the same time to lock out poor from participation in the economy and I think that that there's a point to that and if people are getting rich because they're preventing other people from moving up that's a cause for concern you have another interesting line where you look after libertarians and conservatives on the issue of economic mobility you say libertarians and conservatives take the preference for absolute mobility too far ignoring the value of relative mobility all together what does that mean what are those two types of mobility mobility that you're talking about it's also a question just in terms of poverty just sort of a look at sort of absolute poverty and absolute mobility and suggest that says look we're not the South Sudan Americans the poorest Americans are among the richest people in the world so we shouldn't we've sort of eliminated poverty and we shouldn't worry about that in terms of absolute mobility it's a question of should people at the bottom move up over time and yes they do is everybody moving up everybody's getting richer all the time as I mentioned earlier the poor today wouldn't want to be Carnegie 100 years ago on the other hand I think there's a danger if you have sort of a British style hereditary aristocracy that's going to be at the top all the time and even though everybody moves up if you're born in the bottom 20% you will always be in the bottom 20% your children will always be in the bottom 20% yes that 20% may get richer you may have more things but you can never aspire to be in that top 10 or top 20% that's that's relative mobility and I think that that's dangerous for society I think that that's the sort of thing that leads to sort of gated communities and a large mob outside the gates it's very it's a recipe for instability guillotines things like that yeah how much of the overall say poverty rate is is kind of caught up in this in mobility so like when I was a you know just to graduate from college and I grew up in an upper middle class background I had certainly not been poor but when I left college I didn't have a job and I was I'm sure living beneath the poverty line for a while and so then I show up in that but it was highly unlikely that I was going to end up staying at that level for my entire life and so what how many people are like me and showing up in that data at any given time slice and how many people are like the way that we tend to think of the poor which looks more like what you've described with the the bridge experience you know we of course poverty measures are a snapshot in time generally they're taken from the census bureau they do a survey every year and they ask what your income is and if you're below this arbitrary level we say you're poor we don't really measure it over over time there are other measures out there that shows that over time people do move up and down and in fact your likelihood of reaching the top 20% is roughly the same as your likelihood of staying in the bottom 20% over time so people do move up and in particular people move down being rich today is pretty much a guarantee no guarantee at all that your family is going to stay rich and about two generations of three at the outside most fortunes have been dissipated and and people are no longer as wealthy as they were so we do still see mobility in our society America is very different than a lot of the world in that we still you still can pursue that American dream of becoming rich here that that's something that a lot of the world doesn't still have so if we take your book and we kind of laid the groundwork here about the way we treat poverty the way we spend a lot of money and you say that there's probably diminishing returns to just straight redistribution which seems to be the case so you focus as you mentioned on things that are not just redistribution reforms that can be made that can help people get wealthier and live more productive lives rather than just be be wards of the state so to speak so let's talk about the first one you say reform the criminal justice system and curtail the war on drugs right I think that the it's surprising that criminal justice has such an impact on poverty there's a lot of reasons done for to reform the criminal justice system it basically unfairness to people generally it's certainly unfair to people of color it is class based it is race based there's a host of problems with the criminal justice system but it also significantly impacts poverty if you are arrested when you're 22 when you get a felony conviction and now you're 45 trying for a job you still have to put down that you've been arrested for a felony which makes it harder for you to get hired and in fact it can certainly follow your whole life it makes it harder for you to get housing in many cases if you have to put down that you have a felony conviction you're not eligible for scholarships or even admission to some colleges if you have criminal record so it can hurt you a whole host of reasons that can trap you down into poverty in addition you can look at poor communities in the whole question of child bearing outside of marriage something conservatives worry about a great deal they're always talking about all these women having children they're not married well who are these women supposed to marry you can look at the work by William Julius Wilson and others there's a million and a half young black men who are basically outside of the marriage pool because they're in the criminal justice system they have the criminal records that they prevent them from being from working or supporting a family or else they are still in jail or on probation so on these women are sort of left with this without potential mates sex being sort of a natural thing for for mankind women kind they're going to have sex and that's going to result in children but no potential husband so does this mean that you think we should ban the box like that we shouldn't employers shouldn't be allowed to ask if you had a felony conviction or that I if I'm hiring people shouldn't be allowed to take the fact that this person spent time in prison into account well that may be a second best solution there is some evidence I mean I think it's probably a step in the right direction although there is some evidence to suggest that what employers do when you ban the box is simply assume all black men are criminals and simply stop hiring on that basis so we've got to be careful of that I think a much better approach is to look at our over criminalization in general many of these young black men who are arrested are arrested for things that shouldn't be crimes I mean there's the drug laws of course for women there's prostitution laws but there's a host of other things as well let's remember that Eric Garner was killed for the crime of selling untaxed cigarettes do we have any data on how much having a felony conviction diminishes your earning potential because it seems like this double whammy we pay especially if you think of something like the drug war which shouldn't be a crime first of all you pay a bunch of money to put someone in a cage just like probably 30,000 is usually what they say but of course that's at the marginal cost and then you've diminished their human earning potential for their whole life do we have any idea how much it goes down well there is data on individual earning potential that I can't recall at the top of my head but I can tell you that overall scholars at Vanderbilt suggest that if we did criminal justice reform it would reduce poverty rates by about 20% wow that's that's a lot that's pretty substantial I mean but does that the worry and again we kind of are picking on conservative some today but the worry is okay great we do criminal justice reform and we reduce poverty by 20% but what that also means is that we've got a whole bunch of criminals out there who people now either don't know our criminals can't ask if they're criminals or aren't disincentivized to become criminals in the first place well and certainly people who are armed robbers I guess should be locked up or rapists or murderers on the other hand people selling those untaxed cigarettes I suppose I could live with the idea that they're loosed in society that's the under thinking about think it's Tom Cotton who talks about the under incarceration problem and of course there's the point that usually after 30 you're not going to commit many more crimes so that's right the young man's crime is a young man's gang yeah so we just lock all young men up until they're 30 then let them out well that is that makes a huge difference on crime rates anytime young men are being taken off the streets like video games video games probably have a crime mitigating effect there's a couple papers on that as opposed to this violent video game thing your next reform you propose which is something that would seem to be crucial to this as education and especially getting rid of the public school monopoly well we know that whether or not you graduate school particularly just graduating high school but going on to college of course as well has a tremendous impact on poverty about half of people who don't graduate high school end up in poverty the idea that you could drop out of school and go down to the factory and get a job that's going to support your family is just no longer viable if it ever was it certainly is not in today's age so we need an education system that actually prepares people for the jobs that we have today and educates them and yet despite more and more money we see poor and poor results particularly in low income and minority communities you know cities like Chicago or Washington DC or Baltimore where we spend an inordinate amount upon a per student basis and yet large numbers of students fail to graduate those who graduate test very poorly in some cases they can barely read their diplomas so certainly we need to do something to change the education system the problem is that we have an entrenched bureaucracy essentially a monopoly in the education system that works largely for its own benefit or the benefit of the teachers union and not for parents and teachers or parents and students and I think that what we need to do is inject more competition into the system more experimentation in the way to teach and particularly to return control over to the customers to the idea that parents are ultimately in charge of their child's education and not the teachers union Does this mean you would push for something more like education as jobs training because this part of the problem is that we not only do we send these kids to bad schools but we're sending them to bad schools where they're learning social studies and geography and you know as deers is to my heart English literature which isn't going to necessarily help them in the job market so we're pivoting to education as a way to keep people out of poverty be a better way to approach it. Well the evidence actually is fairly mixed on that the idea that a vocationalist not vocational but a particularly skills based college education versus liberal arts college education makes a big difference in terms of your future income actually there's disputed in the literature But if we're good students of Brian Kaplan we could say for the high school dropouts is it the dropping out of high school that made them poor or is it the fact that they're the kind of person who doesn't finish high school Well that's the problem with the entire success sequence is you're dealing with this correlation and is it A cause B or B cause A that's the same as true on out of marriage births the same as true on employment are there circumstances that cause people to be more likely to fall into those categories and that's a subject that social sciences debate what we do know is that in many interstate schools there's not the programmatic or teachers or other ways in which to encourage students to stay in school there's very low expectations for them to achieve we have what people call the school the prison pipeline in which people of color children of color misbehave can get thrown out of school easier or otherwise disciplined in ways that leave them vulnerable to criminal justice system we've certainly seen that as some very disturbing videos that have made the rounds in recent years so whether or not everybody's going to have the innate skill set, innate ability to go on to higher education is probably not and they certainly could benefit from vocational training more use of apprenticeships things of that nature but I'm not sure we should write them off yet so we talked about higher education but what about on the other end with early childhood education where we could be helping these kids get used to being in school earlier so they're going to succeed better in it but also potentially helping their parents to say remain in labor force they don't have to drop out of the labor force to watch children I would have actually expected there to be more of a benefit from early childhood education than there appears to be but what studies we see on it suggests that there is very little benefit it tends to be dissipated very quickly once students enter the public school system that may be testimony to how bad the public school system is more than it says anything about early childhood education but we do know that by third or fourth grade any gains that they've made tend to be gone and we also know that the few successful experiments are very difficult to replicate they are very individually of individual high cost it's been a lot of money per student and have one teacher for every couple of students and it's just not something that seems to be replicable when done on large scale in terms of childcare what's particularly interesting is that the parents themselves tend to resist this sort of large institutional institutional childcare that seems to get most of the money and most of the subsidies that they would actually prefer sort of informal arrangements with their local church their neighbor or their families in particular that's why it's so destructive when you see things like the Washington DC debating whether or not to require that all day care providers must have a college education we don't require that of parents so I'm not sure why day care providers suddenly different but what that's going to simply do is make it harder and more expensive for poor families to find someone to take care of their kids this freed up educational system that you're advocating of so we can kind of unleash experimentation and therefore hopefully alleviate poverty or at least help in alleviating it do we have evidence from other places that that works I mean there are other countries that have more open and free and dynamic education systems than we do do we see in those places an impact on poverty well we see from around the world that poor families will go way out of their way and spend what limited resources they have to educate their children and they will see the results from it the terrific book on this the beautiful tree I think goes into some detail on some of the benefits you gain from this even as a for profit education in poor third world countries is quite popular with the parents and their children and shows promise and we've seen sort of the results are mixed in the United States because it's hard to get truly free education I mean people talk about charter schools and they appear to work well in Louisiana but not work well in Detroit and things of that nature but they are still heavily regulated by the government even when you have things like vouchers they tend to come with so many strings attached that you're still keeping the government heavily involved in education and that tends to limit the amount of innovation that you can have I mean education hasn't changed much you know I mean there's basically a Roman pedagogy I mean you know we don't have a Greek slave teaching the subjects but it's basically the same education system that they had what we really need is to change something differently your next suggestion is bringing down the cost of housing what are the biggest factors in raising the price of housing people don't realize how big a deal housing policy is in terms of perpetuating poverty I mean it's a huge cost for themselves just in terms of rent taking a disproportionate amount of poor people's income but it also tends to lock people into where they are it makes it hard to move to where the jobs are or to a lower crime area or to where your children get a better education people say well you know go to a better education district in the suburbs well if you can't afford the rent there you know you've got a problem so being able to move being able to afford is important and yet government policy drives up the cost of housing tremendously often to benefit the elites you know it's particularly interesting because zoning laws started in this country very explicitly racially the first zoning laws was actually in Los Angeles but I believe but Baltimore was a close second and the law the zoning law is actually prohibited you from selling a house to someone who was not of the majority race on your block so if most of the people on your block were white you couldn't sell or rent to an African-American family for example and they still sort of have that impact on segregation today of forcing minorities into certain areas of the city and of course a class based as well these zoning laws can add tremendously to the cost of housing there's evidence to suggest that they add 10, 20 in some places like Manhattan or San Francisco they can add 50% to the cost of housing that's a huge burden that the poor are largely bearing and you know to protect the aesthetics of wealthy elites who don't want multi-family housing in their area there was a story in the New York Times not long ago about a family who was very upset their $2 million condo someone built a building next door to them cutting off their view so they barely made a profit when they sold that condo the next one is bringing down the costs making it easier for the poor to bank save, borrow and invest I mean I see banks everywhere it doesn't seem that difficult to get a bank account well it surprisingly is because of money laundering laws there's a requirement for identification specific kinds of identification in order to open a bank account and in many cases the poor don't have it about 20% of poor people lack the proper ID to open a bank account something we hear a lot talked about a lot in terms of voting the poor don't have the proper ID to be able to vote and there's a lot of fighting over that it's relatively easy to go to the DMV and get a driver's license it is although the transportation cost to that is a cost simply purchasing it there's a time attitude involved if you lived in certain areas and in some poor people in the rural south for example where they lack birth certificates they were often delivered by midwives they didn't apply for social security right away there's certain in the minority community that it's often the case where they simply lack the type of identification necessary to prove a date of birth which can create problems I mean ultimately I think there's ways to provide them with identification that we simply haven't done and that gets tangled up again in these voting questions there's reasons why your college ID in Texas is not sufficient to vote but your gun certificate is so that's bank accounts you have these other ones borrow which I think it would be difficult for them to borrow because they probably don't have collateral or income that's part of being poor it's part of this lack of banking if you don't have a bank account then you can't borrow against them but you end up with this poor largely dealing in a cash economy moving to this cashless economy everywhere else but the poor largely dealing in a cash economy which means you're carrying around large wads of money in your pocket it leaves you vulnerable of course to being robbed or picked up by the police as a drug courier or something because they say why do you have $500 in your in your pocket in that regard we also one of the perversities of our welfare system today is this is the idea that we punish the savings and we encourage consumption that if you get a welfare check and you spend every penny of it we're perfectly fine with that doesn't even care what you spend it on but if you save some of that money so that someday you can send your kid to school we're going to take away your check we have these asset tests and we count things like your car against your assets for eligibility well how are we supposed to go get a job if you don't have a car in many locales so we sort of have this perverse set of incentives that encourages you to consume as much money as you can today but not be the sort of responsible person that the rest you know that non-poor people are expected to be and save for the future and invest for your children's future we kind of think that that's a bad thing for the poor why I mean if these these policies sound terrible and sound obviously terrible so like the ones about the stuff we just talked about with banking clearly is hurting the poor it makes perfect sense that these policies would hurt the poor because of the way the poor are situated and yet these are policies I mean these are areas where the people who control the policy in the area the representatives the legislators the regulators whomever seem to also profess a lot of desire to help the poor and so what I mean what gives why haven't we just seen oh well of course poor people are having a hard time getting IDs and that means they can't open bank accounts so let's just change the law there sure well part of that is these laws came out of a fear of money laundering so it's drug war related once again or fear of terrorism so we panic everybody into saying oh my god some Bin Laden might have used a bank account someplace with a phony or some Al Qaeda guy or ISIS guy used a phony ID so let's toughen the ID laws for banking and nobody ever thinks about whether there's an impact on the poor the poor are by and large left out of policy debates I mean you know come election time everyone raises a hue and cry about it but when you actually get to legislation on the hill people don't pay much attention to the impact on the poor is that because the poor lack the resources to say hire lobbyists or donate to campaigns is it just they don't have enough money to the poor are more apt to abstain from voting as well but you're right they don't have lobbyists there's very you know ostensibly passes for lobbyists for the poor are largely lobbyists for the special interests that serve the poor not for poor people themselves well it seems to me that going back to stuff we were talking about in the beginning that people think that we spend a lot of money on welfare programs like clearly they've there's some people who champion the poor who have made victories for poverty alleviation programs and maybe the average American voter is is thinking we're giving them a lot of money what else do they want I guess they want more money but we can't afford that maybe that's maybe that's the extent of their thinking about poverty I think that largely is I mean people are naturally concerned about themselves I mean there's a certain selfishness that goes to self-interest that goes to our thinking about policy in general and I think that that contributes to this idea that we think about poverty policy in terms of what's it going to cost me I've criticized a lot of libertarians for this idea that when poverty comes up it's all about well what's my tax is going to be you know this program on the poor I don't care what it does for the poor whether it's good or bad for them I am but they shouldn't take money from me taxation is theft and therefore that ends the debate I tend to think that policy should be based on something larger than that I mean the whole idea of why we do public policy of why I am a libertarian is the idea of human flourishing of a better society of one in which everybody is better off and that includes the poor and I think that libertarians should pay more attention to that an interesting line you have is anyone who spends much time reading contemporary poverty scholarship realizes that the dirty little secret among many scholars as well as many of those who work directly with the poor is that they do not believe that every person who is poor can thrive on his or her own yeah that really is there's a there's a belief out there and it's surprising it's widespread on the left as well that poor people lack the skills they're less intelligent that they are not capable of taking care of themselves and we do need this sort of custodial system that will simply take care of them we don't want them to starve and so we'll give them their allowance I don't buy that I mean I've known poor people in my life I talked to a lot of poor people I've gone to and visited poor communities and I don't see any evidence that suggests that poor people are lazy or stupid I think poor people simply are in a bad situation and adjusting to it the best they can